Sunteți pe pagina 1din 54

otes on Transportation Law

LAW O TRA SPORTATIO A D PUBLIC UTILITIES


CHAPTER 1
Contract of Transportation person obligates himself to transport persons or property from one place to another for a consideration. 2 KI DS: 1. CARRIAGE OF PASSE GERS Parties: common carrier & passenger (carried gratuitously or not) Perfection: > contract to carry (agreement to carry the passenger at some future date) consensual contract and perfected by mere consent * AIRCRAFT perfected even without issuance of ticket as long as there was already meeting of minds with respect to the subject matter and consideration > contract of carriage real contract; not until the facilities of the carrier are actually used can the carrier be said to have assumed the obligation of the carrier; perfected by actual use. * AIRCRAFT perfected if it was established that the passenger had checked in at the departure counter, passed through customs and immigration, boarded the shuttle bus and proceeded to the ramp of the aircraft and baggage already loaded to the aircraft. * Public Utility Bus or Jeepneys once it stops it is in effect making a continuous offer to riders; perfected when passenger is already attempting to board the vehicle * TRAINS perfected when a person: a. purchased a ticket/ possess sufficient fare with which to pay for his passage b. presented himself at the proper place and in a proper manner to be transported CARRIER: Common carriers (CC) (1732) persons, corporations, firms or associations engaged in the business of carrying or transporting passengers or goods or both, by land, water, or air, for compensation, offering their services to the public. (NOT the means of transportation) one that holds itself out as ready to engage in the transportation of goods for hire as a public employment and not as a casual occupation. Tests for determining WON a party is a common carrier of goods: 1. He must be engaged in the business of carrying goods for others as a public employment, and must hold himself out as ready to engage in the transportation of goods for persons generally as a business and not as a casual occupation. 2. He must undertake to carry good of the kind to which his business is confined. 3. he must undertake to carry by the method by which his business is conducted and over his established roads 4. transportation must be for hire. Characteristics of Common carriers (CC): no distinction between one whose principal business is the transportation of Perfection: > contract to carry goods consensual > contract of carriage - act of delivery of goods (goods are unconditionally placed in the possession and control of the carrier and upon their receipt by the carrier for transportation) c. has a bona fide intention to use facilities of the carrier 2. CARRIAGE OF GOODS Parties: shipper & carrier

San Beda College of Law

A. D. AVILA | H. MORAA

otes on Transportation Law


persons/goods and one who does such as an ancillary business still a CC even if services offered to a limited clientele pipeline operators are CCs not necessarily motor vehicles CHARTER PARTY: - contract by which an entire ship or some principal part thereof is let by the owner to another person for a specified time or use. 2 types: 1. Contract of affreightment involves the use of shipping space on vessels leased by the owner in part or as a whole, to carry goods for another - CC = observe extraordinary diligence; in case of loss, deterioration or destruction of goods of goods, CCs are presumed to be at fault or have acted negligently 2. Charter by demise/ Bareboat Charter whole vessel is let to the charterer with a transfer to him of its entire command and possession and consequent control over its navigation including the master and the crew who are his servants. - charter includes both vessel and crewCC becomes private carrier (PC) insofar as that particular voyage is concerned - if PC- ordinary diligence in the carriage of goods will suffice - PC = undertaking is a single transaction, not a part of the general business or occupation, although involving the carriage of goods for a fee; NO presumption of negligence applies whosoever alleges damage to or deterioration of the goods carried has the burden of proving that the cause was the negligence of the carrier. CCs v. Towage, Arrastre and Stevedoring Towage- a vessel is hired to bring another vessel to another place e.g. a tugboat may be hired by CC to bring the vessel to a port (operator of tugboat not CC) Arrastre operators functions has nothing to do with the trade and business of navigation nor to the use or operation of vessels. Services are not maritime. Stevedoring- involves the loading and unloading of coastwise vessels calling at the port. >>> Common carriers are public utilities, impressed with public interest and concern subject to regulation by the state. REGISTERED OW ER RULE - the registered owner of a vehicle is liable from any damage caused by the negligent operation of the vehicle although the same was already sold or conveyed to another person at the time of the accident. The registered owner is liable to the injured party subject to his right of recourse against the transferee or the buyer - Applicable in case of lease - Registered owner not liable if vehicle was taken from him without his knowledge and consent. Applicable to people involved on a kabit system (arrangement whereby a person who has been granted a certificate of public convenience allows other persons who own motor vehicles to operate them under his license, sometimes for a fee or percentage of the earnings --- contrary to public policy) parties to the kabit system cannot invoke the same as against each other either to enforce their illegal agreement or to invoke the same to escape liability --pari delicto rule having entered into an illegal contract, neither can seek relief from the courts and each must bear the consequences of his acts also applicable to aircrafts and vessels basic rule that no person can operate a common carrier without securing a certificate of public convenience and necessity.

San Beda College of Law

A. D. AVILA | H. MORAA

otes on Transportation Law CHAPTER 2 OBLIGATIO S OF THE PARTIES


I. Obligations of the carrier A. DUTY TO ACCEPT A common carrier granted a certificate of public convenience is duty bound to accept passengers or cargo without any discrimination. It is illegal for domestic ship operators to refuse to accept or carry passengers or cargo without just cause. (Section 16, RA 9295) In air transportation, passengers with confirmed tickets who were not allowed to board are provided with denied boarding compensation and priority boarding rules. No compensation for refusal if it is because of 1) government requisition of the space, 2) substitution of equipment of lesser capacity when required by operational and or safety and/or other causes beyond the control of the carrier, and 3) if arrangements have been made for the passenger to take another flight in a comparable air transportation which will arrive not later than three hours after the time of flight on which the confirmed space is held is supposed to arrive. (Civil Aeronautics Board Economic Regulation) a. Grounds for valid refusal to accept goods 1. dangerous objects or substances including dynamites and other explosives 2. goods are unfit for transportation 3. acceptance would result in overloading 4. contrabands or illegal goods 5. goods injurious to health 6. goods will be exposed to untoward danger like flood, capture by enemies and the like 7. goods like livestock will be exposed to diseases 8. strike 9. failure to tender goods on time In Fisher v. Yangco, factors in determining reasonable discrimination include, 1) suitability to the vessel for the transportation of such products; 2) reasonable possibility of danger or disaster resulting from their transportation in the form and under the conditions in which they are offered for carriage; and 3) the general nature of the business done by the carrier. (1) Hazardous and Dangerous Substances Carrier not properly equipped to transport dangerous chemicals or explosives may validly refuse to accept the same for transport. Those which are not authorized by the Maritime Industry Authority to carry such goods may also validly refuse the same for transport. There must be a Special Permit to Carry from the MARINA. (2) Unfit for Transport Carriers may refuse to accept goods that are unfit for transportation (by nature be unfit for transportation or are unfit because of improper packaging or defect in their containers). However, carriers may accept the goods and limit its liability by stipulation. If by reason of well-founded suspicion of falsity in the declaration as to the contents of the package carrier should decide to examine and investigate it in the presence of witnesses, with the shipper and consignee in attendance. If declaration of shipper is true, expenses occasioned by the examination and of repacking the packages shall be for the account of the carrier Even if the cause of the loss, destruction or deterioration of the goods should be caused by the character of the goods, or the faulty nature of the packing or of the containers, the common carrier must exercise due diligence to forestall or lessen the loss. B. DUTY TO DELIVER THE GOODS a. Time of Delivery Where a carrier has made an express contract, the goods must be delivered within a specified time otherwise he is liable for any delay (indemnity for damages). In the absence of any agreement, goods must be delivered at its destination within a reasonable time (depending on the attending circumstances, nature of the goods). b. Consequences/Effects of Delay Excusable delays in carriage suspend, but do not generally terminate, the contract of carriage; when the cause is removed, the master must proceed A. D. AVILA | H. MORAA

San Beda College of Law

otes on Transportation Law


with the voyage and make delivery. During the detention or delay, vessel continues to be liable as a common carrier, not a warehouseman, and remains duty bound to exercise extraordinary diligence. If common carrier negligently delays in transporting the goods, a natural disaster shall not free it from responsibility. If common carrier delays , without just cause, in transporting the goods or changes the stipulated or usual route, the contract limiting its liability cannot be availed of in case of the loss, destruction, or deterioration of the goods. (1) Abandonment In case of delay through the fault of the carrier, the consignee may refuse to accept the goods or may leave the goods in the hands of the carrier. It must be communicated to the carrier in writing. This right must be exercised between the time of delay and before the arrival of the goods at its destination. The carrier must pay the full value of the goods as if they had been lost or mislaid. If abandonment is not made, indemnification for the losses and damages by reason of the delay cannot exceed the current price which the goods would have on the day and at the place they are to be delivered. The value of the goods which the carrier must pay in case of loss or misplacement shall be that what is declared in the bill of lading. Consignee must not defer the payment of the expenses and transportation charges of the goods otherwise carrier may demand the judicial sale of the goods. (2) Rights of Passengers in Case of Delay As to the rights and duties of the parties strictly arising out of delay, the Civil Code is silent. However, the Code of Commerce provides for such a situation: ARTICLE 698. In case a voyage already begun should be interrupted, the passengers shall be obliged to pay the fare in proportion to the distance covered, without Right to recover for losses and damages if the interruption is due to fortuitous event of force majeure, but with a right to indemnity if the interruption should have been caused by the captain exclusively. If the interruption should be caused by the disability of the vessel and a passenger should agree to await the repairs, he may not be required to pay any increased price of passage, but his living expenses during the stay shall be for his own account. In case the vessel is not able to depart on time and the delay is unreasonable, the passenger may opt to have his/her ticket immediately refunded without any refund service fee from the authorized issuing/ticketing office. C. WHERE AND TO WHOM DELIVERED a. Place Goods should be delivered to the consignee in the place agreed upon by the parties. The shipper may change the consignment of the goods provided that at the time of ordering the change of the consignee the bill of lading signed by the carrier be returned to him, in exchange for another wherein the novation of the contract appears. The expenses occasioned by the change shall be for the account of the shipper. b. Consignee Delivery must generally be made to the owner or consignee or to someone lawfully authorized by him to receive the goods for his account or to the holder of the negotiable instrument. c. Delay to Transport Passengers Effects of delayed and unfinished voyage in inter-island vessels: vessel can not continue or complete her voyage for any cause carrier is under obligation to transport the passenger to his/her destination at the expense of the carrier including free meals and lodging before the passenger is transported to his/her destination; the passenger may opt to have his/her ticket refunded in full if the cause of the unfinished voyage is due to the negligence of the carrier or to an amount that will suffice to defray transportation cost at the shortest possible A. D. AVILA | H. MORAA

San Beda College of Law

otes on Transportation Law


route if the cause of the unfinished voyage is fortuitous event. vessel is delayed in arrival at the port of destination free meals during mealtime delay in departure at the point of origin due to carriers negligence; fortuitous event - free meals during mealtime; carrier not obliged to serve free meals carrier is not obliged to inform passengers of sailing schedule of the vessel actually or constructively, by the carrier to the consignee or to the person who has a right to receive them ARTICLE 1737. The common carriers duty to observe extraordinary diligence over the goods remains in full force and effect even when they are temporarily unloaded or stored in transit, unless the shipper or owner has made use of the right of stoppage in transitu. (common carrier becomes a warehouseman ordinary diligence) ARTICLE 1738. The extraordinary liability of the common carrier continues to be operative even during the time the goods are stored in a warehouse of the carrier at the place if destination, until the consignee has been advised of the arrival of the goods and has had reasonable opportunity thereafter to remove them or otherwise dispose of them. (2) Carriage of Passengers By trains the extraordinary responsibility of common carrier commences the moment the person who purchases the ticket (or a token or card) from the carrier presents himself at the proper place and in a proper manner to be transported with a bona fide intent to ride the coach. * Mere purchase of a ticket does not of itself create the relation of carrier and passenger but it is an element in the inception of the relation. * A proper person who enters upon the carriers premises (station, ticketing office, or waiting room) with the intention of becoming a passenger will ordinarily be viewed as assuming the status of a passenger. * One who goes to the railroad station to inquire as to the possibility of securing passage on a freight train, which he knows, by the rules of the company, is not allowed to carry passengers, and to secure passage thereon if possible, is not entitled to the rights of a passenger but is a mere trespasser. * One who rides upon any part of the vehicle or conveyance which is unsuitable or dangerous, or A. D. AVILA | H. MORAA

B.DUTY TO EXERCISE EXTRAORDINARY DELIGENCE Goods should be delivered in the same condition that they were received and to transport the passengers without encountering any harm or loss. ARTICLE 1755. A common carrier is bound to carry the passengers safely as far as human care and foresight can provide, using the utmost diligence of very cautious persons, with a due regard for all the circumstances. (Civil Code) a. Presumption of Negligence Two conditions for the birth of the presumption of negligence: 1. there exists a contract between the passenger or the shipper and the common carrier 2. the loss, deterioration, injury or death took place during the existence of the contract Doctrine of Proximate Cause there is presumption of negligence If the goods are lost, destroyed or deteriorated, common carriers are presumed to have acted negligently, unless they prove that they observed extraordinary diligence. In case of death of or injuries to passengers, common carriers are presumed to have been at fault or to have acted negligently, unless they prove that they observed extraordinary diligence. b. Duration of Duty (1) Carriage of Goods ARTICLE 1736. The extraordinary responsibility of the common carrier lasts from the time the goods are unconditionally placed in the possession of, and received by the carrier for transportation until the same are delivered,

San Beda College of Law

otes on Transportation Law


which he knows is not intended for passengers, is not presumed to be a passenger. * One who secures free passage by fraud or stealth is precluded from recovery for injuries sustained through the negligence of the carrier, for he has not assumed the status of a passenger. * A person riding on a freight train, on a drivers pass or similar arrangement, to look after livestock being transported and as incident to such transportation is, generally regarded as a passenger for hire. * Motor vehicles like jeepneys and buses are duty bound to stop their conveyances for a reasonable length of time in order to afford passengers an opportunity to board and enter, and they are liable for injuries suffered by boarding passengers resulting from the sudden starting up or jerking of their conveyances while they do so. Once a public utility bus or jeepney stops, it is making a continuous offer to bus riders. Duty to exercise utmost diligence with respect to passengers will not ordinarily terminate until the passenger has, after reaching his destination, safely alighted from the carriers conveyance or had a reasonable opportunity to leave the carriers premises. E. DEFENSES OF COMMON CARRIERS 1. Flood, storm, earthquake, lightning, or other natural disaster or calamity 2. Act of the public enemy in war, whether international or civil 3. Act or omission of the shipper or owner of the goods 4. The character of the goods or defects in the packing or in the containers 5. Order or act of competent public authority 6. Exercise of extraordinary diligence Fortuitous Event to be a valid defense must be established to be the proximate cause of the loss Requisites: 1. The cause of the unforeseen and the unexpected occurrence, or of the failure of the debtor to comply with his obligation, must be independent of the human will 2. It must be impossible to foresee the event which constitutes the caso fortuito, or if it can be foreseen, it must be impossible to avoid 3. The occurrence must be such as to render it impossible for the debtor to fulfill his obligation in a normal manner 4. The obligor (debtor) must be free from any participation in or the aggravation of the injury resulting to the creditor In order for the common carrier to be exempted from responsibility, the natural disaster must have been the proximate and only cause of the loss. However, the common carrier must exercise due diligence to prevent or minimize loss before, during and after the occurrence of flood, storm or other natural disaster in order that the common carrier may be exempted from liability for the loss, destruction, or deterioration of the goods. Fire not considered as a natural calamity or disaster Fire caused by lightning a natural calamity Hijacking does not fall under the categories of exempting causes; the common carrier is presumed to be at fault or to have acted negligently unless there is a proof of extraordinary diligence on its part Mechanical defects damage or injury resulting from mechanical defects is not a damage or injury that was caused by fortuitous event; carrier is liable to its passengers for damages caused by mechanical defects of the conveyance (breakage of a faulty drag-link spring, fracture of the vehicles right steering knuckle, defective breaks) Pages 123-190 Juntilla v. Fontanar Tire-blowouts was not considered as fortuitous event although it was alleged that the tires were in good condition; no evidence was presented to show that the evidence were due to adverse road conditions the carrier must prove all angles. The explosion could have been caused by too much air pressure injected into the tires and the fact that the jeepney was overloaded and speeding at the time of the accident. A. D. AVILA | H. MORAA

