notes on transportation law 2

8/13/2019 Notes on Transportation Law 2

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Notes on Transportation Law

TRANSPORTATION LAW

Transportation the movement of things or personsfrom one place to another; a carrying across

Transportation includes:o Waiting timeo Loading and unloading with respect to

transportation of goodso Stopping in transito All other accessorial movements in connection with

the loaded movement

DEFINITION OF COMMON CARRIERArticle 1732. Common carriers are persons, corporations,firms or associations engaged in the business of carrying ortransporting passengers or goods or both, by land, water, orair, for compensation, offering their services to the public.

Elements:o Must be a person, association, corporation, or firmso Engaged in a businesso Transports persons or goods or both by land, water

or airo Offers service to the publico Accepts compensation for services

True test of common carrier the carriage of goods andpassengers provided it has space for all who opt to availthemselves of its transportation for a fee. NationalSteel vs CAWhether the given undertaking is a part of the businessengaged in by the carrier which he has held out to thegeneral public as his occupation rather than the quantityor extent of the business transacted. Bascos vs CA

Even if a carriage of goods or pax is only an ancillary orsideline, that person can still be considered as a commoncarrier. Even if transportation is merely occasional,sporadic or not on a regular basis. Even though thetransportation is offered only to a narrow segment of thegeneral population. And lastly, even if he has not secureda certificate of public convenience. de Guzman vs CA

Mode of transportation need not be motorized; pipelinesare considered as common carriers.

Article 1732 does not make any distinction between acarrier:o Whose principal business activity is the carrying of

persons or goods or both, and one who does suchcarrying only as an ancillary activity;

o Offering transportation service on a regular orscheduled basis and one offering such service on anoccasional, episodic, or unscheduled basis;

o Offering its services to the general public, i.e., thegeneral community or population, and one whooffers services or solicits business only from anarrow segment of the general population.

Customs broker also considered as a common carriersince transportation of goods is an integral function

Mode of transportation need not be owned by thecommon carrier.

A common carrier need not have fixed or publicly knownroutes. Neither does it have to maintain terminals orissue tickets.

The name of the contract does not matter so long as allthe requisites are present. Hence, a contract of leasemay be one of carriage if all the requisites are attendant.

DILIGENCE REQUIREDArticle 1733. Common carriers, from the nature of their

business and for reasons of public policy, are bound toobserve extraordinary diligence in the vigilance over thegoods and for the safety of the passengers transported bythem, according to all the circumstances of each case.Such extraordinary diligence in the vigilance over the goods isfurther expressed in Articles 1734, 1735, and 1745, Nos. 5, 6,and 7, while the extraordinary diligence for the safety of thepassengers is further set forth in Articles 1755 and 1756.

Extraordinary diligence that extreme measure of careand caution which persons of unusual prudence andcircumspection use for securing and preserving their ownproperties or rights.

In case of loss of goods in transit, the common carrier ispresumed under the law to have been at fault ornegligent. The presumption of fault or negligence may beoverturned by competent evidence showing that thecommon carrier has observed extraordinary diligenceover the goods. The surrender of the original bill of ladingis not a condition precedent for a common carrier to bedischarged of its contractual obligation. If surrender ofthe original bill of lading is not possible,acknowledgement of the delivery by signing the deliveryreceipt suffices. National Trucking vs LorenzoShipping

The duty to exercise the utmost diligence on the part ofthe common carrier is for the safety of passengers, aswell as members of the crew.

The registered owner is not allowed to deny liability byproving the identity of the alleged transferee. The publichas the right to assume that the registered owner is theactual or lawful owner thereof. It would be very difficultand often impossible as a practical matter, for membersof the general public to enforce the rights of action thatthey may have for injuries inflicted by the vehicles beingnegligently operated if they should be required to provewho the actual owner is.

To prove the exercise of extraordinary diligence,petitioner must do more than merely show thepossibility that some other party could be responsible forthe damage. It must prove that it used all reasonablemeans to ascertain the nature and characteristic of thegoods tendered for transport and that it exercised duecare in handling them. Extraordinary diligence mustinclude safeguarding the shipment from damage comingfrom natural elements such as rainfall.

The extraordinary responsibility of the common carrierlasts from the time the goods are unconditionally placedin the possession of, and received by the carrier for


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transportation until the same is delivered, actually orconstructively, by the carrier to the consignee, or to theperson who has a right to receive them.

STATE REGULATIONArticle 1765. The Public Service Commission may, on its ownmotion or on petition of any interested party, after duenotice or hearing, cancel the certificate of public conveniencegranted to any common carrier that repeatedly fails to

comply with his or its duty to observe extraordinary diligenceas prescribed in this Section.

Public Service Commission replaced by:o Land Transportation Officeo Land Transportation Franchising and Regulatory

Boardo Civil Aeronautics Boardo ATOo MARINA

Cancellation of certificate of public convenience may notbe done without hearing; although these bodies mayinitiate the hearing motu propio

A certificate of public convenience constitutes neither afranchise not a contract. It confers no property rights andis a mere license or privilege and therefore can besubject to regulation founded on the police power of theState.

The sale of certificate of public convenience withoutapproval of the governing bodies is not binding againstthe public. It is binding only between the parties.

There is nothing in the law nor in the Constitution, whichindicates that a legislative franchise is an indispensablerequirement for an entity to operate as a domestic airtransport operator. Although Section 11 of Article XIIrecognizes Congress control over any franchise,certificate or authority to operate a public utility, it doesnot mean that Congress has exclusive authority to issuethe same. Franchises issued by Congress are not requiredbefore each and every public utility may operate. Inmany instances, Congress has seen it fit to delegate thisfunction to government agencies, specialized particularlyin their respective areas of public service.

The nature of the business of a common carrier as apublic employment is such that it is clearly within thepower of the state to impose such just and reasonableregulations thereon in the interest of the public as the

legislator may deem proper. The right to enter the public employment as a commoncarrier and to offer ones services to the public for hiredoes not carry with it the right to conduct that businessas one pleases, without regard to the interest of thepublic and free from such reasonable and just regulationsas may be prescribed for the protection of the publicfrom the reckless or careless indifference of the carrier asto the public welfare and for the prevention of unjustand unreasonable discrimination of any kind whatsoeverin the performance of the carriers duties as a servant ofthe public.

Distinctions between a common carrier and a privatecarrierDefinition Involves a single

undertakingAs to whom itmay contract

Bound to carryall pax whochoose to enjoyit

May choosepersons withwhom it maycontract

Degree of

diligencerequired

Extraordinary

diligence

Good father of a

family

As topresumption ofnegligence

Negligence ispresumed if paxor goods do notreach finaldestination

Person whoallegesnegligence mustprove the same

As to Stateregulation

A commoncarrier performspublic serviceand is subject toState regulation

Does notperform publicservice; alsosubject to Stateregulation but

not too strict.

A common carrier shall remain as such notwithstandingthe charter of the whole or portion of a vessel by one ormore person provided that charter is not limited to theship only as in the case of a time-charter or voyagecharter. In the ordinary course of business, the ship isoperated as common carrier transporting goods for allpersons. The chartering of such vessel still leaves thecaptain, officers and compliment under the employ ofthe shipowner (keeping it under his direct supervisionand control).

COMMON CARRIER OF GOODS

Article 1753. The law of the country to which the goods are tobe transported shall govern the liability of the commoncarrier for their loss, destruction or deterioration.

Test to determine if one is a common carrier of goodso He must be engaged in the business of carrying

goods for others as a public employment, and musthold himself out as ready to engage in thetransportation of goods for person generally as abusiness and not as a casual occupation.

o He must undertake to carry goods of the kind towhich his business is confinedo He must undertake to carry by the method by which

his business is conducted and over his establishedroads

o The transportation must be for hire.

Article 1733. Common carriers, from the nature of theirbusiness and for reasons of public policy, are bound toobserve extraordinary diligence in the vigilance over thegoods. x x x


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Such extraordinary diligence in the vigilance over the goods isfurther expressed in Articles 1734, 1735, and 1745, Nos. 5, 6,and 7 x x x

Extraordinary diligence in the vigilance of goods requires rendering service with the greatest skill andforesight to avoid damage and destruction to the goodsentrusted for carriage and delivery.

Article 1734. Common carriers are responsible for the loss,destruction, or deterioration of the goods, unless the same isdue to any of the following causes only:

(1) Flood, storm, earthquake, lightning, or other naturaldisaster or calamity;

(2) Act of the public enemy in war, whetherinternational or civil;

(3) Act or omission of the shipper or owner of thegoods;

(4) The character of the goods or defects in thepackaging or in the containers ;

(5) Order or act of competent public authority.

There is no automatic liability or responsibility for loss,destruction or deterioration of goods. What arises isautomatic presumption of negligence.

The common carrier of goods must prove that itexercised extraordinary diligence. Do not say byexercising XOD because that is different from provingthat CCOG exercised XOD.

