Transportation Law

OVERLAND TRANSPORTATION
Important concepts
A. Bill of lading
Written acknowledgement of receipt of goods and
agreement to transport them to a specific place to a
person named or to his order.
Best evidence of contract of carriage of cargo. (not
indispensable).
Any ambiguity in the bill of lading shall be construed
against the common carrier.
Parties in the Bill of lading
1. Shipper
2. Carrier
3. Consignee
Pour autrui and shipper as its agent.
Where goods were received and accepted by common
carrier although in apparent bad condition bad, it cannot
later invoke it. If shipper insists on shipping it, it will be
ship at his risk.
Kinds: (some)
1. Clean - goods are in good condition
2. Foul- in bad condition
3. Custody- goods received but carrier is yet to arrive.
4. Negotiable- deliverable to bearer or order
5. Non- negotiable- deliverable to specified person.
Functions:
1. Best evidence of contract of carriage of cargo.
2. Document of title.
3. Receipt of cargo.
4. Contract to transport and deliver goods as stipulated.
5. Symbol of goods.
Statement on BOL that goods are in bad
condition is only a prima facie presumption on
the external condition of goods.
Declared value v. stipulated Limited liability value
Latter must be with declaration of true value
and additional payment of premium.
Containerization/said to contain/Shippers load and
count system.
All acts (sealing, locking, accounting,
fumigation ) are done by the shipper, no
participation of the carrier except to transport.
Loss and deterioration of goods: As regards to
quality and quality of goods, it is the sole
responsibility of the shipper unless there is
stipulation to the contrary or inspection is done
at pier side.
When does contract of carriage ends?

Transhipment
Presumption of negligence only applies if the
contrat of carriage involves a common carrier.
Last CC is liable to all prior common carriers
but he may seek reimbursement to common
carrier at fault.

B. Obligations of common carrier
To accept and deliver goods.

Instances of justified refusal
1. necessary and reasonable reason for discrimination.
2. goods are dangerous objects.
3. unfit for transportation.
4. contrabands or illegal
5. injurious to health
In case of carriage by railway. Carrier is exempted from
liability if carriage is insisted by the shipper provided its
objections are written in the bill of lading.
To whom? Goods shall be delivered to consignee or
person named in the bill of lading or to whom the BOL is
negotiated.
When?
1. Stipulated in bill of lading
CC is bound to fulfil the contract and is liable
for any delay.
2. No stipulation
Within reasonable time (depends upon
circumstances)
First shipment of the same goods.
Effects of Delay
1. Merely suspends the contract of carriage.
2. Duty bound to exercise extra ordinary diligence.
3. No defense of fortuitous event.
4. Limited liability rule is not applicable.

C. Notice of Damages
File notice of claim because it is a condition precedent
for any party.
1. Apparent- immediate.
2. Non- apparent- within 24 hours from delivery.
Mandatory.
File for emergency damage and withdraw it
later if no damage.
Shorter period is allowed if assented by
shipper.
If despite notice of claim, CC refused to pay, shipper
may file in court:
1. No bill of lading was issued: within 6 years.
2. Bill of lading was issued: within 10 years.


MARITIME COMMERCE

Constitutes as a present right of property in the ship to
be afterward enforced.
If maritime lien arose prior to registration of preferred
mortgage, it is still has the priority.
Maritime lien in vessel is preferred except:
1. judicial costs
2. taxes due to government
3. salaries and wages of captain and crew
4. indemnity due to shippers
5. costs of repairs
6. preferred mortgages registered prior in time
Limited only to the amount of debt.
Hypothecary (doctrine of limited liability)- liability of the
shipowner is limited only to the vessel itself.
Where applicable:
1. Indemnities to third persons.
2. Negligent acts of captain.
3. Collision
4. Wages of captain and crew.
Where not applicable:
1. Claims under Workmens compensation Act.
2. Injury or damage due to shipowner or shipowner and
captain.
3. Vessel is insured.
4. Expenses for repair of vessel before loss.
5. In case of no total loss and vessel is not
abandoned.
6. collision between two negligent vessels.
Right of abandonment
1. By shipowner or shipagent of vessel
a. In case of civil indemnities to third persons
b. Sec. 138 of Insurance Code.
c. leakage of of liquid cargo.
Effects:
a. Transfer of ownership from shipowner to shipper
or insurer.
b. Insurer must pay in case of Sec. 138 of Insurance
Code as if there was actual total loss.
2. By consignee of goods shipped
a. Partial non- delivery, when goods are useless without
the others.
b. Goods are useless for sale or purpose in which it is
intended.
c. Delay through the fault of carrier.
Effects:
a. Transfer of ownership from shipper to
carrier.
b. Carrier should pay the shipper the market
value of goods at point of destination.
Pilots
Person duly qualified and licensed to conduct a
vessel into or out of ports.
Master pro hac vice (supersedes the master)for
the time being(when vessel is about to arrive)
in the command and navigation of ship.
Pilot is liable for damages due to his negligence
during vessel is about to arrive.
Except: a. fortuitous events
b. countermand by master.
Liability
1. Captains and masters are not liable if damage is
caused by:
a. fortuitous event
b. obligations on repairs, equipment or provisioning
except he bound himself to, in writing.
2. Solidary liabilities of Shipowner/agent to acts done by
Captain to passengers and cargoes.
a. damages due to lack of skill and negligence.
b. thefts and robberies of the crew.
c. lossess and fines for violation of laws.
d. damages due to mutinies
e. damages due to misuse of power
f. deviations
g. arrival under stress
h. due to non-observance of marine regulations.