San Beda College of Law

otes on Transportation Law


measures to secure safety of passengers since the incident was foreseeable. . HOWEVER, if the stone throwing was entirely unforeseeable and the carrier exercised the utmost diligence, then, the bus cant be held liable. Nonetheless, the burden of proof Is on the carrier to prove such exercise of diligence. It is up to the carrier to overthrow the presumption of negligence. If the passenger decides to file a case, al the passenger has to do is to prove that she was a passenger of the bus and that she suffered injuries while on board the bus. (b) Supposing that there were armed men who staged a hold-up while the bus was speeding along the highway. One of them stole the passengers bag and wallet while pointing a gun him. Is the bus liable? Answer: No. Hand-carried luggages are governed by necessary deposit. Besides, theft with use of arms or through irresistible force is a force majeure which exempts carriers from liability. 3. Hi-jacking cannot exculpate the carrier from liability if it is shown that the employees of the carrier were not overwhelmed by the hijackers and that there was no showing of irresistible force. Since, there were 4 employers while there were only 2 hijackers and only one of them was armed with bladed weapon. ON THE OTHER HAND, a hijacking by 3 armed men is an event which is considered to be beyond the control of the carrier. Thus, the carrier may be adjudged from liability if it can be proven that the hijacking was unforeseeable. c. PUBLIC ENEMY - presupposes a state of war and refers to the government of a foreign nation at war with the country to which the carrier belongs, though not A. D. AVILA | H. MORAA

b. OTHER INVALID DEFENSES 1. Damage to cargo due to EXPLOSION of another cargo not attributable to peril of the seas or accidents of navigation. 2. Damage by WORMS and RATS resulting to damage to cargoes cant be cited as an excuse by the carrier. 3. Damage by WATER through a port which had been left open or insufficiently fastened on sailing. 4. Carrier cannot escape liabilities to third persons if damage was caused by BARRATRY where the master or crew of the ship committed unlawful acts contrary to their duties includes theft and fraudulently running the ship ashore. Cases: 1. Problem: A carrier bus on its way to its destination encountered an engine failure, thus, it has to be repaired for 2 days. And while in the repair shop, a typhoon came resulting to the spoilage of cargoes. Answer: A typhoon although a natural disaster, is not a valid defense if it is shown that it was not the only cause of the loss. Especially when the facts indicate that the typhoon was foreseeable and could have been detected through the exercise of reasonable care. Cargoes should have been secured while the bus was being repaired for 2 days. 2. Problem: A passenger told the driver that he has valuable items in his bag which was placed under his feet and he asked the driver (to which he is seated near) to watch for the bag while he is asleep. (a) There have been incidents of throwing of stones at passing vehicles in the North Express Way. While the bus was traversing the super highway, a stone hurled from the overpass and hit the passenger resulting to injuries. Can the passenger hold the bus liable for damages? Answer: Yes. The incident was foreseeable due the prior incidents of stone hurling. The bus should have exercised utmost diligence and employed adequate precautionary

San Beda College of Law

otes on Transportation Law


necessarily with that to which the owner of the gods owes allegiance. - Thieves, rioter, and insurrectionists are not included. They are merely private depredators for whose acts a carrier is answerable. - Rebels in insurrection against their own government are generally not embraced in the definition of public enemy. However, if the rebels hold a portion of territory, they have declared their impendence, cast off their allegiance and has organized armed hostility to the government, and the authority of the latter is at the time overthrown, such an uprising may take on the dignity of a civil war, and so matured and magnified, the parties are belligerent and are entitled to belligerent rights. - Depredation by pirates (which are enemy of all civilized nation) excuses the carrier from liability. - Common carriers may be exempted from responsibility only if the act of the public enemy has been the proximate and only cause of the loss. Moreover, due diligence must be exercised to prevent or at least minimize the loss before, during and after the performance of the act of the public enemy in order that the carrier may be exempted from liability for the loss, destruction, or deterioration of the goods. carrier does not know but the defect was nonetheless apparent upon ordinary observation, it is not relived form liability for loss or injury to goods resulting therefrom. Cases: 1. Problem: A carrier knowing that some of a cargo of sacks of rice had big holes and others had openings just loosely tied with strings resulting to the spillage of rice during the trip. Thus, there was shortage in the delivery of the cargoes. When sued due to the shortage, the carrier interposed a defense that it was not liable since the shortage was due to the defective condition of the sacks. Decide. Answer: Carrier must still exercise extraordinary diligence if the fact of improper packing is known to the carrier or its servants, or apparent upon ordinary observation. If the carrier accepted the cargo despite such defects, the carriers becomes liable for the damage resulting therefrom. Apply Article 1742. e. ORDER OF PUBLIC AUTHORITY Art. 1743. If through the order of public authority the goods are seized or destroyed, the common carrier is not responsible, provided said public authority had power to issue order. Cases: 1. Carrier was not excused from liability since the order of an acting mayor was not considered as a valid order of a public authority. It is required that public authority who issued the order must be duly authorized to issue the order. 2. Carriage of Goods by Sea Act provides that carrier shall not responsible for loss or damage resulting from arrest or restraint of princes, rulers, or people, or seizure under legal process and from quarantine restrictions. F. DEFE SES PASSE GERS I CARRIAGE OF

d. IMPROPER PACKING Character of the goods and defects in the packaging or in the containers are defenses available to the common carrier. Similarly, the Carriage of Good b Sea Act provides that carrier shall not liable for: (1) wastage in bulk or weight or any damages arising form the inherent defect, quality or vice of goods; (2) insufficiency of packing; (3) insufficiency or inadequacy of the marks, or (4) latent defects no discoverable by due diligence. However, NCC likewise provides: Art. 1742. Even if the loss, destruction, or deterioration of the goods should be caused by the character of the goods, or the faulty nature of the packing or the containers, the common carrier must exercise due diligence to forestall or lessen the loss. Thus, if the carrier accepted the goods knowing the fact of improper packing or even if the

- Primary defense of carrier is exercise of extraordinary diligence in transporting passengers. Even if there is a fortuitous event, the A. D. AVILA | H. MORAA

San Beda College of Law

otes on Transportation Law


carriers must also present proof of exercise of extraordinary diligence. Art. 1759. Common carriers are liable for the death of or injuries to passengers through the negligence or willful acts of the carriers employees, although such employees may have acted beyond the scope of their authority or in violation of the orders of the common carriers. The liability does not cease even upon proof that they exercised diligence in the selection and supervision of their employees. Art. 1763. Carrier is responsible for injuries suffered by a passenger on account of the willful acts or negligence of other passengers or of strangers, if the common carriers employees through the exercise of the diligence of a good father of a family could have prevented or stopped the act or omission. a. Employees - Carrier is liable for the acts of its employees. It cant escape liability by claiming that it exercised due diligence in supervision and selection of its employees (unlike in quasi-delicts). Reasons for the rule: 1. Undertaking of the carrier requires that its passenger that full measure of protection afforded by the exercise of high degree of care prescribed by law, inter alia from violence and insults at the hands of strangers and other passengers, but above all, from the acts of the carriers own servants. 2. The liability of the carrier for the servants violation of duty to performance of his contract to safely transport the passenger, delegating therewith the duty of protecting the passenger with utmost care prescribed by law. 3. As between the carrier and the passenger, the former must bear the risk of wrongful acts or negligence of the carriers employees against passenger, since it, and not the passenger, has the power to select and remove them. b. Other Passengers and Third Persons

With respect to acts of strangers and other passengers resulting in injury to apassenger, the availability of such defense is also subject to the exercise of a carrier of due diligence to prevent or stop the act or omission. Negligence of the carrier need not be the sole cause of the damage or injury to the passenger or the goods. The carrier would still be liable even if the contractual breach concurs with the negligent act or omission of another person. G. PASSE GERS BAGGAGES Rules that are applicable to goods that are being shipped are also applicable to baggage delivered to the custody of the carrier. Arts. 1733. 1734 and 1736 of Civil Code are applicable. However, if the luggage was hand-carried, Arts. 1998, 2000-2003 shall apply. Art. 1998. The deposit of effects made by the travellers in hotels or inns shall also be regarded as necessary. The keepers of hotels or inns shall be responsible for them as depositaries, provided that notice was given to them, or to their employees, of the effects brought by the guests and that, on the part of the latter, they take the precautions which said hotel-keepers or their substitutes advised relative to the care and vigilance of their effects. (1783) Art. 2000. The responsibility referred to in the two preceding articles shall include the loss of, or injury to the personal property of the guests caused by the servants or employees of the keepers of hotels or inns as well as strangers; but not that which may proceed from any force majeure. The fact that travellers are constrained to rely on the vigilance of the keeper of the hotels or inns shall be considered in determining the degree of care required of him. (1784a) Art. 2001. The act of a thief or robber, who has entered the hotel is not deemed force majeure, unless it is done with the use of arms or through an irresistible force. (n) Art. 2002. The hotel-keeper is not liable for compensation if the loss is due to the acts of the A. D. AVILA | H. MORAA

San Beda College of Law

otes on Transportation Law


guest, his family, servants or visitors, or if the loss arises from the character of the things brought into the hotel. (n) Art. 2003. The hotel-keeper cannot free himself from responsibility by posting notices to the effect that he is not liable for the articles brought by the guest. Any stipulation between the hotel-keeper and the guest whereby the responsibility of the former as set forth in articles 1998 to 2001 is suppressed or diminished shall be void. (n) Cases: 1. Despite the fact that the carrier gave notice that it shall not be liable for baggage brought in by passengers, the carrier is still liable for lost hand-carried luggage since it is governed by rules on necessary deposits. Under Art. 20000, the responsibility of the depositary includes the loss of property of the guest caused by strangers but not that which may proceed from force majeure. Moreover, article 2001 considers theft as force majeure if it is done with use of arms or through irresistible force. 2. Even if the passenger did not declare his baggage nor pay its charges contrary to the regulations of the bus company, the carrier is still liable in case of loss of the baggage. Since, it has the duty to exercise extraordinary diligence over the baggage that was turned over to the carrier or placed in the baggage compartment of the bus. The non-payment of the charges is immaterial as long as the baggage was received by the carrier for transportation. II. OBLIGATIONS OF SHIPPER, CONSIGNEE and PASSENGER. A. Negligence of Shipper or Passenger The obligation to exercise due diligence is not limited to the carrier. The shipper is obliged to exercise due diligence in avoiding damage or injury. Nevertheless, contributory negligence on the part of the shipper/ passenger would only mitigate the carriers liability; it is not a total excuse. However, if the negligence of the shipper/ passenger is the proximate and only cause of the loss, then, the carrier shall not be liable. The carrier may overcome the presumption of negligence and any be able to prove that it exercised extraordinary diligence in handling the goods or in transporting the passenger. The carrier may be able to prove that the only cause of the loss of the goods is any of the following: 1. Failure of the shipper to disclose the nature of the goods; 2. Improper marking or direction as to the destination; 3. Improper loading when he assumes such responsibility. The shipper must likewise see to it that the goods are properly packed; otherwise, liability of the carrier may either be mitigated or barred depending on the circumstances. Art. 1741. If the shipper or owner merely contributed to the loss, destruction or deterioration of the goods, the proximate cause thereof being the negligence of the common carrier, the latter shall be liable in damages, which however, shall be equitably reduced. Art. 1761. The passenger must observe the diligence of a good father of a family to avoid injury to himself. Art. 1762. The contributory negligence of the passenger does not bar recovery of damages for his death or injuries, if the proximate cause thereof is the negligence of the common carrier, but the amount of damages shall be equitably reduced. a. Last Clear Chance A negligent carrier is liable to a negligent passenger in placing himself in peril, if the carrier was aware of the passengers peril, or should have been aware of it in the reasonable exercise of due care, had in fact an opportunity later than that of the passenger to avoid an accident.

San Beda College of Law

A. D. AVILA | H. MORAA

10

otes on Transportation Law


Last clear chance applies in a suit between the owners and drivers of colliding vehicles. It does no tarise where a passenger demands responsibility from the carrier to enforce its contractual obligations. For it would be inequitable to exempt the negligent driver of the carrier and its owner on the ground that the other driver was likewise guilty of negligence. b. Assumption of Risk Carriers are not insurers of the lives of their passengers. Thus, in air travel, adverse weather conditions or extreme climatic changes are some of the perils involved in air travel, the consequence of which the passenger must assume or expect. However, there is no assumption of risk in a case wherein a passenger boarded a carrier that was filled to capacity. The act of the passenger in taking the extension chair does not amount to implied assumption of risk. Case: Although, there is a sign in the bus that says: do not talk to the driver while the bus is in motion, otherwise, the company would not assume responsibility for any accident:. Nonetheless, the passengers dared the driver to race with another bus, as the bus speeds up in the attempt to overtake the other bus, it failed to slow down. As a result, the bus turns turtle causing the death and injuries to passengers. Is the bus company liable? Answer: Yes. The bus company is obligated to exercise utmost diligence in carrying passengers. This liability cannot be eliminated or limited by simply posting notices. The passenger cannot be said to have assumed the risk of being injured when he urged the driver to accept the dare. At most, the passengers can only be said to be guilty of contributory negligence which would mitigate the liability of the driver, since the proximate cause of the accident was the drivers willful and reckless act in running the race with the other bus. B. FREIGHT a. Amount to be Paid Common carriers are subject to heavy regulations with respect to rates that they are charging to the public. The regulation of rates is founded upon the valid exercise of the Police Power of the state in order to protect the public from arbitrary and excessive rates while maintaining the efficiency and quality of services rendered. The fixing of just and reasonable rates involves a balancing of investor and the consumer interest. Although the consideration that should be paid to the carrier is still subject to the agreement between parties, what can be agreed upon should not be beyond the maximum amount fixed by appropriate government agency. b. Who will pay. Although either of the shipper or the consignor may pay the freight before or at time the goods are delivered to the carrier for shipment, nonetheless, it is the consignor (whom the contract of carriage is made) who is primarily liable for the payment of freight whether or not he is the owner of the goods. The obligation to pay is implied from the mere fact that the consignor has placed the goods with the carrier for the purpose of transportation. c. Time to pay. Code of Commerce provides that payment should be made within 24-hours from the time of delivery in the absence of any agreement between the parties. ARTICLE 374. The consignees to whom the shipment was made may not defer the payment of the expenses and transportation charges of the goods they receive after the lapse of twenty-four hours following their delivery; and in case of delay in this payment, the carrier may demand the judicial sale of the goods transported in an amount necessary to cover the cost of transportation and the expenses incurred. (1) Carriage of Passengers by Sea With respect to carriage of goods by sea, the tickets are purchased in advance. Carriers are not supposed to allow passengers without tickets. The carrier shall collect/ inspect the passengers ticket within one hour from vessels departure as not to disrupt resting or sleeping passengers. If the vessel is not able to depart on time and the delay is unreasonable, the passenger may opt to have his/ her ticket refunded without refund service fee. Delayed voyage means late departure of the vessel from its port of origin and/ or late arrival of the vessel to its port of destination. Unreasonable A. D. AVILA | H. MORAA

San Beda College of Law

11

otes on Transportation Law


delay means the period of time that has lapsed without just cause and is solely attributable to the carrier which has prejudiced the transportation of the passenger and/ or cargoes to their port of destination. A passenger who failed ot board the vessel can refund or revalidate the ticket subject to surcharges. Revalidation means the accreditation of the ticket that is not used and intended to be used for another voyage. (2) Carriers Lien If consignor or the consignee fails to pay the consideration for the transportation of goods, the carrier may exercise his lien in accordance with Art. 375 of Code of Commerce: ARTICLE 375. The goods transported shall be especially bound to answer for the cost of transportation and for the expenses and fees incurred for them during their conveyance and until the moment of their delivery. This special right shall prescribe eight days after the delivery has been made, and once prescribed, the carrier shall have no other action than that corresponding to him as an ordinary creditor. C. DEMURRAGE Demurrage is the compensation provided for the contract of affreightment for the detention of the vessel beyond the time agreed on for loading and unloading. It is the claim for damages for failure to accept delivery. In broad sense, very improper detention of a vessel may be considered a demurrage. Technically, liability for demurrage exists only when expressly stipulated in the contract. Using the term in broader sense, damages in the nature of demurrage are recoverable for a breach of the implied obligation to load or unload the cargo with reasonable dispatch, but only by the party to whom the duty is owed and only against on who is a party to the shipping contract. Notice of arrival of vessels or conveyances, or their placement for purposes of unloading is often a condition precedent to the right to collect demurrage charges.

San Beda College of Law

A. D. AVILA | H. MORAA

12

otes on Transportation Law


CHAPTER 3 EXTRAORDI ARY DILIGE CE I. RATIONALE A common carrier is bound to carry the passengers safely as far a human care and foresight provide, using the utmost diligence of very cautious persons, with due regard for all circumstances. Extraordinary diligence: Calculated to protect the passengers from the tragic mishaps that frequently occur in connection with rapid modern transportation. common carrier ( ote: Typically fare/freight); and 3. Reasonable, just and contrary to public policy. B. PASSENGERS There can be no stipulation lessening the utmost diligence that is owed to passengers. Art. 1757. The responsibility of a common carrier for the safety of passengers as required in Arts. 1733 and 1755 cannot be dispensed with or lessened by stipulation, by the posting of notices, by statements on tickets, or otherwise. ( ote: Absolute; extraordinary at all times.) Gratuitous passenger A stipulation limiting the common carriers liability for negligence is valid, but not for willful acts of gross negligence. The reduction of fare does not justify any limitation.