Article 1735. In all cases other than those mentioned in Nos.1, 2, 3, 4, and 5 of the preceding article, if the goods are lost,destroyed or deteriorated, common carriers are presumed tohave been at fault and acted negligently, unless they prove

that they observed extraordinary diligence as required inArticle 1733.

Effect of the existence of any of the 5 instances underArticle 1734 no automatic presumption of negligence,CCOG need not prove it exercised XOD. However, thisdoes not mean that the CCOG is exempt from liability. Ithas to prove that it complied with the requirements ofArticle 1739, 1740, 1741 and 1742.

Article 1739. In order that the common carrier may beexempted from responsibility, the natural disaster must havebeen the proximate and only cause of the loss. However, thecommon carrier must exercise due diligence to prevent orminimize loss before, during and after the occurrence offlood, storm or other natural disaster in order that thecommon carrier may be exempted from liability for the loss,destruction, or deterioration of the goods. The same duty isincumbent upon the common carrier in case of an act of thepublic enemy referred to in article 1734, No. 2.

Article 1740. If the common carrier negligently incurs in delayin transporting the goods, a natural disaster shall not freesuch carrier from responsibility.

Article 1741. If the shipper or owner merely contributed tothe loss, destruction or deterioration of the goods, theproximate cause thereof being the negligence of the commoncarrier, the latter shall be liable in damages, which however,shall be equitably reduced.

Article 1742. Even if the loss, destruction, or deterioration ofthe goods should be caused by the character of the goods, orthe faulty nature of the packing or of the containers, the

common carrier must exercise due diligence to forestall orlessen the loss.

What shipper needs to show to have prima facie caseagainst carrier: o Actual receipt of goods by the carrier o Failure to deliver the goods in the same conditions

as it was received. The mere proof of delivery of goods in good order to a

carrier, and of their arrival at the place of destination inbad order, makes out a prima facie case against thecarrier, so that if no explanation is given as to how theinjury occurred, the carrier must be held responsible. It isincumbent upon the carrier to prove that the loss wasdue to accident or some other circumstance inconsistentwith its liability.

RE: Containerized shipments In order to hold the carrier liable for whatever loss,damage or deterioration that happened on the goodsinside the container, it has to be opened in front of thecarrier and inspected. If the consignee received thecontainer, does not check it, brings it to his warehouseand complains days later, then that is no longer allowed.The inspection should be done in front of the carrier.If the inspection is done upon arrival, there is

presumption that the goods were received in good order.The carrier then will have to prove that the goods werereceived otherwise.

Arrastre operator should observe the same degree ofdiligence as that required of a common carrier. He is thecustodian of the goods discharged from a vessel, hence itis his duty to take good care of the goods and to turnthem over to the party entitled to their possession.

As a general rule, common carriers are presumed to havebeen at fault or negligent if the goods they transporteddeteriorated, got lost or destroyed. Unless they provethey exercised extraordinary diligence in transporting the

goods in order the goods. In order to avoid anyresponsibility for any loss or damage, therefore, theyhave the burden of proving that they observed suchdiligence.

Where the shipper expressly consents to his goods beingcarried on deck, the shipper therefore, takes the risk ofany damage or loss due to fortuitous event.

Even if the damage was due to a fortuitous event, thecarrier cannot escape liability if it was proven by theowner of goods that the injury might have been avoidedby the exercise of reasonable skill and attention on the


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part of the ships crew. The burden is then shifted uponthe shipper to show the negligence.

Fire is not one of those enumerated under Article 1734which exempts a common carrier from liability for theloss/destruction of the goods it assumes to carry fromone place to another. This being the case, the automaticpresumption of negligence attaches and it is incumbentupon the carrier that it exercised XOD to exculpate itselffrom any liability.

Assuming arguendo that fire is considered as a naturaldisaster, in order to free itself from liability, the commoncarrier must prove:o The natural disaster must have been the proximate

and only case of the losso It exercised due diligence to prevent/minimize the

losso It was not in delay

Common carriers are bound to exercise XOD over thegoods they transport. In the event of loss or destructionof the transported goods while in the custody of thecommon carrier, an automatic presumption arises thatthe common carrier was negligent, unless it is able toprove otherwise.

Monsoon does not fall into the category of a storm or anatural disaster as contemplated in Article 1734 thatwould absolve the carrier from liability.

Under Article 1734, there is no automatic presumption ofnegligence due to flood, storm, earthquake, lightning, orother natural calamity. However, the common carriermust prove the following:o The natural calamity or disaster must have been the

proximate and only cause of the losso The common carrier exercised due diligence to

prevent/minimize the loss before, during and afterthe occurrence of the natural calamity.

Requirements for act of public enemy in war:o The natural act of the public enemy must have been

the proximate and only cause of the losso The CCOG exercised due diligence to prevent or

minimize the loss In order to totally escape liability, the CCOG must prove

that the act/negligence of the shipper is the only andproximate cause of the loss. If the CCOG is not able toprove that the only and proximate cause of the loss is theact of the shipper, then, there will be an equitablereduction of the liability.

If there is a defect in the packaging or character of thegoods, then the requisite for CCOG to escape liability isthat it must prove that it exercised due diligence toforestall or lessen the loss.

If goods are delivered to the CCOG and the defect in thegoods/packaging is apparent, then the CC may accept thegoods with reservation or exception. It must be indicatedin the bill of lading that the goods are already defective,etc. and if the goods arrived in the same condition as itwas received, then that can be used as an exception.

Requisite for an order or act of competent publicauthority:

o Person issuing order must have power to issue sucho The order must be lawful or must have been issued

under legal process or authority

DURATION OF LIABILITYArticle 1736. The extraordinary responsibility of the commoncarrier lasts from the time the goods are unconditionallyplaced in the possession of, and received by the carrier fortransportation until the same are delivered, actually or

constructively, by the carrier to the consignee, or to theperson who has a right to receive them, without prejudice tothe provisions of article 1738.

Article 1737. The common carrier's duty to observeextraordinary diligence over the goods remains in full forceand effect even when they are temporarily unloaded orstored in transit, unless the shipper or owner has made use ofthe right of stoppage in transitu.

Article 1738. The extraordinary liability of the commoncarrier continues to be operative even during the time thegoods are stored in a warehouse of the carrier at the place ofdestination, until the consignee has been advised of thearrival of the goods and has had reasonable opportunitythereafter to remove them or otherwise dispose of them.

From the time the goods are unconditionally placed inthe possession of, and received by the carrier fortransportation until the goods are delivered, actually orconstructively, by the carrier to the consignee, or to theperson who has a right to receive them.

The liability of the carrier as common carrier begins withthe actual delivery of the goods for transportation, andnot merely with the formal execution of a receipt or bill

of lading; the issuance of a bill of lading is not necessaryto complete delivery and acceptance. Even where it isprovided by statute that liability commences with theissuance of the bill of lading, actual delivery andacceptance are sufficient to bind the carrier.

The test as to whether the relation of shipper and carrierhad been established is, had the control and possessionof the goods been completely surrendered by theshipper to the carrier? Whenever the control andpossession of goods passes to the carrier and nothingremains to be done by the shipper, then it can be saidwith certainty that the relation of shipper and carrier hasbeen established.

RE: TranshipmentWhen the carrier under the terms of the bill of lading haddelivered the goods at the port of destination, at thatpoint, he merely becomes the agent of consignee andceases to be liable as carrier for loss or damages of thegoods transported. Thereafter, the loss of the goods in itshand for causes beyond its control without negligencebeing proved, cannot sustain a claim for damage againstthe carrier.


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VALIDITY OF STIPULATIONSArticle 1744. A stipulation between the common carrier andthe shipper or owner limiting the liability of the former forthe loss, destruction, or deterioration of the goods to adegree less than extraordinary diligence shall be valid ,provided it be:(1) In writing , signed by the shipper or owner;(2) Supported by a valuable consideration other than theservice rendered by the common carrier; and

(3) Reasonable, just and not contrary to public policy.

Article 1745. Any of the following or similar stipulations shallbe considered unreasonable, unjust and contrary to publicpolicy :(1) That the goods are transported at the risk of the owner orshipper;(2) That the common carrier will not be liable for any loss,destruction, or deterioration of the goods;(3) That the common carrier need not observe any diligencein the custody of the goods;(4) That the common carrier shall exercise a degree ofdiligence less than that of a good father of a family, or of aman of ordinary prudence in the vigilance over the movablestransported;(5) That the common carrier shall not be responsible for theacts or omission of his or its employees;(6) That the common carrier's liability for acts committed bythieves, or of robbers who do not act with grave or irresistiblethreat, violence or force, is dispensed with or diminished;(7) That the common carrier is not responsible for the loss,destruction, or deterioration of goods on account of thedefective condition of the car, vehicle, ship, airplane or otherequipment used in the contract of carriage.

