MULTIPLE-CHOICE

QUESTIONS

TOPICS COVERED Provision of the Code of Commerce on Carriers Commercial Contracts for Transportation Maritime Commerce Rules on Vessels Persons who take part in Maritime Commerce Doctrine of Limited Liability Rule and Exceptions Risks Damages and Accidents of Maritime Commerce Doctrine of Inscrutable Fault Doctrine of Last Clear Chance Special Contracts of Maritime Commerce

Submitted By: Morana, Chleriza Vinky C. Casil, Marianne Lasallete Apdua, Arnold

1.

Is the railroad carrier liable if goods being transported are lost, damaged or deteriorated, being refused at first instance and shipper merely insisted its shipment? a. NO, carriers are authorized to refuse packages which appear unfit for transportation, so the insistence of the shipper absolves the carrier. b. NO, as long as the refusal and objection of the carrier is made to appear in Bill of Lading c. YES, its acceptance estopped the carrier from invoking that the goods were refused and shipper was at fault. d. YES, because common carriers are required by law to exercise extraordinary diligence in vigilance of goods being transported, and in case goods are lost, destroyed or deteriorated, presumption of fault operates against them.

Answer: B, as a rule, common carriers cannot ordinarily refuse to carry particular class of goods unless they are authorized to do so as if it is unfit for transportation under Art.356. However, this authority is not absolute when it comes to transportation of packages insisted upon to railroad carriers, for they cannot refuse to carry them. But the latter shall be exempt from all responsibility if their objections are made to appear in the Bill of Lading. 2. When does delay in delivery of goods amounts to CONVERSION? a. When property is in the hands of the common carrier and not delivered within reasonable time after it reached destination. b. When the non-delivery of goods has reached more than 2 years from the time it arrived the port.

c. When the goods, while in the hands of common carrier appropriate and use the same for its own benefit after it reached destination d. When goods after reaching destination, consignee demands delivery and carrier refused. Answer: D, in order to successfully charge the carrier for conversion, it is not enough that ownership is deprived for a long period of time. Even if common carrier delays, he cannot be charged of conversion if no demand was given by consignee and carrier refused to deliver thereon without just cause. 3. Can a common carrier examine and invade the privacy of its passengers to check and inspect each and every belonging and look into contents of package if there are doubts as to the declaration of contents in Bill of Lading? a. YES, as a common carrier charged with duty to exercise extraordinary diligence, it has a wide range of authority to implement the duty imposed. b. NO, it is a patent invasion and violation of constitutional right to privacy which sets the limit of authority of common carriers. c. YES, only if common carrier has well founded belief and suspicion as to contents of the package and the examination is being done in the presence of the consignee, the shipper, or before a notary public. d. YES, as long as the proper steps to examine contents of package are followed, no right is violated.

Answer: C, if the carrier has a well founded suspicion of falsity in the declaration as to the contents of package, he may examine it. However, he must follow the procedure set forth in Art 357, which is to make the examinations either in the presence of shipper, consignee and witnesses or before notary public.

4.

When does a common carrier incurs no liability on account of delay, if no specific time or period is fixed for delivery of goods to consignee is reflected in Bill of Lading? a. If goods were delivered within reasonable time. b. If delay was caused by force majeure c. If goods were delivered to consignee personally or by duly authorized agent at place indicated for receiving regardless of time element since no period is fixed in the bill. d. If goods reached destination, despite long interval of time from shipment, carried and forwarded by the first shipment of same similar goods.

Answer: D, pursuant to Art. 358 of the Code of Commerce, if no period fixed for delivery of goods, the carrier must deliver them in the first shipment of the same or similar goods. Thus, despite delay, if carrier has forwarded it o the first shipment, he will not be bound for damages, the fact that there is absence of time fixed to deliver. Should he not do so, the damages caused by delay shall be for his account. 5. Can common carrier validly refused to return goods to consignee if the latter fails to present Bill of Lading as it conclusively operates as an evidence of receipt of goods? a. YES, Bill of Lading has two-fold character. It is a contract between parties and a receipt of goods shipped. Thus, absence of it upon claim precludes the consignee to obtain the goods. b. YES. Bill of Lading is the symbol of goods covered by it. It is a document of title which places the carrier as depositary on guard to deliver the goods only once Bill is presented. c. NO. Presentment of Bill of Lading is not a condition precedent for common carrier to surrender the goods. The presentment of acknowledgement of delivery receipt

