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LAW ON TRANSPORTATION
SOURCES OF LAW ON TRANSPORTATION UNDER PHILIPPINE c. Shipper- the owner of the goods
JURISDICTION
Characteristics of Bill of Lading
Q: What are the different sources of transportation laws in
the Philippines? Q: What are the 3 characteristics of Bill of Lading?
A: A:
1. Civil Code provisions on common carriers (Art. 1732- 1. Good evidence of contract of carriage
1764) 2. Evidence of receipt
2. Code of Commerce on Common Carriers 3. Evidence title to the goods by the shipper
3. Carriage of Goods by Sea Act (COGSA) Ship Mortgage
Decree of 1521 § It is not really a contract of carriage, only a good
4. Salvage law evidence of such contract
5. Public Service Act as amended
6. Warshaw Convention KINDS OF BILL OF LADING
Q: Who are the essential parties to a bill of lading? Ex: New Yorrkà Manila à Cebu
A: It is a document of lease of a particular vessel executed NOTE: Contract of affreightment- a common carrier is always
between the owner of the vessel and the charterer. It is a involved (Home Insurance & Planters Product cases)
contract of lease of the vessel.
Q: Compare the 3 kinds of charter party.
Q: What is the purpose of charter party?
A:
A: The purpose is to indicate that the carrier is under charter
to the charterer for the purpose of transporting the goods. TIME VOYAGE BAREBOAT
The vessel is The charterer The charterer
A contract by which an entire ship, or some principal part hired for a specific hires the vessel takes
thereof is let/leased by the owner to another person for a
amount of time. for a single responsibility for
specified time or use. (Planters Products, Inc. vs. CA, 226 SCRA
476) Also, owner still voyage the crewing and
manages the maintenance of
Q: Who are the parties in a charter-party? vessel but the the ship during
charterer gives the time of the
A: orders for the charter, assuming
a. Ship owner or ship agent
employment of the legal
b. Charterer
the vessel, and responsibilities of
THREE FORMS OF CHARTER PARTY may sub-charter the owner and is
the vessel on a known as a
Q: What are the 3 forms of Charter Party? time charter or disponent owner.
voyage charter
A: basis
Q: What is “Lay time period”? A: It is a requirement under Art. 835 of the Code of
Commerce in case of collision which compels the filing of
A: The free time which allows the shipper to load within the protest within the period of 24 hours when the vessel enters
period without any worry that he will be penalized or any on a port, domestic or foreign. A disclaimer of liability. It is to
penalty for demurrage claim that the collision did not happen because of the
negligence of the master of the ship. Condition precedent or
Q: What is “Extra-lay Period”? prerequisite to recovery of damages arising from collisions
and other maritime accidents.
A: Additional time. Days which follow after the lay days have
elapsed The action for the recovery of loss and damages arising from
collisions can not be admitted if a sworn statement or
VII. DISPATCH MONEY v. PRIMAGE declaration is not presented within twenty-four hours to
competent authority of the point where the collision took
Q: What is “Dispatch money”? place, or that of the first port of arrival of the vessel." (Art.
835)
A: Sum of money stipulated in the bill of lading or charter
party which provides that the amount is given as a reward to § If no protest is filed, despite collision, there could be no
the master of the ship for loading or unloading the cargo right on the part of the owner to recover “collision
within the terms of the contract. damage” from the other party
§ The non-filing may also cause the dismissal of actions
§ A condition sine qua non to recover the so-called
collision damage
HIERARCHY OF LAWS ON TRANSPORTATION A: If the vessel is built sufficiently and equipped to carry a
particular kind of cargo which it contracted to carry and the
Q: State the hierarchy of laws on transportation. same is loaded safely.
Q: What specific provision under the Civil Code dictates that It also avoids a distinction between a person or enterprise
it is the provisions of the civil code that will apply, or in its offering transportation service on a regular or scheduled
absence, the code of commerce, special laws, and COGSA in basis and one offering such service on an occasional, episodic
suppletory character? or unscheduled basis.
A: It refers to a vessel that has a degree of fitness which an One is a common carrier even if he has no fixed and publicly
ordinary, careful, and prudent man/owner would require to known route, maintains no terminals, and issues no tickets
have at the commencement of the voyage having regard to (Asia Lighterage Shipping, Inc. vs. CA).
all probable circumstances of it.
Q: What are the characteristics of a common carrier?
It is the fitness adjudged by an ordinary prudent man.
A:
Cargo-worthy
1. Undertakes to carry for all people indifferently and
Q: What is “Cargo-worthy”? thus is liable for refusal without sufficient reason
1. It must be engaged in the business of carrying goods for Q: What is the rationale behind the “extra-ordinary
others as a public employment and must hold itself out diligence?”
as ready to engage in the transportation of goods
generally as a business and not as a casual occupation; A:
2. It must undertake to carry goods of the kind to which its 1. From the nature of the business and for reasons of
business in confined; public policy (Art. 1733)
3. It must undertake to carry by the method by which his 2. Relationship of trust
business is conducted and over its established roads; and 3. Business is impressed with a special public duty
4. The transportation must be for hire. 4. Possession of the goods
5. Preciousness of human life
The SC held that the true test of a common carrier is the
carriage of goods or passengers provided it has space for all NOTE: A common carrier is not an absolute insurer of all risks
who opt to avail themselves of its transportation for a fee. of travel.
COMMON CARRIER v. PRIVATE CARRIER Q: What is the coverage of the requirement of extra-
ordinary diligence?
Q: Give the distinctions between common and private
carrier. A:
COMMON CARRIER PRIVATE CARRIER Q: What are the reasons for the exercise of extra-ordinary
As to availability diligence?
Holds himself out for all Contracts with particular
people indiscriminately individuals or groups only A:
Q: When will the shipper or charterer pay the total amount A: Due to the recklessness of their drivers which is the
of goods? common sight even in crowded areas, and particularly, on the
highways throughout the country.
A:
Q: What are the 3 options of the common carrier in case the
1. Declaration of value on the face of the bill of defect is apparent in the packing of goods?
exchange
2. Payment of additional freight if carrier so demands A:
PRESUMPTIONS APPLICABLE TO COMMON CARRIERS 1. Inform the shipper to preparew the packing of the
goods
Q: What are the “deterrence or presumptions” applicable to 2. Pack the goods itself and ask the shipper for
common carriers? payment
3. Refuse to accept package
A:
SUBSECTION 2. - VIGILANCE OVER GOODS
1. Exercise of Extra-ordinary diligence
2. In cases of lost, destruction, and deterioration of the Q: What are the exemptions on liability of common carrier?
goods and that the passengers were not safely
transported, the common carrier is presumed to be A:
at fault or negligent.
Art. 1734. Common carriers are responsible for the loss,
NOTE: These presumptions are rebuttable. destruction, or deterioration of the goods, unless the same
is due to any of the following causes only:
Q: What are the evidence of negligence?
