Professional Documents
Culture Documents
54
MEMORY AID
IN
COMMERCIAL LAW
TRANSPORTATION LAWS
CONTRACT OF TRANSPORTATION/
CARRIAGE
A contract whereby a person, natural
or juridical, obligates to transport
persons, goods, or both, from one
place to another, by land, air or water,
for a price or compensation.
Classifications:
1. Common or Private
2. Goods or Passengers
3. For a fee (for hire) or Gratuitous
4. Land, Water/maritime, or Air
5. Domestic/inter-island/coastwise
or International/foreign
It is a relationship which is imbued
with the public interest.
COMMON CARRIER
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 (Art. 1732, Civil
Code).
Art. 1732 of the New Civil Code
avoids any distinction between one
whose principal business activity is the
carrying of persons or goods or both
and one who does such carrying only
as an ancillary activity (sideline). It
also avoids a distinction between a
person
or
enterprise
offering
transportation service on a regular or
scheduled basis and one offering such
service on an occasional, episodic or
unscheduled basis.
Neither does the law distinguish
between a carrier offering its services
to the general public that is the
general community or population and
one who offers services or solicits
business only from a narrow segment
55
MEMORY AID
IN
COMMERCIAL LAW
carriers
liability
except when
provided by
law
liability,
provided it is
not contrary
to
law,
morals
or
good
customs
5. Exempting circumstance
Prove
caso fortuito,
extraordinary Art.
1174
diligence and NCC
Art.
1733,
NCC
6.Presumption of negligence
There is a No
presumption presumption
of fault or of fault or
negligence
negligence
7.Governing law
Law on
Law
on
common
obligations
carriers
and
contracts
GOVERNING LAWS
A. Domestic/inter-island/coastwise
Applicable to Land, Water, and Air
transportation
1. Civil Code - primary
2. Code of Commerce (Arts. 349,
379, 573-734, 580, 806-845) suppletory
B. International/foreign/overseas
(Foreign country to Philippines)
Applicable to Water/maritime and Air
transportation
The law of the country of destination
generally applies.
1. Civil Code - primary
2. Code of Commerce - suppletory
3. Others - suppletory
a. Water/maritime: Carriage of
Goods by Sea Act (COGSA)
b. Air: Warsaw Convention
56
MEMORY AID
IN
COMMERCIAL LAW
57
MEMORY AID
IN
COMMERCIAL LAW
FOR ACTS
FOR ACTS
OF OTHER
OF ITS
PASSENGE
EMPLOYEES
RS OR
STRANGER
S
Required diligence and
defense
Extraordinary Ordinary
diligence
diligence
Nature of liability
Tort;
Not
however,
absolute;
The
limited
by
employee
Art. 1763
must be on
duty at the
time of the
act.
(Maranan v.
Perez)
5. ORDER
OR
ACT
OF
PUBLIC
AUTHORITY
Said public authority must have the
power to issue the order (Art. 1743).
Consequently, where the officer acts
without legal process, the common
carrier will be held liable. (Ganzon v.
CA 161 SCRA 646)
Diligence in the selection and
supervision of employees under Article
2180 of the Civil Code cannot be
interposed as a defense by the
58
MEMORY AID
CARRIAGE OF GOODS
IN
COMMERCIAL LAW
CARRIAGE OF
PASSENGERS
Parties
1. Common carrier
2. Passenger
1. Common carrier
2. Shipper
3. Consignee
Cause of liability
Delay in delivery, loss,
Death or injury to the
destruction, or deterioration
passengers
of the goods
Duration of liability
From the time the goods are
unconditionally placed in the
possession of, and received
by
the
carrier
for
transportation until the same
are delivered actually or
constructively by the carrier
to the consignee or to the
person who has the right to
receive them. (Art. 1736)
It 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. (Art. 1737)
It continues to be operative
even during the time the
goods are stored in a
warehouse of the carrier at
the place of destination until
the
consignee
has
bee
advised of the arrival of the
goods
and
has
had
reasonable
opportunity
thereafter to remove them or
otherwise dispose of them.