suffices if Bill of Lading is not possible to produce due to some reasons. d. YES, Bill of Lading is a written acknowledgement of receipt of goods. Absence of which, nothing will be used as a reference to identify the goods being claimed. Common carrier is charged to exercise extraordinary diligence in vigilance over goods transported by them until delivery to consignee. Answer: C, under Art. 353 of the Code of Commerce, the surrender of the original Bill of Lading is not a condition precedent for a common carrier to be discharged of its obligation. If surrender of original Bill is not possible, acknowledgement of the delivery by signing the delivery receipt suffices. 6. Is the provision in Bill of Lading, limiting the common carriers liability for loss or damage for any cause to a specified amount, is valid? a. NO, it constitutes an unlimited qualification of carriers liability as the option to declare higher value is not stated. b. YES, Bill of Lading is a contract between parties which was freely and voluntarily entered into. As it is not contrary to public policy, such stipulation must prevail c. YES, provided that the loss, destruction or deterioration is a result of negligence of common carrier. d. YES, provided that the nature and value of goods shipped were declared and reflected in Bill of Lading.

Answer: A, it is an invalid provision as it gives an unlimited qualification of the carriers liability. The carrier may limit its liability to an agreed valuation and the option of the shipper to declare a value on goods higher than the limit set in the bill of lading upon paying additional charges must expressly be stated in the bill.

7.

When does consignee may file his protest against the carrier for loss or damage of goods known only upon opening of the package? a. At the time of receipt of goods b. Three days from delivery c. Within 24 hours after receipt d. Seven days from receipt

Answer: A, under Art. 366 of the Code of Commerce, if damage can be determined only upon opening of the packages, claims against the carrier must be made within twenty four hours following the receipt of merchandise. After lapse of such time or transportation has been paid, no claim may be maintain against the carrier. 8. X has a business of transporting coconut oil produced exclusively in Mindanao. He intends to buy an additional vessel for its business. What office will be able to help him in determining if such vessel is subject to any existing lien or mortgage? a. Bureau of Customs b. Maritime Industry Authority c. Bureau of Coast Guard at the port of entry d. Regional Trial Court

Answer: C, liens and encumbrances on merchant vessels are recorded in the Bureau of Coast Guard at the port of entry where the vessel is registered. 9. Captain or master performs three distinct roles, which among the following is not included? a. Supervisory employee b. Technical director of the vessel c. Represents the government of the country under whose flag he navigates. d. General agent of the ship owner

Answer: A, because the captain of the vessel is a confidential and managerial employee which for purposes of maritime commerce is one who has command of the vessel. 10. P chartered the ship of Z to transport his logs from Zamboanga to Manila. In the course of their voyage, they met a storm and had to dock in Cebu for three days. M, the captain of the ship, borrowed P20, 000.00 from P on the pretext that he would need the money for the repair of the ship. M misappropriated the money and converted it to his own benefit. Who is liable to return the money to P? a. M since he is the one who borrowed the money. b. M because he misappropriated the money. c. Z because it is provided for by the charter contract. d. Z because the purpose of borrowing the money is to repair the ship. Answer: D, because the ship owner is liable for the acts of the captain to repair, equip and provision the vessel even if the money, as in the case at bar, was misappropriated. 11. A, B and C, members of the crew of Madrigal Shipping Company, were hired, together with others, to man a ship from London to Manila, the contract to expire on arrival of the ship at the port of Manila. They complied with their obligations until the ship reached Tokyo on July 17, 2010 when they were dismissed and replaced after they were duly paid their salaries up to the date of dismissal. The ship proceeded and reached the port of Manila on September 29, 2010. Can A, B and C claim for additional salaries? a. No, because they were already paid in Tokyo. b. Yes, since the voyage was from London to Manila. c. No, because they were illegally dismissed. d. Yes, since they were not accorded due process.

