TRANSPORTATION LAW- Dec.

3, 2010
I. Air Transportation
Lhuiller v. British Airways case:

says that the governing law is the Warsaw Convention

issue is jurisdiction

high contacting parties countries which are signatories in the

Warsaw convention; countries who abide with the provisions of the
agreement in the WC

international flight flight between two high contracting parties

(according to WC)

importance to determine if international flight to know the

applicability of WC (if international flight, then WC applies)

in this case, international flight (London-Italy) therefore, WC applies

Held: case shall be filed in the:

(a) place of the main office of the airline (London)
(b) place where you bought the ticket (Italy)
(c) place where the incident happened

Therefore: Philippine court has no jurisdiction over the case, case

dismissed for lack of jurisdiction
IN ONE CASE:

One guy from Iloilo or Bacolod who joined a golf tournament in

Bangkok

He needed to pass Singapore and so he bought ticket from PAL going

to Singapore

since PAL has no direct flight from Singapore to Bangkok he got a

British Airways ticket going to Thailand from Singapore

He arrived using PALs plane but British Airways would not accept
them because the ticket was not indorsed by PAL

BA: if we accept this ticket, there is a possibility that PAL will not pay
us

He was not able to use the questioned ticket and Garuda Airways
going to Bangkok

Some of them got sick because of the hassle and so was not able to
play golf

When they got back in the Phils, they filed a case for damages for
breach of contact against PAL

PAL filed motion to dismiss

ISSUES
1. Should the case be filed against BA?
2. Do the Philippine courts have jurisdiction over
the case given it is a flight from Singapore to
Thailand?
3. Does the WC apply?

HELD

1.

No. When he purchased ticket from PAL, PAL only

used BA as their agent by virtue of an
agreement between airlines and the main carrier
is PAL and so PAL should be the one sued.
2. Yes. The cause of contract here is not a breach of
contact of carriage but the negligence of PAL in
communicating the ticket to the British Embassy
as far as the connection is concerned. Note that
the negligence happened before contact of
carriage was effected.
3. No. The cause of action is not the contract of
carriage but PALs negligence making the WC not
applicable.
NOTE: Compare the Lhuiller case and this case

II. OBLIGATIONS OF THE PARTIES

A. Vigilance over the Cargo
1733. Extraordinary diligence is required
1735. Presumption of negligence in case of loss, damage or deterioration

GR: as long as it is shown that there is damage then the common

carrier (CC) could be made liable

EXP: CC could prove that it has exercised extraordinary diligence

over the goods
1736. Coverage of extraordinary diligence lasts from the time the cargoes
are conditionally placed in the position of and received/accepted for
transportation by the carrier to be delivered to the consignee, without
prejudice to 1738
1737. Even if the cargoes are temporarily unloaded, CC is still obligated to
exercise extraordinary diligence UNLESS the shipper/owner avails of the
right to stoppage in transitu

stoppage in transitu right of an unpaid vendor to stop the

shipment or transportation of the cargo to the consignee because
the consignee is not capable of paying him, and so the vessel
becomes a warehouse, therefore shall exercise the diligence of the
good father of a family and not extraordinary diligence
1738. CC has to continue to operate with extraordinary diligence even if the
goods are placed in the warehouse at the place of destination.

Fact that it has reached the destination and place of the warehouse
it doesnt follow that the extraordinary diligence has already ceased
to exist.

It would only cease to exist if CC has given a reasonable time and

given notice to the consignee to release the same

If there is actual or constructive delivery, extraordinary diligence

ceases to exist

Actual delivery cargoes were given to the consignee and the

consignee receives the cargoes.
Constructive delivery notice was already given to the consignee
regarding the arrival of the cargoes and the consignee was already
given a reasonable time to release it even if there is no actual
release

In cargoes, if there is delay, then one of the options of the shipper is to

abandon the cargo once in transit and ask for the full price of the cargo. But
to be able to do so,
Requisites:
1. there should be a demand in writing addressed to the CC stating
your intention to abandon the goods
2. it shall be done before the cargo reaches the destination
B. TRANSPORTATION OF PASSENGERS (CC)
1.
2.
3.