(Art. 1738)
Delivery of goods to the
custom authorities is not
delivery to the consignee. (Lu
Do v. Binamira, 101 Phil 120)
59
MEMORY AID
IN
COMMERCIAL LAW
60
MEMORY AID
IN
COMMERCIAL LAW
Defenses
1. Ordinary circumstance:
Exercise
of
extraordinary diligence
(Art. 1735)
2. Special circumstances:
a. Flood,
storm,
earthquake, lighting,
or
other natural
disaster or calamity
(plus force majeure)
b. Act of the public
enemy
in
war,
whether
international or civil
c. Act or omission of
the shipper or the
owner of goods
d. The character of
the goods or defects
in the packing or in
the containers
e. Order or act of
competent
public
authority (Art. 1734)
1.Exercise
of
extraordinary
diligence (Art. 1756)
2.Caso fortuito
61
MEMORY AID
IN
COMMERCIAL LAW
Valid stipulations
1. Reduction of degree of
diligence
to
ordinary
diligence, provided it be:
a)In writing, signed by the
shipper or owner;
b)Supported by a valuable
consideration
other
than
the
service
rendered
by
the
carriers; and
c) Reasonable, just and
not contrary to public
policy. (Art. 1744)
2. Fixed amount of liability: A
contract fixing the sum to be
recovered by the owner or
shipper
for
the
loss,
destruction or deterioration
of the goods, if it is
reasonable and just under the
circumstances and has been
fairly and freely agreed upon.
(Art. 1750)
3. Limited liability for delay:
An agreement limiting the
common carriers liability for
delay on account of strikes or
riots (Art. 1748)
4. Stipulation limiting liability
to the value of the goods
appearing in the bill of lading,
unless the shipper or owner
declares a greater value. (Art.
1749)
62
MEMORY AID
IN
COMMERCIAL LAW
Void stipulations
1. That
the
goods
are
transported at the risk of the
owner or shipper;
2. That carrier will not be
liable
for
any
loss,
destruction or deterioration
of the goods;
3. That the carrier need not
observe any diligence in the
custody of the goods;
4. That the carrier shall
exercise
a
degree
of
diligence less than that of a
good father of a family over
the movable transported;
5. That the carrier shall not
be responsible for the acts or
omissions of his or its
employees;
6. That the carriers liability
for
acts
committed
by
thieves or robbers who do
not act with grave or
irresistible threat, violence or
force is dispensed with or
diminished;
7. That the carrier is not
responsible for the loss,
destruction or deterioration
of the goods on account of
the defective condition of
the car, vehicle, ship or
other equipment used in the
contract of carriage. (Art.
1745)
AS
TO
CARRIERS
VALID &
ENFORCEA
BLE
1.
One
limiting the
liability
of
the
carrier
to an agreed
valuation,
unless
the
shipper
declares
a
higher value
and pays a
higher rate
of freight
(H.E.
Heacock
Company
vs.
Macondray
& Company
Inc.)
(Arts. 349-379)
Applicability
1. Domestic land and water/maritime
transportation.
(Pandect
of
Commercial Law and Jurisprudence,
Justice Jose Vitug, 1997 ed.)
2.
Domestic
Air
Transportation.
(Commercial
Law
Review,
Cesar
Villanueva, 2004 ed.)
IMPORTANT CONCEPTS:
1. Bill of lading
2. Obligations of the carrier
3. Right of abandonment
4. Notice of damage
5. Combined carrier agreement
BILL OF LADING
The written acknowledgment of
receipt of goods and agreement to
transport them to a specific place to a
person named or to his order.
Rules:
1. It is not indispensable for the
creation of a contract of carriage.
(Compania Maritima vs. Insurance
Company of North America, 12 SCRA
213)
2. Ambiguity is construed against the
carrier, the contract being one of
adhesion.
3. The consignee, although the
instrument is oftentimes drawn up only
by the consignor and carrier, becomes
bound by all the stipulations contained
therein by making a claim for loss on
the basis of said bill of lading. (SeaLand Services Inc. vs. IAC)
4. The right of a party to recover for
loss of shipment consigned to him
under a bill of lading drawn up only by
and between the shipper and the
explosives
2.) Goods are unfit for transportation
3.) Acceptance would result in
overloading
4.) Contrabands or illegal goods
5.) Goods are 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 disease
8.) Strike
9.) Failure to tender goods on time.
(Notes and Cases on the Law on
Transportation and Public Utilities,
Aquino, T. & Hernando, R.P. 2004 ed.
p.68)
In case of carriage by railway, the
carrier is exempted from liability if
carriage is insisted upon by the
shipper, provided its objections are
stated in the bill of lading.