(1) Flood, storm, earthquake, lightning, or other
A: natural disaster or calamity;
ACTS OF PUBLIC ENEMY Art. 1735. In all cases other than those mentioned in Nos. 1,
2, 3, 4, and 5 of the preceding article, if the goods are lost,
Q: What are the requisites under this defense? destroyed or deteriorated, common carriers are presumed
to have been at fault or to have acted negligently, unless
A: they prove that they observed extraordinary diligence as
required in Article 1733.
1. Must be the proximate and only cause of the loss
2. Exercise of due diligence to prevent or minimize the The presumption of negligence on the part of the common
loss before, during or after the act causing the loss, carrier in cases of loss, destruction, or deterioration of the
deterioration or destruction of the goods (Art. 1739) goods that the common carrier failed to exercise extra-
ordinary diligence, thus, he is held liable for damages.
NEGLIGENCE OF THE SHIPPER OR OWNER
Q: What are the 2 provisions which are preventive measures
Q: What are the requisites under this defense? recommended by the Code Commission to Congress to be
passed to curbe the negligent acts of common carriers?
A:
A:
a. Sole and proximate cause: absolute defense
b. Contributory: partial defense. (Art. 1741) 1. Art. 1733. Common carriers, from the nature of their
business and for reasons of public policy, are bound to
CHARACTER OF THE GOODS OR DEFECTS IN THE PACKING observe extraordinary diligence in the vigilance over the
OR IN THE CONTAINER goods and for the safety of the passengers transported
by them, according to all the circumstances of each
Even if the damage should be caused by the inherent case.
defect/character of the goods, the common carrier must
exercise due diligence to forestall or lessen the loss. (Art. Such extraordinary diligence in the vigilance over the
1742); goods is further expressed in Articles 1734, 1735, and
1745, Nos. 5, 6, and 7, while the extraordinary diligence
A: No, generally. The common carrier has no right as a Also known as the “Tackle-
general rule. They can only inquire. to-tackle Principle”
A: As a rule, that is unjust, against public policy, and it is null A: The charterer
and void. (Art. 1745)
Q: Who is supposed to navigate the vessel?
Art. 1745. Any of the following or similar stipulations shall
be considered unreasonable, unjust and contrary to public A: The charterer
policy:
Q: Who is supposed to furnish the fuel, and provisions to
(1) That the goods are transported at the risk of the the vessel?
owner or shipper;
(2) That the common carrier will not be liable for any A: The charterer
loss, destruction, or deterioration of the goods;
(3) That the common carrier need not observe any Q: Who has the full control and supervision of the vessel?
diligence in the custody of the goods;
(4) That the common carrier shall exercise a degree of A: Charterer
diligence less than that of a good father of a family,
or of a man of ordinary prudence in the vigilance Q: If there will be loss, destruction, or damage caused by the
over the movables transported; navigation of the vessel by the charterer, who is liable?
(5) That the common carrier shall not be responsible
for the acts or omission of his or its employees; A: Charterer
(6) That the common carrier's liability for acts
committed by thieves, or of robbers who do not act Q: In case of bareboat or demise charter, what kind of
with grave or irresistible threat, violence or force, is diligence must it exercise?
dispensed with or diminished;
(7) That the common carrier is not responsible for the A: Ordinary diligence
loss, destruction, or deterioration of goods on
account of the defective condition of the car, Q: Does the princple of presumption of fault or negligence
vehicle, ship, airplane or other equipment used in apply in this case?
the contract of carriage.
A: No. The presumption under Art. 1736 applies only to
Q: What is the exception? common carriers. The moment you convert or change the
complexion, the presumption will no longer apply.
A: If the common carrier acts as a private carrier (in case of
bareboats. Q: What are the 2 sides of the carrier vessel?
A: When there are several shippers and consignees. Thus, it 1. Port side of the vessel which is the left side
returns to the complexion of a common carrier. 2. Star board side which is the right side
A: There is a pro hac vice transfer in case of a demise charter. Art. 1737. The common carrier's duty to observe
The owner is no longer the common carrier. There is already extraordinary diligence over the goods remains in full force
a change of complexion as enunciated in the Planters case and effect even when they are temporarily unloaded or
stored in transit, unless the shipper or owner has made use
Q: What are the 2 conditions apparent in the Home of the right of stoppage in transitu.
Insurance case?
A: The shipper or owner has made use of the right of Q: Is limiting the performance of extra-ordinary diligence of
stoppage in transitu. common carrier for loss, destruction or damage, valid?
Q: Why did the shipper instruct the carrier to stop? A: Yes., subject to the conditions of Art. 1744:
A: The buyer becomes insolvent. Art. 1744. A stipulation between the common carrier and
the shipper or owner limiting the liability of the former for
Art. 1530. Subject to the provisions of this Title, when the the loss, destruction, or deterioration of the goods to a
buyer of goods is or becomes insolvent, the unpaid seller degree less than extraordinary diligence shall be valid,
who has parted with the possession of the goods has the provided it be:
right of stopping them in transitu, that is to say, he may
resume possession of the goods at any time while they are (1) In writing, signed by the shipper or owner;
in transit, and he will then become entitled to the same (2) Supported by a valuable consideration other than
rights in regard to the goods as he would have had if he had the service rendered by the common carrier; and
never parted with the possession. (n) (3) Reasonable, just and not contrary to public policy.
Q: What is the legal effect of the instruction of stoppage? Q: Who gives a valuable consideration?
A: It terminates the contract of carriage between the carrier A: The common carrier.
and the shipper. The carrier becomes a
warehouseman/bailee Example: reduction of fair in exchange for the exercise of
lesser diligence to that which is required
Q: How is it exercised?
Q: State the stipulations that are null and void.
A: By giving notice to the captain. Or, if by land, instruction
must be given to the office then to the common carrier. A:
Q: What are the elements of the right of stoppage in Art. 1745. Any of the following or similar stipulations shall
transitu? be considered unreasonable, unjust and contrary to public
policy:
A:
(1) That the goods are transported at the risk of the
1. Notice to the common carrier that there is a owner or shipper;
stoppage because the consignee is insolvent; (2) That the common carrier will not be liable for any
2. Contract of carriage ceases upon acceptance of loss, destruction, or deterioration of the goods;
notice; (3) That the common carrier need not observe any
3. At the time of the notice, the goods must still be in diligence in the custody of the goods;
the possession of the carrier and not yet delivered to (4) That the common carrier shall exercise a degree of
the consignee. diligence less than that of a good father of a family,
or of a man of ordinary prudence in the vigilance
Q: Is there a liability on the part of the carrier prior to the over the movables transported;
notice to the consignee that the goods have arrived? (5) That the common carrier shall not be responsible
for the acts or omission of his or its employees;
A: Yes, by express provision of the law (6) That the common carrier's liability for acts
committed by thieves, or of robbers who do not act
Art. 1738. The extraordinary liability of the common carrier with grave or irresistible threat, violence or force, is
continues to be operative even during the time the goods dispensed with or diminished;
are stored in a warehouse of the carrier at the place of
Art. 1748. An agreement limiting the common carrier's SUBSECTION 3. - SAFETY OF PASSENGERS
liability for delay on account of strikes or riots is valid.