II. HOW DUTY IS COMPLIED WITH Common carrier binds itself to carry the passengers safely as far as human care and foresight can provide, using the utmost diligence of a very cautious person, with due regard for all the circumstances. - The duty even extends to the members of the crew or complement operating the carrier. A reasonable man or a good father of a family in the position of the carrier must exercise extraordinary diligence in the performance of his contractual obligation. - Whether or not a reasonable man, exercising extraordinary diligence, could have foreseen and prevented the damage or loss that occurred. III. EFFECT OF STIPULATION A. GOODS The law allows a stipulation whereby the carrier will exercise a degree of diligence which is less than extraordinary with respect to goods. Art. 1744. A stipulation between the common carrier and the shipper owner limiting the liability of the former for the loss, destruction, or deterioration of the goods to a degree less than extraordinary diligence shall be valid, provided it be: 1. In writing, signed by the shipper/owner; 2. Supported by a valuable consideration other than the service rendered by the

IV. EXTRAORDINARY CARRIAGE BY SEA A. SEAWORTHINESS

DILIGENCE

IN

a.) Warranty of Seaworthiness of Ship Extraordinary diligence requires that the ship which will transport the passengers and goods is seaworthy. Seaworthiness of the vessel is impliedly warranted. The carrier shall be bound before and at the beginning of the voyage to exercise due diligence to make the ship seaworthy. b.) No duty to inquire Because of the implied warranty of seaworthiness, shippers of goods, when transacting with common carriers, are not expected to inquire into the vessels seaworthiness, genuineness of its licenses and compliance with all maritime laws. Passengers cannot be expected to inquire everytime they board a common carrier, whether the carrier possesses the necessary papers or that all the carriers employees are qualified.

San Beda College of Law

A. D. AVILA | H. MORAA

13

otes on Transportation Law


It is the carrier that carries such burden of proving that the ship is seaworthy. Presentation of certificates of seaworthiness is not sufficient to overcome the presumption of negligence. c.) Meaning of Seaworthiness A vessel must have such degree of fitness which an owner who is exercising extraordinary diligence would require his vessel to have at the commencement of the voyage, having regard to all the probable circumstances of it. This includes fitness of the vessel itself to withstand the rigors of voyage, fitness of the vessel to store the cargoes and accommodate passengers to be transported and that it is adequately equipped and properly manned. General Test of Seaworthiness: Whether the ship and its appurtenances are reasonably fit to perform the service undertaken. Example: The carrier was able to establish that the ship itself was seaworthy because the records reveal that the vessel was drydocked and inspected by the Phil. Coast Guard before its first destination. A warranty of seaworthiness requires that it be properly laden, and provided with a competent master, a sufficient number of competent officers and seamen, and the requisite appurtenances and equipment. The carrier shall be bound before and at the beginning of the voyage to exercise due diligence to: 1. Make the ship seaworthy; 2. Properly man, equip, and supply the ship; 3. Make all parts of the ship in which goods are carried, fit and safe for their reception, carriage, and preservation. The carrier shall properly and carefully load, handle, stow, carry, keep, care for, and discharge the goods carried. The ship must be cargoworthy. The ship must be efficiently strong and equipped to carry the particular kind of cargo which she has contracted to carry and her cargo must be so loaded that it is safe for her to proceed on her voyage. The vessel must be adequately equipped and properly manned. On top of regular maintenance and inspection, Captains, masters or patrons of vessels must prove the skill, capacity, and qualifications necessary to command and direct the vessel. If the owner of a vessel desires to be the captain without having the legal qualifications, he shall limit himself to the financial administration of the vessel and shall entrust the navigation to a qualified person. It is not an excuse that the carrier cannot afford the salaries of competent and licensed crew or that latter is unavailable. B. OVERLOADING Duty to exercise due diligence likewise includes the duty to take passengers or cargoes that are within the carrying capacity of the vessel. C. PROPER STORAGE The vessel itself may be suitable for the cargo but this is not enough because the cargo must also be properly stored. Cargo must generally not be placed on deck. The carrying of deck cargo raises the presumption of unseaworthiness unless it can be shown that the deck cargo will not interfere with the proper management of the ship. D. NEGLIGENCE OF CAPTAIN AND CREW Failure on the part of the carrier to provide competent captain and crew should be distinguished from the negligence of the said captain and crew, because the latter is covered by the Limited Liability Rule (liability of the shipowner may be limited to the value of the A. D. AVILA | H. MORAA

San Beda College of Law

14

otes on Transportation Law


vessel). If the negligence of the captain and crew can be traced to the fact that they are really incompetent, the Limited Liability Rule cannot be invoked because the shipowner may be deemed negligent. a.) Rules on passenger safety (Read Memorandum Circular No. 114: p. 204) E. DEVIATION AND TRANSSHIPMENT a.) Deviation If there is an agreement between the shipper and the carrier as to the road over which the conveyance is to be made (subject to the approval by the Maritime Industry Authority), the carrier may not change the route, unless it be by reason of force majeure. Without this cause, he shall be liable for all the losses which the goods may suffer, aside from paying the sum stipulated for that case. When on account of the force majeure, the carrier had to take another route which resulted to an increase in transportation charges, he shall be reimbursed upon formal proof. b.) Transshipment The act of taking cargo out of one ship and loading it into another; to transfer goods from the vessel stipulated in the contract of affreightment to another vessel before the place of destination named in the contract has been reached. Transshipment of freight without legal excuse is a violation of the contract and subjects the carrier to liability if the freight is lost even by a cause otherwise excepted. V. EXTRAORDINARY CARRIAGE BY LAND DILIGENCE IN duty bound to make sure that the parts that they are purchasing are not defective. Hence, it is a long-standing rule that a carrier cannot escape liability by claiming that the accident that resulted because of a defective break or tire is due to a fortuitous event. This is true even if it can be established that the tire that was subject of a blowout is brand new. The duty to exercise extraordinary diligence requires the carrier to purchase and use vehicle parts that are not defective. B. TRAFFIC RULES The carrier fails to exercise extraordinary diligence if it will not comply with basic traffic rules. The Civil Code provides for a presumption of negligence in case the accident occurs while the operator of the motor vehicle is violating traffic rules. In cases involving breach of contract of carriage, proof of violation of traffic rules confirms that the carrier failed to exercise extraordinary diligence. C. DUTY TO INSPECT There is no unbending duty to inspect each and every package or baggage that is being brought inside the bus or jeepney. The carrier is duty bound to conduct such inspection depending on the circumstances.

VI. EXTRAORDINARY DILIGENCE IN CARRIAGE BY AIR The aircraft must be in such a condition that it must be able to withstand the rigors of flight. Airworthiness An aircraft, its engines propellers, and other components and accessories, are of proper design and construction, and are safe for air navigation purposes, such design and construction being consistent with accepted engineering practice and in accordance with aerodynamic laws and aircraft science. Proof of airworthiness is not by itself sufficient to prove exercise of extraordinary diligence. The fact that the flight was cancelled due to fortuitous event does not mean that the carriers duty already ended. The carrier is still obligated to A. D. AVILA | H. MORAA

A. CONDITION OF VEHICLE Common carriers that offer transportation by land are similarly required to make sure that the vehicles that they are using are in good order and condition. Rule on Mechanical Defects If the carriers will replace certain parts of the motor vehicle, they are

San Beda College of Law

15

otes on Transportation Law


look after the convenience and comfort of the passenger. A. INSPECTION Is the duty of the carrier to make inquiry as to the general nature of the articles shipped and of their value before it consents to carry them; and its failure to do so cannot defeat the shippers right to recovery of full value of the package if lost, in the absence of showing of fraud or deceit on the part of the shipper. Where a common carrier has reasonable ground to suspect that the offered goods are of a dangerous character, the carrier has the right to know the character of such goods and to insist inspection, if reasonable and practical under the circumstances, as a condition of receiving and transporting such goods. To be subjected to unusual search, other than the routinary inspection procedure customarily undertaken, there must exist proof that would justify cause for apprehension that the baggage is dangerous as to warrant exhaustive inspection, or even refusal to accept carriage of the same.

San Beda College of Law

A. D. AVILA | H. MORAA

16

otes on Transportation Law CHAPTER 4 BILL OF LADI G


I. CO CEPTS, DEFI ITIO A D KI DS Bill of Lading (BOL)a written acknowledgement, signed by the master of a vessel or other authorized agent of the carrier, that he has received the described goods from the shipper, to be transported on the expressed terms to be described the place of destination, and to be delivered to the designated consignees of the parties. It operates as a (1) RECEIPT (2) as a CONTRACT (3) as a DOCUMENT OF TITLE. A BOL is not necessary for the perfection of a contract of carriage. Thus, the obligation to exercise extraordinary diligence by the carrier is still required even if there is no bill of lading. In the absence of the bill of lading, disputes shall be determined on the basis of the provisions in the New Civil Code and suppletorily by the Code of Commerce. KINDS of BILL of LADING
1. Clean Bill of Lading 2. Foul Bill of Lading 3. Spent Bill of Lading Does not contain any notation indicating any defect in the goods. One that contains the abovementioned notation. The goods are already delivered but the bill of lading was not yet returned (upon delivery, the carrier is supposed to retrieve the covering bill of the goods) Issued by a carrier who is obliged to use the facilities of other carriers as well as his own facilities for the purpose of transporting the goods from the city of the seller to the city of the buyer, which BOL is honored by the second and other interested carriers who dont issue their own BOL. -states that the goods have been received on board the vessel which is to carry the goods. -apparently guarantees the certainty of shipping as well as the seaworthiness of the vessel to carry the goods. -states that the goods have been received for shipment with or without specifying the vessel by which the goods are to be shipped. -issued when conditions are not normal and there is insufficiency of shipping space. 7. Custody Bill of Lading 8. Port Bill of Lading The goods are already receied by the carrier but the vessel indicated therein has not yet arrived in the port. The vessel indicated in the BOL that will transport the goods is already in the port.

EFFECTIVITY of BOL- upon its delivery to and acceptance by the shipper. The acceptance of the bill without dissent raises the presumption that all the terms therein were brought to the knowledge of the shipper and agreed to by him, and in the absence of fraud or mistake, he is stopped thereafter from denying that he assented to such claims. THE 3-FOLD LADI G ATURE OF THE BILL OF

I. RECEIPT- as comprehending all methods of transportation, a BOL may be defined as a written acknowledgement of the receipt of goods and an agreement to transport an to deliver them at a specified place to a person named or on his order. Other terms, shipping receipts, forwarders receipts, and receipts for transportation. (SC) the designation however is not material, and neither is the form of the instrument. If it contains an acknowledgement by the carrier of the receipt of goods for transportation it is, in legal effect a BOL. II. CONTRACT - it expresses the terms and conditions of the agreement between the parties; names the parties; includes consignees etc. It is the law between the parties bound by its terms and conditions. It is to be construed liberally in favor of the shipper who adhered to such bill as it is a contract of adhesion. The only participation of the party is the signing of his signature or his adhesion thereto. ART. 24 (NCC). In all contractual property or other relations, when one of the parties is at a disadvanatge on account of his moral dependence, ignorance indigence, mental weakness, tender age and other handicap, the court must be vigilant for his protection.

4. Through Bill of Lading

5. On Board Bill

6. Received for Shipment Bill

San Beda College of Law

A. D. AVILA | H. MORAA

17

otes on Transportation Law


It is covered by the parol evidence rule, that the terms of the contract are conclusive upon the parties and evidence aliunde is not admissible to vary or contradict a complete enforceable agreement. If mistake was alleged, it must be timely raised in the pleadings and it must be a mistake of fact mutual to the parties. The BOL is the legal evidence of the contract and the entries thereof constitutes prima facie evidence of the contract. All the essential elements of a valid contract (cause, consent, object) are present when such bill are issued. BASIC STIPULATIONS (for overland transpo, maritime commerce and airline transpo of passengers, please refer to the textbook for the codal pp. 267-275) PROHIBITED AND LIMITING STIPULATION 1. Exempting the carrier from any and all liability for loss or damage occasioned by its own negligence - INVALID as it is contrary to public policy. 2. Parties may stipulate that the diligence to be exercised by the carrier for the carriage of goods be less than extraordinary diligence if it is (a) in writing and signed by both parties (b) supported by a valuable consideration other than the service rendered by the common carrier ( c ) the stipulation is just, reasonable and not contrary to law. 3. Providing an unqualified limitation of such liability to an agreed valuation - INVALID 4. Limiting the liability of the carrier to an agreed valuation unless the shipper declares a higher value and pays a higher rate of freight- VALID and ENFORCEABLE. III. AS A DOCUMENT OF TITLE ART 1507 ( CC). A document of title in which it is stated that the goods referred to therein will be delivered to the bearer or to the order of any person named in such document is a negotiable document of title. If the document of title contains the required words of negotiability to make the instrument negotiable under Article 1507 of the NCC, the document remains to be negotiable even if the words not negotiable or non negotiable are places thereon a. Bearer document- negotiated by delivery b. Order document- negotiated by indorsement of the specified person so named Effects of negotiation. Negotiation of the document has the effect of manual delivery so as to constitute the transferee the owner of the goods. RECOVERY OF DAMAGES FROM CARRIER FOR CARRIAGE OF GOODS: 1. Inter-island - if goods arrived in damaged condition (Art. 366): a. If damage is apparent, the shipper must file a claim immediately (it may be oral or written); b. If damage is not apparent, he should file a claim within 24 hours from delivery. The filing of claim under either (1) or (2) is a condition precedent for recovery. If the claim is filed, but the carrier refuses to pay: enforce carriers liability in court by filing a case: a. within 6 year, if no bill of lading has been issued; or b. within 10 years, if a bill of lading has been issued. 2. Overseas where goods arrived in a damaged condition from a foreign port to a Philippine port of entry: (COGSA) a. upon discharge of goods, if the damage is apparent, claim should be filled immediately; b. if damage is not apparent, claim should be filled within 3 days from delivery. Filing of claim is not a condition precedent, but an action must be filed against the carrier within a period of 1 year from discharge; if there is no delivery, the one-year period starts to run from the day the vessel left port (in case of undelivered or lost cargo), or from delivery to the arrastre (in case of damaged cargo). Where there was delivery to the wrong person, the prescriptive period is 10 years because there is a violation of contract, and the carriage of goods by sea act does not apply to misdelivery. (Ang v. American SS Agencies (19 SCRA 631) A. D. AVILA | H. MORAA

San Beda College of Law

18

otes on Transportation Law


CARRIAGE OF GOODS BY SEA ACT (C.A. o. 65) F COGSA is applicable in international maritime commerce. It can be applied in domestic sea transportation if agreed upon by the parties. (paramount clause) F COGSA is suppletory to the Civil Code and the Code of Commerce in the Carriage of goods from foreign ports to the Philippines. F Under the Sec. 4 (5), the liability limit is set at $500 per package unless the nature and value of such goods is declared by the shipper. This is deemed incorporated in the bill of lading even if not mentioned in it (Eastern Shipping v. IAC, 150 SCRA 463). Note that Art. 1749 of the NCC applies to interisland trade. Prescriptive periods F Suit for loss or damage to the cargo should be brought within one year after: a. delivery of the goods; or b. the date when the goods should be delivered. (Sec. 3[6]) The one-year prescriptive period is suspended by: 1. express agreement of the parties (Universal Shipping Lines, Inc. v. IAC, 188 SCRA 170) 2. when an action is filed in court until it is dismissed. (Stevens & Co. v. ordeutscher Lloyd, 6 SCRA 180) WARSAW CO VE TIO of 1929 WHE APPLICABLE: Applies to all international transportation of person, baggage or goods performed by aircraft for hire. International transportation means any transportation in which the place of departure and the place of destination are situated either: 1. within the territories of two High Contracting Parties regardless of whether or not there be a break in the transportation or transshipment, or 2. within the territory of a single High Contracting Party, if there is an agreed stopping place within a territory subject to the sovereignty, mandate or authority of another power, even though that power is not a party to the Convention. Transportation to be performed by several successive air carriers shall be deemed to be one undivided transportation, if it has been regarded by the parties as a single operation, whether it has been agreed upon under the form of a single contract or of a series of contracts, and it shall not lose its international character merely because one contract or a series of contracts is to be performed entirely within a territory subject to the sovereignty, suzerainty, mandate, or authority of the same High Contracting Party. (Art. 1) OTE: Warsaw prevails over the Civil Code, Rules of Court and all laws in the Philippines since an international law prevails over general law. WHE OT APPLICABLE: 1. If there is willful misconduct on the part of the carriers employees. The Convention does not regulate, much less exempt, carrier from liability for damages for violating the rights of its passengers under the contract of carriage (PAL v. CA, 257 SCRA 33). 2. when it contradicts public policy; 3. if the requirements under the Convention are not complied with. LIABILITY OF CARRIER FOR DAMAGES: 1. Death or injury of a passenger if the accident causing it took place on board the aircraft or in the course of its operations; (Art. 17) 2. Destruction, loss or damage to any luggage or goods, if it took place during the carriage; (Art. 18) and 3. Delay in the transportation of passengers, luggage or goods. (Art. 19) OTE: The Hague Protocol amended the Warsaw Convention by removing the provision that if the airline took all necessary steps to avoid the damage, it could exculpate itself completely (Art. 20(1)). (Alitalia v. IAC, 192 SCRA 9) LIMIT OF LIABILITY 1. passengers - limited to 250,000 francs except: agreement to a higher limit 2. Goods and checked-in baggage - 250 francs/kg