However, when a common carrier
accepts cargo for shipment for
valuable consideration, it takes the risk
of delivering it in good condition as
when it was loaded. (PAL vs. CA)
RIGHT
OF
CONSIGNEE
TO
ABANDON GOODS
Instances:
1. Partial non-delivery, where the
goods are useless without the others
(Art. 363);
2. Goods are rendered useless for sale
or consumption for the purposes for
which they are properly destined (Art.
365); and
3. In case of delay through the fault of
the carrier (Art. 371).
Time of delivery
Stipulated
No
in
stipulation
Contract/Bil
l of Lading
1. Carrier is 1. Within a
bound
to reasonable
fulfill
the time.
contract and 2. Carrier is
is liable for bound
to
any
delay; forward them
no
matter in
the
1st
from
what shipment of
n
3. Carriage
of goods
Notice of damage
1.
1.Not a
Condition
condition
precedent
precedent
2.
2.3-day
24-hour
period for
period for
claiming
claiming
latent
latent
damage
damage
Prescriptive period
None
One
year
provided;
from
the
Civil
Code date
of
applies.
delivery
(delivered
but
damaged
goods),
or
date
when
the
vessel
left port or
from
the
date
of
delivery
to
the arrastre
(nondelivery
or
loss).
COMBINED CARRIER AGREEMENT
(ART. 373)
GENERAL RULE: In case of a contract
of transportation of several legs, each
carrier is responsible for its particular
leg in the contract.
EXCEPTION: A combined carrier
agreement where a carrier makes itself
liable assuming the obligations and
acquiring as well the rights and causes
of action of those which preceded it.
2. MARITIME
COMMERC
E
(Arts. 573-869)
IMPORTANT CONCEPTS:
1. Merchant vessel
2. Maritime lien and Preference of
Credit
3. Doctrine of limited liability
4. Causes of revocation of voyage
5. Participants
in
maritime
commerce
6. Charter party
7. Loans
on
bottomry
and
respondentia
8. Accidents in maritime commerce
MARITIME/ADMIRALTY LAW
It is the system of laws which
particularly relates to the affairs and
business of the sea, to ships, their
crews and navigation, and to maritime
conveyance of persons and property.
(Notes and Cases on the Law on
Transportation and Public Utilities,
Aquino & Hernando, citing Francisco,
p.254)
Maritime laws apply only to
maritime trade and sea voyages.
(Pandect of Commercial Law and
Jurisprudence, Justice Jose Vitug, 1997
ed.)
Arrastre service is not maritime in
character. It refers to a contract for the
unloading of goods from a vessel.
(ICTSI vs. Prudential Guarantee, 320
SCRA 244)
CHARACTERISTICS OF MARITIME
TRANSACTION
1. Real - similar to transactions over
real property with respect to effectivity
against third persons which is done
through
registration.
(Rubiso
vs.
Rivera, 37 Phil. 72). The evidence of
real nature is shown by: 1) the
limitation of the liability of the agents
to the actual value of the vessel and
the freight money; and 2) the right to
retain the cargo and embargo and
detention of the vessel (Luzon
Vessel
engaged
in
maritime
commerce,
whether
foreign
or
otherwise. (Bar Review Materials in
Commercial Law, Jorge Miravite, 2002
ed.)
Constitutes property which may be
acquired and transferred by any of the
means recognized by law. They shall
continue to be considered as personal
property. (Arts. 573, 585)
They are susceptible to maritime
liens such as for the repair, equipping
and provisioning of the vessel in the
preparation of a voyage, as well as
mortgage liabilities, in satisfaction of
which a vessel may be validly arrested
and sold. (Ship Mortgage Decree of
1978)
MARITIME LIEN
It constitutes a present right of
property in the ship, a jus in re, to be
afterward enforced in admiralty by
process in rem. (PNB vs. CA, 337 SCRA
381)
If the maritime lien arose prior to the
recording of a preferred mortgage, it
shall have priority over the said
mortgage lien. (PNB vs. CA, 337 SCRA
381)
salvage,
bottomry
loans,
and
indemnity
due shippers
for the value
of
goods
transported
but
which
were
not
delivered to
the
consignee;
5. Costs of
repair
and
equipment
of
the
vessel, and
provisioning
of
food,
supplies and
fuel during
its
last
voyage; and
6. Preferred
mortgages
registered
prior in time.
prior in time
to
the
recording of
the
preferred
mortgage;
6. Damages
arising
out
of tort; and
7. Preferred
mortgage
registered
prior in time.