Special Contracts of marine commerce
Charter party
By virtue of which the owner or agent binds himself to
transport merchandise or persons at fixed price.
Bill of lading
Written acknowledgement of receipt of goods and
agreement to transport them to a specific place to a
person named or to his order..
Bottomry or Respondentia
By virtue of which a person lends to another a certain
amount of money or goods on things exposed to
maritime risk to be returned if things are safely
transported.
Bottomry- liability of shipowner or agent is
contingent upon safe arrival of vessel to
destination.
Respondentia- liability of owner of cargo is
contingent upon safe arrival of cargo to
destination.
Vis--vis
Charter party and bill of lading
As to kind, former is a complete contract while latter is
more of a receipt which accredits goods. As to perfection,
former is a consensual contract while latter is a real
contract.
Bareboat or demise and contract of affreightment
Former is when the shipowner leases to the charterer the
whole vessel including master and crew. It transforms a
common carrier into a private carrier thus limited
liability rule is without application. Charterer is treated
as owner pro hac vice and assumes customary rights and
liabilities of owner. Latter is when a part or whole of its
space to others. Shipowner retains possession, command
and navigation. It may be either time charter, chartered
for a fixed period or voyage charter, chartered for a
particular voyage.

Paramount Clause
Clause in a charter party that COGSA shall apply even
though transportation is domestic subject to extent that
bill of lading is repugnant to COGSA or applicable law.
York-Antwerp Rule: Rules on liability for averages with regard to
deck cargo.
1. deck cargo is allowed only in domestic/coastwise/inter-island
shipping not international/overseas/foreign.
2. if deck cargo is loaded with the consent of the shipper on
international trade, it must always contribute to general average,
but should the same be jettisoned, it cannot claim reimbursement.
3. if deck cargo is loaded with the consent of the shipper on
coastwise shipping it must always contribute to general average,
but should the same be jettisoned, it can claim reimbursement
Ratio: domestic shipping is usually short so as the
exposure in marine peril.
Arrival under stress
Arrival of the vessel to the nearest and convenient port
instead of the port of destination, if during the voyage
the vessel cannot continue to the port of destination.
Lawful: lack of provisions, well founded fear of
seizures.
Unlawful: defect of vessel due to improper
repair, risk of enemies not well known.
Who bears the expenses: shipowner except for
damages of lawful arrival.
Collision
Impact of two moving vessels.
Rules:
1. Two vessels about to enter, the farther must allow the
nearer to enter first; If they collide fault is imputable to
one who arrived later unless it can prove otherwise.
2. Two vessels met, smaller shall give the right of way to
larger one.
3. vessel leaving port shall leave the way clear for
another which may be entering the port.
Shipwreck
Loss of vessel or rendering it incapable of navigation due
to running or grounding against object in sea or coast.
If due to captains fault, shipowner may demand
indemnity from him.
Rules on collision or allision as may be pertinent is
applicable.
Cases covered by collision and allusion
1. One vessel at fault: only vessel at fault.
2. Both vessels at fault: each bear its own but solidary liable
to shippers.
3. Vessel at fault unknown: each bear its own but solidary
liable to shippers.(Doctrine of inscrutable fault)
4. Third vessel at fault: third vessel.
5. Fortuitous event: No liability.
Maritime protest
Condition precedent to recover damages due to collision
or other maritime accidents.
Made by the captain so an innocent vessel may recover
from guilty vessel within 24 hours from the time of
collision or other maritime accident before a competent
authority in nearest port even not point ofb destination
in Phils. Or Phil. Consul in abroad.
SC: 24 hour period is not mandatory to small
vessels without buque or deck.
COGSA
GR: Applies only in foreign sea transportation for
carriage of goods.
EX: Paramount clause: Agreement by parties to be
applied in domestic sea transportation.
Action for loss or damage shall be brought within 1 year
after delivery of goods or date goods should have been
delivered but it may be SUSPENDED if there is
agreement by parties, filing of an action in court.
1 year period shall run from delivery to arrastre
operator and not to consignee.
1 year period applies to right of subrogation by
insurer but not for claims against insurer for
insurance proceeds.
Reasonable deviation
Saving life.
Reasonable ground of belief for seizure.
Severance of relationship bet. Flag and port of
destination.
Order of detention.