Act of Public Enemy

1. there should be actual war between the place of destination and
place where the carrier belongs, international or civil

public enemy pirates are public enemy, thieves, robbers, rioters

and hijackers are not public enemies

Obligation to accept the passengers without discrimination

Obligation to transport them safely
Obligation to transport without delay

When will CC be liable in transporting passengers?

a. When there is delay (1740)
b. When there is deviation (1747)
III. DEFENSES OF THE COMMON CARRIER
1734. GR: CCs are responsible for the loss, destruction and deterioration of
the goods
EXP: if the same is due to any of the following causes ONLY:
memorize!!!
1. floods, storm, lightning, earthquake or other natural disasters and
calamities
2. in case of an act of a public enemy during war, international or civil
3. act or omission of the owner of the cargo (shipper)
4. character of the goods or defects in the packing or container
5. order or act of competent public authority
REQUISITES:
Natural Disaster
1. this is the only cause of loss, destruction and deterioration of the
goods
2. that the CC has exercised the due diligence in preventing or
minimizing the loss before, during and after the occurrence of the
natural disaster (1739)
CC incurs delay (1740) or deviation change of route (1742 or 1741)

Delay delay in the departure and/or arrival

If there is delay, CC is still liable although the goods suffered

deterioration, loss or destruction caused by natural calamity, which
is an absolute defense.

Public enemy in war, whether civil or international , as a valid

defense of common carrier
o There must be an actual war between the country where the
common carrier comes from and the country that
confiscated the goods. (hijackers, thieves, robbers are not
considered as public enemy; but a pirates are considered as
such.)

Character of the goods or defect in the packing of the container

o Common carrier will not be liable if there are already defects
in the goods or in the packing of the goods.
o But If the defect is apparent and the common carrier still
accepts it, then the fact that there was prior defect could no
longer be raised as a defense against the shipper. If the
common carrier does not know of the defect then it can be
raised as a defense. Provided, that it had exercised the
diligence to forestall or minimize damage (Art. 1742).
Order of a Public Authority may be used as a defense when:
o It is a valid order
o There is a force that could compel the common carrier to
abide by the order of the competent authority.
LIABILITIES OF COMMON CARRIER:

Act of an employee that caused injury to the passenger would still

make the common carrier liable, whether or not the employee is
acting in accordance with his duty; or even if the act of the
employee that caused the injury is in violation of the instruction of
the common carrier.

It shall also be noted that, by express provision of the law, an act of

a stranger or co-passenger of the common carrier that caused injury
to another passenger would still make the common carrier liable.

If a passenger was injured and he has not yet paid his fare, then he
is not considered a passenger and the common carrier will not be
liable to him; but if he has an intention to pay even if he has not yet
paid, then he can still be considered as a passenger.

If the passenger was not aware that he rode the wrong bus, he is still
considered as a passenger.

If the passenger pretended to be the owner of a plane ticket and

boarded the plane, he cannot be considered as passenger because
there was fraud on his part.

In the case of gratuitous passenger, the common carrier is still

liable; but the liability may be limited depending upon the stipulation
of the passenger and the common carrier. However in the case of an
ordinary passenger, the liability of the common carrier cannot be
lessened or diminished by stipulation.
Note that the stipulated limitation of liability in the case of gratuitous
passengers shall only be valid in ordinary negligence. It is not valid if the
cause of injury is willful act of gross negligence.
Cause of action if the passenger is injured:
1. Culpa Contractual (breach of contract)
Case against the common carrier only. Cannot be filed against
the driver because he is only an agent. Preponderance of
evidence is needed to establish liability.
2. Quasi-delict
Case against the driver and the common carrier; based on torts.
3.

Culpa Criminal
Case against the driver. Common carrier is subsidiarily liable if
the driver is insolvent.
Possible damages:

Actual damages
o (life expectancy=2/3 x 80 age) x income and expenses

Moral damages
o Hurt feelings, sleepless nights, mental anguish
o In culpa contractual, moral damage is not awarded except in
the case of death or bad faith.

Exemplary damages
o Awarded if there is one or more aggravating circumstances

Nominal damages
o Awarded to vindicate the right of the plaintiff.
Transportation Laws Dec. 10, 2010
Code of commerce/ Maritime Law:
Corporation A - has bus1, bus 2, and bldg.
The owners of corporation A are:
B who has a house and lot
C- who has a car
D who has a car

Corporation has a distinct and separate personality. So the liability of

A cannot be transfer to B, C ,D...
Nature of liability under maritime law: it is real and hypothetical in nature...
What does real and hypothetical in nature mean? It is limited liability.
Limited liability- in case the vessel is totally loss through the fault or
negligence of the captain, the liability of ship owner is extinguished.

Authority: Art. 837 under code of commerce: the owner shall be

civilly liable for the acts of the captain up to the actual value of the
ship, freight...

Limited liability only applies to maritime transaction/ business...