Art. 1755. A common carrier is bound to carry the
Art. 1749. A stipulation that the common carrier's liability is passengers safely as far as human care and foresight can
limited to the value of the goods appearing in the bill of provide, using the utmost diligence of very cautious
lading, unless the shipper or owner declares a greater value, persons, with a due regard for all the circumstances.
is binding.
Q: What are the principles governing the liability of the
Art. 1750. A contract fixing the sum that may be recovered. common carriage?
by the owner or shipper for the loss, destruction, or
deterioration of the goods is valid, if it is reasonable and just A:
under the circumstances, and has been fairly and freely
agreed upon. (1) The liability of the common-carrier is contractual
and arises upon the breach of its obligations and
Q: How can the 3 limitations be frustrated? there is breach if it fails to exercise extraordinary
diligence according to all the circumstances of each
A: case.
(2) A carrier is obliges to carry its passengers with
1. If the common carrier incurred UNJUST DELAY in utmost diligence of very cautious persons, having
shipping of goods due regard for all the circumstances.
2. When it changes the stipulated usual route of the (3) A carrier is presumed to be at fault or have acted
common carrier and it results to the loss of the negligently in case if death of, or injury to
goods. passengers, it being its duty to prove that it
exercised extra-ordinary diligence.
Art. 1747. If the common carrier, without just cause, delays (4) A carrier is not an insurer of all risks of travel
the transportation of the goods or changes the stipulated or because the common-carrier’s liability rests on
usual route, the contract limiting the common carrier's negligence only.
liability cannot be availed of in case of the loss, destruction, (5) The carrier is not responsible for events which could
or deterioration of the goods. not be foreseen, or which, though foreseen, are
inevitable.
Q: What are the effects of the 2 events?
If the proximate cause is the negligence of the shipper and
A: the contributory negligence was made by the common
1. Cannot avail of the limitations stipulated carrier, the shipper cannot recover damages because the law
The reduction of fare does not justify any limitation of the Art. 1764. Damages in cases comprised in this Section shall
common carrier's liability. be awarded in accordance with Title XVIII of this Book,
concerning Damages. Article 2206 shall also apply to the
Art. 1759. Common carriers are liable for the death of or death of a passenger caused by the breach of contract by a
injuries to passengers through the negligence or willful acts common carrier.
of the former's employees, although such employees may
have acted beyond the scope of their authority or in Art. 1765. The Public Service Commission may, on its own
violation of the orders of the common carriers. motion or on petition of any interested party, after due
hearing, cancel the certificate of public convenience granted
This liability of the common carriers does not cease upon to any common carrier that repeatedly fails to comply with
proof that they exercised all the diligence of a good father his or its duty to observe extraordinary diligence as
of a family in the selection and supervision of their prescribed in this Section.
employees.
Art. 1766. In all matters not regulated by this Code, the
Art. 1760. The common carrier's responsibility prescribed in rights and obligations of common carriers shall be governed
the preceding article cannot be eliminated or limited by by the Code of Commerce and by special laws.
stipulation, by the posting of notices, by statements on the
tickets or otherwise. RULES ON PASSENGERS’ BAGGAGE
Art. 1761. The passenger must observe the diligence of a IN THE CUSTODY OF THE IN THE CUSTODY OF THE
good father of a family to avoid injury to himself. PASSENGERS COMMON CARRIER
(HAND-CARRIED) (CHECKED-IN)
Art. 1762. The contributory negligence of the passenger Legal nature of the baggage
does not bar recovery of damages for his death or injuries, if Necessary deposit Considered as “goods”
the proximate cause thereof is the negligence of the
common carrier, but the amount of damages shall be Required diligence by the common carrier
equitably reduced. Diligence of a depositary Extraordinary diligence
(ordinary diligence)
Art. 1763. A common carrier is responsible for injuries Applicable rules
suffered by a passenger on account of the wilful acts or
Arts. 1998 and 2000-2003 Arts. 1733-1753
negligence of other passengers or of strangers, if the
common carrier's employees through the exercise of the
(1) When the carrier had reached the point of Consensual contract Real contract
destination
(2) Passenger has alighted safely, upon direction by the BAREBOAT v. CONTRACT OF AFREIGHTMENT
conductor to alight, from the carrier
(3) The engine should be stopped Q: Differentiate Bareboat from Contract of Affreightment
(4) Safe distance from the common carrier (Time and Voyage charter).
Q: What is a Charter Party? Q: What law will apply in case the passenger’s baggage is
NOT in his personal custody?
A: A contract by virtue of which the owner or agent binds
himself to transport merchandise or persons for a fixed price. A: Arts. 1733 to 1753 shall apply. Thus, Arts. 1733-1753 shall
A contract by which an entire ship, or some principal part apply to baggage not in the possession of the passenger.
thereof is let/leased by the owner to another person for a
specified time or use. (Planters Products, Inc. vs. CA, 226 SCRA Otherwise, the Civil Code provisions on Common Carriage
476) shall not apply but Arts. 1998, 200 to 2003.
Q: Who are the essential parties in a charter party? In his of baggage and personal effects with the passenger, the
latter must follow instructions from the common carrier to
A: prevent loss and to protect his personal effects, otherwise, he
will not be able to recover. The so-called Rule on Necessary
1. Ship owner or ship agent Deposit shall apply in this case.
2. Charterer
RULE ON NECESSARY DEPOSIT
CHARTER PARTY v. BILL OF LADING
Art. 1998. The deposit of effects made by the travellers in
Q: Differentiate Charter party from Bill of lading. hotels or inns shall also be regarded as necessary. The
keepers of hotels or inns shall be responsible for them as
A: depositaries, provided that notice was given to them, or to
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UNIVERSITY OF SANTO TOMAS
NOTES ON LAW ON TRANSPORTATION
Kenneth & King Hizon (2A)- UST Faculty of Civil Law
their employees, of the effects brought by the guests and A: It is based on the contract since there exists a contractual
that, on the part of the latter, they take the precautions relation. Thus, there is a breach of contract.
which said hotel-keepers or their substitutes advised
relative to the care and vigilance of their effects. (1783) Q: However, it is said that there is a demarcation line as to
the liability. What is it?
Art. 2000. The responsibility referred to in the two
preceding articles shall include the loss of, or injury to the A: The common carrier is not considered as insurer of all
personal property of the guests caused by the servants or risks.
employees of the keepers of hotels or inns as well as
strangers; but not that which may proceed from any force FORTUITOUS EVENT
majeure. The fact that travellers are constrained to rely on
the vigilance of the keeper of the hotels or inns shall be Q: What is fortuitous event?
considered in determining the degree of care required of
him. (1784a) A: That which could not be foreseen, or which though
foreseen, is inevitable (Civil Code, Art. 1174).