Article 1746. An agreement limiting the common carrier'sliability may be annulled by the shipper or owner if thecommon carrier refused to carry the goods unless the formeragreed to such stipulation.

Article 1747. If the common carrier, without just cause ,delays the transportation of the goods or changes thestipulated or usual route, the contract limiting the commoncarrier's liability cannot be availed of in case of the loss,destruction, or deterioration of the goods.

Article 1748. An agreement limiting the common carrier'sliability for delay on account of strikes or riots is valid.

Article 1749. A stipulation that the common carrier's liabilityis limited to the value of the goods appearing in the bill oflading, unless the shipper or owner declares a greater value,is binding.

Article 1750. A contract fixing the sum that may be recoveredby the owner or shipper for the loss, destruction, ordeterioration of the goods is valid, if it is reasonable and justunder the circumstances, and has been fairly and freelyagreed upon.

Article 1751. The fact that the common carrier has nocompetitor along the line or route, or a part thereof, to whichthe contract refers shall be taken into consideration on thequestion of whether or not a stipulation limiting the commoncarrier's liability is reasonable, just and in consonance withpublic policy.

Article 1752. Even when there is an agreement limiting theliability of the common carrier in the vigilance over the goods,

the common carrier is disputably presumed to have beennegligent in case of their loss, destruction or deterioration.

For the stipulation to be valid, it must not be just astipulation. It must contain a statement which says that ifthe shipper agrees or has declared a higher valuation,and has paid for a higher price thereof, then the 500peso limitation is not applicable.

A stipulation which exempts the carrier from any and allliability from loss or damage occasioned by its ownnegligence is not valid.

3 kinds of stipulation:o No liability the carrier will not be liable at all for

the negligent acts of its crew and employees voido Limited liability regardless of the value of the

cargo, the maximum liability of the carrier will beonly to a certain amount void

o Qualified liability the carrier fixes a maximumliability in the event the shipper does not declare anyvalue, or a value up to a certain amount. Should theshipper declare a higher value and willing to payhigher freightage, the carrier shall accordingly beliable for greater damage.

A common carrier undertaking to carry a special cargo orchartered to a special person only, becomes a private

carrier. As a private carrier, a stipulation exempting theowner from liability for the negligence of its agent is notagainst public policy and is deemed valid.

In a contract of private carriage, the parties may validlystipulate that responsibility for the cargo rests solely onthe charterer, exempting the shipowner from liability forloss of or damage to the cargo caused even by thenegligence of the captain.

BAGGAGE OF PASSENGERS

Article 1754. The provisions of articles 1733 to 1753 shall

apply to the passenger's baggage which is not in his personalcustody or in that of his employee. As to other baggage, therules in articles 1998 and 2000 to 2003 concerning theresponsibility of hotel-keepers shall be applicable.

Article 1998. The deposit of effects made by travellers inhotels or inns shall also be regarded as necessary. Thekeepers of hotels or inns shall be responsible for them asdepositaries, provided that notice was given to them, or totheir employees, of the effects brought by the guests andthat, on the part of the latter, they take the precautions


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which said hotel-keepers or their substitutes advised relativeto the care and vigilance of their effects.

Article 2000. The responsibility referred to in the twopreceding articles shall include the loss of, or injury to thepersonal property of the guests caused by the servants oremployees of the keepers of hotels or inns as well asstrangers; but not that which may proceed from any forcemajeure. The fact that travellers are constrained to rely on

the vigilance of the keeper of the hotels or inns shall beconsidered in determining the degree of care required of him.Article 2001. The act of a thief or robber, who has enteredthe hotel is not deemed force majeure, unless it is done withthe use of arms or through an irresistible force.

Article 2002. The hotel-keeper is not liable for compensationif the loss is due to the acts of the guest, his family, servantsor visitors, or if the loss arises from the character of thethings brought into the hotel.

Article 2003. The hotel-keeper cannot free himself fromresponsibility by posting notices to the effect that he is notliable for the articles brought by the guest. Any stipulationbetween the hotel-keeper and the guest whereby theresponsibility of the former as set forth in articles 1998 to2001 is suppressed or diminished shall be void.

CARRIAGE OF PASSENGERS

Article 1755. A common carrier is bound to carry thepassengers safely as far as human care and foresight canprovide, usingthe utmost diligence of very cautious persons, with a dueregard for all the circumstances.

Art. 1756. In case of death of or injuries to passengers,common carriers are presumed to have been at fault or tohave acted negligently, unless they prove that they observedextraordinary diligence as prescribed in Articles 1733 and1755.

Automatic presumption of negligence, rebutted byproving that carrier exercised extraordinary diligence forthe safety of passengers according to the circumstancesof each case.

Unlike the provisions of carriage of goods, in carriage ofpassengers, there are no exceptions as to thepresumption of negligence . They will be automaticallypresumed to be negligent under 1756, there are noexceptions.

Take note that proving extraordinary diligence is not theonly way of escaping liability. A fortuitous event willalways exempt the obligor from liability, if the fortuitousevent is the cause of the death, injury of the passenger.

In an action based on a contract of carriage, the courtneed not make an express finding of fault or negligenceon the part of the carrier in order to hold it responsibleto pay damages to the passenger. Because of the

automatic presumption of negligence, the burden ofproof is on the carrier. If the carrier rebuts thepresumption, then it is absolved. If it does not rebut thatpresumption, there is no need for the passenger or hisheirs to prove negligence.

Defective parts of vehicles cannot be considered afortuitous event because the manufacturer of thedefective parts is considered in law the agent of thecarrier, and the good repute of the manufacturer will not

relieve the carrier from liability. As a general rule, hi-jacking of an airline cannot be a

fortuitous event because this is not unforeseen, this isexpected. That is why security checks are conducted.

But in GACAL vs. PAL - this was considered a fortuitousevent because the inspection was done by the military,and not PAL. This case is a special case.

No provision for CC of pax for the duration of liability The relation of carrier and passenger does not

necessarily cease where the latter, after alighting fromthe car, aids the carrier's servant or employee inremoving his baggage from the car. It has been

recognized as a rule that the (contractual) relation ofcarrier and passenger does not cease at the moment thepassenger alights from the carrier's vehicle at a placeselected by the carrier at the point of destination, butcontinues until the passenger has had a reasonable timeor a reasonable opportunity to leave the carrier'spremises. And, what is a reasonable time or a reasonabledelay within this rule is to be determined from all thecircumstances.

Doctrine of Last Clear Chance -- this doctrine calls forapplication in suits between owners of two collidingvehicles. It does not apply where a pax demandsresponsibility from a carrier to enforce its contractualobligations. It would be inequitable to exempt thenegligent driver and its owner on the ground that theother driver was likewise guilty of negligence. Thecommon law notion of last clear chance permitted courtsto grant recovery to a plaintiff who has also beennegligent provided that the defendant had the last clearchance to avoid the casualty and failed to do so.

VALIDITY OF STIPULATIONS

Two kinds:1. As to the diligence required

2. As to the amount of liability

AS TO THE DILIGENCE REQUIREDArticle 1757. The responsibility of a common carrier for thesafety of passengers as required in Articles 1733 and 1755cannot be dispensed with or lessened by stipulation, by theposting of notices, by statements on tickets, or otherwise.

Diligence required: XOD What kind of XOD: Utmost diligence of a very cautious

person


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CC of Goods are allowed to lessened the degree ofdiligence, but NOT do away with the same completely.CC of Pax CANNOT dispense with nor lessen the degreeof diligence.

AS TO AMOUNT OF LIABILITYArticle 1758. When a passenger is carried gratuitously, astipulation limiting the common carrier's liability fornegligence is valid, but not for wilful acts or gross negligence.

The reduction of fare does not justify any limitation of thecommon carrier's liability.

General Rule: Cannot be limited Requisites to limit liability

o Pax carried gratuitouslyo Existence of stipulation limiting liabilityo Accident/Breach not caused by willful acts or gross

negligence. Minimum amount that heirs of pax can

collect from CC is P 50,000 because this is indemnity fordeath. CC is automatically liable for this minimum

amount; if it wants to lessen this amount, CC must followArt. 1758.

LIABILITY FOR ACTS OF EESArticle 1759. Common carriers are liable for the death of orinjuries to passengers through the negligence or wilful acts ofthe former's employees, although such employees may haveacted beyond the scope of their authority or in violation ofthe orders of the common carriers.This liability of the common carriers does not cease uponproof that they exercised all the diligence of a good father ofa family in the selection and supervision of their employees.

There is no express provision in CC of Goods exactly likeArt. 1759. BUT, the absence of express stipulation doesnot mean that CC of Goods not liable for acts of ees.Under Art. 1775, par. 5, the CC cannot stipulate that itshall not be responsible for the acts of its ees.