CONSIGNEE
AGENT
What may be abandoned
Vessel
Goods
shipped
Instances
1. In case of 1.
Partial
civil liability nonfrom
delivery,
indemnities
where
the
to
third goods
are
persons (Art. useless
587);
without the
2. Sec. 138, others (Art.
Insurance
363);
Code;
2. Goods are
3. In case of rendered
leakage of at useless for
least of sale
or
the contents consumption
of a cargo for
the
containing
purposes for
liquids (Art. which they
687)
are properly
destined
(Art.
365);
and
3. In case of
delay
through the
fault of the
carrier (Art.
371).
Effects
1.
Transfe 1.Transfer of
r
of ownership
ownership of on the goods
the
vessel from
the
from
the shipper
to
shipowner to the carrier.
the shippers 2.Carrier
or insurer.
should pay
2.
In case the shipper
of (2), the the market
insurer must value of the
pay
the goods at the
insured as if point
of
there
was destination.
actual total
loss of the
vessel.
CAUSES
OF
REVOCATION
OF
VOYAGE
1. War or interdiction of commerce;
2. Blockade;
3. Prohibition to receive cargo at
destination;
4. Embargo;
5. Inability of the vessel to navigate.
(Art. 640)
Terms:
1. Interdiction of commerce A
governmental
prohibition
of
commercial intercourse intended to
bring about an entire cessation for
the time being of all trade whatever.
2. Blockade A sort of circumvallation
of a place by which all foreign
connection and correspondence is,
as far as human power can effect it,
to be cut off.
3. Embargo A proclamation or order
of a state, usually issued in time of
war
or
threatened
hostilities,
prohibiting the departure of ships or
goods from some or all the ports of
such state until further order.
PARTICIPANTS
IN
MARITIME
COMMERCE
A. Shipowners and ship agents
B. Captains and masters of the vessel
C. Officers and crew of the vessel
D. Supercargoes
E. Pilot
A. SHIPOWNERS AND SHIP AGENTS
Shipowner (proprietario)
Person who has possession, control
and management of the vessel and the
consequent
right
to
direct
her
navigation and receive freight earned
and paid, while his possession
continues.
Ship agent (naviero)
Person entrusted with provisioning
and representing the vessel in the port
Crew
The aggregate of seamen who man a
ship, or the ships company.
Hired by the ship agent, where he is
present and in his absence, the captain
hires them, preferring Filipinos, and in
their absence, he may take in
foreigners, but not exceeding 1/5 of
the crew. (Art. 634)
Classes of Seamans Contracts
1. By the voyage;
2. By the month; and
3. By share of profits or freightage.
Just Causes for the Discharge of
Seaman While Contract Subsists
1. Perpetration of a crime;
2. Repeated insubordination, want of
discipline;
3. Repeated
incapacity
and
negligence;
4. Habitual drunkenness;
5. Physical incapacity;
6. Desertion. (Art. 637)
Rules in case of Death of a
Seaman
The seamans heirs are entitled to
payment as follows:
1. If death is natural:
a. compensation up to time of death
if engaged on wage
b. if by voyage - half of amount if
death occurs on voyage out; and
full, if on voyage in
c. if by shares - none, if before
departure; full, if after departure
2. if death is due to defense of vessel full payment;
3. if captured in defense of vessel - full
payment;
4. if captured due to carelessness wages up to the date of the capture.
(Art. 645)
Complement of the Vessel
Persons
who
discharges
administrative duties assigned to him
by ship agent or shippers, keeping an
account and record of transaction as
required in the accounting book of the
captain. (Art. 649)
E. PILOT
A person duly qualified, and licensed,
to conduct a vessel into or out of ports,
or in certain waters.
The term generally connotes a person
taken on board at a particular place for
the purpose of conducting a ship
through a river, road or channel, or
from a port.
Master pro hac vice for the time
being in the command and navigation
of the ship.
While in exercising his functions a
pilot is in sole command of the ship
and supersedes the master for the
time being in the command and
navigation of the ship, the master does
not surrender his vessel to the pilot
and the pilot is not the master. There
are occasions when the master may
and should interfere and even displace
the pilot, as when the pilot is obviously
incompetent
or
intoxicated
(Far
Eastern Shipping Company vs. CA).
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
laws. (Notes and Cases on the Law on
CHARTER
PARTY
Charterer
may rescind
charter party
by
paying
half of the
freightage
agreed upon.
portion
of
the amount
agreed upon.
If the leased
property
is
sold to one
who
knows
of
the
existence of
the
lease,
the
new
owner must
respect the
lease.