Answer: B, because the contract for the voyage is from London to Manila, hence the salaries should also be for the whole voyage. There is nothing in the problem stating the cause of the dismissal, if any, it is therefore assumed that they were dismissed without lawful cause and in breach of the employment agreement. 12. Who records the entry and exit of all the goods in freight book? a. Captain b. Supercargo c. First mate d. Second mate Answer: A, because it is one of the inherent duties of the Captain to have three folioed and stamped books, among which is the freight book where he records the entry and exit of all the goods as well as the names and places of sailing of the passengers. 13. Who is a pilot? a. A person who keeps an account and record of transactions in the accounting book of the captain. b. A person who has no authority in the vessel except in matters referring to the motor apparatus. c. A person duly qualified and licensed to conduct a vessel into or out of ports, or in certain waters. d. A person who assign work to crew members.

Answer: C, a pilot is a person taken on board at a particular place for the purpose of conducting a ship through a river, road or channel, of from a port. He becomes the master pro hac vice and should give all directions as to speed, course, stopping and reversing, anchoring, towing and the like. 14. The captain of SS Osiris, of Philippine Registry, in the course of a voyage to Sydney, Australia, was caught by severe typhoon that marooned the ship along a small island in the

South Pacific. The captain wants to replenish his food supply before continuing his voyage but he has no funds and does not expect to receive any from the ship agent. Where can he derive his funds? a. By sale of part of the cargo b. By loan on bottomry c. By drawing on the ship agent d. From the consignee of the vessel Answer: D, because where the captain does not expect to receive any fund from the ship agent, he shall obtain the same from the following, in successive order: (1) from the consignee of the vessel; (2) from the consignee of the cargo; (3) by drawing on the ship agent; (4) by a loan on bottomry; (5) by sale of part of the cargo. 15. When does a registered owner of a vessel which was capsized at the time of the voyage including its goods can invoke the limited liability rule? a. In cases resulting from the negligence or fault of the captain only. b. In cases resulting from the negligence or fault of the shipowner or ship agent only. c. In cases resulting from the negligence or fault of both the shipowner and the ship agent. d. In cases resulting from the liabilities incurred by the shipowner for the vessel before its loss. Answer: A, because the application of limited liability doctrine of the maritime is premised on the condition that the death of or injury of the passenger occurred by reason of the fault or negligent of the captain only. In cases where the owner is likewise blamed, the limited liability rule does not apply. 16. Aqua Marina Shipping Lines leased its vessel M/V Rafiya Aliana to Mr. Wing Pa who appoints its own captain. At the

course of the voyage, the goods were lost and the passengers were injured. It was found out that the captain was the one negligent. Who will bear the loss and the damages? a. Mr. Wing Pa, the lessee of the vessel, because he was the one who appointed the negligent captain. b. The captain will pay directly to third person because he was the one negligent. c. Aqua Marina and Mr. Wing Pa shall be held solidarily liable for the loss because they have both interest in the vessel. d. Aqua Marina, the owner, even if the vessel was leased and it was not who appoint the negligent captain. Answer: D. The owner continues to be responsible for the acts of the captain even if the latter is not appointed by him, because he is the only one who appears as having control of the vessel in the certificate of registration to which third parties look. 17. Vessels A and B collided at the middle of the sea. As a result, vessel A sank and all the goods and cargoes it carries. Owner of vessel A filed an action against the owner of vessel B for damages caused to the formers vessel by reason of the said collision. C who is a passenger of vessel A filed its Motion to Intervene. Will Cs motion prosper? a. Yes, because his baggage was lost as a result of the collision that is why he is entitled for damages. b. No, because he has no legal interest in the matter of litigation, or in the success of either of the parties, or an interest against both. c. Yes, applying the provision on contract of carriage between the vessel. d. No, because the baggage has been lost already and cannot be recovered under the limited liability rule.