Defense of Diligence of Good father of family is availableif the cause of action is culpa acquiliana (Art. 2176, 2180of NCC), But if the cause of action is for breach ofcontract of carriage, this defense of GFOF cannot beinvoked.

CONTRIBUTORY NEGLIGENCE

Article 1761. The passenger must observe the diligence of agood father of a family to avoid injury to himself.

Article 1762. The contributory negligence of the passengerdoes not bar recovery of damages for his death or injuries, ifthe proximate cause thereof is the negligence of the commoncarrier, but the amount of damages shall be equitablyreduced.

Contributory Negligence -- It is the principle thatnegligence, no matter how slight, on the part of theperson injured which is one of the causes proximately

contributing to his negligence equitably reduces theliability of the CC.

Contributory negligence is conduct on the part of theinjured party, contributing as a legal cause to the harmhe has suffered, which falls below the standard to whichhe is required to conform for his own protection.

To hold a person as having contributed to his injuries, itmust be shown that he performed an act that broughtabout his injuries in disregard of warning or signs of an

impending danger to health and body. Test of negligence -- Was there anything in the

circumstances surrounding the plaintiff at the time healighted from the train which would have admitted aperson of average prudence that to get off the trainunder the conditions then existing was dangerous? If so,the plaintiff should have deserted from alighting; and hisfailure so to desist was contributory negligence.

When the bus is not in motion there is no necessity for aperson who wants to ride the same to signal his intentionto board. A public utility bus, once it stops, is in effectmaking a continuous offer to bus riders. Hence, it

becomes the duty of the driver and the conductor, everytime the bus stops, to do no act that would have theeffect of increasing the peril to a passenger while he wasattempting to board the same.

It is the duty of common carriers of passengers, includingcommon carriers by railroad train, streetcar, ormotorbus, to stop their conveyances a reasonable lengthof time in order to afford passengers an opportunity toboard and enter, and they are liable for injuries sufferedby boarding passengers resulting from the suddenstarting up or jerking of their conveyances while they aredoing so.

It is a prevailing rule that it is negligence per se forpassengers on a railroad to protrude any part of his bodyand that no recovery can be had for an injury.

RESPONSIBILITY FOR ACTS OF STRANGERSArticle 1763. A common carrier is responsible for injuriessuffered by a passenger on account of the wilful acts ornegligence of other passengers or of strangers, if thecommon carrier's employees through the exercise of thediligence of a good father of a family could have prevented orstopped the act or omission.

This is one instance wherein the carrier need not prove

that it exercised XOD to escape liability. If theinjury/death of pax was caused by the act of a stranger(somebody who is not an ee of the carrier) the carrierneed only prove that its ees exercised diligence of GFOFto prevent or stop the act or omission. It is not theresponsibility of the CC of Pax to ensure that no injuryfrom outside forces will be caused to the pax, i.e. when abomb is thrown from the roadside.

If a passenger is bumped off his flight and he has aconfirmed booking, that is a breach because the carrierin the ticket ensured that it will deliver the pax to itsdestination on the time and date stipulated.


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A round trip ticket issued by the carrier to the passengerwas in itself a complete written contract by and betweenthe carrier and the passenger. It had all the elements of acomplete written contract, to wit: (a) the consent of thecontracting parties manifested by the fact that thepassenger agreed to be transported by the carrier to andfrom Los Angeles via San Francisco and Hongkong back tothe Philippines, and the carriers acceptance to bring himto his destination and then back home; (b) cause or

consideration, which was the fare paid by the passengeras stated in his ticket; and, (c) object, which was thetransportation of the passenger from the place ofdeparture to the place of destination and back, which arealso stated in his ticket.

When an airline issues a ticket to a passenger, confirmedfor a particular flight on a certain date, a contract ofcarriage arises. The passenger has every right to expectthat he be transported on that flight and on that date,and it becomes the airline's obligation to carry him andhis luggage safely to the agreed destination withoutdelay. If the passenger is not so transported or if in theprocess of transporting, he dies or is injured, the carriermay be held liable for a breach of contract of carriage.

Breach of contract is defined as the failure without legalreason to comply with the terms of a contract. It is alsodefined as the failure, without legal excuse, to performany promise which forms the whole or part of thecontract.

DISTINCTIONS BETWEEN CCOG AND CCOPDiligence Required extraordinary

diligenceUtmost diligenceof very cautiousperson.

Whenpresumption ofnegligence arises

Loss, destructionor deteriorationand non-arrival ofthe goods atdestination andnegligent delay

death or injuryand non-fulfillment of thecontract

Whenpresumption ofnegligence doesnot ariseautomatically

in the five (5)instancesmentioned;natural calamity,etc.

NONE, thepresumption ofnegligence willALWAYS arise incase the carriageof PAX

W/N degree of

diligence can bedispensed with

For both, it cannot be dispensed with

W/N degree ofdiligence can belessened

yes, under therequisitespreviouslydiscussed

NO

W/N liability incase of breach canbe lessened?

yes, under Art.1748, 1749 and1750

As a general rule,NO, unless carriedgratuitously;stipulation butonly for simplenegligence.

VIP: When we talk about transportation laws we should notonly focus on breach of contract of carriage. We should alsoinclude that there are other causes of action which may arise.

MARITIME COMMERCE

Applicable laws:o Code of Commerceo COGSAo Salvage Law Governing body -- MARINA (Maritime Industry Authority)

Functions of Marina: CF PD 474o Issue certificate of public convenience for the

operation of domestic and overseas water carriers;o Register and issue certificate, licenses, or documents

necessary or incident thereto. Certificate of Public Convenience (CPC) -- requirement

for a carrier to operate domestic sea voyages Kinds of VESSELS (under PD 474)

"Vessels " or " Watercraft " -- Any barge, lighter, bulkcarrier, passenger ship freighter, tanker, container ship,

fishing boats or other artificial contrivance utilizing anysource of motive power, designed, used or capable ofbeing used as a means of water transportation operatingeither as common contract carrier, including fishingvessels covered under Presidential Decree No. 43, except

(1) those owned and/or operated by the ArmedForces of the Philippines and by foreigngovernments for military purposes, and(2) bancas, sailboats and other waterbornecontrivance of less than three gross tons capacityand not motorized.

HOW OWNERSHIP OF A VESSEL MAY BE ACQUIREDArticle 573. Merchant vessels constitute property which maybe acquired and transferred by any of the means recognizedby law.

orIn relation to Art. 712 of the Civil Code:a. Donation;b. lawc. Testate or intestate succession;d. As a consequence of certain contractse. By traditionf. By prescription (3 years if possession in good faith, with justtitle duly recorded, otherwise, 10 years)

The acquisition of a vessel must be included in a writteninstrument, which shall not produce any effect withregard to third persons if not recorded in the mercantileregistry.

A captain cannot acquire by prescription the ship ofwhich he is in command. possession is not adverse

A vessel is a movable property, but ownership must beevidenced by certificate of ownership and transfers mustbe registered in the proper registry to bind 3rd persons.

Requisites for Legal Acquisition of a Merchant Vessel:o Must appear in a written instrument;


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o Recorded in the proper registry -- under EO 125,transaction must be registered with the Marina butnow this is being conducted by the PPA.

The requisite of registration in the registry, of thepurchase of a vessel, is necessary and indispensable inorder that the purchaser's rights may be maintainedagainst a claim filed by a third person.

Repair and Maintenance of Vessel during the Voyage

Article 583. If the ship being on a voyage the captain shouldfind it necessary to contract one or more of the obligationsmentioned in Nos. 8 and 9 of Article 580, he shall apply to the judge or court if he is in Philippine territory, and otherwise tothe Filipino Consul should there be one, and, in his absence tothe judge or court or to the proper local authority, presentingthe certificate of the registry of the vessel treated of in Article612, and the instruments proving the obligation contracted.The judge or court, the consul or the local authority as thecase may be, in view of the result of the proceedingsinstituted, shall make a temporary memorandum in thecertificate of their result, in order that it may be recorded inthe registry when the vessel returns to the port of herregistry, or so that it can be admitted as a legal and preferredobligation in case of sale before the return, by reason of thesale of the vessel by virtue of a declaration ofunseaworthiness.The lack of this formality shall make the captain personallyliable to the creditors who may be prejudiced through hisfault.

Article 580 Nos. 8 and 9 are contract obligations for therepair and equipment of the vessel and obtain loans andbottomry.

Article 580 (8). The part of the price which has not been paidthe last vendor, the credits pending for the payment ofmaterial and work in the construction of the vessel, when ithas not navigated, and those arising from the repair andequipment of the vessel and its provisioning with victuals andfuel during its last voyage. x x x(9) The amounts borrowed on bottomry bonds before thedeparture of the vessel, proven by means of the contractsexecuted according to law and recorded in the commercialregistry; the amounts borrowed during the voyage with theauthority mentioned in the foregoing subdivision, filling thesame requisites, and the insurance premium, proven by thepolicy of the contract or certificate taken from the books ofthe broker.