San Beda College of Law

A. D. AVILA | H. MORAA

19

otes on Transportation Law


except: consigner declared its value and paid a supplementary sum, carrier liable to not more than the declared sum unless it proves the sum is greater than its actual value. 3. hand-carry baggage - limited to 5,000 francs/passenger Bill of Lading as Document of Title (page 341) An agreement relieving the carrier from liability or fixing a lower limit is null and void. (Art. 23) Carrier not entitled to the foregoing limit if the damage is caused by willful misconduct or default on its part. (Art. 25) ACTIO FOR DAMAGES 1. Condition precedent A written complaint must me made within: - 3 days from receipt of baggage - 7 days from receipt of goods - in case of delay, 14 days from receipt of baggage/goods F otherwise the action is barred except in case of fraud on the part of the carrier. (Art. 26) 2. Jurisdiction - governed by domestic law 3. Venue at the option of the plaintiff: a. court of domicile of the carrier; b. court of its principal place of business; c. court where it has a place of business through which the contract has been made; d. court of the place of destination. (Art. 28) 4. Prescriptive period 2 years from: a. date of arrival at the destination b. date of expected arrival c. date on which the transportation stopped. (Art. 29) 5. Rule in case of various successive carriers, a. In case of transportation of passengers the action is filed only against the carrier in which the accident or delay occurred unless there is an agreement whereby the first carrier assumed liability for the whole journey. b. In case of transportation of baggage or goods i. the consignor can file an action against the first carrier and the carrier in which the damage occurred ii. the consignee can file an action against the last carrier and the carrier in which the damage occurred. These carriers are jointly and severally liable. (Art. 30) Bill of lading is a document of title under the Civil Code. It can be a negotiable document of title. A. egotiability - It is negotiable if it is deliverable to the bearer, or to the order of any person named in such document. (Art. 1507, Civil Code) a) Effect of Stamp or otation on- egotiable the document remains to be negotiable even if the words not-negotiable or non-negotiable are placed thereon. - Art. 1510 (Civil Code) B. How egotiated a) Bearer document (Art. 1508 and 1511) - may be negotiated be delivery b) Order document (Sec. 38, NIL and Art. 1509, NCC) - can only be negotiated through the indorsement of the specified person so named. - such indorsement may be in blank, to bearer or to a specified person. Where a negotiable document of title is transferred for value by delivery, and the endorsement of the transferor is essential for negotiation, the transferee acquires a right against the transferor to compel him to endorse the document. xxx (Art. 1515, Civil Code) C. Effects of egotiation - has the effect of manual delivery so as to constitute the transferee the owner of the goods - results in the transfer of ownership because transfer of document likewise transfers control over the goods - refer to Art. 1513 Nota Bene: COGSA/WARSAW applies to foreign vessels or airplane or international travel Code of Commerce applies to interisland or domestic travel.

San Beda College of Law

A. D. AVILA | H. MORAA

20

otes on Transportation Law CHAPTER 5 ACTIO S A D DAMAGES I CASE OF BREACH


Cause of action of a passenger and shipper: a) against common carrier based on culpa contractual or culpa aquiliana b) on the part of the driver based on either culpa delictual or culpa aquiliana If the negligence of third persons concurs with the breach, the liability of the third person who was driving the vehicle and/or his employer may be based on quasi delict. Solidary liability - In case the negligence of the carriers driver and a third person concurs, the liability of the parties carrier and his driver, third person is joint and several. I. Notice of Claim and Prescriptive Period A. Overland Transportation of Goods and Coastwise Shipping a) When to file a claim with carrier - Art. 366 constitutes a condition precedent to the accrual of a right of action against a carrier for damage caused to the merchandise. Under Art. 366 of the Code of Commerce, an action for damages is barred if the goods arrived in damaged condition and no claim is filed by the shipper within the following period: 1) immediately if damage is apparent; 2) within twenty four (24) hours from delivery if damage is not apparent the period does not begin to run until the consignee has received possession of the merchandise that he may exercise over it the ordinary control pertinent to ownership. This provision applies even to transportation by sea within the Phils. or coastwise shipping. does not apply to misdelivery of goods. But the period prescribed in Art. 366 may be subject to modification by agreement of the parties. b) Extinctive Prescription - six (6) years if there is no written contract - ten (10) years if there is written contract This rule likewise applies to carriage of passengers for domestic transportation. B. International Carriage of Goods by Sea A claim must be filed with the carrier within the following period: 1) if the damage is apparent the claim should be filed immediately upon discharge of the goods; or 2) within 3 days from delivery if damage is not apparent Filing of claim is not condition precedent. Thus, regardless of whether the notice of loss or damage has been given, the shipper can still bring an action to recover said loss or damage within one year after the delivery of the goods. a) Prescription Action for damages must be filed within a period of one (1) year from discharge of the goods. The period is not suspended by an extrajudicial demand. Does not apply to conversion or misdelivery. The one (1) year period refers to loss of goods and not to misdelivery. Damages arising from delay or late delivery id not the damage or loss contemplated under the COGSA. The goods are not actually lost or damaged. The applicable period is ten (10) years. This rule applies in collision cases. The one (1) year period starts not from the date of the collision but when the goods should have been delivered, had the cargoes been saved.

San Beda College of Law

A. D. AVILA | H. MORAA

21

otes on Transportation Law


Insurance The insurer who is exercising its right of subrogation is also bound by the one (1) year prescriptive period. However, it does not apply to the claim against the insurer for the insurance proceeds. The claim against the insurer is based on contract that expires in ten (10) years. II. Recoverable Damages Damages is the pecuniary compensation, recompense or satisfaction for an injury sustained, or as otherwise expressed, the pecuniary consequences which the law imposes for the breach of some duty or violation of some rights. A. Extent of Recovery (Art. 220, CC) Carrier in good faith is liable only to pay for the damages that are the natural and probable consequences of the breach of the obligation and which the parties have foreseen or could have reasonably foreseen at the time the obligation was constituted. Carrier in bad faith or guilty of gross negligence liable for all damages, whether the same can be foreseen or not. The carrier who may be compelled to pay has the right of recourse against the employee who committed the negligent, willful or fraudulent act. Damages cannot be presumed. In case of goods the plaintiff is entitled to their value at the time of destruction. For personal injury and even death the claimant is entitled to all medical expenses as well as other reasonable expenses that he incurred to treat his or her relatives injuries. In case of death the plaintiff is entitled to the amount that he spent during the wake and funeral of the deceased. But, expenses after the burial are not compensable. Read Art. 2206 (Civil Code) The amount of fixed damages is now P50,000.00 1) Loss of earning capacity Net Earning Capacity = Life Expectancy x [Gross Annual Income less Necessary Living Expenses] Life expectancy (2/3 x 80 age at death) Net earnings based on the gross income of the victim minus the necessary incidental living expenses which the victim would have incurred if he were alive. Amount of living expenses must be established. In the absence of proof, it is fixed at fifty (50%) of the gross income. Rules on loss of earning applies when the breach of the carrier resulted in the plaintiffs permanent incapacity.

B. Kinds of Damages a) Actual or Compensatory Damages only for the pecuniary loss suffered by him as he has duly proved 2 Kinds: 1. the loss of what a person already possesses (dao emrgente); 2. the failure to receive as a benefit that would have pertained to him (lucro cesante). Damages may be recovered: Art. 2205 (Civil Code) 1) For loss or impairment of earning capacity in cases of temporary or permanent personal injury; 2) For injury to the plaintiffs business standing or commercial credit.

2) Attorneys fees - refer to Art. 2208 of the Civil Code - attorneys fees may be awarded in an action for breach of contract of carriage under par. 1,2,4,5,10 and 11 of Art. 2208. 3) Interests 12% per annum if it constitutes a loan or forbearance of money 6% per annum if it does not constitute loan or forbearance of money 12% - for final judgment

b) Moral Damages

San Beda College of Law

A. D. AVILA | H. MORAA

22

otes on Transportation Law


- Includes physical suffering, mental anguish, fright, serious anxiety, besmirched reputation, wounded feelings, moral shock, social humiliation and similar injury. - Though incapable of pecuniary computation, moral damages may be recovered if they were the proximate result of the defendants wrongful act or omission. - may be recovered when there is death or there is malice or bad faith. (in transportation of passengers) - Refer to Art. 2219 and 2220 - Generally, no moral damages may be awarded where the breach of contract is not malicious. c) ominal Damages - Refer to Art. 2221-2223 (Civil Code) - the assessment of nominal damages is left to the discretion of the court - the award of nominal damages is also justified in the absence of competent proof of the specific amounts of actual damages suffered. - cannot co-exist with actual damages d) Temperate or Moderate Damages - Art. 2224 provides: may be recovered when the court finds that some pecuniary loss has been suffered but its amount can not, from the nature of the case, be provided with certainty. - cannot co-exist with actual damages e) Liquidated Damages those agreed by the parties to a contract, to be paid in case of breach thereof. Ordinarily, the court cannot change the amount of liquidated damages agreed upon by the parties. However, Art. 2227 of the Civil Code provides that liquidated damages, whether intended as an indemnity or a penalty, shall be equitable reduced if they were iniquitous or unconscionable. f) Exemplary or Corrective Damages Requisites for the award of exemplary damages: 1. They may be imposed by way of example in addition to compensatory damages, and only after the claimants right to them has been established. 2. They cannot be recovered as a matter of right, their determination depending upon the amount of compensatory damages that may be awarded to the claimant. 3. The act must be accompanied by bad faith or done in wanton, fraudulent, oppressive or malevolent manner. The award of exemplary damages in breach of contract of carriage is subject to the provisions under Art. 2232-2235 of the Civil Code.

San Beda College of Law

A. D. AVILA | H. MORAA

23

otes on Transportation Law CHAPTER 6 MARITIME LAW


General Concepts The real and hypothecary nature of maritime law simply means that the liability of the carrier in connection with losses related to maritime contracts is confined to the vessel Articles 837, 587, and 590 cover only: (1) liability to third persons, (2) acts of the captain, (3) collisions Limited Liability Rule - No vessel, no liability - The total destruction of the vessel extinguishes maritime liens because there is no longer any res to which it can attach - The civil liability for collision is merely coexistent with the ship owners interest in the vessel - EXCEPTIONS: 1. Where the injury or death to a passenger is due either to the fault of the ship owner, or to the concurring negligence of the ship owner and the captain 2. Where the vessel is insured 3. In workmens compensation claims 4. Expenses for repairs and provisioning of the ship prior to the departure thereof a. Negligence the LLR applies if the captain or the crew caused the damage or injury. However, if the failure to maintain the seaworthiness of the vessel can be ascribed to the ship owner alone or the ship owner concurrently with the captain, then the LLR cannot be invoked - The carrier is liable for the damages to the full extent and not up to the value of the vessel if it was established that the carrier was guilty of negligence in allowing the captain and crew to do negligent acts during the voyage, in failing to maintain the ship as seaworthy and in allowing the ship to carry more passengers than it was allowed to carry LLR cannot be invoked in failure to maintain the seaworthiness of the vessel Authorizing the voyage notwithstanding its knowledge of a typhoon is tantamount to negligence exempts the case from the operation of LLR

b. Insurance claims - Total loss of the vessel did not extinguish the liability of the carriers insurer; despite the loss of the vessel, its insurance answers for the damages that a ship owner or agent, may be held liable for by reason of the death of its passengers c. Workmens compensation - Even if the vessel was lost, the liability thereunder is still enforceable against the employer or ship owner Abandonment - Vessel, its appurtenances and the freightage - An indispensable requirement before the ship owner or ship agent can enjoy the benefits of the LLR - If the carrier does not want to abandon the vessel, then he is still liable even beyond the value of the vessel Procedure for Enforcement - In sinking of a vessel, the claimants or creditors are limited in their recovery to the remaining value of accessible assets - In case of a lost vessel, there are the insurance proceeds and pending freightage for the particular voyage - No claimant can be given precedence over the others by the simple expedience of having filed or completed its action earlier than the rest Protests - The written statement by the master of a vessel or any authorized officer, attested by proper officer or a notary, to the effect that damages has been suffered by the ship A. D. AVILA | H. MORAA

San Beda College of Law

24

otes on Transportation Law


Protest is required in the following cases: 1. When the vessel makes an arrival under stress 2. Where the vessel is shipwrecked 3. Where the vessel has gone through a hurricane or the captain believes that the cargo has suffered damages or averages 4. Maritime collisions

Philippine Shipping Company v. Vergara (1600) Heirs of Delos Santos v. CA (51165)

San Beda College of Law

A. D. AVILA | H. MORAA

25

otes on Transportation Law CHAPTER 7 VESSELS


Definitions P.D. 474 a watercraft; any barge, lighter, bulk carrier, passenger ship freighter, tanker container ship, fishing boats, or other artificial contrivance utilizing any source of motive power, designed, used or capable of being used as means of transportation operating other as common contract carrier, including fishing vessels covered under P.D. 43 Except: (i) Those owned and/or operated by the AFP and by foreign governments for military purposes (ii) Bancas, sailboats and other waterbone contrivance of less than three gross tons capacity and not motorized Lopez vs. Duruelo (29166, Oct. 22, 1928) Construction, Equipment and Manning - Subject to the rules issued by the MARINA - Article 574, Code of Commerce Personal Property - Under Article 416, Civil Code - Under Art 585, Code of Commerce: for all purposes not modified or restricted; hence, there are rules that apply to real estate - Ships or vessels, whether moved by steam or by sail, partake, to a certain extent, of the nature and condition of real property, on account of their value and importance in the world of commerce - Art 573, Code of Commerce: transfer of vessels should be in writing and must be recorded in the appropriate registry Vessels that are under the jurisdiction of the MARINA can be transferred only with notice to said administrative agency

a. Prescription - Acquisition of a vessel must appear in a written instrument, which shall not produce any effect with respect to third persons (Art. 573, Code of Commerce) - Ownership shall be acquired by possession in good faith, continued for three (3) years, with a just title duly recorded - In the absence of the aforementioned requisites, continuous possession for ten (10) years shall be necessary in order to acquire ownership. - A captain may not acquire by prescription the vessel which he is in command - Co-owners shall have the right of repurchase and redemption in sales made to strangers, but only within nine (9) days following the inscription of the sale in the registry, and by depositing the price at the same time b. Sale - Includes the rigging, masts, stores and engine of a steamer appurtenant thereto, which at the time belongs to the vendor - Arms, munitions of war, provisions and fuel shall not be considered as included in the sale - Obligation of the vendor to deliver to the purchaser a certified copy of the record sheet of the vessel in the registry up to the date of the sale - If alienation of the vessel should be made while it is on a voyage, the freightage which it earns from the time it receives its last cargo shall pertain entirely to the purchaser, and the payment of the crew and other persons shall be for his account - If the sale is made after the vessel has arrived at the port of its destination, the freightage shall pertain to the vendor, and the payment of the crew and other persons shall be for his account, unless contrary is stipulated REGISTRATION

OWNERSHIP Acquisition - Vessels may be acquired or transferred by any means recognized by law; may be sold, donated and may even be acquired through prescription

San Beda College of Law

A. D. AVILA | H. MORAA

26

otes on Transportation Law


Registered through MARINA The person who is the registered owner of the vessel is presumed to be the owner of the vessel The sale or transfer of the vessel is not binding on third persons unless the same is registered Tariff and Customs Code: A certificate of Philippine registry confers upon the vessel the right to engage in the Philippine coastwise trade and entitles it to the protection of the authorities and the flag of the Philippines in all ports and on the high seas

SHIPS MANIFEST - Vessels are required to carry manifests in coastwise trade - Tariff and Customs Code: manifests shall be required for cargo and passengers transported from one place or port in the Philippines to another only when one or both of such places is a port of entry Manifest - a declaration of the entire cargo - object is to furnish customs officers with a list to check against, to inform the revenue officers what goods are being brought into a port of the country on a vessel - hence, the requirement that a vessel must carry a manifest is not complied with even if a bill of lading can be presented. - Bill of lading is just a declaration of a specific cargo, rather than the entire cargo - It is issued as a matter of convenience by virtue of a contract