Art. 2001. The act of a thief or robber, who has entered the
hotel is not deemed force majeure, unless it is done with An event is considered fortuitous if the following elements
the use of arms or through an irresistible force. (n) concur:
Art. 2002. The hotel-keeper is not liable for compensation if (a) the cause of the unforeseen and unexpected
the loss is due to the acts of the guest, his family, servants occurrence, or the failure of the debtor to comply
or visitors, or if the loss arises from the character of the with his obligations, must be independent of human
things brought into the hotel. (n) will;
(b) it must be impossible to foresee the event which
Art. 2003. The hotel-keeper cannot free himself from constitutes the caso fortuito, or if it can be foreseen,
responsibility by posting notices to the effect that he is not it must be impossible to avoid;
liable for the articles brought by the guest. Any stipulation (c) the occurrence must be such as to render it
between the hotel-keeper and the guest whereby the impossible for the debtor to fulfill his obligation in a
responsibility of the former as set forth in articles 1998 to normal manner; and
2001 is suppressed or diminished shall be void. (n) (d) the obligor must be free from any participation in
the aggravation of the injury resulting to the
TRANSPORT OF PASSENGERS creditor.
Q: How is the common carrier supposed to transport Q: What is the effect when a passenger is carried
passengers? gratuitously?
Q: What is the effect of absolute liability for the defect of The reduction of fare does not justify any limitation of the
the parts of the engines of the common carrier? common carrier's liability.
A: The common carrier will still be held liable Q: What is the effect if there is a stipulation that there will
be non-liability in case of damage not caused by the gross
Q: How about negligence of the manufacturer? negligent act of the common carrier?
A: In that case, the manufacturer will be considered as the A: The stipulation is valid if the damage is not due to the
agent of the common carrier, thus, he will still be held liable. willful act of the common carrier.
This is in the light of the Doctrine of Respondeat Superior.
The user of the object is held liable. Art. 1759. Common carriers are liable for the death of or
injuries to passengers through the negligence or wilful acts
Q: What is the basis of the liability of the common carrier? of the former's employees, although such employees may
This liability of the common carriers does not cease upon Lastly, teachers or heads of establishments of arts and
proof that they exercised all the diligence of a good father trades shall be liable for damages caused by their pupils and
of a family in the selection and supervision of their students or apprentices, so long as they remain in their
employees. custody.
The common carrier will still be held liable to the passenger if The responsibility treated of in this article shall cease when
the act of the employee was done within the course of the the persons herein mentioned prove that they observed all
employment because the common carrier is bound by its the diligence of a good father of a family to prevent
contractual obligation. damage. (1903a)
If it was done outside, it cannot be held liable. LIABILITY OF COMMON CARRIER FOR AN EMPLOYEE WHO
Ex: A, driver of a bus, after delivering the bus to the ACTED BEYOND THE SCOPE
station/garage, he stabbed B, a passenger. Note that the bus
is already placed in the garage. Thus, the common carrier can Q: What is the liability of a common carrier acting beyond
no longer be held liable since the damage was made outside the scope?
the course of the employment.
A: It depends:
It is said that Art. 1759 is dependent highly on evidence.
1. If the act occurred prior to the new civil code, he is
Q: What if the common carrier bumped with a private not liable. The act of employee is considered as a
carrier? What is his best defense? fortuitous event
2. If after the new civil code, he is liable.
A: His principal defense can be the exercise of due diligence.
To be able to avoid liability, there should be a good quantum NOTE: "Last clear chance" rule not applicable to contracts of
of evidence. carriage.-- The principle of last clear chance applies only in a
suit between the owners and drivers of two colliding vehicles;
This is also related to Art. 2180 it does not apply where a passenger demands responsibility
from the common carrier to enforce its contractual
Art. 2180. The obligation imposed by Article 2176 is obligation; it would be iniquitous to exempt the driver and his
demandable not only for one's own acts or omissions, but employer on the ground that the other driver was also
also for those of persons for whom one is responsible. negligent.
The father and, in case of his death or incapacity, the TERMINATION OF CARRIER-PASSENGER RELATIONSHIP
mother, are responsible for the damages caused by the
minor children who live in their company. Q: When relationship of carrier and passenger terminates?
Guardians are liable for damages caused by the minors or A: The relation of common carrier and passenger does not
incapacitated persons who are under their authority and cease at the moment that the passenger alights from the
live in their company. common carrier's vehicle at a place selected by the common
carrier at the point of destination, but continues until the
The owners and managers of an establishment or enterprise passenger had reasonable time or a reasonable opportunity
are likewise responsible for damages caused by their to leave the common carrier's premises. What is a
employees in the service of the branches in which the latter reasonable time or a reasonable delay within this rule is to be
are employed or on the occasion of their functions. determined from all the circumstances
Employers shall be liable for the damages caused by their ACCOMODATION PASSENGER
employees and household helpers acting within the scope of
their assigned tasks, even though the former are not Q: Who are “accommodation passengers”?
engaged in any business or industry.
A: They are passengers who are normally given the privilege
The State is responsible in like manner when it acts through of ride by a private vehicle and the latter will not be held
a special agent; but not when the damage has been caused liable. However, the act should not be due to the willful act in
by the official to whom the task done properly pertains, in order to avoid liability.
Q: What is the liability of the common carrier in case of acts Section 3. It shall be unlawful for any person, natural or
of a co-passenger or stranger? juridical, to ship, load or carry in any passenger aircraft
operating as a public utility within the Philippines, and
A: There is always liability if the common carrier could have explosive, flammable, corrosive or poisonous substance or
exercised due diligence to prevent the occurrence. material.
Q: What if a force majeure prevented him against the act of Sec. 4. The shipping, loading or carrying of any substance or
the passenger? material mentioned in the preceding section in any cargo
aircraft operating as a public utility within the Philippines
A: He will not be liable according to Art. 1763. shall be in accordance with regulations issued by the Civil
Aeronautics Administration.
Art. 1763. A common carrier is responsible for injuries
suffered by a passenger on account of the wilful acts or Sec. 5. As used in this Act
negligence of other passengers or of strangers, if the
common carrier's employees through the exercise of the (1) "Explosive" shall mean any substance, either solid or
diligence of a good father of a family could have prevented liquid, mixture or single compound, which by chemical
or stopped the act or omission. reaction liberates heat and gas at high speed and causes
tremendous pressure resulting in explosion. The term shall
include but not limited to dynamites, firecrackers, blasting
REPUBLIC ACT NO. 6235 caps, black powders, bursters, percussions, cartridges and
AN ACT PROHIBITING CERTAIN ACTS INIMICAL TO CIVIL other explosive materials, except bullets for firearm.
AVIATION, AND FOR OTHER PURPOSES.
(2) "Flammable" is any substance or material that is highly
combustible and self-igniting by chemical reaction and shall
Section 1. It shall be unlawful for any person to compel a include but not limited to acrolein, allene, aluminum dyethyl
change in the course or destination of an aircraft of Philippine monochloride, and other aluminum compounds, ammonium
registry, or to seize or usurp the control thereof, while it is in chlorate and other ammonium mixtures and other similar
flight. An aircraft is in flight from the moment all its external substances or materials.
doors are closed following embarkation until any of such
doors is opened for disembarkation. (3) "Corrosive" is any substance or material, either liquid,
solid or gaseous, which through chemical reaction wears
It shall likewise be unlawful for any person to compel an away, impairs or consumes any object. It shall include but not
aircraft of foreign registry to land in Philippine territory or to limited to alkaline battery fluid packed with empty storage
seize or usurp the control thereof while it is within the said battery, allyl chloroformate, allytrichlorosilane, ammonium
territory. dinitro-orthocresolate and other similar materials and
substances.