The omission to follow these requirements will make thecaptain personally liable. He cannot ask for a refund fromthe carrier.

Persons who take part in marine commerce:o SHIP OWNERo SHIP AGENT - By agent is understood the person

entrusted with the provisioning of a vessel, or whorepresents her in the port in which she happens tobe.

o CAPTAIN one who governs the vessels andnavigates the high seas or of large dimension andimportance.

o MASTER commands small ships and engagesexclusively in coastwise trade For purposes of maritime commerce, captain,

master, and patron all mean the same.o SAILING MATE the second chief of the vesselo SECOND MATE the one who takes command of the

vessel in case of disability or disqualification of thecaptain or sailing mate

o CREW OR SAILORS the persons who man the vesseland those who perform other duties

Article 586. The owner of a vessel and the agent shall becivilly liable for the acts of the captain and for the obligationscontracted by the latter to repair, equip, and provision thevessel, provided the creditor proves that the amount claimedwas invested therein.

Powers and duties of a ship agent: o Article 595 (2) Represent the ownership of the

vessel and may, in his own name and in suchcapacity, take judicial and extra-judicial steps inmatters relating to commerce.

o Article 596 (1) Occupy the duties of the captain, ifhe has the qualifications of a captain

o Article 597 Select and come into an agreementwith the captain and contract in the name of theowners, who shall be bound in all that refers torepairs, details of equipment, armament, provisions,fuel, freight, and in general that pertains to therequirement of navigation.

o Article 602 Indemnify the captain for all expenses

he may have incurred from his own funds or fromthose of other persons for the benefit of the vessel.

Qualifications of CaptainArticle 609. Captains and masters of vessels must be Filipinohaving legal capacity to bind themselves in accordance withthis Code, and must prove that they have the skill, capacity,and qualifications required to command and direct the vessel,as established by marine laws, ordinances, or regulations, orby those of navigation, and that they are not disqualifiedaccording to the same for the discharge of the duties of thatposition.If the owner of a vessel desires to be the captain thereof anddoes not have the legal qualifications therefor, he shall limithimself to the financial administration of the vessel, and shallentrust her navigation to a person possessing thequalifications required by said ordinances and regulations.

Qualifications of a Captain or Master under RA 937o Citizen of the Philippineso Physically fit and must be examined physicallyo Must undergo examination into moral, technical

qualificationso Other prescribed requirements


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Qualifications of a Master under Article 609 of the Codeof Commerceo Filipinoo Legal capacity to bind himselfo Proof that they have skill, capacity, and qualifications

required to command and direct a vessel asestablished by: Marine laws, ordinances or regulations Those of navigation

o Not disqualified according to the same for thedischarge of the duties of that position.

A person without license to navigate, lacks not just theskill to do so, but also the utmost familiarity with theusual and safe routes taken by seasoned and legallyauthorized ones.

General Functions of a CaptainArticle 610. The following powers are inherent in the positionof captain or master of a vessel:1. To appoint or make contracts with the crew in the absenceof the agent and propose said crew, should said agent bepresent; but the agent shall not be permitted to employ anymember against the captain's express refusal.2. To command the crew and direct the vessel to the port ofits destination, in accordance with the instructions he mayhave received from the agent.3. To impose, in accordance with the agreements and thelaws and regulations of the merchants marine, on board thevessel, correctional punishment upon those who do notcomply with his orders or who conduct themselves againstdiscipline, holding a preliminary investigation on the crimescommitted on board the vessel on the high seas, which shallbe turned over to the authorities, who are to take cognizancethereof, at the first port touched.

4. To make contracts for the charter of the vessel in theabsence of the agent or of her consignee, acting inaccordance with the instructions received and protecting theinterests of the owner most carefully.5. To adopt all the measures which may be necessary to keepthe vessel well supplied and equipped, purchasing for thepurpose all that may be necessary, provided there is no timeto request instructions of the agent.6. To make, in similar urgent cases and on a voyage, therepairs to the hull and engines of the vessel and to her riggingand equipment which are absolutely necessary in order forher to be able to continue and conclude her voyage; but ifshe should arrive at a point where there is a consignee of thevessel, he shall act in concurrence with the latter.

The captain of a vessel is a confidential and managerialemployee within the meaning of the above doctrine. Amaster or captain, for purposes of maritime commerce,is one who has command of a vessel. A captaincommonly performs three (3) distinct roles: (1) he is ageneral agent of the shipowner; (2) he is alsocommander and technical director of the vessel; and (3)he is a representative of the country under whose flaghe navigates . Of these roles, by far the most important is

the role performed by the captain as commander of thevessel; for such role (which, to our mind, is analogous tothat of "Chief Executive Officer" [CEO] of a present-daycorporate enterprise) has to do with the operation andpreservation of the vessel during its voyage and theprotection of the passengers (if any) and crew and cargo.In his role as general agent of the shipowner, the captainhas authority to sign bills of lading, carry goods aboardand deal with the freight earned, agree upon rates and

decide whether to take cargo. The ship captain, as agentof the shipowner, has legal authority to enter intocontracts with respect to the vessel and the trading ofthe vessel, subject to applicable limitations establishedby statute, contract or instructions and regulations of theshipowner. To the captain is committed the governance,care and management of the vessel. Clearly, the captainis vested with both management and fiduciary functions.

More importantly, a ship's captain must be accorded areasonable measure of discretionary authority to decidewhat the safety of the ship and of its crew and cargospecifically requires on a stipulated ocean voyage. Thecaptain is held responsible, and properly so, for suchsafety. He is right there on the vessel, in command of itand (it must be presumed) knowledgeable as to thespecific requirements of seaworthiness and the particularrisks and perils of the voyage he is to embark upon. Theapplicable principle is that the captain has control of alldepartments of service in the vessel, and reasonablediscretion as to its navigation. It is the right and duty ofthe captain, in the exercise of sound discretion and ingood faith, to do all things with respect to the vessel andits equipment and conduct of the voyage which arereasonably necessary for the protection and preservationof the interests under his charge, whether those be of

the shipowners, charterers, cargo owners or ofunderwriters. It is a basic principle of admiralty law thatin navigating a merchantman, the master must be leftfree to exercise his own best judgment. Therequirements of safe navigation compel us to reject anysuggestion that the judgment and discretion of thecaptain of a vessel may be confined within a straitjacket,even in this age of electronic communications.

Compulsory pilotage -- there is a pilot assigned to pilotthe vessel outside the break water until it reaches itsberth.

Under the rules of compulsory pilotage, once a pilottakes over the helm, the captain will have to stand asideand surrender all his authority to the pilot who is morefamiliar with the docking maneuvers.

A pilot, in maritime law, is a person duly qualified, andlicensed, to conduct a vessel into or out of ports, or incertain waters. In a broad sense, the term "pilot"includes both (1) those whose duty it is to guide vesselsinto or out of ports, or in particular waters and (2) thoseentrusted with the navigation of vessels on the high seas.However, the term "pilot" is more generally understoodas a person taken on board at a particular place for the


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purpose of conducting a ship through a river, road orchannel, or from a port.

Under English and American authorities, generallyspeaking, the pilot supersedes the master for the timebeing in the command and navigation of the ship, and hisorders must be obeyed in all matters connected with hernavigation. He becomes the master pro hac vice andshould give all directions as to speed, course, stoppingand reversing, anchoring, towing and the like. And when

a licensed pilot is employed in a place where pilotage iscompulsory, it is his duty to insist on having effectivecontrol of the vessel, or to decline to act as pilot. Undercertain systems of foreign law, the pilot does not takeentire charge of the vessel, but is deemed merely theadviser of the master, who retains command and controlof the navigation even on localities where pilotage iscompulsory.

While it is indubitable that in exercising his functions apilot-is in sole command of the ship and supersedes themaster for the time being in the command andnavigation of a ship and that he becomes master pro hacvice of a vessel piloted by him, there is overwhelmingauthority to the effect that the master does notsurrender his vessel to the pilot and the pilot is not themaster. The master is still in command of the vesselnotwithstanding the presence of a pilot. There areoccasions when the master may and should interfere andeven displace the pilot, as when the pilot is obviouslyincompetent or intoxicated and the circumstances mayrequire the master to displace a compulsory pilotbecause of incompetency or physical incapacity. If,however, the master does not observe that a compulsorypilot is incompetent or physically incapacitated, themaster is justified in relying on the pilot, but not blindly.

In general, a pilot is personally liable for damages causedby his own negligence or default to the owners of thevessel, and to third parties for damages sustained in acollision. Such negligence of the pilot in the performanceof duty constitutes a maritime tort. At common law, ashipowner is not liable for injuries inflicted exclusively bythe negligence of a pilot accepted by a vesselcompulsorily. The exemption from liability for suchnegligence shall apply if the pilot is actually in charge andsolely in fault. Since, a pilot is responsible only for hisown personal negligence, he cannot be held accountablefor damages proximately caused by the default of others,or, if there be anything which concurred with the fault ofthe pilot in producing the accident, the vessel master andowners are liable.