San Beda College of Law

A. D. AVILA | H. MORAA

27

otes on Transportation Law CHAPTER 8 PERSO S WHO TAKE PART I MARITIME COMMERCE
SHIPOWNERS AND SHIP AGENTS Shipowner - the person who is primarily liable for damages sustained in the operation of vessel - evident intent to place the primary responsibility on the owner of the vessel - naviero construed to include the shipowner, ship agent and even the character who is considered as owner pro hac vice Ship agent - the person entrusted with provisioning of the vessel, or who represents her in the port in which she happens to be - ship agent is jointly and severally liable with the owner, applies both for breach of contract and extra-contractual obligation such as tort - even though not the owner, is liable in every way to the creditor for losses and damages, without prejudice to his right against the owner, the vessel and its equipment and freight, subject to the LLR the shipowner and ship agent shall be civilly liable for the acts of the captain and for obligations contracted by the latter to repair, equip, and provision the vessel ship agent shall also be civilly liable for the indemnities in favor of third persons which may arise from the conduct of the captain in the care of the goods which he loaded on the vessel; but he may exempt himself through abandonment neither the shipowner or the ship agent shall be liable for the obligations contracted by the captain, if the latter exceeds the powers and privileges pertaining to him if the amounts claimed were invested for the benefit of the vessel, the responsibility therefor shll devolve upon its owner or agent Part Owners - a partnership shall be presumed as established by the co-owners - if not more than two, decision of the member having controlling interest - more than two, proportionately - a vessel may not be detained, attached or levied upon in execution in its entirety for the private debts of a part owner - the co-owners of a vessel shall be civilly liable in the proportion of their interest in the common fund, for the results of the acts of the captain - each co-owner may exempt himself from liability by abandonment - all part owners shall be liable, in proportion to their respective ownership, for the expenses for repairing the vessel - the sale of the vessel must be made at public auction, unless the co-owners stipulate SHIP AGENT - whether the owner or a manager for an owner or for an association of co-owners, must have the capacity to trade and must be recorded in the merchants registry of the province - shall represent the ownership of the vessel - may, in his own name, and in such capacity, take judicial and extrajudicial steps in matters relating to commerce A. Powers - May discharge the duties of the captain of the vessel, subject to Art. 609(qualifications) - Shall designate and come to terms with the captain - shall contract in the name of the owners, who shall be bound in all that refer to repairs, details of equipment, armament, provisions of food and fuel, and freight of the vessel, and in general, in all that relates to the requirements of navigation B. Limitation on Power - May not order a new voyage, or make contracts for a new charter, or insure the vessel, without the authorization of its A. D. AVILA | H. MORAA

San Beda College of Law

28

otes on Transportation Law


owner or resolution of the majority of the co-owners, unless powers are granted in the certificate of appointment If he insures the vessel without authorization, he shall be subsidiarily liable for the solvency of the insurer meaning, both being the chiefs and commanders of ships MARINA: master is the person having command of the ship, used for both domestic trade and international trade MARINA: boat captain is a person authorized by the MARINA to act as officer and/or in command of a boat/ship or has the qualification or license to act as such

C. Duty to Account - If managing for an association, he shall render an account of the results of each voyage of the vessel D. Reimbursement and Liabilities - Co-owners shall pay the expenses in proportion to their interest - In order to enforce the payment, the managing agent shall be entitled to an executor action (accion ejecutiva) - Shall indemnify the captain for all the expenses he may have incurred with funds of his own or of others, for the benefit of the vessel E. Discharge of Captain and Crew - Subject to the provisions of the Labor Code and rules promulgated by POEA - Before the vessel sets out to sea, the ship agent may, at his discretion, discharge the captain and members of the crew whose contracts are not for a definite period or voyage - In case of voluntary sale of the vessel, all contracts between the ship agent and the captain shall terminate, reserving to the latter his right to the indemnity which may pertain to him CAPTAINS AND MASTERS OF VESSELS - The name of captain or master is given, according to the kind of vessel, to the person in charge of it - The first denomination is applied to those who govern vessels that navigate the high seas or ships of large dimensions and importance, although they be engaged in the coastwise trade - Masters are those who command smaller ships engaged exclusively in the coast wise trade - For the purpose of maritime commerce, captain and master have the same

Qualifications (Captains, masters or patrons of vessel) 1. Must be Filipinos 2. Have legal capacity to contract 3. Prove the skill, capacity and qualifications necessary to command and direct the vessel 4. Must not be disqualified for the discharge of the duties of the position 5. if the owner of the vessel desires to be the captain, without having the legal qualifications, he shall limit himself to the financial administration of the vessel, and intrust navigation to a person possessing the qualifications Powers and Functions - A master or captain is one who has command of a vessel - A captain commonly performs three distinct roles: 1. He is a general agent of the shipowner (operation and preservation of the vessel during its voyage and the protection of the passengers, crew and cargo) 2. He is also commander and technical director of the vessel (authority to sign bills of lading, carry goods aboard and deal with the freight earned, agree upon rates and decide whether to take the cargo; authority to enter into contracts with respect to the vessel and the trading of the vessel) 3. He is a representative of the country under whose flag he navigates A. D. AVILA | H. MORAA

San Beda College of Law

29

otes on Transportation Law


The captain is vested with both management and fiduciary functions - Code of Commerce: (for captain and masters) 1. To appoint or make contracts with the crew in the absence of the ship agent 2. To command the crew and direct the vessel to the port of destination 3. To impose correctional punishment upon those who fail to comply with his orders or are wanting in discipline 4. To make contracts for the charter of the vessel in the absence of the ship agent or of its consignee 5. To adopt all proper measures to keep the vessel well supplied and equipped 6. To order the repairs on the hull and engines of the vessel 7. To obtain funds Discretion of Captain and Master - Ships captain must be accorded a reasonable measure of discretionary authority to decide what the safety of the ship and of its crew and cargo specifically requires on a stipulated ocean voyage - It is presumed that he is knowledgeable as to the specific requirements of seaworthiness and the particular risks and perils of the voyage he is to embark upon - It is the right and duty of the captain, in the exercise of sound discretion and in good faith, to do all things with respect to the vessel and its equipment and conduct of the voyage which are reasonably necessary for the protection and preservation of the interests under his charge PILOTAGE Pilot a person duly qualified and licensed to conduct a vessel into or out of ports, or in certain waters - A person taken on board at a particular place for the purpose of conducting a ship through a river, road, channel, or from port It includes: 1. Those whose duty it is to guide vessels into or out of ports, or in particular waters 2. Those entrusted with the navigation of vessels on high seas Compulsory Pilotage - States possessing harbors have enacted laws or promulgated rules requiring vessels approaching their ports to take on board pilots licensed under the local law - Being implemented in the Port of Manila - Duties and Responsibilites: 1. Harbor pilot shall be responsible for the damage caused to a vessel or to life and property at ports due to his negligence or fault; absolved if force majeure or natural calamities provided he exercised extra diligence to prevent or minimize damage 2. The master shall retain overall command of the vessel even or pilotage grounds whereby he can countermand or overrule the order or command of the Harbor Pilot on board; hence, any damage shall be liability or registered owner 3. Pilot shall be held responsible for the direction of the vessel from the time he assumes his work as pilot until he leaves it anchored; provided, his responsibility shall cease at the moment the Master neglects or refuses to carry out his order Master and Pilot - While the pilot is in sole command of the ship and supersedes the master for the time being in the command and navigation of a ship and that he becomes master pro hac vice of a vessel piloted by him, there is authority to the effect that the master does not surrender his vessel to the pilot and the pilot is not the master; the master is still in command of the vessel notwithstanding the presence of a pilot - There are occasions when the master may and should interfere and even displace the A. D. AVILA | H. MORAA

San Beda College of Law

30

otes on Transportation Law


pilot, as when the pilot is obviously incompetent or intoxicated and the circumstances may require the master to displace a compulsory pilot because of incompetency or physical incapacity Master is not wholly absolved from his duties while a pilot is on board his vessel, and may advise with or offer suggestions Master is still in command of the vessel, except so far as her navigation is concerned, and must cause the ordinary work of the vessel to be properly carried on and the usual precaution taken Where the pilot is not a compulsory one but is employed voluntarily, the owners of the vessel are, all the more, liable for his negligent act

Pilot and his Association - The fact that the pilot is a member of an association does not make the association jointly and severally liable. - Art 2180 of the NCC does not apply because there is no employee-employer relationship OFFICERS AND CREW OF VESSELS Art. 648, Code of Commerce: the complement of a vessel shall be understood all the persons on board, from the captain to the cabin boy, necessary for the management, maneuvers, and service - therefore, the complement shall include the crew, the sailing mates, engineers, stokers and other employees on board not having specific designations - it shall not include the passengers or the persons whom the vessel is transporting Minimum Safe Manning - it is required that there is sufficient number of officers and crew that are serving in the vessel Supercargoes - shall discharge on board the vessel the administrative duties which the ship agent or the shippers may have assigned to them - shall keep an account and record of their transactions in a book - the powers and responsibilities of the captain shall cease, when there is a supercargo

Shipowner and Pilot - Pilot is personally liable for damages caused by his own negligence or default to the owners of the vessel, and to third parties for damages sustained in a collision; constitutes maritime tort - In case of collision, the colliding vessel is prima facie responsible, hence, the burden of proof is upon the party claiming benefit of the exemption from liability. - It must be shown affirmatively that the pilot was at fault and that there was no fault on the part of the officers or crew, which might have been conducive to the damage - The fact that the law compelled the master to take the pilot does not exonerate the vessel from liability - Parties injured are not under necessity to look to the pilot from whom redress is not always had for compensation - The owners of the vessel are responsible to the injured party for the acts of the pilot, and they must be left to recover the amount as well as they can against him - It cannot be maintained that the circumstance of having a pilot on board, and acting in conformity to his directions operate as a discharge or responsibility of the owners - Except insofar as their liability is limited or exempted by statute, the vessel or her owner are liable for all damages caused by the negligence or other wrongs of the owners or those in charge of the vessel

San Beda College of Law

A. D. AVILA | H. MORAA

31

otes on Transportation Law CHAPTER 9 CHARTER PARTIES


I. DEFINITION AND CONCEPT a contract whereby an entire ship, or some principal part of the said ship, is let by the owner thereof to a merchant or other person for a specified time or use for the convenience of goods, in consideration of the payment of freight term taken from carta partita, meaning divided document Carta partita refers to the ancient practice of writing out the terms and conditions of the contract in duplicate on one piece of parchment and then dividing it down the middle thus providing each party with a copy Charter contract is often referred to as form of mercantile lease for it often involves a charterer, who is most often a merchant himself, who desires to lease a ship or vessel owned by another for the transport of his goods for commercial purposes Charter may also involve the transportation of persons from one port to another Parties: charterer, charter party, and shipowner DIFFERENT KINDS OF CHARTER PARTIES A. Bareboat or Demise Charter the shipowner leases to the charterer the whole vessel, transferring to the latter the entire command, possession and consequent control over the vessels navigation, including the master and the crew, who thereby become the charterers servants - charterer becomes owner pro hac vice since he mans the vessel with his own set of master and crew, effectively becoming the owner for the voyage or service stipulated, subject however to any liability for damages arising from negligence - in this case, the master of the vessel is the agent of the charterer, and not of the shipowner, and therefore, it is the charterer who is liable for the expenses of the voyage including the wages of the seamen B. Contract of Affreightment the charterer hires the vessel only, either for a determinate period of time or for a single or consecutive voyage, with the shipowner providing for the provisions of the ship, the wages of the master and crew, and the expenses for the maintenance of the vessel 1. Time charter the vessel is leased to the charterer for a fixed period of time 2. Voyage charter the vessel is leased for a single or particular voyage III. EFFECT OF CHARTER ON CHARACTER OF VESSELS - Character of the common carrier as such is not affected by the charter party of the same is a contract of affreightment - It is only when the charter includes both the vessel and its crew, as in a bareboat or demise that a common carrier becomes private PERSONS WHO MAY MAKE CHARTER The owners of the vessel who have legal control and possession of the vessel may validly enter into charter parties with a charterer A third person called a broker may, however, intervene in the execution of the charter between the principals Charterer may sub-charter the entire vessel to a third person but only in the event that there is no prohibition in the original charter regarding any sub-charter A sub-charter, when entered into, is an independent contract by itself involving only the charterer and the sub-charterer and therefore does not give rise to any contractual relation between the general owner and the sub-charterer. A. D. AVILA | H. MORAA

II.

IV. -

San Beda College of Law

32

otes on Transportation Law


Part-owners are not precluded from chartering the same for their own commercial purposes; enjoy preference in the charter of the vessel over other persons Ship agent is not allowed to make contracts for a new charter unless he is properly or duly authorized by the owner or the same has been extended to him in his certificate of appointment Captains or masters of the vessel have inherent powers to enter into valid and binding charter parties, except: 1. In the event of absence of the ship agent or consignee 2. Only if the said captain or master acts in accordance with the instructions of the agent or owner and protects the latters interests Validity of the charter is not affected by the circumstance that the captain or master who executed the charter violated the orders or instructions of the agent or owner; the agent or owner shall have a right of action to recover damages against the erring captain or master h. The amount of the primage to be paid the captain i. The days agreed upon for loading and unloading j. The lay days and extra days to be allowed and the demurrage to be paid Primage payment for the use of the equipment belonging to the captain VI. FREIGHT Parties may fix the manner or form in which the charter price or money shall be satisfied Freight shall accrue according to the conditions stipulated in the contract If there is no stipulation, the rules are the following: 1. The freight shall begin to run from the day of loading on the vessel 2. In charters with a fixed period, the freight shall begin upon that very day 3. If the freight is charged according to weight, the payment thereof shall be made according to the gross weight, including the weight of the containers Where the goods were jettisoned for the common safety, freightage shall not accrue thereon, although the same will be regarded as a general average If goods were lost on account of shipwreck or stranding, or due to seizure by pirates or enemies, no freight will accrue thereby If the freight should have been paid in advance, then the same should be returned unless there is agreement to the contrary Failure of the captain or master to carry the goods in his ship or send them to the point of destination results in the abandonment upon any claim for freight thereon, except when it has been made payable in advance

V.

REQUISITES OF A VALID CHARTER PARTY - Governed by the general principles on ordinary contracts 1. Consent of the contracting parties 2. An existing vessel which should be placed at the disposition of the shipper 3. The freight 4. Compliance with the requirements of Art. 562 of the Code of Commerce

Art. 562, Code of Commerce: a. Must be drawn in duplicate and signed by the contracting parties b. Kind, name, tonnage of vessel c. Flag and port of registry d. Name and domicile of the captain and of the ship agent e. Port of loading and unloading f. Capacity, number of tons or weight, or measurement of the things to load g. The freight to be paid

VII.

DEMURRAGE AND DEADFREIGHT Lay days: time for loading and unloading; provided for in the Charter Party A. D. AVILA | H. MORAA

San Beda College of Law

33

otes on Transportation Law


Demurrage: a sum of money due by express contract for the detention of the vessel in loading or unloading, beyond the time allowed for that purpose in the charter party Where the charterer failed to occupy the leased portion of the vessel, he may thereby be made liable by the shipowner for the deadfrieght that occurred Computation of lay days the stipulated lay days do not begin to run against the consignee until the vessel has arrived at berth or other usual and customary place for loading or unloading, and is in actual readiness to discharge its cargo - if no lay days is provided for in the charter party, it is understood that the charterer will unload and discharge the cargoes within a reasonable time or with reasonable diligence VIII. RIGHTS AND OBLIGATIONS OF THE CHARTER PARTY 5. After 3/5 of the vessel is loaded, the shipowner may not substitute the chartered vessel with another one unless he procures the consent of the charterers or shippers 6. The captain may not accept the cargo from any other person unless the consent of the charterer is obtained 7. The shipowner may be held liable for damages incurred by the charterer due to the voluntary delay of the captain in putting to sea B. Charterer 1. The charterer shall have the right to sub-charter the vessel to a third person only if he is so authorized by the shipowner; otherwise, he shall be liable therefor 2. A charterer who loads goods different from that contracted upon, without the knowledge of the shipowner or captain, and which results to damage due to confiscation, embargo, detention, and other causes, shall be liable to indemnify the parties injured thereby 3. Should illicit cargo be shipped by the charterer in the chartered vessel with the knowledge of the shipowner or of the captain, said charterer shall be joinly liable with the shipowner for the damages to the shippers 4. The charterers and shippers may not, for the payment of freight and other expenses incurred, abandon the goods damaged due to inherent defects or by reason of fortuitous event IX. EFFECT OF BILL OF LADING - If issued, the charter party still governs their rights and the BL may be used as proof of receipt of goods - BL constitutes a contract between the vessel and the consignee, and neither he nor his endorsee is bound by the terms of the charter party of which he has no notice or knowledge

A. Shipowner or Captain 1. The shipowner is bound to observe a margin greater than two percent between that represented and her actual capacity which is not allowable 2. Any loss incurred by a shipper whose cargo is refused on account of the receipts by the shipowner of a greater amount of cargo belonging to other persons shall be for account of the shipowner in the form of indemnity; freight may be reduced instead of rescission 3. If there should be several charter parties and not all could be accommodated, preference shall be given to the persons who is first in loading his cargo, and the others shall have preference in the order of the dates of their charter; in the absence of priority, in proportion to the amounts of weight or space that they may have contracted 4. The shipowner may effect a substitution with respect to the vessel which had been initially chartered with that of another

Note: Read the pertinent codal provisions (570590) A. D. AVILA | H. MORAA

San Beda College of Law

34

otes on Transportation Law CHAPTER 10 LOA S O BOTTOMRY A D RESPO DE TIA


I. DEFINITIONS AND CONCEPT Bottomry - a contract whereby the owner of a ship borrows for the use, equipment or repair of the vessel, for a definite term, and pledges the ship (or the keel or bottom of the ship pars pro toto) as security, with the stipulation that if the ship is lost during the voyage or during the limited time on account of the perils enumerated, the lender shall lose his money. Loan on Respondentia where the goods or some part thereof are hypothecated as security for a loan, the payment of which is dependent upon maritime risks - it is the borrowers personal responsibility which is deemed to be the principal security for the performance of the contract, hence the term respondentia There must be a marine risk upon which the loan in predicated such that if the vessel or the cargo is lost by virtue of that risk, the lender loses the capital or money lent There is no bottomry or respondentia if the money borrowed is subject to repayment in any event, nor in the case where a collateral secures the obligation to repay as when there is an insurance policy upon the vessel or the cargo The lender in a loan on respondentia does not lose his capital should the ship perish due to marine peril, so long as the goods subject of the loan survive or are saved DISTINGUISHED LOAN FROM SIMPLE
involved There must necessarily be marine risk, the existence of which must be duly established The loan must be executed in accordance with form and manner required in the Code of Commerce Must be recorded in the registry of vessels in order to bind third persons Preference is extended to the last lender if there be several lenders, on the theory that were it not for the last lender, then the prior lenders would not have benefited from the preservation of the

There need not be such risk involved

The formal requisites regarding contracts in general would apply

No such registration is required

The first lender as a general rule, enjoys preference

II.