Sec. 2. Any person violating any provision of the foregoing
section shall be punished by an imprisonment of not less than (4) "Poisonous" is any substance or materials, except
twelve years but not more than twenty years, or by a fine of medicinal drug, either liquid, solid or gaseous, which through
not less than twenty thousand pesos but not more than forty chemical reactions kills, injuries or impairs a living organism
thousand pesos. or person, and shall include but not limited to allyl
isothiocyanate, ammunition (chemical, non-explosive but
The penalty of imprisonment of fifteen years to death, or a containing Class A, B or poison), aniline oil, arsine,
fine of not less than twenty-five thousand pesos but not more bromobenzyle cyanide, bromoacetone and other similar
than fifty thousand pesos shall be imposed upon any person substances or materials.
committing such violation under any of the following
circumstances: Sec. 6. Any violation of Sec. three hereof shall be punishable
by an imprisonment of at least five years but not more than
1. Whenever he has fired upon the pilot, member of ten years or by a fine of not less than ten thousand pesos but
the crew or passenger of the aircraft; not more than twenty thousand pesos: Provided, That if the
violation is committed by a juridical person, the penalty shall
Any violation of Sec. four hereof shall be an offense (1) Actual or compensatory;
punishable with the minimum of the penalty provided in the (2) Moral;
next preceding paragraph. (3) Nominal;
(4) Temperate or moderate;
Sec. 7. For any death or injury to persons or damage to (5) Liquidated;
property resulting from a violation of Sections three and four (6) Exemplary or corrective.
hereof, the person responsible therefor may be held liable in
accordance with the applicable provisions of the Revised 2 KINDS OF AIRCRAFT UNDER ART. 6235
Penal Code.
Q: What are the 2 kinds of aircrafts referred to by Act. 6235?
Sec. 8. Aircraft companies which operate as public utilities or
operators of aircraft which are for hire are authorized to open A:
and investigate suspicious packages and cargoes in the
presence of the owner or shipper, or his authorized 1. Philippine-Registered aircraft
representatives if present; in order to help the authorities in 2. Foreign-Registered aircraft
the enforcement of the provisions of this Act: Provided, That
if the owner, shipper or his representative refuses to have the UNLAWFUL ACTS CONCERNING
same opened and inspected, the airline or air carrier is A PHIL-REGISTERED AIRCRAFT
authorized to refuse the loading thereof.
Q: What are the unlawful acts concerning Philippine-
Sec. 9. Every ticket issued to a passenger by the airline or air Registered aircraft?
carrier concerned shall contain among others the following
condition printed thereon: "Holder hereof and his hand- A:
carried luggage(s) are subject to search for, and seizure of,
prohibited materials or substances. Holder refusing to be 1. Any act of a person to compel the aircraft to change
searched shall not be allowed to board the aircraft," which its course or destination
shall constitute a part of the contract between the passenger 2. To seize or usurp control thereof while in flight
and the air carrier.
Q: What do you mean by “while in flight”?
Sec. 10. The Civil Aeronautics Administration is hereby
directed to promulgate within one month after the approval A: An aircraft is in flight from the moment all its external
of this Act such regulations as are provided in Sec. four hereof doors are closed following embarkation until any of such
and cause the publication of such rules and regulations in the doors is opened for disembarkation.
Official Gazette and in a newspaper of national circulation for
at least once a week for three consecutive weeks. Such If the aircraft was intentionally closed for particular
regulations shall take effect fifteen days after publication in passengers, it is not considered in flight.
the Official Gazette.
The aircraft will be considered closed from the time all its
Sec. 11. This Act shall take effect after the publication external doors are closed following embarkation despite the
mentioned in the preceding section. fact that it had not left the tarmac.
Q: Why is there a difference in case of a Philippine- “Before the box containing the firecrackers were allowed to
Registered aircraft and a Foreign-Registered aircraft be loaded in the bus by the conductor, inquiry was made with
regarding the “in flight” requirement? the passenger carrying the same as to what was in it, since its
“opening was folded and tied with abaca.” According to the
A: There is emphasis to protect the safety of the aircraft and judge of the lower court, “if proper and rigid inspection were
the passengers in case of Philippine-Registered aircraft observed by the defendant, the contents of the box could
against: have been discovered and the accident avoided. Refusal by
the passenger to have the package opened was no excuse
(1) change in the course or destination of an because, as stated by Dispatcher Cornista, employees should
aircraft of Philippine registry, call the police if there were packages containing articles
(2) seizing or usurpation the control thereof against company regulations.” Even it that may be true, the
law does not require as much. Article 1733 is not as
In case of Philippine-Registered aircraft, the Act is supposed unbending, for it reasonably qualifies the extraordinary
to protect the Philippine properties in its jurisdiction. diligence required of common carriers for the safety of the
passengers transported by them to be “according to all the
AGGRAVATING CIRCUMSTANCES circumstances of each case.” “In fact, Article 1755 repeats
this same qualification: “A common carrier is bound to carry
Q: What are the acts considered as aggravating the passengers safely as far as human care and foresight can
circumstances under Act. 6235? provide, using the utmost diligence of very cautious persons,
with due regard for all the circumstances.”
A:
Q: What are the options of the aircraft if the passenger
1. Whenever he has fired upon the pilot, member of refuses to allow his luggage to be searched?
the crew or passenger of the aircraft;
2. Whenever he has exploded or attempted to explode A:
any bomb or explosive to destroy the aircraft; or 1. Prevent or refuse to board such passenger
3. Whenever the crime is accompanied by murder, 2. Allow the passenger board but will leave the
homicide, serious physical injuries or rape. package in the custody of the carrier.
(b) The term "contract of carriage" applies only to contracts (a) Make the ship seaworthy;
of carriage by covered by a bill of lading or any similar (b) Properly man,equip, and supply the ship;
document of title, insofar as such document relates to the (c) Make the holds, refrigerating and cooling chambers,
carriage of goods by sea, including any bill of lading or any and all other parts of the ship in which goods are
similar document as aforesaid issued under or pursuant to a carried, fit and safe for their reception, carriage, and
character party from the moment at which such bill of lading preservation.
or similar document of title regulates the relations between a
carrier and a holder of the same. . (2) The carrier shall properly and carefully load, handle, stow,
carry, keep, care for, and discharge the goods carried.
(c) The term "goods" includes goods, wares, merchandise, (3) After receiving the goods into his carrier, or the master or
and articles of every kind whatsoever, except live animals and agent of the carrier, shall, on demand of the shipper, issue to
cargo which by the contract of carriage is stated as being the shipper a bill of lading showing among other things —
carried on deck and is so carried..
(a) The loading marks necessary for identification of the
(d) The term "ship" means any vessel used for the carriage of goods as the same are furnished in writing by the
goods by sea. shipper before the loading of such goods starts,
provided such marksare stamped or otherwise
(e) The term "carriage of goods" covers the period from the shown clearly upon the goods if uncovered,in such a
time when the goods are loaded to the time when they manner as should ordinarily remain legible until the
are discharged from the ship. end of the voyage.