The law does provide that the master can countermandor overrule the order or command of the harbor pilot onboard.

Books to be carried by the captainArticle 612. The following obligations are inherent in theoffice of captain: x x x3. To have three folioed and stamped books, placing at thebeginning of each one a note of the number of folios it

contains, signed by the maritime official, and in his absenceby the competent authority.In the first book, which shall be called " log book ," he shallenter every day the condition of the atmosphere, theprevailing winds, the course sailed, the rigging carried, thehorsepower of the engines, the distance covered, themaneuvers executed, and other incidents of navigation. Heshall also enter the damage suffered by the vessel in her hull,engines, rigging, and tackle, no matter what is its cause, as

well as the imperfections and averages of the cargo, and theeffects and consequence of the jettison, should there be any;and in cases of grave resolutions which require the advice ora meeting of the officers of the vessel, or even of thepassengers and crew, he shall record the decision adopted.For the informations indicated he shall make use of thebinnacle book, and of the steam or engine book kept by theengineer.In the second book, called the " accounting book ," he shallenter all the amounts collected and paid for the account ofthe vessel, entering specifically article by article, the sourcesof the collection, and the amounts invested in provisions,repairs, acquisition of rigging or goods, fuel, outfits, wages,and all other expenses. He shall furthermore enter therein alist of all the members of the crew, stating their domiciles,their wages and salaries, and the amounts they may havereceived on account, either directly or by delivery to theirfamilies.In the third book, called " freight book ," he shall record theentry and exit of all the goods, stating their marks andpackages, names of the shippers and of the consignees, portsof loading and unloading, and the freight earned. In the samebook he shall record the names and places of sailing of thepassengers and the number of packages of which theirbaggage consists, and the price of the passage.

Books to be carried by the captain on board the vessel:o Logbook where he shall enter everyday everything

significant about the voyageo Accounting book where he shall enter all the

amounts collected and paid for the accounts of thevessel

o Freight book where he shall record the entry anfexit of goods.

The logbook is an official record of entries made by aperson in the performance of his duty required by lawand are prima facie evidence of the facts enteredtherein.

A copy of an official entry in the logbook is legally bindingand serves as an exception to the hearsay rule. Unlessthere is a controversy with regard to the genuineness ofthe said entry and the authenticity of the copy presentedin evidence.

Prohibited acts of a captain:o Make separate transactions for his own account (if

he navigates for freight in common or on shares)o Fail to make the agreed voyage (refuse to leave

port)o Substitute himself by other persons


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o Contract loans on respondentiao Borrow money on bottomry for his own transactionso Commit fraud in his accounts

Art Prohibited Act Effect/

Consequence

When Allowed

613 MakingSEPARATE

TRANSACTIONSfor HIS OWNACCOUNT [ifhe navigatesfor freight incommon or onshares]

1 His profitshall belong

to otherpeoples ininterest, BUT

2 His lossesshall be forhis exclusiveaccount

614 FAILURE toMAKE AgreedVoyage

1 He shallindemnify alllosses whichhis failuremay cause

If he isprevented inmaking thevoyage becauseof a fortuitousevent

2 He may becriminallypenalized

615 SUBSTITUTINGhimself byOTHERPERSONS

1 He shall beliable for theacts of thesubstitute

If he acquiresthe consent ofthe ship agent

2 Whateverprofit isincurred by

thesubstituteshall belongto otherpeoples ininterest

3 Whateverloss isincurred bythesubstituteshall be for

his exclusiveaccount

4 He and thesubstitutemay bedischarged bythe shipagent

617 CONTRACTLoans onRESPONDENTIA

Contract shall beVOID [becausethe captain is

secured by thecargo

NOT the ownerof the cargo]

617 BORROWMoney onBOTTOMRY forhis OWNTransactions

1 Principal,interests andcosts shall becharged tohis exclusiveaccount

For the portionof the vesselwhich he owns,PROVIDED:

1 No moneyhas been

previouslyborrowedon thewholevessel, and

2 He may bedischarged bythe shipagent

2 There doesnot existany otherkind of lienorobligationchargeable

against thevessel

3 He mustnecessarilystate whatinterest hehas in thevessel

621 BORROWS orSELLS outsideof the cases

and withoutthe formalitiesprescribed bylaw

1 He shall beliable for theprincipal,

interests, andcosts

2 He shallindemnify forthe damageshe may cause

621 CommitsFRAUD in hisAccounts

1 He shallreimbursethe amountdefrauded

2 He shall be

subject to theprovisions ofthe RevisedPenal Code

DURATION OF LIABILITY OF THE CAPTAINArticle 619. The captain shall be liable for the cargo from thetime it is turned over to him at the dock, or afloat alongsidethe ship, at the port of loading until he delivers it on theshores or on the discharging wharf, of the port of unloadingunless the contrary has been expressly agreed upon.


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The captain has a shorter period of responsibility ascompared to the carrier. Of course, unless is a stipulationto the contrary.

Maritime protest -- This has to be done by the captain ifthe vessel/cargo is lost or injured. It is a written statement under oath , made by the captain or master ofthe vessel after the occurrence of an accident or disasterin which the vessel or cargo is lost or injured with respect

to circumstances attending such occurrence. Purpose -- It is usually intended to show that the loss or

damage resulted from a peril of the sea or some othercause for which neither the master nor owner wasresponsible. It concludes with the protestation againstany liability of the owner for such loss or damage.

Article 624. A captain whose vessel has gone through ahurricane or who believes that the cargo has suffereddamages or averages, shall make a protest thereon beforethe competent authority at the first port he touches withinthe twenty-four hours following his arrival, and shall ratify itwithin the same period when he arrives at the place of hisdestination, immediately proceeding with the proof of thefacts, it not being permitted to open the hatches until this hasbeen done.The captain shall proceed in the same manner if, the vesselhaving been wrecked, he is saved alone or with part of hiscrew, in which case he shall appear before the nearestauthority, and make a sworn statement of the facts.The authority or the consul abroad shall verify the said facts,receiving a sworn statement of the members of the crew andpassengers who may have been saved, and taking the othersteps which may assist in arriving at the facts, drafting acertificate of the result of the proceedings in the log book and

in that of the sailing mate, and shall deliver the originalrecords of the proceedings to the captain, stamped andfolioed, with a memorandum of the folios, which he mustrubricate, for their presentation to the judge or court of theport of destination.The statement of the captain shall be believed if it is inaccordance with those of the crew and passengers; if theydisagree, the latter shall be accepted, unless there is proof tothe contrary.

Procedure:o Protest must be made with a competent authority at

first port he touches;o within 24 hours following his arrivalo Captain must ratify it within 24 hours when he

arrives at the place of destination where he mustproceed immediately with the proof of the facts

o He must not open the hatches until all of the aboveare done.

Officers and crew of the vesselo Sailing mate - He is the 2nd chief of the vessel; takes

place of the captain and assumes all his duties andpowers in case of absence, sickness or death.

o Second mate takes over in case of disability,disqualification of the captain and the sailing mate

o Crew or sailors -- they are enlisted by the captain insuch number he may deem proper

Article 627. The sailing mate , as the second chief of thevessel and unless the agent orders otherwise, shall take theplace of the captain in cases of absence, sickness, or death,and shall then assume all his powers, obligations, and

responsibilities.

Article 627 of the Code of Commerce defines the ChiefMate, also called Chief Officer or Sailing Mate, as "thesecond chief of the vessel, and unless the agent ordersotherwise, shall take the place of the captain in cases ofabsence, sickness, or death, and shall then assume all hispowers, duties, and responsibilities." A Chief Officer,therefore, is second in command, next only to thecaptain of the vessel.

Chief Mate is a managerial employee because the saidofficer performed the functions of an executive officernext in command to the captain; that in the performanceof such functions, he is vested with powers orprerogatives to lay down and execute managementpolicies.

Art 632-633, Code of Commerce

Art. 634-637

The shipowner or the captain can discharge the crew(Art. 637)

Article 604. If the captain or any other member of the crew

should be discharged during the voyage, they shall receivetheir salary until the return to the place where the contractwas made, unless there are good reasons for the discharge,all in accordance with Articles 636 et seq. of this Code.

Gen Rule: They shall continue to receive their salariesuntil their return to the port where the contract wasmade. They have to be paid the full round trip.

Except: If there is a just cause or just motive.

Rule in case of discharge if the contract is for a definite

period or voyageArticle 605. If the contracts of the captain and members ofthe crew with the agent should be for a definite period orvoyage, they can not be discharged until the fulfillment oftheir contracts, except for reasons ofinsubordination in serious matters, robbery, theft, habitualdrunkenness, and damage caused to the vessel or to its cargoby malice or manifest or proven negligence.