Elements of real and hypothetical in nature:

The vessel is totally or partially loss

Done through negligence or fault of the captain and not the owner

E.g. the real and hypo in nature will not apply: Negros navigation v
Miranda
During the voyage, there was a collision of negros navigation and an
oil tanker because of the negligence of the captain... but the cause is that
the boat is not sea worthy because it sunk within 5-10 minutes where in
many people died. And allowing the boat to be overloaded with people, that
is why there was negligence on the part of the owner and not only to the
negligence of the captain... That is why the limited liability rule will no longer
apply in this case.

Limited liability rule: Vessel, appearance, freight and insurance

It does not violate the civil code.

In order to avail limited liability in partial loss there must be a

written notice of abandonment. That the owner is turning over to the
predator possessor of the thing or abandoning the vessel.

Principle of Limited liability rule (LLR): no vessel, no liability...

Is there a need of abandonment? No there is no need because there

is nothing to abandon.
Exception of LLR:

If there is a concurrence of owner or agent of the vessel

In case if the vessel is insured

The nature of the claim is in special law that the workers who died in
the performance of their duties. It is Workmens compensation claim.

When all the expenses for repair incurred prior to the voyage,
because there was obligation already arise.

The freight that was paid will not be included in the LLR. It is only the
value of the vessel will be extinguished.
Protests:
Within 24hrs
Or to the first point of entry in the Philippines
It is not applicable to all case... Only if the vessel was shipwreck, hurricane,
arrival under stress, in case of maritime collision (take note of this, because
it involves maritime vessels and it should be both maritime vessel)

Where to file? In 1981, the jurisdiction is regarding to the amount involved

In Metro Manila: RTC exceeds 400k
Outside MM: RTC- exceeds 300k
Below this amount above stated: will in Metropolitan Trial Court.
Maritime Collision- there is a need to protest
Vessel any barge, lighter, bulk vessel, freighter, passenger freighter,
tanker, fishing boats, contrabands... design and capable of transporting
person or cargo from one coast to another.
Not vessel: If the vessel is operated under Arm forces of the Philippines, all
foreign , Bangka, sailing boats, less than 3 gross tons, boats that are
accessory, yachts, health service, floating store houses
Requisites of maritime vessel:
1 Not accessory
2 Has a license to engage in the transportation
3 Using to transport crates or people by sea
Under code of commerce Art.835 regarding the person capability to protest
and that it should be both maritime vessels.

Registration and extraordinary diligence

Vessel is personal property. It is registered with conveyance and customs
MARINA RULES IN REGISTRATION- it is the one who set the rules
How to acquire? Good faith with valid title: 3yrs
GF without valid title with adverse possession: 10 yrs
Through sale
Can you sell a vessel while in voyage? Yes
Who will pay the payment of wages? Purchaser
Who will collect the freight earn? Pertains to purchaser
Can you sell a vessel when you reach in the San Francisco or destination?
Yes
Who will collect? The Seller because he already finished the transaction
Who will pay the wages? Seller
Who will abandon the ship? The ship owner or agent but not the chartered..
Co-owner can abandon it only in proportion of his share.
All vessels must be registered.
What are the vessels need to be registered?
Owned by the Philippine citizen or Phil. Companies that atleast 60%
owned by Phil. Citizen
More 15 gross tons in capacity
Optional registration: 15 tons or less
Not required: war vessels, boats of private 3 tons or less, non-motorize
boats,
Temporary certificate:

May be given incase of charter or Marina

Charter must not be less than 1yr.. operation entirely by Filipino citizens and
man by Filipino citizens
When can you delete/cancel the registration?
Phil.; incase of bare boat chartered by a foreign
Pre-termination of chartered agreement
Sale of the vessel to a foreigner
Scrapping or decommission of the vessel (no longer to be used)
Constructive or total loss
Transpo Lecture- Jan 7
Charter Party - a special contract in maritime commerce. It is not the
contracting parties but the contract itself. It is a contract by which the owner
or agent of the vessel leases the whole or part of the vessel to another for
transportation of the cargo or passengers from one place to another for a
certain price.
Governing laws:
Common Carrier- civil code
Private Carrier- Code of Commerce
The moment CC becomes a private carrier- Code of Commerce
Importance of determining whether common carrier is considered a private
carrier:
1. To know which law will govern
2. Stipulation that limits liability is valid in a private carrier but not in a
common carrier.
When is a common carrier considered as private carrier? BARE BOAT
CHARTER
BARE BOAT CHARTER
It is when a vessel is hired (including the crew and everything). The
control, management, and possession is with the charterer.
Article 652 of the code of commerce: Contents and formalities of the
chartered parties
1. The charter parties has to be drawn in duplicates, signed by the
parties.
2. Charter parties should also specify:
* the kind, the name, and the tonnage of the vessel.
* the origin of registry of the vessel.
* The name of the shipper, the owner, and the charterer.
* Port of loading and unloading.
* Capacity and the carriage agreed upon by the parties to be loaded.
* The freightage
* the primage
* lay days.