Answer. B, because in an action brought by a steamship owner against the owner of a sailing vessel for damages caused to the steamship by a collision, a passenger who suffered a loss of baggage and freight by reason of the collision cannot intervene in an action for the adjudication of his rights. (Urrutia and Company v. Baco River Plantation Co., 26 Phil 632). 18. In the Code of Maritime Commerce, protest shall be made within twenty-four (24) hours before a competent authority. Which is not included? a. When the vessel makes an arrival under stress. b. Where the vessel is shipwrecked. c. When the collision involves a motor boat or small boat manned by fishermen. d. Where there is a maritime collision. Answer: C, because the provisions on collision does not apply in cases of small boats engaged in river or bay traffic. Consequently, the protest required is not necessary to preserve the right of a person aboard a motor engaged in conveying passengers between ship and shore who is injured in a collision between the motor boat and the larger vessel. 19. M/V Brit Kheira having its right of way changes its course during the third zone of collision to avoid an imminent danger due to the fault of another vessel M/V Allyza. Who is liable for all damages resulting from the collision ? a. Only M/V Brit Kheira is liable because it should have not changed its course. b. Both vessels are liable because they are both at fault. c. Only M/V Allyza is liable for having a greater fault in allowing such dangerous proximity to be brought about. d. Both vessels shall suffer for their own loss and solidary for damages to third persons.

Answer: C, because the act of M/V Brit Kheira, in changing its course, having been done in extremis, even if wrong, is not responsible for the result. M/V Allyza is not absolved from liability which suffered herself and the other vessel to get into such dangerous proximity. M/V Brit Kheira is justified under the doctrine in extremis. 20. In order to make an arrival under stress, there are formalities to follow. Which of the following is not an essential requisite? a. Assembly of the officers, at which shall be summoned the persons interested in the cargo who may attend but may not vote. b. Presentation of the bill of lading and inventory of the cargo in the custody of the vessel before the competent authority. c. Drafting and entering in the log book the proper minutes which shall be signed by all. d. Entry in the log book of the objections and protests of the persons interested in the cargo. Answer: B, inventory of the cargo under the custody of the vessel during the arrival under stress is not a requisite provided for under the law. 21. A vessel bound to Romblon made an arrival under stress at the port of Batangas. The goods this vessel carries were in danger of being damaged if not sold. All the formalities for the filing of the protest required by law have been complied with. The owner of the vessel also authorized its captain to sell the cargoes. Is there a valid sale of cargo? a. Yes, because the formalities are complied. b. No, because the owners did not consent the selling.

c. Yes, because if goods were damaged, the shipwoner will be answerable. d. No, because there is absence of authorization for the sale by the competent court or consul. Answer: D, because in order to have a valid sale of cargo, in cases of arrival under stress, the following requisites shall be present: (i) the entire cargo or part thereof should appear to be damaged, or there should be an imminent danger of its being damaged; (ii) there must be an authorization for the sale by a competent court or consul; and (iii) the formalities required in Art. 624 are complied with. 22. In case of losses and deteriorations suffered by a vessel and her cargo by reason of shipwreck or stranding, who bears the loss? a. The owner of the vessel shall bear all the loss of the vessel and her cargo. b. The captain shall be liable for all the losses of the vessel and her cargo. c. It shall be individually for the account of the owners, the part of the wreck which may be saved belonging to them in the same proportion. d. It shall be jointly shouldered by the owners, the part of the wreck which may be saved belonging to them in the same proportion. Answer: C, Article 840 of the Code of Commerce states that the losses and deteriorations suffered by a vessel and her cargo by reason of shipwreck or stranding shall be individually for the account of the owners, the part of the wreck which may be saved belonging to them in the same proportion. 23. Who is liable in case where the shipwreck or stranding should arise through the malice, negligence, or lack of skill of the captain, or because the vessel put to sea insufficiently repaired and prepared?

a. b. c. d.