Grounds if captain discharges crew


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Article 636. Should a fixed period for which a sailor has signednot be stated, he cannot be discharged until the end of thereturn voyage to the port where he enrolled.

Article 637. Neither can the captain discharge a sailor duringthe time of his contract except for sufficient cause, thefollowing being considered as such:1. The perpetration of a crime which disturbs order on thevessel.

2. Repeated offenses of insubordination, against discipline, oragainst the fulfillment of the service.3. Repeated incapacity or negligence in the fulfillment of theservice to be rendered.4. Habitual drunkenness.5. Any occurrence which incapacitates the sailor to carry outthe work under his charge, with the exception of theprovisions contained in Article 644.6. Desertion.

Article 644. A sailor who falls sick shall not lose his right towages during the voyage, unless the sickness is the result ofhis own fault. At any rate, the costs of the attendance andcure shall be defrayed from the common funds, in the form ofa loan.If the sickness should be caused by an injury received in theservice or defense of the vessel the sailor shall be attendedand cured from the common funds, there being deductedbefore anything else from the proceeds of the freight, thecost of the attendance and cure.

Supercargo -- A person specially employed by the ownerof a cargo to take charge of and sell to the bestadvantage merchandise which has been shipped, and topurchase returning cargoes and to receive freight, as he

may be authorized.

Article 649. Supercargoes shall discharge on board the vesselthe administrative duties which the agent or shippers mayhave assigned them; they shall keep an account and record oftheir transactions in a book which shall have the sameconditions and requisites as required for the accounting bookof the captain, and shall respect the latter in his duties aschief of the vessel.The powers and liabilities of the captain shall cease, whenthere is a supercargo, with regard to that part of theadministration legitimately conferred upon the latter, butshall continue in force for all acts which are inseparable fromhis authority and office.

Article 650. All the provisions contained in the secondsection of Title III, Book II, with regard to qualifications,manner of making contracts, and liabilities of factors shall beapplicable to supercargoes.

Article 651. Supercargoes cannot, without specialauthorization or agreement, make any transaction for theirown account during the voyage, with the exception of the

ventures which, in accordance with the custom of the port ofdestination, they are permitted to do.Neither shall they be permitted to invest in the return tripmore than the profits from the ventures, unless there is aspecial authorization thereto from the principals.

ABANDONMENT/DOCTRINE OF LIMITED LIABILITYMARINE TRANSPORTATION

Recall: Article 586 and 583 (SO/SA civilly liable for acts ofcaptain and obligations contracted)

Article 587. The agent shall also be civilly liable for theindemnities in favor of third persons which arise from theconduct of the captain in the care of the goods which thevessel carried; but he may exempt himself therefrom byabandoning the vessel with all her equipments and thefreight he may have earned during the voyage.

Other provisions providing for abandonment:

Article 590. The owners of a vessel shall be civilly liable in theproportion of their contribution to the common fund, for theresults of the acts of the captain, referred to in Article 587.Each part owner may exempt himself from this liability by theabandonment before a notary of the part of the vesselbelonging to him.

And in cases of collision if the same is caused by the captainalone, under

Article 837: The civil liability contracted by the shipowners inthe cases prescribed in this section, shall be understood aslimited to the value of the vessel with all her appurtenances

and all the freight earned during the voyage.

Abandonment -- It is equivalent to an offer of the valueof the vessel, her equipment and freight earned in returnfor an exemption from liability.

So if the vessel sank and the sinking of the vessel wascaused entirely by the negligence of the captain, the SOor SA can be held liable. But if SO or SA abandons thevessel, then the liability will only be limited to the valueof the vessel, the freightage and the equipment.

The real and hypothecary nature of maritime law,therefore, distinguishes it from Civil law and commerciallaw because of this doctrine. A shipping transportationcontract is "real and hypothecary" in nature under Art.587 which accord/issue a shipowner/agent the right ofabandonment and by necessary implication, his liability isconfined to that to which he is entitled as of right toabandon, meaning the vessel and all her equipment andthe freight she may have earned during the voyage.

Reasons why SO/SA are given the right to abandonment:o To offset against the innumerable hazards and perils

of the sea;o To encourage ship building and marine commerce


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When abandonment is made in the instances providedby law, it cannot be refused.

A charterer cannot make an abandonment because hecannot be considered in place of the owner or theshipagent in matters regarding to the responsibilitypertaining to ownership and possession of the vessel.Even if the charter is a bareboat or demise charter.

EXCEPTIONS TO RIGHT OF ABANDONMENT (meaningeven if the right to abandonment exists, the SO/SA will

still pay for more than the value of the vessel)o When the vessel is properly insured - the insurance

will take care of the liability, the value of which maybe more than the value of the vessel, freight, etc.

o When the liability for repairs of the vessel wasincurred before the loss of such vessel (favorite BQ)

o When the liability is one which arises from theprovisions of the labor code.

When abandonment CANNOT BE MADEo When the voyage is not maritime, but only in a river,

bay, or gulfo When the vessel is not acting as a common carrier

but a private carrier.o When the SO/SA is at fault, i.e. when there is lack ofproper equipment, lack of technical training of thecrew, unlicensed crew members, captain. So anykind of negligence, no matter how minute willremove the right of abandonment.

The doctrine of limited liability cannot be invoked in thiscase because there was fault or negligence on the part ofthe carrier because it overloaded the vessel even if it wascleared to leave. And everytime it is discovered that avessel is overloaded with cargo/pax, goodbyeabandonment.

Article 587 speaks only of situations where the fault ornegligence is committed solely by the captain. In caseswhere the shipowner is likewise to be blamed, Article587 does not apply. Such a situation will be covered bythe provisions of the New Civil Code on CommonCarriers.

Whenever death or injury to a passenger occurs,common carriers are presumed to have been at fault orto have acted negligently unless they prove that theyobserved extraordinary diligence as prescribed byArticles 1733 and 1755

Right of abandonment does not exist in case the sinkingof the vessel was due to a fortuitous event. In this case

the ship owner or ship agent will be exempt fromliability. The exception to the limited liability doctrine applies

when the damage is due to the fault of the shipowner orto the concurrent negligence of the shipowner and thecaptain. Where the shipowner fails to overcome thepresumption of negligence, the doctrine of limitedliability cannot be applied.

As a general rule, a ship owner's liability is merely co-extensive with his interest in the vessel, except whereactual fault is attributable to the shipowner. Thus, as anexception to the limited liability doctrine, a shipowner or

ship agent may be held liable for damages when thesinking of the vessel is attributable to the actual fault ornegligence of the shipowner or its failure to ensure theseaworthiness of the vessel.

SPECIAL CONTRACTS IN MARITIME COMMERCE: o Charter partyo bill of ladingo loans on bottomry and respondentia

CHARTER PARTY - a contract wherein the entire ship orsome principal part thereof is let by the owner toanother person for a specified time or use, inconsideration of the payment of a fee.

Two kinds of charter patyo Contract of Affreightment - here the owner retains

control of the vessel, he provides the crew, what isbeing leased is only the space of the vessel. Acontract of affreightment can be a time charter or avoyage charter.

o Bareboat/Demise Charter wherein the owner of thevessel gives up the control and full possession of thevessel to the charterer who becomes the owner prohac vice.

If Voyage or time charter = common carrier retains itsnature as a common carrier; but if it is bareboat charter,the common carrier becomes a private carrier for thatparticular charter only.

Formal/Substantial requirementsArticle 652. A charter party must be drawn in duplicate andsigned by the contracting parties, and when either does notknow how or cannot do so, by two witnesses at their request.The charter party shall include, besides the conditionsunrestrictedly stipulated, the following statements:1.The kind, name, and tonnage of the vessel.

2.Her flag and port of registry.3.The name, surname, and domicile of the captain.4.The name, surname, and domicile of the agent, if the lattershould make the charter party.5.The name, surname, and domicile of the charterer, and ifhe states that he is acting by commission, that of the personfor whose account he makes the contract.6.The port of loading and unloading.7.The capacity, number of tons or weight, or measure whichthey respectively bind themselves to load and transport, orwhether it is the total cargo.8.The freightage to be paid, stating whether it is to be a fixedamount for the voyage or so much per month, or for thespace to be occupied, or for the weight or measure of thegoods of which the cargo consists, or in any other mannerwhatsoever agreed upon.9.The amount of primage to be paid to the captain.10.The days agreed upon for loading and unloading.11.The lay days and extra lay days to be allowed and the rateof demurrage.

PRIMAGE a small allowance or compensation payableto the master or owner of the vessel for the use of itscables to load and unload the goods and to the mariners


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for lading and unlading in port. So what you pay thosewho load;

DEMURRAGE an amount stipulated in the charter partyto be paid by the charter/shipper to the ship owner forany delay.