(b) Either the number of packages or pieces, or the
BACKGROUND OF THE ACT quantity or weight, as the casemay be, as furnished
in writing by the shipper.
This act was enacted when the Philippines was still a territory (c) The apparent order and conditions of the goods:
of the United States. Provided, that no carrier, master, or agent of the
carrier, shall be bound to state or show in the bill of
Q: To what contracts of carriage is COGSA applicable? lading any marks, number, quantity, or weight
which he has reasonable ground for suspecting not
A: It is applicable to all contracts for carriage of goods by sea accurately to represent the good actually received
to and from Philippine ports in foreign trade. or which he has had no reasonable means of
checking.
§ It does not however repeal or limit any provision of the
Code of Commerce; it is only a suppletory law to the (4) Such a bill of lading shall be prima facie evidence of the
Code of Commerce. receipt by the carrier of the goods as therein described in
§ Art. 1753 accordance with paragraphs (3) (a), (b), and (c), of this
§ Art.1766 section: (The rest of the provision is not applicable to the
§ Hence, the rights and obligations of carriers in all Philippines).
contracts for the carriage of goods by sea to the
Philippine ports shall be governed by the provisions of (5) The shipper shall be deemed to have guaranteed to the
the NCC, in default of such provisions, by that of the carrier the accuracy at the time of shipment of the marks,
Code of Commerce and other special laws, and in the number, quantity, and weight, as furnished by him; and the
absence of both, by that of the COGSA. shipper shall indemnify the carrier against all loss, damages,
and expenses arising or resulting from inaccuracies in such
RISKS particulars. The right of the carrier to such indemnity shall in
no way limit his responsibility and liability under the contract
Sec. 2. Subject to the provisions of Section 6, under every of carriage to any person other than the shipper..
contract of carriage of goods by sea, the carrier in relation to
the loading, handling, stowage, carriage, custody, care, and (6) Unless notice or loss or damage and the general nature of
discharge of such goods shall be subject to the such loss or damage by given in writing to the carrier or his
responsibilities and liabilities and entitled to the rights and agent at the port of discharge or at the time of the removal of
immunities hereinafter set forth. the goods into the custody of the person entitled to delivery
thereof under the contract of carriage, such removal shall be
RESPONSIBILITIES AND LIABILITIES prima facie evidence of the delivery by the carrier of the
goods as described in the bill of lading. If the loss or damage
Sec. 3. (1) The carrier shall be bound before and at the is not apparent, the notice must be given within three days of
beginning of the voyage to exercise due diligence to — the delivery..
The notice in writing need not be given if the state of the Q: On Feb.22, 1965 the insurer filed the complaint against
goods has at the time of their receipt been the subject of Luzon Stevedoring Corp. and Barber Lines, Inc. for recovery
joint survey or inspection. of damages caused to cargo shipped to the consignee, the
cargo being delivered on Feb 25, 1964. The complaint was
In any event the carrier and the ship shall be discharged from amended and filed on April 7, 1965. Has the action against
all liability in respect of loss or damage unless suit is brought the new defendant prescribed?
within one year after delivery of the goods or the date when
the goods should have been delivered: Provided, that, if a A: Yes, the one-year statutory and contractual prescriptive
notice of loss or damage, either apparent or concealed, is not period had already expired when the insurance company filed
given as provided for in this section, that fact shall not affect on April 7 its action against Barber.
or prejudice the right of the shipper to bring suit within one
year after the delivery of the goods or the date when the Q: A certain cargo was shipped in New York aboard M/S
goods should have been delivered. Toreador of which the general agent in the Philippines is
Macondray, with freight prepaid to Cebu City pursuant to
In the case of any actual or apprehended loss or damage, the the Bill of lading. However, the carrier transshipped the
carrier and the receiver shall give all reasonable facilities to cargo after its discharge in Manila aboard the S/S Siquijor,
each other for inspecting and tallying the goods. an inter-island vessel. The shipment was finally discharged
in Cebu City, short of 2 pieces of the cargo. Macondray
(7) After the goods are loaded the bill of lading to be issued alleged that the complaint should be dismissed on the
by the carrier, master, or agent of the carrier to the shipper ground that the action has already prescribed. Will COGSA
shall if the shipper so demands, be a "shipped" bill of lading: apply?
Provided, that if the shipper shall have previously taken up
any document of title to such goods, he shall surrender the A: The action is based on the contract of carriage up to the
same as against the issue of the "shipped" bill of lading, but final port of destination, which was Cebu for which the
at the option of the carrier such document of title may be corresponding freight had been prepaid. The transshipment
noted at the port of shipment by the carrier, master, or agent of the cargo from Manila to Cebu was not a separate
with the name or names of the ship or ships upon which the transaction from that originally entered into by Macondray as
goods have been shipped and the date or dates of shipment, the agent of Toreador. The fact that the transshipment was
and when so noted the same shall for the purpose of this made via an interisland vessel did not operate as to remove
section be deemed to constitute a "shipped" bill of lading. the transaction from the operation of the COGSA.
(8) Any clause, covenant, or agreement in a contract of The provision applies to both damages and losses. It
carriage relieving the carrier of the ship from liability for loss anticipates 2 possibilities:
or damage to or in connection with the goods, arising from
negligence, fault, or failure in the duties and obligations (a) That the delivery has been made—the action should
provide in this section or lessening such liability otherwise be brought within 1 year after delivery of the goods;
than as provided in this Act, shall be null and void and of no (b) If no delivery is made—the period should be
effect. A benefit of insurance in favor of the carrier, or similar computed from the date when the goods should
clause, shall be deemed to be a clause relieving the carrier have been delivered.
from liability.
If the carrier arrived on Nov. 2, 1962, and left on Nov.4,
PRESCRIPTION OF ACTION 1962—it was on the latter date that the carrier had the last
opportunity to deliver goods. The period of 1 year within
Q: When a cargo from USA was unloaded at the port of which the carrier should be sued shall commenced to run
Manila on February 26, 1947, a shortage was discovered from Nov. 5 and expired on Nov. 4, 163.
prompting the consignee to make a written notice to the
carrier. The action was commenced only on May 7, 1948. COMMENCEMENT OF ACTION IF DELIVERY WAS MADE TO
Has the action prescribed? ARRASTRE OPERATOR
A: Yes, it has already prescribed since it was commenced only Q: When should the 1 year period within which the carrier
after the lapse of 1 year, 2 months and 9 days. should sue the carrier start to run, from delivery of the
goods to consignee or to arrastre operator?
A: Yes. Otherwise, what the Act prohibits after the lapse of The provisions of the NCC on prescription should not be
the 1 year prescriptive period can be done indirectly by the made to apply in a case governed by the COGSA.
shipper or owner of the goods by simply filing a claim against
the insurer even after the lapse of 1 year. As such, the 1 year Q: Who are the persons who can give notice to and bring
limitation will be practically useless. suit against the carrier?