SALVAGE LAW
Service rendered by one person to vessel or cargo which
is either abandoned in distress in sea or unable to protect
or secure.
Requisites:
Valid object of salvage (shipwreck or derelict).
Derelict- ship or cargo abandoned by who are
in charge without hope of recovering it.
Exposure to marine peril (not perils of the
ship).
Services voluntarily rendered.
Services are successful, total or partial.
Contract of towage
One vessel,usually motorized pulls another loaded or not
from one place to another for compensation.

Distinguish
SALVAGE TOWAGE
Special law Civil Code
Requires success Not necessarily
Done with consent of
captain
Only consent of tugboat
owner
Marine peril only Either peril
Vessel involve in accident Need not to be in accident

REWARDS
Fixed by RTC
Maximum reward for person: 50 %
Vessel is salvor: 50% shipowner, 25 % captain
and 25% for salaries of ofiicers and crew.

Taking passengers from sinking ship, without rendering
service in rescuing vessel is not a salvage service but
duty to humanity and not for reward.

BAR QUESTION:
Carriage; Valuation of Damaged Cargo (1993)
A shipped thirteen pieces of luggage through LG
Airlines from Teheran to Manila as evidenced by LG Air
Waybill which disclosed that the actual gross weight of
the luggage was 180 kg. Z did not declare an inventory
of the contents or the value of the 13 pieces of luggage.
After the said pieces of luggage arrived in Manila, the
consignee was able to claim from the cargo broker only
12 pieces, with a total weight of 174 kg. X advised the
airline of the loss of one of the 13 pieces of luggage and
of the contents thereof. Efforts of the airline to trace the
missing luggage were fruitless. Since the airline failed to
comply with the demand of X to produce the missing
luggage, X filed an action for breach of contract with
damages against LG Airlines. In its answer, LG Airlines
alleged that the Warsaw Convention which limits the
liability of the carrier, if any, with respect to cargo to a
sum of $20 per kilo or $9.07 per pound, unless a higher
value is declared in advance and additional charges are
paid by the passenger and the conditions of the
contract as set forth in the air waybill, expressly subject
the contract of the carriage of cargo to the Warsaw
Convention. May the allegation of LG Airlines be
sustained? Explain.
SUGGESTED ANSWER:
Yes. Unless the contents of a cargo are declared or the
contents of a lost luggage are proved by the satisfactory
evidence other than the self-serving declaration of one
party, the contract should be enforced as it is the only
reasonable basis to arrive at a just award. The passenger
or shipper is bound by the terms of the passenger ticket
or the waybill. (Panama v Rapadas 209 s 67)

Common Carrier; Duty to Examine Baggages;
Railwayand Airline (1992)
Marino was a passenger on a train. Another passenger,
Juancho, had taken a gallon of gasoline placed in a
plastic bag into the same coach where Marino was
riding. The gasoline ignited and exploded causing injury
to Marino who filed a civil suit for damages against the
railway company claiming that Juancho should have
been subjected to inspection by its conductor. The
railway company disclaimed liability resulting from the
explosion contending that it was unaware of the contents
of the plastic bag and invoking the right of Juancho to
privacy.
a) Should the railway company be held liable for
damages?
b) If it were an airline company involved, would your
answer be the same? Explain briefly.
SUGGESTED ANSWER:
a) No. The railway company is not liable for damages. In
overland transportation, the common carrier is not
bound nor empowered to make an examination on the
contents of packages or bags, particularly those
handcarried by passengers.
b) If it were an airline company, the common carrier
should be made liable. In case of air carriers, it is not
lawful to carry flammable materials in passenger
aircrafts, and airline companies may open and
investigate suspicious packages and cargoes (RA 6235)

Maritime Commerce; Bareboat (2003)
For the transportation of its cargo from the Port of
Manila to the Port of Kobe, Japan, Osawa & Co.,
charteredbareboat M/V Ilog of Karagatan
Corporation. M/V Ilog met a sea accident resulting in the
loss of the cargo and the death of some of the seamen
manning the vessel. Who should bear the loss of the
cargo and the death of the seamen? Why? (4%)
SUGGESTED ANSWER:
(per Dondee) Osawa and Co. shall bear the loss because
under a demise or bareboat charter, the charterer (Osawa
& Co.) mans the vessel with his own people and
becomes, in effect, the owner for the voyage or service
stipulated, subject to liability for damages caused by
negligence.