LAYDAYS -- no. of days between unloading anddeparture

WHO CAN RESCIND A CHARTER PARTY Either party

Article 688. A charter party may be annulled at the request ofthe charterer:1.If before loading the vessel he should abandon the charter,paying half of the freightage agreed upon. (abandonment ofcharter before loading; pay 1/2 of the freight)2.If the capacity of the vessel should not agree with thatstated in the certificate of the tonnage, or if there is an errorin the statement of the flag under which she sails.(Charterer will be indemnified by the owner)3.If the vessel should not be placed at the disposal of thecharterer within the period and in the manner agreed upon.(non placement at disposal of the charterer)4.If, after the vessel has put to sea, she should return to theport of departure, on account of risk of pirates, enemies, orbad weather, and the freighters should agree to unload her.(charterer must pay owner for the voyage out, meaning oneway)In the second and third cases the person from whom thevessel was chartered shall indemnify the charterer for thelosses he may suffer. In the fourth case the person fromwhom the vessel was chartered shall have a right to thefreightage in full for the voyage out. If the charter shouldhave been made by the months, the charterers shall pay thefull freightage for one month, if the voyage were to a port inthe same waters, and two months, if the voyage were to a

port in different waters. From one port to another of thePeninsula and adjacent islands, the freightage for one monthonly shall be paid.5.If a vessel should make a port during the voyage in order tomake urgent repairs and the freighters should prefer todispose of the merchandise.(pay for voyage out)When the delay does not exceed thirty days, the freightersshall pay the full freight for the voyage out. Should the delayexceed thirty days, they shall only pay the freight inproportion to the distance covered by the vessel.

Article 689. At the request of the person from whom thevessel is chartered the charter party may be rescinded:1.If the charterer at the termination of the extra lay daysdoes not place the cargo alongside the vessel.In such case the charterer must pay half the freight stipulatedbesides the demurrage for the lay days and extra lay dayselapsed.2.If the person from whom the vessel was chartered shouldsell her before the charterer has begun to load her and thepurchaser should load her for his own account. In such casethe vendor shall indemnify the charterer for the losses hemay suffer.

If the new owner of the vessel should not load her for his ownaccount the charter party shall be respected (in such case, thecharter party is not rescinded) and the vendor shall indemnifythe purchaser if the former did not inform him of the charterpending at the time of making the sale. Otherwise, if heinformed him, then no need to indemnify.

Rescission by ChartererGround

1. Abandonment of charterbefore loading2. Capacity of vessel notfound to be in conformitywith that stated incertificate of tonnage3. Error in the statement ofthe flag under which vesselnavigates

Consequence

1. He must pay of freightagreed upon2. He will be indemnified byowner for damages suffered3. He will be indemnified byowner for damages suffered

4. Non placement of vesselat disposal of chartererwithin period and manneragreed upon5. Vessel returns to port ofdeparture on account ofrisk from pirates, enemiesor inclement weather6. Vessel makes port inorder to make repairs

1. He will be indemnified byowner for damages suffered2. If he unloads the vessel,owner shall have the right tofreight in full for voyage out3. He must dispose of thegoods

Failure of charterer to placecargo alongside vessel atthe termination of extra laydays(Agreed date November 10.But November 21 na wala

pa rin)

Charter is rescinded but hemust pay the charterer:a. of the freight stipulated,andb. demurrage for the lay daysand extra lay days

Sale of vessel before thecharterer has begun to loadthe vessel.(November 10 entered thecontract and November 14,the vessel has been sold toanother)

1. Charter is rescinded ifthe buyer of the vesselhas loaded the vesselfor his own account BUTseller/owner mustindemnify charterer fordamages suffered

2. Charter is NOTrescinded if buyer has

NOT loaded the vesselfor his own account BUTthe seller shallindemnify the buyer ifhe did not inform thebuyer of the charter atthe time of making thesale

(if new owner has nointention of using the


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vessel but only boughtit as investment, thenthe charterer can stilluse it. But if the ownerhas a plan and he willuse the vessel on thesame dates of thecharter contract, thenthe previous ship owner

shall be liable to thecharterer.

Charter Party vs Ordinary Lease Contract Charter Party Ordinary Lease

ContractPeriod If for definite

period, thecharterer mayrescind thecharterparty by payinghalf of thefreightage

If the lease is for adefinite period,the lessee cannotterminate thecontract

Effect of sale to3rd person

New ownercannot becompelled torespect thecharter party.

If the leasedproperty is sold toone who knows ofthe existence ofthe lease contract,the new ownermust respect thelease

Seaworthiness cannot be agreed to between the parties(parang jurisdiction of the court) because it is a factwhich has to be proven.

A ship is efficient as an instrument of transport if its hull,tackle and machinery are in a state of good repair, if sheis sufficiently provided with fuel and ballast, and ismanned by an efficient crew.

A vessel is cargoworthy if it is sufficiently strong andequipped to carry the particular kind of cargo which shehas contracted to carry, and her cargo must be so loadedthat it is safe for her to proceed on her voyage. A mereright given to the charterer to inspect the vessel beforeloading and to satisfy himself that she was fit for thecontracted cargo does not free the shipowner from his

obligation to provide a cargoworthy ship. BILLS OF LADING An instrument in writing signed bythe carrier or his agent, describing the freight so as toidentify it, stating the name of the consignor, the termsof the contract of carriage and agreeing or directing thatthe freight be delivered to the order or assigns of aspecified person at a specified place.

3-Fold Character of a BL 1. A RECIEPT which:

a. specifies the quantity, condition andcharacter of the goods received, and

b. recites the date and place of shipmentand the fees paid by the shipper

2. It is evidence of a CONTRACT by which the 3 parties[shipper, carrier, consignee] undertake specificresponsibilities and assume stipulated obligations;also fixes the route, destination, freight charges, andstipulates the rights and obligations assumed by theparties [Art. 353]

3. Document of title , under Negotiable instrumentslaw

Kinds of Bill of lading:1. A clean bill of lading, says that the goods were

received in good order/does not say anything on thecondition of the goods. Meaning no defect.

2. Foul , there are notations, goods are rusty, packaginghas holes.

3. Spent, the goods are already delivered but the bill oflading was not returned by consignee to the carrier.

4. Through, one issued by the carrier who is obliged touse the facilities of other carriers. So we have hereCarrier A, B, C, D from davao to manial to hongkongso no need for each carrier to issue a Bill of ladingpwede na si A lang and in w/c bill of lading ishonoured by the second and other interestedcarriers who do not issue their own bills.

5. Custody, one wherein the goods are alreadyreceived by the carrier but the vessel indicated

therein has not yet arrived in the port.

6. Port , issued by the carrier to whom the goods havebeen delivered, and the vessel indicated in the bill oflading by which the goods are to be shipped isalready in the port where the goods are held forshipment. Of course the shipper wants to know ifthe vessel arrived especially for perishable goods

7. On board, issued when the goods have been actuallyplaced abroad the ship w/ very reasonable

expectation that the shipment is as good as on itsway.

8. Received, one in which it is stated that the goodshave been received for shipment w/ or w/ospecifying the vessel by which the goods are to beshipped.

A "bill of lading delivered and accepted constitutes thecontract of carriage even though not signed," becausethe "(a)cceptance of a paper containing the terms of aproposed contract generally constitutes an acceptance of


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the contract and of all of its terms and conditions ofwhich the acceptor has actual or constructive notice." Ina nutshell, the acceptance of a bill of lading by theshipper and the consignee, with full knowledge of itscontents, gives rise to the presumption that the samewas a perfected and binding contract.

Article 353. The legal basis of the contract between theshipper and the carrier shall be the bills of lading, by the

contents of which all disputes which may arise with regard totheir execution and fulfillment shall be decided withoutadmission of other exceptions than forgery or material errorsin the drafting thereof.After the contract has been complied with the bill of ladingissued by the carrier shall be returned to him, and by virtue ofthe exchange of this certificate for the article transported, therespective obligations and actions shall be considered ascancelled, unless in the same act the claims which thecontracting parties desired to reserve are reduced to writing,exception being made of the provisions of Article 366.If in case of loss or for any other reason whatsoever, theconsignee cannot return upon receiving the merchandise thebill of lading subscribed by the carrier, he shall give saidcarrier a receipt for the goods delivered, this receiptproducing the same effects as the return of the bill of lading.

What is the presumption if the carrier does not hold thebill of lading after the fulfilment of the contract oftransportation? The presumption is that the carrier didnot deliver the goods.

In the code of commerce, there is art.356; can thecarrier refuse to accept goods? In general, No because itis obliged to offer services to whoever wants to avail itsservices but may refuse if the goods are unfit for

transportation. When can carrier examine the goods? When there is a

reason of well

notes on transportation law 2

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