Civil
law
concept
The
new
owner is not
compelled to
respect the
charter party
so long as he
can load the
vessel
with
his
own
cargo.
(Art.
689)
Commercial
law concept
CHARTER
BILL OF
PARTY
LADING
An entire or More like a
complete
private
contract.
receipt which
the captain
gives
to
accredit
goods
received
from persons
Consensual
Real contract
contract
BAREBOAT
OR DEMISE
CHARTER
CONTRACT
OF
AFFREIGHT
MENT (TIME
OR VOYAGE
CHARTER)
Charterer
Owner
becomes
remains
liable
to liable
as
others
carrier
and
caused by its must answer
negligence
for
any
breach
of
duty
Charterer
Charterer is
regarded as not regarded
owner
pro
hac vice for
the voyage
Owner
of
vessel
relinquishes
possession,
command
and
navigation to
charterer
Common
carrier
is
converted to
private
carrier.
as owner.
The
vessel
owner
retains
possession,
command
and
navigation of
the ship
Common
carrier is not
converted to
a
private
carrier.
A stipulation
in a charter
party that in
case of a
maritime
accident for
which
the
shipowner is
not
responsible
by
law,
contract
or
otherwise,
the
cargo
shippers,
consignees
or
owners
shall
contribute
with
the
shipowner in
general
average.
(Pandect of
Commercial
Law
and
Jurisprudenc
e,
Justice
Jose
Vitug,
1997 ed.)
Clause
paramount
or
paramount
clause
A clause in a
charter party
providing
that
the
COGSA shall
apply, even
though
the
transportatio
n
is
domestic,
subject
to
the
extent
that
any
term of the
bill of lading
is repugnant
to
the
COGSA
or
applicable
law, then to
the
extent
thereof
the
provision of
the bill of
lading
is
void.
(Pandect of
Commercial
Law
and
Jurisprudenc
e,
Justice
Jose
Vitug,
1997 ed.)
CHARTERER
1. If
the
vessel
is
chartered
wholly,
not
to
accept
cargo
from
others;
2. To
observe
represented
capacity;
3. To unload
cargo
clandestinely
placed
4. To
substitute
another
vessel if load
is less than
3/5
of
capacity;
5. To
leave
the port if
the charterer
does
not
bring
the
cargo within
the lay days
and extra lay
days
allowed;
6. To place in
a vessel in a
condition to
navigate;
7. to
bring
cargo
to
nearest
neutral port
in case of
war
or
blockade.
(Arts.
669678)
1. To
pay
the agreed
charter
price;
2. To
pay
freightage
on
unboarded
cargo;
3. To
pay
losses
to
others
for
loading
uncontracte
d cargo and
illicit cargo;
4. To wait if
the
vessel
needs
repair;
5. To
pay
expenses for
deviation.
(Arts.
679687)
ers
reques
t
(Art
688)
ners
reques
t
(Art.
689)
causes
(Art.
690)
1.
By
abando
ning the
charter
and
paying
half of
the
freighta
ge;
2. Error
in
tonnage
or flag;
3.
Failure
to place
the
vessel
at
the
chartere
rs
disposal
;
4.
Return
of
the
vessel
due to
pirates,
enemie
s or bad
weather
;
5.
Arrival
at
a
port for
repairs.
1. If the
extra
lay days
termina
te
without
the
cargo
being
placed
alongsid
e
the
vessel;
2. Sale
by the
owner
of
the
vessel
before
loading
by the
chartere
r;
1. War
or
interdict
ion of
commer
ce;
2.
Blockad
e;
3.
Prohibiti
on to
receive
cargo;
4.
Embarg
o; and
5.
Inability
of the
vessel
to
navigat
e.
Terms:
1. Primage - bonus to be paid to the
captain after the successful voyage.
LOAN
ON
BOTTOMRY
AND
RESPONDENTIA
A real, unilateral, aleatory contract,
by virtue of which one person lends to
another a certain amount of money or
goods on things exposed to maritime
risks, which amount, with its earnings,
is to be returned if the things are
safely transported, and which is lost if
the latter are lost.
LOAN ON
BOTTOMRY
LOAN ON
RESPONDE
NTIA
Definition
Loan made Loan taken
by
on security
shipowner
of the cargo
or
ship laden on a
agent
vessel, and
guaranteed repayable
by
vessel upon
safe
itself
and arrival
of
repayable
cargo
at
upon arrival destination.
of vessel at (Art. 719)
destination.