Freighter Shipowner Captain Agent

Answer: C, Pursuant to Article 841 of the Code of Commerce, if the wreck or stranding should arise through the malice, negligence, or lack of skill of the captain, or because the vessel put to sea insufficiently repaired and prepared, the owner or the freighters may demand indemnity of the captain for the damages caused to the vessel or cargo by the accident. 24. An act committed by the master or mariners of a ship for some unlawful or fraudulent purpose contrary to their duty to their owners, whereby the latter will sustain an injury. Intentional fraud or breach of trust, or willful violation of law, is necessary to constitute such offense. a. Conspiracy b. Protest c. Arrival Under Stress d. Barratry Answer: D, Barratry as defined in American Insurance Law is "any willful misconduct on the part of master or crew in pursuance of some unlawful or fraudulent purpose without the consent of the owners, and to the prejudice of the owner's interest." 25. It is the compensation provided for in the contract of affreightment for the detention of the vessel beyond the time agreed on for loading and unloading. It is also the claim for damages for failure to accept delivery. a. Stevedoring b. Demurrage c. Custom Duties d. Barratry

Answer: B, Magellan Manufacturing Marketing Corp. v. Court of Appeals defined "demurrage" as follows: Demurrage, in its strict sense, is the compensation provided for in the contract of affreightment for the detention of the vessel beyond the time agreed on for loading and unloading. Essentially, demurrage is the claim for damages for failure to accept delivery. In a broad sense, every improper detention of a vessel may be considered a demurrage. 26. Statement 1: Shipwreck means a ship which has received injuries rendering it incapable of navigation; a loss of a vessel at sea; a maritime casualty which may be derelict or abandoned by the owner without hope or intention of recovery. Statement 2: In case of shipwreck, the captain shall make the proper protest at the first port within 72 hours. a. Both statements are true. b. Both statements are false. c. First statement is True and while Second statement is False. d. First statement is False and while Second statement is True. Answer: D, (1.) Suggested meaning of shipwreck. (2) Article 612 (15) of the Code of Commerce states that in case of wreck, the Captain shall make the proper protest in due form at the first port reached, before the competent authority within twenty-four hours, stating therein all the incidents of the wreck, in accordance with case 8 of this article. 27. Aside from payment of freight, an additional percentage is paid to the master of the ship for his care and trouble. This is known as: a. Demurrage

b. Average c. Layday d. Primage Answer: D, Primage is a commercial term signifying originally a small customary payment over and above the freight made to the master of the ship for his care and trouble. It is now generally included in the freight, as an additional percentage. It varies according to the usages of different ports and particular trades. (Encyclopedia Britannica) 28. It is a case when the charterer mans the vessel with his own people and becomes, in effect, the owner pro hac vice, subject to liability to others for damages caused by negligence. a. Demise or bareboat b. Time Charter c. Voyage Charter d. Contract of Lease Answer: A, In the case of Lea Mer Industries vs. Malayan Insurance, it discussed that a Contract of Demise or Bareboat is a situation where the charterer will generally be considered as owner for the voyage or service stipulated. To create a demise, the owner of a vessel must completely and exclusively relinquish possession, command and navigation thereof to the charterer; anything short of such a complete transfer is a contract of affreightment (time or voyage charter party) or not a charter party at all. 29. Loans on bottomry or respondentia may be executed in the following forms except: a. By means of a verbal contract.

b. By means of a bond signed by the contracting parties and the broker who took part therein. c. By means of a private instrument. d. By means of a public instrument.

Answer: B, Article 720 of the Code of Commerce states that loans on bottomry or respondentia may be executed by means of a public instrument, a bond signed by the contracting parties and the broker who took part therein and a private instrument. Under whichever of these forms the contract is executed, it shall be entered in the certificate of the registry of the vessel and shall be recorded in the commercial registry, without which requisites the credits originating from the same shall not have, with regard to other credits, the preference which, according to their nature, they should have, although the obligation shall be valid between the contracting parties. 30. Statement 1: In case of loan on bottomry, it may be made on the salaries of the crew of the vessel. Statement 2: It is allowed that expected profits may be the subjected of the loans on bottomry. a. Both statements are true. b. Both statements are false. c. First statement is True and while Second statement is False. d. First statement is False and while Second statement is True. Answer: B, Article 720 of the Code of Commerce states that no loans on bottomry may be made on the salaries of the crew or on the profits expected.