Q: What does “loss” mean? A: The notice in writing can be given to and the suit can be
brought against the carrier by:
A: It contemplates merely a situation where no delivery at all
was made by the shipper of the goods because the same had a. Shipper; or
perished, gone out of commerce, or disappeared in such a b. Consignee; or
way that their existence is unknown, or they cannot be c. Any legal holder of the bill of lading like the indorsee
recovered. It does not include a situation where there was or the subrogee (the insurer of the goods)
indeed delivery but the same is made to the wrong person, or
a misdelivery. Q: Certain goods were shipped from US to Manila and were
received by the consignee, except one case which was
NOTE: The 1 year period of prescription is not applicable to missing. The consignee failed to give notice of claim within
misdelivery or conversion of goods. 30 days after receipt of the cargo but brought suit against
the carrier within 1 year after delivery of the shipment. Was
Q: What is the period of prescription in case of misdelivery the suit been properly brought notwithstanding the
or conversion of goods? consignee’s failure to give notice as required by the bill of
lading?
A: The applicable rule on prescription found in the NCC and
not the rule under COGSA: A: The said clause in the bill of lading is null and void.
According to COGSA, regardless of whether notice of loss or
1. 10 years-breach of a written contract; damage has been given, the shipper can still bring an action
2. 4 years- for quasi-delict to recover said loss or damage within 1 year after the delivery
of the goods.
Q: Does a written claim for loss or damage interrupt the
period of prescription? The obligation of the carrier to carry the goods includes the
duty not to delay their transportation, so that if the goods are
A: No, in the case of Yek Tong Lin Fire and Maritime lost or damaged by reason of an unjustified delay, the carrier
Insurance v. American President Lines, the Court has already is liable therefor; and the action is still basically one for
rejected the contention that an extra-judicial demand tolled damage to the goods and must be filed within the period of 1
the prescriptive period provided for in the COGSA. year from delivery of the goods or the date when the goods
would have been delivered.
The pendency of an extra-judicial claim for damages field
with the carrier does not suspend the running if the Q: Does COGSA apply to an arrastre operator?
prescriptive period of 1 year.
A: No, it does not apply.
Q: When is the period of prescription suspended by law?
RIGHTS AND IMMUNITIES
A: Art. 1155 of NCC provides that prescription of actions is
interrupted when they are filed before the court and Sec 49 Sec. 4. (1) Neither the carrier nor the ship shall be liable for
of Act No. 190 provides that if, in an action filed in due time, loss or damage arising or resulting from unseaworthiness
the plaintiff fails otherwise that upon the merits, and the unless caused by want of due diligence on the part of the
Sec. 5. A carrier shall be at liberty to surrender in whole or in Sec. 9. Nothing contained in this Act shall be construed as
part all or any of his rights and immunities or to increase any permitting a common carrier by water to discriminate
of his responsibilities and liabilities under this Act, provided between competing shippers similarly placed in time and
such surrender or increase shall be embodied in the bill of circumstances, either (a) with respect to their right to
lading issued to the shipper. demand and receive bills of lading subject to the provisions of
The provisions of this Act shall not be applicable to charter this Act; or (b) when issuing such bills of lading either in the
parties; but if bills of lading are issued in the case of a ship surrender of any of the carrier's rights and immunities or in
under a charter party, they shall comply with the terms of the increase of any of the carrier's responsibilities and
this Act. Nothing in this Act shall be held to prevent the liabilities pursuant to Section 5, Title I, of this Act; (c) in any
insertion in a bill of lading of any lawful provisions regarding other way prohibited by the Shipping Act, 1916, as
general average..chan robles virtual law library amended..chan robles virtual law library
Sec. 6. Notwithstanding the provisions of the preceding Sec. 11. When under the custom of any trade the weight of
section, a carrier, master or agent of the carrier, and a any bulk cargo inserted in the bill of lading is a weight
shipper shall, in regard to any particular goods be at liberty to ascertained or accepted by a third party other than the
enter into any agreement in any terms as to the responsibility carrier or the shipper and the fact that the weight as
and liability of the carrier for such goods, and as to the rights ascertained or accepted is stated in the bill of lading, then
and immunities of the carrier in respect to such goods, or his notwithstanding anything in this Act, the bill of lading shall
obligation to seaworthiness, (so far as the stipulation not be deemed to be prima facie evidence against the carrier
regarding seaworthiness is contrary to public policy), or the of the receipt of goods of the weight so inserted in the bills of
care or diligence of his servants or agents in regard to the lading, and the accuracy thereof at the time of shipment shall
loading, handling, stowage, carriage, custody, care and not be deemed to have been guaranteed by the shipper..
discharge of the goods carried by sea; provided, that in this
case no bill of lading has been or shall be issued and that the Sec. 12. (Not applicable to the Philippines.).
terms agreed shall be a non-negotiable document and shall
be marked as such. Sec. 13. This Act shall apply to all contracts for carriage of
goods by seas to or from ports of the United States in foreign
Any contract for the carriage of goods by sea, subject to the Q: So what are the exceptions in the application of COGSA
provisions of this Act, effective during any period when Title I to our domestic trade?
hereof, or any part thereof, is suspended, shall be subject to
all provisions of law now or hereafter applicable to that part A:
of Title I which may have thus been suspended..chan robles
virtual law library (a) In the event that there is a Paramount Clause in the
contract of carriage
Sec. 15. This Act shall take effect ninety days after the date (b) In the application of the Hierarchy of Laws in our
of its approval; but nothing in this Act shall apply during a jurisdiction
period not to exceed one year following its approval to any
contract for the carriage of goods by sea, made before the Q: What laws shall apply in case of domestic trade?
date on which this Act is approved nor to any bill of lading or
similar document of title issued, whether before or after such A:
date of approval in pursuance of any such contract as
aforesaid..chan robles virtual law library 1. Civil Code
2. Code of Commerce
Sec. 16. This Act may be cited as the "Carriage of Goods by
Sea Act.".chan robles virtual law library
Thus, there are 2 parties: § It is not a contract because the contract is the CHARTER
PARTY itself.
rd
1. Owner § However, if the said bill of lading is issued to a 3 party
2. Charterer who is not a party in the charter party, the said bill of
lading shall now become an evidence of the contract of
If there is no owner or there is no charterer, that carrier carriage. From then, COGSA shall apply.
cannot be classified as CARRIER under COGSA. It must be § As long as there is a promise to issue the BOL and
owned by real owner, who may be registered owner or a nothing is issued, COGSA still applies.
charterer.
Q: The goods have been delivered to an inter-island vessel
Q: Who is a charterer? at the port of Manila for delivery to Cebu or the goods were
delivered to a vessel at the port of Manila for the delivery to
A: It refers to a bareboat or demise where there is transfer of another jurisdiction. The goods were received by carrier
ownership, hence, it becomes a private carrier (Planters’ without issuing a BOL or similar document. The goods
Products case). arrived at damage condition.
A person or firm who enters into a contract with a shipowner A: The carrier could not be sued under COGSA. The remedy is
for the transportation of cargo or passengers for a stipulated to sue under the Civil Code or the Code of Commerce.
period of time, i.e. a shipowner's customer.