(Art. 719)
Who may contract
Shipowner
Only
the
or
ship owner of the
agent.
cargo.
Outside
of
the
residence of
the owners the captain.
Common elements:
1. Exposure of security to
marine peril;
2. Obligation of the debtor
conditioned only upon
safe
arrival
of
the
security at the point of
destination.
Forms:
1. Public instrument
2. Policy
signed by the
3.
1.
2.
3.
4.
5.
6.
7.
BOTTOMRY
/
RESPONDE
NTIA
ORDINARY
LOAN
(MUTUUM)
Not subject
to
any
contingency
(absolute
liability)
The
last
lender is a
preferred
creditor
The
first
lender is a
preferred
creditor
Indemnity
is
paid after the
loss
has
occurred
In case of loss
of the vessel
due to a risk
insured
against,
the
obligation
of
the
insurer
becomes
absolute
Consensual
contract
LOAN ON
BOTTOM
RY OR
RESPOND
ENTIA
Indemnity
is paid in
advance
by way of
a loan
In case of
loss of the
vessel due
to
a
marine
peril, the
obligation
of
the
borrower
to pay is
extinguish
ed
Real
contract
MARITIME
An extraordinary or accidental
expense incurred during the voyage in
order to preserve the cargo, vessel or
both, and all damages or deterioration
suffered by the vessel from departure
to the port of destination, and to the
cargo from the port of loading to the
port of consignment. (Art. 806)
The person whose property has
been saved must contribute to
reimburse the damage caused or
expense incurred if the situation
constitutes general average.
Classes:
1. Particular or Simple Average
2. Gross or General Average
Where both vessel and cargo are
saved, it is general average; where
only the vessel or only the cargo is
saved, it is particular average.
Expenses incurred to refloat a
vessel, which accidentally ran aground,
in order to continue its voyage, do not
constitute general average. Not only is
there absence of a marine peril,
common
safety
factor,
and
deliberateness. It is the safety of the
property, and not the voyage, which
constitutes the true foundation of
general average. (A. Magsaysay, Inc.
vs. Agan, G.R.No. L-6393, Jan. 31,
1955)
PARTICULA
GROSS OR
R OR
GENERAL
SIMPLE
Definition
Damages or Damages or
expenses
expenses
caused to the deliberately
vessel
or caused
in
cargo
that order
to
did not inure save
the
to
the vessel,
its
common
cargo
or
benefit, and both
from
borne
by real
and
respective
known risk.
The
insurers
(Art.859)
and lenders
on bottomry
and
respondenti
a
shall
likewise
contribute.
(Art.732).
Number of interests
involved
Only
one Several
interest
interests
involved
involved
(ART.855 (2))
3. Fuel for the vessel if there is
more than sufficient fuel for the
voyage. (Rule IX, York-Antwerp
Rule)
Jettison
Act of throwing cargo overboard in
order to lighten the vessel.
Order of goods to be cast overboard:
1. Those which are on the deck,
preferring the heaviest one with
the least utility and value;
2. Those which are below the upper
deck, beginning with the one with
greatest weight and smallest
value. (Art. 815)
Jettisoned goods are not res nullius
nor deemed abandoned within the
meaning of civil law so as to be the
object of occupation by salvage.
(Pandect of Commercial Law and
Jurisprudence, Justice Jose Vitug, 1997
ed.)
In order that the jettisoned goods
may be included in the gross or
general average, the existence of the
cargo on board should be proven by
means of the bill of lading. (Art. 816)
York-Antwerp
(Y-A)
Rules
on
Determining Liability for Averages
With Regard To Deck Cargo
1. Deck cargo is allowed only in
domestic/coastwise/inter-island
shipping,
and
is
prohibited
in
international/overseas/foreign
shipping.
2. If deck cargo is loaded with the
consent of the shipper on overseas
trade, it must always contribute to
general average, but should the same
be jettisoned, it would not be entitled
to reimbursement because there is
violation of the Y-A Rules.
3. If deck cargo is loaded with the
consent of the shipper on coastwise
shipping, it must always contribute to
INTERNATI
ONAL
Deck cargo is Deck cargo
allowed
is
not
allowed
With shippers consent
General
Particular
average
average
Without shippers consent
Captain is
Captain is
liable
liable
ARRIVAL
UNDER
STRESS
(ARRIBADA)
The arrival of a vessel at the nearest
and most convenient port instead of
the port of destination, if during the
voyage the vessel cannot continue the
trip to the port of destination.