Bottomry or Respondentia The rate of interest is not subject to the Usury Law on account of the extraordinary risks

Simple loan The rate of interest must not exceed the ceiling fixed by the Usury Law

Instance where the loan on bottomry and respondentia may be regarded as simple loan only 1. if lender loaned an amount which is larger than the value of the object liable for the bottomry loan due to fraudulent means employed by the borrower, the loan shall be valid only for the amount at which the object is appraised by experts, and the surplus principal shall be repaid as if it were a simple loan, with legal interest thereon 2. if the full amount of the loan which is contracted in order to load the vessel is not used for the cargo, or given on the goods if all of them could not have been loaded, the balance will be considered as simple loan to forestall the possibility of other contracts which differ in nature from being included under the name of the bottomry loan

San Beda College of Law

A. D. AVILA | H. MORAA

35

otes on Transportation Law


3. if the effects on which the money is taken not be subjected to any risk, the contract will be regarded as simple loan III. PARTIES TO THE LOANS a. Shipowner - may secure a loan on bottomry upon his ship - if part-owner only, he may contract but shall be limited only to the extent of his interest in the vessel b. Ship captain - if part-owner may also obtain loan up to the extent of his interest - in cases of extreme necessity, in order to comply with the obligations under Art. 583 and 611 of the Code of Commerce - no loans can be made on the salaries of the crew nor on the profits which may be expected c. Cargo owner - shall have the right to enter into a loan on respondentia involving his cargo d. Captain - being mere agent of the shipowner, may not contract on a loan on respondentia; otherwise, loan is void and costs of the contract shall be chargeable to his private account IV. FORM OF THE LOANS - Must be executed in accordance with the form and manner prescribed in Art. 270 of the Code of Commerce 1. by means of a public instrument 2. by means of a policy signed by the contracting parties and the broker taking part therein 3. by means of a private instrument shall be entered in the certificate of registry of the vessel and shall be recorded in the registry of vessels contract must contain the following: a. statement of the kind, name and registry of the vessel b. the name and domicile of the captain c. the name and domiciles of the person giving and the person receiving the loan d. the amount of the loan and the premium stipulated e. the time for repayment f. the objects pledged to secure payment g. the voyage which the risk is to run V. CONSEQUENCES OF LOSS OF EFFECTS OF THE LOSS - if the effects of the loan be lost due to accident of the sea and it is proven that the cargo was on board, then the lender loses the right to institute the action which would pertain to him as such - lender retains such right of action if the loss was caused by the inherent defect of the thing, or through the fault or malice of the borrower, or through barratry on the part of the captain, or if it was caused by damages suffered by the vessel as a consequence of being engaged in a contraband, or if it arose from having loaded the goods on a vessel different from that designated in the contract, unless the change was made due to force majeure - lenders shall suffer in proportion to their respective interest, the general average which may take place in the things upon which the loans were made - in particular average, the lender is obligated to contribute in proportion to his respective interest, should it not belong to the kind of risks excepted in Art. 731 - in shipwreck, the amount for the payment of the loan shall be reduced to the proceeds of the effects which have been saved but only after deducting the costs of the salvage - if loan is on the vessel or its parts, the freight earned during the voyage shall also be liable for its payment - if the same vessel or cargo should be the object of the loan and marine insurance, the value of what may be saved in case of shipwreck shall be divided between the A. D. AVILA | H. MORAA

San Beda College of Law

36

otes on Transportation Law


lender and the insurer, in proportion to their interests Note: Read the pertinent codal provisions (594597)

San Beda College of Law

A. D. AVILA | H. MORAA

37

otes on Transportation Law CHAPTER 11 AVERAGES


I. AVERAGES IN GENERAL The following shall be considered averages: 1. All extraordinary or accidental expenses which may be incurred during the voyage in order to preserve the vessel, the cargo, or both. 2. Any damages or deterioration which the vessel may suffer from the time it puts to sea from the port of departure until it casts anchor in the port of destination, and those suffered by the merchandise from the time they are loaded in the port of shipment until they are unloaded in the port of their consignment. (Art. 806, Code of Commerce) Petty and ordinary expenses incident to navigation shall be considered as ordinary expenses to be defrayed by the ship owner, unless there is express agreement to the contratry Classified into: 1. General or gross average 2. Simple or particular average SIMPLE AVERAGE A. Definition - shall include all the expenses damages caused to the vessel or to cargo which have not inured to common benefit and profit of all persons interested in the vessel and cargo III. lender shall also bear the loss in proportion to his interest C. Example of Simple Averages Refer to page 599-600 GENERAL AVERAGE A. Definition and Requisites - shall include all the damages and expenses which are deliberately caused in order to save the vessel, its cargo or both at the same time, from real and known risk - Requisites: 1) there must be a common danger 2) that for common safety part of the vessel or of the cargo or both is sacrificed deliberately 3) that from the expenses or damages caused follows the successful saving of the vessel and cargo 4) that the expenses or damages should have been incurred or inflicted after taking proper legal steps and authority Common Danger - both the ship and the cargo, after has been loaded, are subject to the same danger, whether during the voyage, or in the port of loading or unloading - danger arises from the accidents of the sea, dispositions of the authority, or faults of men - circumstances should produce the peril ascertained and imminent or may rationally be said to be certain and imminent Deliberate Sacrifice - there must be voluntary sacrifice of a part for the benefit of the whole in order to justify general average contribution (ex. voluntary jettison) - it cannot involve a damage which resulted beyond the control of the captain and crew or without any intention on their part - normally, the sacrifice is made through the jettison of the cargo A. D. AVILA | H. MORAA

II.

and her the the her

B. By Whom Borne - the owner of the goods that suffered the damage bears the loss since it does not inure to the common benefit - res perit domino - if the vessel or goods are hypothecated by a loan on bottomry or respondentia, the

San Beda College of Law

38

otes on Transportation Law


- there can also be general average even if the sacrifice was not made during the voyage: a. where the sinking of a vessel is necessary to extinguish a fire in a port, roadstead, creek or bay b. where cargo is transferred to lighten the ship on account of a storm to facilitate entry into a port * loss can no longer be considered a general average if the thing was inevitably lost IV. Sacrifice must be successful - no general contribution can be demanded if the vessel and other cargo that are sought to be save were in fact not saved - however, if the ship was saved from the typhoon, there will be liability for general average contribution even if the vessel will be subsequently lost for some other reason during the voyage Compliance with legal steps - expenses or damages should have been incurred or inflicted after taking proper legal steps and authority B. Examples of General Average Refer to page 607-608 C. By Whom Borne - shall be borne by those who benefited from the sacrifice (shipowner and owner of the cargoes saved) - contribution may also be imposed on the insurers of the vessel or cargoes that were saved as well as lenders on bottomry or respondentia - INSURERS: liable for any general average in proportion to the contribution attaching to his policy value where the said value is less than the contributing value of the thing insured - LENDERS: shall suffer, in proportion to their respective interest, the general average which may take place in the goods in which the loan is made D. Who is entitled to Indemnity - owner of the goods which were sacrificed is entitled to receive the general average contribution - the ff goods are not covered, even if sacrificed: a. goods carried on deck unless the rule, special law or customs of the place allow the same b. goods that are not recorded in the books or records of the vessel c. fuel for the vessel if there is more than sufficient fuel for the voyage PROOF AND LIQUIDATION AVERAGE Refer to page 615 YORK-ANTWERP RULES Refer to page 624 OF

V.

San Beda College of Law

A. D. AVILA | H. MORAA

39

otes on Transportation Law CHAPTER 12 COLLISIO S


Definition: an impact or sudden contact of a moving body with an obstruction in its line of motion, whether both bodies are in motion or one stationary and the other, no matter which, in motion. > In Maritime Commerce: an impact or sudden contact of a vessel with another whether both are in motion or one stationary. > Strictly speaking, it refers to the contact of 2 moving vehicles. Allision: one vessel is moving while the other is stationary. > But for the purposes of applying the Code of Commerce (CC), collision includes both collision per se and allision. > It is not necessary in order for one vessel to be liable that his vessel have hit another. A shipowner/agent may be made liable even if his vessel did not actually collide with another vessel. i. This situation is covered by Art. 831, Code of Commerce, which makes the owner of a third vessel liable if it forced a vessel to hit another. Zones of Collision 1. FIRST ZONE: covers all the time up to the moment when the risk of collision may be said to have begun. i. Within this zone no rule is applicable because none is necessary. ii. Each vessel is free to direct its course as it deems best without reference to the movements of the other vessel. 2. SECOND ZONE: covers the time between the moment when the risk of collision begins and the moment when it has become a practical certainty. i. The burden is on the vessel required to keep away and avoid danger. 3. THIRD ZONE: covers the time between the moment of actual contact or the occurrence of the error in extremis. i. The vessel which has forced the privileged vessel into danger is responsible even if the privileged vessel has committed an error within that zone. Doctrine of Error in Extremis: If a vessel having a right of way suddenly changes its course during the third zone, in an effort to avoid an imminent collision due to the fault of another vessel, such act may be said to be done in extremis, and even if wrong, it cannot create responsibility on the part of said vessel.

ii.

Applicable Law in Collision: Liability for negligence in the absence of contract is governed by Art. 2176, NCC quasi-delict. > The liabilities of shipowners/agents as well as the captain or crew is still governed by the provision of the Code of Commerce on Collision. Rules on Liability: Liability in collision cases are negligence based. Thus, even if liability with respect to collision is not governed by quasi-delict, courts are called upon to determine the negligence of the persons involved in order to impose liability. > Liability of the person causing the injury: criminal and civil > Test in determining negligence: the test of a reasonable man in the position of an expert that applies in quasi-delict should also be applied although with due consideration to the expertise of the persons involved including the carrier itself, the captain, officers and crew of the vessels. i. Test: Whether a reasonable man with same expertise would have done what the party in question did under the same circumstances (forseeable or not forseeable). ii. BUT REMEMBER, some rules that apply to quasi-delict cannot be applied in collision cases. E.g. doctrine of last clear chance and the rule on contributory negligence cannot be applied. REASON: Art. 827. If collision is imputable to both vessels, each one shall suffer its own damages, and both shall be solidarily responsible for the losses and damages occasioned to their cargoes. > It does not matter if one vessel has the last clear chance or that the other A. D. AVILA | H. MORAA

San Beda College of Law

40

otes on Transportation Law


contributed to the collision, for as long as it can be proven that both are at fault or contributed to the collision both vessels are liable. Rules on Collision of Vessels: a) The collision may be due to the fault, negligence or lack of skill of the captain, sailing mate, or any other member of the complement of the vessel. The owner of the vessel at fault shall be liable for losses or damages (Art. 826, CC). b) The collision may be due to the fault of both vessels. Each vessel shall suffer its own losses, but as regards the owner of the cargoes, both vessels shall be jointly and severally liable (Art. 827, CC). c) If it cannot be determined which vessel is at fault, each vessel shall also suffer its own losses and both shall be solidarily liable for losses or damages on the cargoes (Art. 828, CC). d) The vessels may collide with each other through fortuitous event or force majeure. In this case, each shall bear its own damage (Art. 830, CC). e) Two vessels may collide with each other without their fault but by reason of a third vessel. The third vessel will be liable for losses and damages (Art. 831, CC). f) A vessel which is properly anchored and moored may collide with those nearby by reason of storm or other cause of force majeure. The vessel run into shall suffer its own damage or expense (Art. 832, CC). g) There is a presumption that a vessel is lost by reason of collision, if such vessel 1) sinks immediately upon being run into, or 2) is lost during the voyage or is obliged to be stranded in order to be saved after having been obliged to make a port to repair the damages (Art. 833, CC). h) The presence of pilots in both the colliding vessels, while discharging their duties at the time of the collision, shall not exempt the captains of each vessel from liability. However, the captains shall have the right to be indemnified by the pilots without prejudice to the criminal liability which the latter may incur (Art. 834, CC). i) The indemnity due by reason of the death or injury of persons shall be preferred if the value of the vessel and her appurtenances is not sufficient to cover all the liabilities (Art. 838, CC). If the collision should take place between Philippine vessels in foreign waters, or if having taken place in the open seas, and the vessels should make a foreign port, the Consul of the Philippines in said port shall hold a summary investigation of the accident, forwarding the proceedings to the Secretary of Foreign Affairs for continuation and conclusion (Art. 839, CC).

j)

Doctrine of Inscrutable Fault: Where fault is established but it cannot be determined which of the two vessels were at fault, both shall be deemed to have been at fault. Requirements for Action to Recover Losses and Damages arising from Collisions: 1. There must be a protest or declaration; 2. The protest or declaration must be presented within 24 hours; 3. The protest or declaration must be presented before a competent authority: a. If collision occurred in Philippine territory: competent authority of the i) point where the collision took place or ii) that of the first port of arrival of the vessel; b. If collision occurred in a foreign country: consul of the Philippines PROTEST (Maritime Protest) written statement by the master of the vessel or any authorized officer, attested by proper officer or a notary, to the effect that damages has been suffered by the ship. > It is required in the following cases: a) Arrival under stress b) Vessel is shipwrecked c) Vessel has gone through a hurricane or the captain believes that the cargo has suffered damages or averages d) Maritime collisions > The absence of protest, with respect to damages caused to persons or to the cargo, may not prejudice the persons interested who were not on A. D. AVILA | H. MORAA

San Beda College of Law

41

otes on Transportation Law


board or were not in a condition to make known their wishes. > Limited liability rule applies to collision. CASES: ational Development Co. v. CA FACTS: NDP, first preferred mortgagee of three vessels including the vessel Dona Nati, appointed MCP (Maritime Co. of the Phil.) as its agent to manage and operate said vessel for and its behalf and account. E. Philipp Corp. of New York loaded on board Dona Nati 1, 200 bales of American raw cotton consigned to the order of Manila Banking Corp. (MBC) and the Peoples Bank and Trust Co. acting for and in behalf of the Pan Asiatic Commercial Co. who represents Riverside Mills Corp. Also loaded on the same vessel were the cargoes (200 cartons of sodium lauryl sulfate and 10 cases of aluminum foil) of Kyokuto Boekui, Kaisa, Ltd. consigned to the order of MBC. En route to Manila the vessel Dona Nati figured in a collision at Ise Bay, Japan with a Japanese vessel SS Yasushima Maru. As a result of which 550 bales of the raw cotton were lost and destroyed, of which 535 bales as damaged were landed and sold on the authority of the General Average Authority and 15 bales were not landed and lost. The Kyokuto cargoes were totally damaged. ISSUE: 1) The determination of which laws govern loss or destruction of goods due to collision of vessels outside Philippine waters. 2) Liabilities. RULING: 1) The law of the country to which the goods are to be transported governs the liability of the common carrier in case of their loss, destruction or deterioration. In the case at bar, the goods in question are transported from San Francisco and Tokyo to the Philippines and they were lost due to a collision which was found to have been caused by the negligence or fault of both captains of the colliding vessels. The laws of the Philippines will apply, and its is immaterial that the collision actually occurred in foreign waters, such as Ise Bay, Japan. 2) But more in point to the instant case is Article 827 of the same Code, which provides that if the collision is imputable to both vessels, each one shall suffer its own damages and both shall be solidarily responsible for the losses and damages suffered by their cargoes. Under the provisions of the Code of Commerce, particularly Articles 826 to 839, the shipowner or carrier, is not exempt from liability for damages arising from collision due to the fault or negligence of the captain. Primary liability is imposed on the shipowner or carrier in recognition of the universally accepted doctrine that the shipmaster or captain is merely the representative of the owner who has the actual or constructive control over the conduct of the voyage. In case of collision, both the owner and the agent are civilly responsible for the acts of the captain. The Court held that both the owner and agent ( aviero) should be declared jointly and severally liable, since the obligation which is the subject of the action had its origin in a tortious act and did not arise from contract. The agent, even though he may not be the owner of the vessel, is liable to the shippers and owners of the cargo transported by it, for losses and damages occasioned to such cargo, without prejudice, however, to his rights against the owner of the ship, to the extent of the value of the vessel, its equipment, and the freight. City of Manila v. Atlantic, Gulf and Pacific Co. FACTS: The plaintiff's launch Jan, towing six small scows up the River Pasig at Santa Ana came into collision with a large lighter, heavily laden, towed by the launch Oriente of the defendant. She was run aground with her frame near the port bow smashed in. It is proved that the Jan carried lights; that both she and the scows she was towing were properly manned, and according to the testimony of the plaintiff's witnesses as soon as they saw the light ahead of the Oriente their whistle was blown and on receiving an answering whistle, in order to avoid a shock, they veered to starboard, leaving the channel and running into shoal water. Defendant's witnesses admit that they saw the Jan and its tow with the lights thereon and blew their own whistle, but say that they did not hear any whistle from the other launch, which kept the middle of the stream; that their boat was also put to starboard and the launches successfully passed one another, but, their scow in tow, being slow in changing direction, struck against the Jan, and A. D. AVILA | H. MORAA