Freight-fare or kind of cargo to be loaded

Primage- fee given for the special care given to the cargo or by
using the equipment

Lay days- allowable number of days that a charterer may load or

unload the cargo
Why is this important to know?

Because we are dealing with cargoes and vessels, and they are
always in transit and delay would cause a lot of money for additional
charge for demorage
Demorage- fee charged in excess of the number of days allowed to
load and unload
Requisites for a valid charter party:
1. Consent of the contracting parties
2. Existence of the vessel at the disposal of the charterer
3. Stipulation as to the freightage
4. Compliance with Art. 652 o the Code of Commerce
What is the indication of Art 652- the charter party has to be in writing as
general rule
EXP: Art 653, if the cargoes be received and the charter party has
not yet been signed then it is understood that it has been executed and the
one that will govern the obligation of the parties are the stipulations in the
bill of lading
Kinds of Charter Party:
1. Bare Boat Charter Party or Demise Charter Party
a person hires the vessel and the crew, and so the charterer would
be the one who would take charge in paying the wages of the crew
and in control of provisioning everything in the vessel, in effect, the
crew became the employees of the charterer
charterer party would be liable to third persons
charterer has command, possession and navigation of the vessel; he
acts as owner who handles everything
only instance where common carrier would be a private carrier
2. Contract of Afreightment charterer hires the vessel either for a
deteminate period of time or per voyage or successive voyages
a. Voyage Charter per voyage or successive voyages
b. Time Voyage fixed time
Contract of Towage contract of service where the barge is towed by a
vessel
Can a ship captain enter a charter party?
Art. 655, the ship captain can enter a charter party provided, in the
absence of a ship agent, even if it is in contravention or against the
instruction of the ship agent or owner still valid
But the owner may go against the ship captain for damages
Art. 656 as to determine when demorage shall be given
if there is no time stipulated in the charter party then the usage of
the port shall be used
What if during the chartering, the vessel was found later on not seaworthy
anymore?

Art 657, the captain is obligated to look for a vessel and continue the
voyage within 150 kilometers from port
If the captain cant find vessel to deliver he may apply for deposit
of the cargo

Art 658, the freight shall accrue as stipulated in the contract. But if the
stipulation is not clear, the rule will be, if on the charter there is a month or a
date, then the freight will accrue during the time of the loading. If there is a
fixed period, then the fright accrues on that very date.
Art 659-if the cargoes are placed on the vessel, the captain may sell the
cargos subject to the following conditions:
1. if the money from the sale will be needed for the repair of the
problem of the vessel.
2. Unavoidable and urgent expenses
Effect- if after the repair, the cargo was able to reach the point of
destination, then the captain will pay the owner based on the price in the
place of destination. Same goes with if the vessel did not reach the
destination.
Will the cargo be liable for the freight? If the vessel was not able to reach the
destination, its liability shall be proportionate to the distance. If it reaches
the destination, it will be liable for the whole value.
Art. 659- partial freight

if the vessel was lost or did not reach the destination.

Art. 662- shipwreck but cargo was recovered= liable only up to the extent of
the damage (partial freight)
Art. 665 the moment the cargo is placed in the vessel, the common carrier is
already liable. There is already a lien created in the cargo.

What are the liabilities?

o Freight
o Expenses
o Average (expense that inure to the benefit of cargo holders)
accorded to him. Ex: Jettison.
If you cannot pay the liabilities, then under
Art 668 the cargos be sold in the auction. Cargos to be sold in auction by the
captain:

cargos under 665 and 666

if the cargo is at the risk of deteriorating

consignee cannot be found or refuses to claim the cargo

if it is very expensive to preserve the cargo.

Instances where cargo is liable for full freight: art 659

The cargo was sold for the repair, and the vessel reached the
destination.
Under 662, when the vessel was repaired but after the repair the
cargo was not sold and the vessel reached the destination.
Under 663, deterioration due to packing
Fortuitous event

When not required to pay a freight?

Under 661, when for reasons of shipwreck or stranding, or when the

goods were confiscated by enemies or pirates.
Under 660, when the cargo was thrown overboard and was never
recovered. (jettison)