When
lawful
When
unlawf
ul
Who
bears
expens
es:
The
inability
to
continu
e
voyage
is due
to lack
of
provisio
ns,
wellfounded
fear of
seizure,
private
1. Lack
of
provisio
ns due
to
negligen
ce
to
carry
accordin
g
to
usage
and
customs
;
2. Risk
of
The
shipown
er
or
ship
agent is
liable in
case of
unlawful
arrival
under
stress.
But
they
shall
not be
liable
ers,
pirates,
or
acciden
ts
of
the sea
disablin
g it to
navigat
e. (Art.
819)
enemy
not well
known
or
manifest
3. Defec
t
of
vessel
due
to
imprope
r repair;
and
4. Malic
e,
negligen
ce, lack
of
foresigh
t or skill
of
captain.
(Art.
820)
for the
damage
s
caused
by
reason
of
a
lawful
arrival.
(Art.
821)
arrastre
operator.
(Hartford
Insurance v. E. Razon, Inc.)
Fire
STEVEDORING SERVICE
The carriage of goods from the
warehouse or pier to the holds of the
vessel. (Chief of Staff vs. CIR)
As understood in the port business,
the term consists of the handling of
cargo from the hold of the ship to the
dock, in case of pier-side unloading; or
to a barge, in case of unloading at sea.
(Anglo-Fil Trading Corp. vs. Lazaro)
The loading on the ship of outgoing
cargo is also part of stevedoring work.
(Ibid.)
CONTAINERIZATION/
SAID-TOCONTAIN/ SHIPPERS LOAD AND
COUNT SYSTEM
System whereby the shipper loads his
cargoes in a specially designed
container, seals the container and
delivers
it
to
the
carrier
for
transportation. The carrier does not
participate in the counting of the
merchandise for loading into the
container, the actual loading, and the
sealing of the container. (US Lines v.
Comm. Of Customs, ICTSI v. Prudential
Guarantee)
The matter of quantity, description
and conditions of the cargo inside the
container is the sole responsibility of
the shipper, unless there is stipulation
to the contrary. (US Lines vs. Comm. Of
Customs, Reyma Brokerage v. Phil.
Home Assurance)
Note: In order to attribute to the
carrier any damage to the shipment
that may be found, inspection of the
goods should be done at pier-side.
(Bankers vs. CA)
III. CARRIAGE OF GOODS BY SEA
ACT/COGSA (C.A. No. 65)
APPLICABILITY
WHEN INAPPLICABLE
1. When
public
policy
is
contradicted;
2. If the requirements under the
Convention are not complied
with.
IMPORTANT CONCEPTS:
1. Transportation documents
a. Passenger ticket
b. Baggage check
c. Air way bill
2. Liability of the carrier for damages
a. Death or injury to passengers
b. Loss or damage to baggage or
goods
c. Delay
3. Successive carrier agreement
4. Jurisdiction
5. Combined transportation agreement
PASSE BAGGA
NGER
GE
TICKET CHECK
Passeng Checke
er
d-in
baggag
e
AIR
WAYBIL
L
Goods
to be
shipped
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
of
embarking
or
disembarking; (Art. 17)
2. Destruction, loss or damage to any
baggage or goods, if it took place
during the transportation by air; (Art.
18) and
Transportation by air The period
during which the baggage or goods are
in the charge of the carrier, whether in
an airport or on board an aircraft, or, in
case of a landing outside an airport, in
any place whatsoever.
It includes any transportation by
land or water outside an airport if such
takes place in the performance of a
contract for transportation by air, for
2. Checked-in baggage
GENERAL RULE: $20 per kilogram
EXCEPTION: In case of special
declaration of value and payment of a
supplementary sum by consignor,
carrier is liable to not more than the
declared sum unless it proves the sum
is greater than actual value.
3. Hand-carried baggage
$1000/passenger
4. Goods to be shipped
GENERAL RULE: $20 per kilogram
EXCEPTION: In case of special
declaration of value and payment of a
supplementary sum by consignor,
carrier is liable to not more than the
declared sum unless it proves the sum
is greater than actual value.
An agreement relieving the carrier
from liability or fixing a lower limit is
null and void. (Art. 23)
Carrier is not entitled to the
foregoing limit if the damage is caused
TOWAGE
Governed
by
Civil
Code
on
contract of
lease
Success
is
not required
Only
the
consent of
the tugboat
owner
is
needed
Vessel need
not
be
involved in
an accident
Fees belong
to
the
tugboat
owner
SERVICES
GENERAL RULE: No public service
shall operate without having been
issued
a
certificate
of
public
convenience or a certificate of public
convenience and necessity.