San Beda College of Law

42

otes on Transportation Law


they claim that they did all in their power to avoid a collision in view of the difficulty of controlling the boat on their course downstream. It appears that this tow was secured to their launch by a single cable, forking in the shape of the letter "Y" so that each end was fastened to one side of the lighter. The judge of the court below in rendering judgment for the plaintiff appears to have relied upon several incidents; that the captain of the Oriente had no license but only a permit to navigate from the surveyor of customs; that it was easier to control the boat going with the current than the one going against it; that there was but one tow rope when there might have been more, and that there was no helmsman on the lighter. RULING: It is indeed of common knowledge, that a boat going against the current is quicker to mind her helm than one borne along by it, and the plaintiff's expert also testified that whereas in ocean tows several cables were used, on the River Pasig it was customary to employ but one in order to leave the vessel under tow greater freedom of movement and therefore better self-control. Aboard this lighter there was no light, there was no crew, and it seems there was no rudder. The absence of the light may not have contributed to the accident, but the lack of a rudder and of any person to direct the boat so clearly deprived it of control of its own movements that we are satisfied that when under tow of the forked rope it was not handily manageable. Therefore, instead of following approximately in the wake of the launch, it struck out on a tangent thereto, thus causing the collision. We attach no importance to the character of the permit to the Oriente's captain as a cause of the accident. Government v. Phil. Fernandez Hermanos Steamship Co. & bridge of the Isabel discerned the light of another vessel, which proved to be the Antipolo, also a coastwise vessel, on its way to Manila and coming towards the Isabel. At about the same time both the watch and mate on the bridge of the Antipolo also saw the Isabel, the two vessels being then about one mile and a half or two miles apart. Each vessel was going approximately at the speed of 6 miles an hour, and in about ten minutes they had together traversed the intervening space and were in close proximity to each other. When the mate of the Antipolo, who was then at the wheel, awoke to the danger of the situation and saw the Isabel "almost on top of him," to use the words of the committee on marine accidents reporting the incident, he put his helm hard to the starboard. ISSUE: Whether both vessels were negligent. RULING: This maneuver was correct, and if the helmsman of the Isabel had done likewise, all would apparently have been well, as in that event the two vessels should have passed near to each other on the port side without colliding. As chance would have it, however, the mate on the Isabel at this critical juncture lost his wits and, in disregard of the regulations and of common prudence, at once placed his own helm hard to port, with the result that his boat veered around directly in the path of the other vessel and a collision became inevitable. Upon this the mate on the Antipolo fortunately stopped his engines, but the Isabel continued with full speed ahead, and the two vessels came together near the bows. The Isabel immediately sank, with total loss of vessel and cargo, though the members of her crew were picked up from the water and saved. The mate of the Antipolo was clearly negligent in having permitted that vessel to approach directly towards the Isabel until the two were in dangerous proximity. For this there was no excuse whatever, since the navigable sea at this point is wide and the incoming steamer could easily have given the outgoing vessel a wide berth. On the other hand it is not clear that the Isabel was chargeable with negligence in keeping on its course; for this boat had its jib sail hoisted, and may for that reason be considered to have had the right of way. Negligence shortly preceding the moment of collision is, however, undoubtedly chargeable to the Isabel, for the incorrect and incompetent way A. D. AVILA | H. MORAA

FACTS: At about 10 o'clock at night, the coastwise Isabel, equipped with motor and sails, left the port of Manila with primary destination to Balayan, Batangas, carrying, among its cargo, 911 sacks of rice belonging to the plaintiff and consigned to points in the south. After the boat had been under weigh for about four hours, and has passed the San Nicolas Light near the entrance into Manila Bay, the watch and the mate on the

San Beda College of Law

43

otes on Transportation Law


in which this vessel was then handled. The explanation of this may perhaps be found in the fact that the mate on the Isabel had been on continuous duty during the whole preceding day and night; and being almost absolutely exhausted, he probably was either dozing or inattentive to duty at the time the other vessel approached. Both vessels were at fault; and although the negligence on the part of the mate of the incoming vessel preceded the negligence on the part of the mate of the outgoing vessel by an appreciable interval of time, the first vessel cannot on that account be absolved from responsibility. Where both vessels are to blame, both shall be solidarily responsible for the damage occasioned to their cargoes. As the Isabel was a total loss and cannot sustain any part of this liability, the burden of responding to the Government of the Philippine Islands, as owner of the rice embarked on the Isabel, must fall wholly upon the owner of the other ship, that is, upon the defendant, the Philippine Steamship Company, Inc. Lopez v. Duruelo (already discussed under Chapter 7) Marine Trading Co. v. Government FACTS: About 8 o'clock in the morning, in the Pasig River, below and near the bridge of Spain, the launch bohol was towing up the river two rudderless scows or lighters, one behind the other. The scow nearest the launch was about 5 meters behind, was empty, and was high in the water. The second lighter was tied to the rear of the fist one, with a distance of about 2 meters intervening, was loaded, and was lower in the water. The second lighter was tied to the rear of the first one, with a distance of about 2 meters intervening, was loaded, and was lower in the water. The Active was coming down the river from Pandacan toward Manila Bay. The patron of the Active blew one blast of his whistle, which indicated that the Active had a clear way and should pass to starboard. When under the bridge of Spain, the Active passed the bohol and the first scow towed by it. But when the Active was about to pass the second scow, the latter swerved to the left, and its forward left end corner struck the Active on the port side between the cabin and the bow with such force and impact that the launch sank immediately.

ISSUE: Whether or not the accident occurred through the negligence of the bohol only, or whether both launches can be blamed for the collision. RULING: Negligence on the part of the bohol is demonstrated by the following: 1) The patron of the bohol gave the whistle which indicated that the Active had a clear way and should pass to the starboard, and did not give four blasts of the whistle in quick succession in order to denote danger. 2) The two scows in tow by the bohol were apparently not properly fastened together, as required by section 197 of the Philippine Marine Regulations. 3) The two launches passed each other under the bridge of Spain, and the bohol, instead of steering so as to avoid danger of a collision between the Active and its scows, kept its course and crowded the Active most against a buoy. While, in accordance with paragraph 163 of the Philippine Marine Regulations, steam vessels towing have the right of way over steam vessels not towing this does not mean that the vessel with a tow can usurp the entire river so as to force another vessel into the bank. In conformity with the doctrine cited by appellant, that the preferred steamer will not be held in fault for maintaining her course and speed, this is only true so long as it is possible for the other vessel to avoid her by the proper maneuver. As opposed to the foregoing, we find that the plaintiff's agent was in no way to blame for the collision. Smith Bell & Co. and Tokyo Marine & Fire Insurance Co. v. CA FACTS: In the early morning of 3 May 1970-at exactly 0350 hours, on the approaches to the port of Manila near Caballo Island, a collision took place between the M/V "Don Carlos," an interisland vessel owned and operated by private respondent Carlos A. Go Thong and Company ("Go Thong"), and the M/S "Yotai Maru," a merchant vessel of Japanese registry. The "Don Carlos" was then sailing south bound leaving the port of Manila for Cebu, while the "Yotai Maru" was approaching the port of Manila, coming in from Kobe, Japan. The bow of the "Don Carlos" A. D. AVILA | H. MORAA

San Beda College of Law

44

otes on Transportation Law


rammed the portside (left side) of the "Yotai Maru" inflicting a three (3) cm. gaping hole on her portside near Hatch No. 3, through which seawater rushed in and flooded that hatch and her bottom tanks, damaging all the cargo stowed therein. ISSUE: Whether the "Yotai Maru" had been negligent and at fault in the collision with the "Don Carlos." RULING: The Court believes that there are three (3) principal factors which are constitutive of negligence on the part of the "Don Carlos," which negligence was the proximate cause of the collision. 1) Failure of the "Don Carlos" to comply with the requirements of Rule 18 (a) of the International Rules of the Road ("Rules"), which provides: When two power-driven vessels are meeting end on, or nearly end on, so as to involve risk of collision, each shall alter her course to starboard, so that each may pass on the port side of the other. This Rule only applies to cases where vessels are meeting end on or nearly end on, in such a manner as to involve risk of collision, and does not apply to two vessels which must, if both keep on their respective course, pass clear of each other. The only cases to which it does apply are when each of two vessels is end on, or nearly end on, to the other; in other words, to cases in which, by day, each vessel sees the masts of the other in a line or nearly in a line with her own; and by night to cases in which each vessel is in such a position as to see both the sidelights of the other. It does not apply, by day, to cases in which a vessel sees another ahead crossing her own course; or, by night, to cases where the red light of one vessel is opposed to the red light of the other or where the green light of one vessel is opposed to the green light of the other or where a red light without a green light or a green light without a red light is seen ahead, or Where both green and red lights are seen anywhere but ahead. For her part, the "Yotai Maru" did comply with its obligations under Rule 18 (a). As the "Yotai Maru" found herself on an "end-on" or a "nearly end-on" situation vis-a-vis the "Don Carlos, " and as the distance between them was rapidly shrinking, the "Yotai Maru" turned starboard (to its right) and at the same time gave the required signal consisting of one short horn blast. The "Don Carlos" turned to portside (to its left), instead of turning to starboard as demanded by Rule 18 (a). The "Don Carlos" also violated Rule 28 (c) for it failed to give the required signal of two (2) short horn blasts meaning "I am altering my course to port." When the "Yotai Maru" saw that the "Don Carlos" was turning to port, the master of the "Yotai Maru" ordered the vessel turned "hard starboard" at 3:45 a.m. and stopped her engines; at about 3:46 a.m. the "Yotai Maru" went "full astern engine." 20 The collision occurred at exactly 3:50 a.m. 2) Failure to have on board that night a "proper look-out" as required by Rule I (B) Under Rule 29 of the same set of Rules, all consequences arising from the failure of the "Don Carlos" to keep a "proper look-out" must be borne by the "Don Carlos." A "proper look-out" is one who has been trained as such and who is given no other duty save to act as a look-out and who is stationed where he can see and hear best and maintain good communication with the officer in charge of the vessel, and who must, of course, be vigilant. In the case at bar, the failure of the "Don Carlos" to recognize in a timely manner the risk of collision with the "Yotai Maru" coming in from the opposite direction, was at least in part due to the failure of the "Don Carlos" to maintain a proper look-out. 3) The fact that Second Mate Benito German was, immediately before and during the collision, in command of the "Don Carlos." Second Mate German simply did not have the level of experience, judgment and skill essential for recognizing and coping with the risk of collision as it presented itself that early morning when the "Don Carlos," running at maximum speed and having just overtaken the "Don Francisco" then approximately one mile behind to the starboard side of the "Don Carlos," found itself head-on or nearly head on vis-a-vis the "Yotai Maru. It is essential to point out that this situation was created by the "Don Carlos" itself. Tiampo v. Villanueva, et al.

San Beda College of Law

A. D. AVILA | H. MORAA

45

otes on Transportation Law


FACTS: In the morning of the accident in question and before the occurrence thereof, the m/s Tai Yin was anchored in the stream, Iloilo Harbor (Guimaras Strait) near the mouth of the Iloilo River. To the north of said motorship's anchorage was the s/s Diana Dollar and still farther north was the s/s Silver Sandal, both anchored. The s/s Takaoka Maru was anchored away to starboard near Guimaras Island. Sometime after 5 a. m., m/s Tai Yin hove up anchor and started at slow speed ahead towards the North Entrance of Guimaras Strait passing between the s/s Diana Dollar and the shore under the direction of Port Pilot Ramon Garriz. The motorship's captain and second officer, and Captain Rafael Xaudaro, a local coastwise pilot, were on the bridge with said pilot. At that juncture, the lorcha or sail vessel Cataluna was sighted off the motorship's port bow with sails set apparently southward bound, heading on a course opposite to but clear off the motorship's. When they were at a distance of about 500 or 600 feet apart, the Cataluna was taken in tow by launch Fredy and both tug and tow, without giving any warning signal, swung to port across the bow of the m/s Tai Yin towards the s/s Takaoka Maru. As said maneuver was made when the tug and tow in question were at such distance from the said motorship that collision was imminent, the said motorship gave one blast signifying her course to starboard. The launch Fredy, however, disregarded such signal and continued on her course to port whereupon the m/s Tai Yin promptly reversed her engines at full speed giving the regulation signal of three blasts. Notwithstanding said maneuver, however, the port bow of the m/s Tai Yin struck the starboard side of lorcha Cataluna causing the latter to sink. There is no question that when the m/s Tai Yin and lorcha Cataluna came in sight of each other when both were underway, they were following opposite courses that ran clear off each other. Under the circumstances both vessels should have maintained their respective courses until one or the other or both had passed clear off each other. The maneuver of launch Fredy to port across the bow of the oncoming motorship was against all rules of seamanship and was a gross violation of the Rules of the Road as it unnecessarily provoked and thereby caused the present collision. When the launch Fredy initiated and continued her maneuver to port, the m/s Tai Yin, with the shore close to her port side and the steamer Diana Dollar and Silver Sandal off her starboard side and bow, and in view of her tonnage and draft, could not have possibly executed any safe and reasonable maneuver to avoid collision, or at least minimize the effects thereof, other than to reverse her engines at full speed which she did promptly. Such temerary maneuver of launch Fredy across the bow of the m/s Tai Yin may be attributed to no cause other than to the negligence of her patron who either failed to notice the presence and approach of the m/s Tai Yin, as may be deduced from his testimony, or failed to sense the extreme danger of his act, evidently believing, in his manifest ignorance of navigation rules, that he had the right of way and expecting the much larger and more cumbersome vessel to keep clear. RULING: Among rules applicable to navigation none is better founded on reason and experience than that which requires the navigating officers of any vessel to assume that an approaching vessel will observe the regulations prescribed for navigation. Any other rule would introduce guess work into the control of ships and produce uncertainty in the operation of the regulations. There was no valid reason for the Fredy not to have kept the original course until both vessels were clear of one another, and the contention of plaintiff-appellant that paragraph 163 of the Philippine Marine Regulations, to the effect that steam-vessels towing, have the right of way over steam-vessels not towing, is controlling, is incorrect. Such a rule is subject to reasonable limitations and this court has held in the case of the Marine Trading Co. vs. Government of the Philippine Islands (39 Phil., 29), that the vessel with a tow is not, by that fact, authorized to usurp the entire channel. US v. Smith Bell & Co. FACTS: This was an action by the plaintiff against the defendant, brought in the Court of First Instance of the city of Manila, to recover the sum of $1,600, United States currency, for damages occasioned to the Navy boat Barcelo on the 6th day of November, 1902, at about 11 o'clock p.m., on the said day, near the mouth of the Pasig River, by a collision with a casco that was then and there A. D. AVILA | H. MORAA