EXCEPTIONS:
1. Warehouses;
2. Animal
drawn
vehicles
and
bancas moved by oar or sail;
3. Airships, except for the fixing of
maximum rates for fare and
freight;
4. Radio companies, except for
rates fixing;
5. Public
services
owned
or
operated by the government,
except as to rates fixing;
6. Ice plants; and
7. Public markets.
PUBLIC SERVICE
A person who owns, operates,
manages or controls in the Philippines
for hire or compensation, with general
or
limited
clientele,
whether
permanent, occasional or accidental,
and done for general business
purposes, any common carrier or
public utility, ice plants, power and
water supplies, communication and
similar public services. (Sec. 13b, CA
146)
A casual or incidental service devoid
of public character and interest is not
brought within the category. The
question depends on such factors as
the extent of services, whether such
person or company has held himself or
itself out as ready to serve the public
or a portion of the public generally.
(Luzon Stevedoring vs. PSC)
NOTE: The Public Service Commission
created under the Public Service Law
has already been abolished under P.D.
No. 1 and other issuances. It has been
replaced by the following government
agencies: LTO; LTFRB; ATO; BOE; NTC;
CERTIFICAT
E
OF
PUBLIC
CONVENIE
NCE
AND
NECESSITY
(CPCN)
An
authorizatio
n issued by
the
appropriate
government
agency for
the
operation of
public
service for
which
a
prior
franchise is
required by
law;
e.g.
telephone
and
other
services.
POWERS
EXERCISAB
LE
WITHOUT
PRIOR
NOTICE
AND
HEARING
1. Issuance
of CPC or
CPCN;
2. Fixing of
rates, tolls,
and
charges;
3. Setting
up
of
standards
and
classificatio
ns;
4. Establish
1. Investigat
ion
any
matter
concerning
public
service;
2. Requiring
operators to
furnish safe,
adequate,
and proper
service;
3. Requiring
public
ment
of
rules
to
secure
accuracy of
all meters
and
all
measuring
appliances;
5. Issuance
of
orders
requiring
establishme
nt
or
maintenanc
e
of
extension
of facilities;
6. Revocati
on,
or
modificatio
n of CPC or
CPCN;
7.
Suspension
of CPC or
CPCN,
except
when it is
necessary
to
avoid
serious and
irreparable
damage or
inconvenien
ce to the
public
or
private
interest, in
which case,
a
suspension
not
more
than
30
days
may
be ordered,
prior to the
hearing.
(Soriano v.
Medina,
164
SCRA
services to
pay
expenses of
investigation
;
4. Valuation
of properties
of
public
utilities;
5. Examinati
on and test
of
measuring
appliances;
6. Grant of
special
permits
to
make extra
or
special
trips
in
territories
specified in
the
certificate;
7. Uniform
accounting
system and
furnishing of
annual
reports;
8. Compellin
g
compliance
with
the
laws
and
regulations.
36)
UNLAWFUL
ACTS
OF
PUBLIC
UTILITY COMPANIES
1. Engagement
in
public
service
business without first securing the
proper certificate;
2. Providing or maintaining unsafe,
improper or inadequate service as
determined by the proper authority;
3. Committing any act of unreasonable
and unjust preferential treatment to
any particular person, corporation or
entity as determined by the proper
authority;
4. Refusing or neglecting to carry
public mail upon request. (Secs. 18
and 19)
ACTS REQUIRING PRIOR APPROVAL
1. Establish and maintain individual or
joint rates;
2. Establish and operate new units;
3. Issue free tickets;
4. Issue any stock or stock certificates
representing an increase of capital;
5. Capitalize any franchise in excess of
the amount actually paid to the
Government;
6. Sell, alienate, mortgage or lease
property, certificates or franchise.
Under Sec. 20(g) of C.A. No. 146, the
sale, etc. may be negotiated and
completed before the approval by the
proper authority. Its approval is not a
condition precedent to the validity of
the contract. The approval is necessary
only to protect public interest.
PRIOR OPERATOR/OLD OPERATOR
RULE
The rule allowing an existing
franchised operator to invoke a
preferential right within the authorized
territory as long as he renders
satisfactory and economical service.
The policy is not to issue a certificate
to a second operator to cover the