San Beda College of Law

46

otes on Transportation Law


being towed by the launch Alexandra. The launch Alexandra is the property of the defendant. The inferior court found that the defendant had not complied with the rules of navigation in Manila Bay, in that it failed to display lights in accordance with such regulations, and that, by reason of such failure, the collision and consequent damages occurred. The defendant claimed that the plaintiff could not recover in the action, for the reason that it had not complied with the provisions of the Code of Commerce, relying particularly upon article 835 of the same. Article 835 provides: "The action for the recovery of loss and damages arising from collisions can not be admitted if a sworn statement or declaration is not presented within twenty-four hours to competent authority of the point where the collision took place, or that of the first port of arrival of the vessel." The plaintiff claimed that this provision of the Commercial Code did not apply to it. RULING: The quoted provision of the Commercial Code applies to all persons engaged in traffic upon the waters of the Philippine Archipelago; that the defendant has as much right to insist upon compliance with this provision of the code where the damages were done to a boat operated by the Government as if such boat had been operated by a private individual or company. This provision of the Commercial Code, requiring protest to be made and presented to the proper authority within twenty-four hours after the collision, or after the arrival of the injured boat in port, is a prerequisite to the bringing of an action for damages. By having failed to comply with this provision of the Commercial Code it can not maintain this action for damages. C.B. Williams v.Yangco FACTS: The steamer Subic, owned by the defendant, collided with the lunch Euclid owned by the plaintiff, in the Bay of Manila at an early hour on the morning of January 9, 1911, and the Euclid sank five minutes thereafter. Counsel for the plaintiff, basing his contention upon the theory of the facts as contended for by him, insisted that under he doctrine of "the last clear chance," the defendant should be held liable because, as he insists, even if the officers on board the plaintiff's launch were negligence in failing to exhibit proper lights and in failing to take the proper steps to keep out of the path of the defendant's vessel, nevertheless the officers on defendant's vessel, by the exercise of due precautions might have avoided the collision by a very simple manuever. RULING: But it is sufficient answer to this contention to point out that the rule of liability in this jurisdiction for maritime accidents such as that now under consideration is clearly, definitely, and unequivocally laid down in the above-cited article 827 of the Code of Commerce; and under that rule, the evidence disclosing that both vessels were blameworthy, the owners of either can successfully maintain an action against the other for the loss or injury of his vessel. In cases of a disaster arising from the mutual negligence of two parties, the party who has a last clear opportunity of avoiding the accident, notwithstanding the negligence of his opponent, is considered wholly responsible for it under the common-law rule of liability as applied in the courts of common law of the United States. But this rule (which is not recognized in the courts of admiralty in the United States, wherein the loss is divided in cases of mutual and concurring negligence, as also where the error of one vessel has exposed her to danger of collision which was consummated by he further rule, that where the previous application by the further rule, that where the previous act of negligence of one vessel has created a position of danger, the other vessel is not necessarily liable for the mere failure to recognize the perilous situation; and it is only when in fact it does discover it in time to avoid the casualty by the use of ordinary care, that it becomes liable for the failure to make use of this last clear opportunity to avoid the accident. So, under the English rule which conforms very nearly to the common-law rule as applied in the American courts, it has been held that the fault of the first vessel in failing to exhibit proper lights or to take the proper side of the channel will relieve from liability one who negligently runs into such vessels before he sees it; although it will not be a defense to one who, having timely warning of the danger of collision, fails to use proper care to avoid it. In the case at bar, the most that can be said in support of plaintiff's contention is that there was A. D. AVILA | H. MORAA

San Beda College of Law

47

otes on Transportation Law


negligence on the part of the officers on defendant's vessel in failing to recognize the perilous situation created by the negligence of those in charge of plaintiff's launch, and that had they recognized it in time, they might have avoided the accident. But since it does not appear from the evidence that they did, in fact, discover the perilous situation of the launch in time to avoid the accident by the exercise of ordinary care, it is very clear that under the above set out limitation to the rule, the plaintiff cannot escape the legal consequences of the contributory negligence of his launch, even were we to hold that the doctrine is applicable in the jurisdiction, upon which point we expressly reserve our decision at this time.

San Beda College of Law

A. D. AVILA | H. MORAA

48

otes on Transportation Law CHAPTER 13 ARRIVAL U DER STRESS A D SHIPWRECKS


13.1 Arrival under stress 13.1.1. Definition: It is the arrival of the vessel at the nearest and most convenient port, if during the voyage the vessel cannot continue the trip of the port of destination due to: a) Lack of provisions; b) Well-founded fear of seizure, privateers, or pirates; and c) By reason of any accident of the sea disabling it to navigate. 13.1.2. Steps in the determination of the propriety of an arrival under stress a) The captain should determine during the voyage if there is well founded fear of seizure, privateers and other valid grounds; b) The captain shall then assemble the officers; c) The captain shall summon the persons interested in the cargo who may be present and who may attend but without right to vote; d) The officers shall determine and agree if there is well founded reason after examining the circumstances. The captain shall have the deciding vote; e) The agreement shall be drafted and the proper minutes shall be signed and entered in the log book; f) Objections and protests shall likewise be entered in the minutes. 13.1.3. When Improper An arrival shall not be considered lawful in the following cases (Art. 820, CC): 1. If the lack of provisions should arise from the failure to take the necessary provisions for the voyage according to usage and customs, or if they should have been rendered useless or lost through bad stowage or negligence in their care. 2. If the risk of enemies, privateers, or pirates should not have been well known, manifest, and based on positive and provable facts. 3. If the defect of the vessel should have arisen from the fact that it was not repaired, rigged, equipped, and prepared in a manner suitable for the voyage, or from some erroneous order of the captain. 4. When malice, negligence, want of foresight, or lack of skill on the part of the captain exists in the act causing the damage. 13.1.4. Expenses General Rule: Expenses of an arrival under stress shall always be for the account of the shipowner/agent. Exception: They shall not be liable for the damages which may be caused the shippers by reason of the arrival provided the latter is legitimate. Otherwise, the ship agent and the captain shall be jointly liable (Art. 821, CC). If in order to make repairs to the vessel or because there is danger that the cargo may suffer damage, it should be necessary to unload, the captain must request authorization from the competent judge or court for the removal, and carry it out with the knowledge of the person interested in the cargo, or his representative, should there be any. In a foreign port, it shall be the duty of the Philippine Consul, where there is one, to give the authorization. i. If in order to make repairs to the vessel - expenses shall be for the account of the ship agent/owner. ii. If because there is danger that the cargo may suffer damage expenses shall be chargeable against the owners of the merchandise for whose benefit the act was performed. iii. Both reasons expenses shall be divided proportionately between the value of the vessel and that of the cargo. (Art. 822, CC) 13.1.5. Custody of Cargo The custody and preservation of the cargo which has been unloaded shall be entrusted to A. D. AVILA | H. MORAA

San Beda College of Law

49

otes on Transportation Law


the captain, who shall be responsible for the same, except in cases of force majeure (Art. 823, CC). The captain may request a competent judge or court, or the consul in a proper case, the sale of all or part of the cargo, if the entire or part of said cargo should appear to be damaged, or there should be imminent danger of its being damaged. The competent authority (or consul) shall authorize the sale after an examination and declaration of experts, advertisements, and other formalities required by the case, and entry in the book, in accordance with Art. 624. The captain shall, in a proper case, justify the legality of his conduct, under the penalty of answering to the shipper for the price the merchandise would have brought if they had arrived in good condition at the port of destination (Art. 824, CC). 13.1.6. Liability of the Captain A. If after the cause of the arrival under stress has ceased and the captain should not continue the voyage, the latter shall be responsible for damages caused by his delay. However, if the cause was fear of enemies, privateers, or pirates, a deliberation and resolution in a meeting of the officers of the vessel and persons interested in the cargo who may be present (see 13.1.1) shall precede the departure (Art. 825, CC). 13.2. Shipwreck 13.2.1. Definition: It is the demolition or shattering of a vessel caused by her driving ashore or on rocks and shoals in the midseas, or by the violence of winds and waves in tempests. 13.2.2. Rules in case of salvage GOODS/CARGOES: 1. It shall be specially bound for the payment of the expenses of the respective salvage. The amount shall be paid by the owners before the goods are delivered to them. In case the merchandise should be sold, the payment for the expenses with respect to the salvage shall be preferred over any other obligation (Art. 842, CC). 2. If several vessels sail under convoy, and any of them should be wrecked, the cargo saved shall be distributed among the rest in proportion to the amount which each one is able to take. If it is not possible to transfer to the other vessels the entire cargo of the vessel wrecked, the goods of the highest value and smallest volume shall be saved first (Art. 843, CC). OBLIGATIONS/DUTIES OF THE CAPTAIN: 1. In paragraph [A (ii)] above, the captain of the wrecked vessel shall enter a protest against any captain who refuses to receive what may correspond to the latter without sufficient cause, for the losses and damages resulting therefrom. The protest shall be presented before 2 sea officials, ratifying the same within 24 hours after arrival at the first port, and including it in the proceedings the former must institute in accordance with Art. 612. The captain, with the concurrence of the officers of his vessel, shall also be the one to designate which cargo has the highest value and the lowest volume (Art. 843, CC). 2. A captain who may have taken on board the goods saved from the wreck shall continue his course to the port of destination, and on arrival shall deposit the same, with judicial intervention, at the disposal of the legitimate owners. In case he changes his course, if he can unload them at the port of which they were consigned, the captain may make said port if the shippers or supercargoes present and the officers and passengers of the vessel consent A. D. AVILA | H. MORAA

San Beda College of Law

50

otes on Transportation Law


thereto; BUT he may not do so, even with said consent, in time of war or when the port is difficult and dangerous to make. NOTE: The owner of the cargo shall defray all the expenses of this arrival as well as the payment of the freightage which, after taking into consideration the circumstances of the case, may be fixed by agreement or by a judicial decision (Art. 844, CC). 13.2.3. Other Related Provisions 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 which may be saved belonging to them in the same proportion (Art. 840, CC). If the wreck or stranding should be caused by the malice, negligence, or lack of skill of the captain, or because the vessel put to sea was insufficiently repaired or equipped, the ship agent or the shippers may demand indemnity of the captain for the damages caused to the vessel or to the cargo by the accident, in accordance with Arts. 610, 612, 614, and 621 (Art. 841, CC). If on the vessel there should be no person interested in the cargo, who can pay the expenses and freightage corresponding to the salvage, the competent judge or court may order the sale of the part necessary to cover the same. This shall also be done when its preservation is dangerous, or when in a period of one year it should not have been possible to ascertain who are its legitimate owners (Art. 845, CC).

San Beda College of Law

A. D. AVILA | H. MORAA

51

otes on Transportation Law CHAPTER 14 SALVAGE


14.1. Definition: service which one person renders to the owner of a ship or goods, by his own labor, preserving the goods or the ship which the owner or those entrusted with the care of them have either abandoned in distress at sea, or are unable to protect and secure. There is salvage where a person (or persons) picks up and conveys to a safe place a vessel or its cargo which are beyond the control of the crew or shall have been abandoned by them (Sec. 1, Salvage Law/SL). NOTE: There can be also a contract of salvage that may be voluntarily agreed upon by the parties. > It is a compensation for actual services rendered to the property charged with it, and is allowed for meritorious conduct of the salvor, and in consideration of a benefit conferred upon the person whose property he has saved. > A claim for salvage rests on the principle that, unless the property be in fact saved by those who claim the compensation, it cannot be allowed, however benevolent their intention and however heroic their conduct. 14.2. Kinds of Salvage Services: 1. Voluntary compensation is dependent upon success 2. Rendered under a contract for a per diem or per horam wage, payable at all events 3. Under a contract for a compensation payable only in case of success > Where the stipulated compensation is dependent upon success, and particularly of success within a limited time, it may be very much larger than a mere quantum meruit. Such contracts will not be set aside by Courts unless corruptly entered into, or made under fraudulent representations, a clear mistake or suppression of important facts, in immediate danger to the ship, or under circumstances amounting to compulsion, or when their enforcement would be contrary to equity and good conscience. 14.3. Requirements for Compensation: A salvage claim may be awarded to the salvor if the following requirements are present: 1. There must be a marine peril; 2. The vessel is a) shipwrecked beyond the control of the crew or b) shall have been abandoned; 3. The service of picking up and conveying the vessel of cargo to a safe place is voluntarily rendered and is not required from an existing duty or from a special contract; and 4. The service must have been successful in whole or in part or that the service rendered contributed to such success. > The salvor must have no relation, contractual or otherwise, upon the ship in distress. Thus, the following persons shall have no right to a reward: 1. The crew of the vessel shipwrecked or which was in danger of shipwreck; 2. He who shall have commenced the salvage in spite of opposition of the captain or of his representatives; and 3. He who shall have failed to comply with the provisions of Sec. 3, SL. Sec. 3. He who shall save or pick up a vessel or merchandise at sea, in the absence of the captain of the vessel, owner, or a representative of either of them, they being unknown, shall convey and deliver such vessel or merchandise, as soon as possible, to the Collector of Custom, if the port has a collector, and otherwise to the provincial treasurer or municipal mayor. 14.4. Abandonment > The abandonment mentioned in 14.3 is present when the vessel is considered a derelict. 14.4.1. Derelict: a ship or her cargo which is abandoned and deserted at sea by those who were in charge of it, without any hope of recovering it (sine spe recuperandi), or without any intention of returning to it (sine animo revertendi). > Whether the property is to adjudged derelict is determined by ascertaining what was the intention A. D. AVILA | H. MORAA

San Beda College of Law

52

otes on Transportation Law


and expectation of those in charge of it when they quitted it. > If those in charge left with the intention of returning, or of procuring assistance, the property is not derelict, but if they quitted the property with the intention of finally leaving it, it is derelict, and a change of their intention and an attempt to return will not change its nature. > It is a rare case when the master of the ship will leave without the intention of returning, if there is the slightest hope of saving his vessel. Thus, if it is clear that the intention to return is slight, the salvage which was done thereafter is considered valid. > COMME T: The essence of derelict is that when a vessel is found at sea, deserted, and has been abandoned by the master and crew without the intention of returning and resuming the possession, x x x the finder who takes the possession with the intention of saving her, gains a right of possession, which he can maintain against the true owner (Aquino & Hernando, p. 678, citing Erlanger & Galinger v. Swedish East Asiatic Co., Ltd.). When there is no derelict, there can be no abandonment, and if there is the absence of abandonment, the finder or salvor cannot claim reward. REMEMBER, the owner does not renounce his right of property while the vessel is in the possession of the finder or salvor. This is not presumed to be his intention, nor does the finder acquire any such right. But the owner does abandon temporarily his right of possession, which is transferred to the finder, who becomes bound to preserve the property with good faith, and bring it to a place of safety for the owners use; and he acquired a right to be paid for his services a reasonable and proper compensation, out of the property itself. 14.5. Basis for Entitlement to Salvage Reward > A compensation as salvage should not be viewed by the admiralty courts as pay on the principle of quantum meruit or as a remuneration pro opere et labore, but as a reward given for perilous services, voluntarily rendered, and as an inducement to mariners to embark in such dangerous enterprises to save life and property.

14.5.1. Principal circumstances to be considered in fixing the amount of compensation: 1. The labor expended by the salvors in rendering the salvage service; 2. The promptitude, skill, and energy displayed in rendering the service and saving the property; 3. The value of the property employed by the salvors in rendering the service, and the danger to which such property was exposed; 4. The risk incurred by the salvors in rescuing the property from the impending peril; 5. The value of the property salved; and 6. The degree of danger from which the property was rescued. 14.5.1.2. Principal circumstances to be considered in fixing the amount of compensation under Section 10, Salvage Law: 1. The expenditures made to recover or save the vessel or the cargo or both 2. The zeal demonstrated 3. The time employed, the services rendered 4. The excessive express occasioned the number of persons who aided 5. The danger to which they and their vessels were exposed as well as that which menaced the things recovered or salvaged 6. The value of such things after deducting the expenses. 14.6. Rights and Obligations of Salvors and Owners The salvor is entitled to compensation for services rendered, and the enforcement of that right, he has a lien upon the property salvaged whereby he has the right of retention over the property until he is paid. o The salvor is to all intents and purposes, a joint owner and if the property is lost he must bear his share like the other joint owners. If the ship and its cargo are saved together by the salvor, the salvage allowance should be charged against the ship and cargo in the proportion of their respective values, as in the A. D. AVILA | H. MORAA

San Beda College of Law

53

otes on Transportation Law


case of general average; and neither is liable for the salvage due from the other. o The liability of the owner is limited to such part of the salvage compensation due for the entire service as is proportionate to the value of the ship. o Not only is the salvage charge a separate and divisible burden as between the ship and cargo, but also as between portions of the cargo belonging to different owners. The salvor has a right of possession of a derelict for purposes of a salvage claim. While the salvor has the right to retain the abandoned vessel or cargo until the salvage is completed without interference from other persons, it would not be so if the salvor has inadequate means. In such case, the salvor is bound to accept additional assistance from other salvors who may offer their services. See Section 3 cited in 14.3. See Comment under 14.4.1 The owner or his representative shall have a right to the delivery of the vessel or things saved after the salvage is accomplished, provided that he pays, or gives a bond to secure the expenses and the proper reward. If the owner does not make any claim within 3 MONTHS after the publication by the authorities of a salvage report, the things saved shall be sold at a public auction, the proceeds shall be deposited to the National Treasury after deducting the expenses and the proper reward to which the salvor is entitled. o If 3 YEARS lapses without any claim, the salvor shall be entitled to half of the deposit as his reward and the other half shall pertain to the government. The owner of the salving vessel is also entitled to the salvage reward for the use of his vessel in rendering salvage services even though he may not have been present at the time the salvage service was rendered. o Reward is also due to the captain and crew of the salving vessel. o If a vessel or its cargo shall have been assisted or saved, entirely or partially, by another vessel, the reward for salvage or assistance shall be divided between the owner, the captain, and the remainder of the crew of the latter vessel, so as to give the owner , the captain , and all the remainder of the crew , in proportion to their respective salaries, in the absence of an agreement to the contrary. If different persons intervened in the salvage or in rendering assistance, the reward shall be divided between them in proportion to the services which each one may have rendered, and, in case of doubt, in equal parts.

San Beda College of Law

A. D. AVILA | H. MORAA

54

S-ar putea să vă placă și