The bill of lading is the principal document for the basis of the
Q: What is a Contract of Carriage? action of the consignee while the charter party is the
document is the document for the owner’s basis of action.
A: It refers to a contract where a bill of lading on a similar
document or title is involved. The charter party is a contract between the owner and the
charterer as evidence of their contract of carriage. It is issued
Refers to a bill of lading to a similar document of title insofar only upon demand of the shipper
as such document relates to the carriage of goods by sea,
may be a contract of sale, including any bill of lading or any Q: Again, the rule is in the event of loss or damage, the basis
similar document as aforesaid issued under or pursuant to a will be the charter party agreement and not the bill of
charter party from the moment at which such bill of lading or lading. When will the bill of lading be held as a separate
similar document of title regulates the relations between a contract?
carrier and a holder of the same.
A: When the charter is endorsed the title to a third party, it
Q: Explain the contract of carriage under COGSA? now becomes a contract of sale.
Q: Since Y indorsed the bill of lading to X and sold the goods 1. Carrier is liable when the goods have crossed the
to the latter, it signifies the transfer of ownership. What is side of the ship (port side)
the consequence of such? 2. Shipper is liable over the loss of the goods already
on board
A: The bill of lading now operates as a separate contract of
carriage between Y and X. X, can sue on the basis of that new THINGS NOT CONSIDERED AS GOODS UNDER COGSA
contract. X cannot sue on the basis of the charter party
between A and Y since he is not a privy to it. Q: What are the things not considered as “goods” under
COGSA?
The owner of the goods may endorse the bill of lading to a
buyer of the goods since it is a negotiable instrument. The A:
moment the BOL is endorsed, the BOL becomes a contract
between: 1. Live animals (they would die if not put on deck)
2. Deck cargo which should be
(a) Owner of the goods a. Agreed to be carried on deck
(b) Buyer of the goods b. Actually carried on deck
Q: If X wanted to recover damages against Y who sold the Q: If live animals and deck cargo arrived at the port in
goods to M, what is his remedy? damaged condition or lost, can you sue under COGSA?
A: If the proximate cause is negligence of the carrier, Y must A: No, it is not covered by the goods that could be litigated
file a third party complaint… under COGSA. They are exempted.
PERIOD OF RESPONSIBILITY The provision that should govern the liability of the common
CIVIL CODE v. COGSA carrier in that respect would be the provisions of the Civil
Code and Code of Commerce.
Q: What is the period of responsibility of carrier under
COGSA? Q: What if the cargo is not carried on deck?
A: The period is different from the Civil Code provision Art. A: If not carried on deck even though there’s an agreement to
1736. such, common carriage is liable for it constitutes a breach of
contract.
Q: Why does the law does not compel the carrier to issue a Q: When the shipper requests for a BOL, what should the
bill of lading under the 2 circumstances? BOL contain?
A: When the 2 circumstances are present, the law protects A: The BOL must show all the identifying marks of the
the carrier for it will be held liable for issuing an inaccurate shipment supplied to him in writing by the shipper which
bill of lading. would refer to:
When the inaccuracies have caused the damage, the carrier 1. Marks
can limit its liability to the shipper as a consequence of the 2. Quantity
inaccuracies 3. Weight
4. Apparent good order condition of the shipment
RISKS ASSUMED BY THE CARRIER
Q: What is the evidentiary value of BOL issued by carrier to
Q: What are the risks that are supposed to be assumed by shipper containing those identifying marks?
the carrier if it would transfer the goods of the shipper?
A: Under COGSA, they simply establish prima facie the fact
A: Any risk that would arise in the loading which includes: that those shipments were loaded on board together with
identifying marks supplied by shipper to the carrier.
1. Loading- when the goods have been loaded and they
are damaged, there is responsibility on the part of Q: Is there a possibility to issue a BOL without necessarily
the carrier especially when the goods have crossed stating the identifying marks?
the side of the vessel
2. Handling- there is responsibility on the part of the A: Yes, under COGSA:
carrier if the goods are damaged on board in the
handling of the cargo 1. If it has reasonable grounds for suspecting
3. Stowage- when the goods are on board and they are inaccuracies made by the shipper
placed in one side on board not properly protected, 2. When he has no reasonable means of checking
there is stowage and therefore, there is liability on
the part of the carrier Q: What is the consequence if the shipper supplied the
4. Carriage- when during the carriage of goods on carrier with those identifying marks of his shipment in
board, the goods were rained on and they are not writing?
protected, there is responsibility
5. Custody- when there is custody on board by carrier, A: The shipper is deemed to have guaranteed the
any loss or damage to cargo, while the cargo is in the truthfulness of those information. There is a guarantee of the
custody of the carrier on board, there is shipper and if they turn out to be untrue, and they caused
responsibility on the part of carrier. damage to the carrier, the carrier has right of action against
6. Care- if the goods are supposed to be kept in the the shipper on the basis of breach of warranty.
holds, and refrigerated but they were stored on deck
and they suffer damage, there is responsibility on If the goods arrived in damage condition, and the carrier
the part of the carrier due to deficient care being could prove that the damaged condition of cargo emanated
given to the cargo from inaccurate description of the goods, the carrier can limit
7. Discharge of goods- when the goods are being its liability to the owner of the shipment corresponding to the
discharged from carrier to the port docked, the true value of the goods that have been guaranteed by
goods are damaged, there is full responsibility on the shipper.
part of carrier.
Q: Thus, what does the shipper warrant?
A: It depends. Applicability
1. Domestic/inter- 1. International/
1. Upon receipt- when the loss is apparent (visible) island/coastwise overseas/foreign (from
2. Within 3 days from receipt- not apparent loss transportation foreign country to Phils.)
2. Land, water, air Note: subject to the rule
Q: What is the conseqence of failure to give notice to the transportation on Paramount Clause
carrier? 3. Carriage of goods 2. Water/maritime
transportation
A: There is presumption that the goods have been delieverd 3. Carriage of goods
and were delivered in good order condition to the consignee,
but when the goods are delivered in damage condition, the Notice of damage
presumption can be rebutted by presenting evidence proving 1. Condition precedent 1. Not a condition
the damage. 2. 24-hour period for precedent
claiming latent damage 2. 3-day period for
Q: Can the consignee or shipper still file an action against claiming latent damage
the common carrier for damages owing to the damaged *without this, claim is
condition of the goods that he received or the goods were barred automatically *not barred, but the
not all delivered to him? shipper shall have the
defense because of the
A: Yes, despite the fact that there is no notice of loss or failure to give notice
damage under COGSA, the consignee or owner still has the Notice should be in
right to file an action for recovery of damages against the writing
carrier. The right is not removed from the shipper, this is the
Prescriptive period
best part of the COGSA. The failure will only raise
None provided; Civil Code One year from the date of
presumption that the goods have been delieverd and were
delivered in good order condition to the consignee. applies. delivery (delivered but
damaged goods), or date
Pertinent laws when the vessel left port
or from the date of
ARTICLE 366. Within the twenty-four hours following the delivery to the arrastre
receipt of the merchandise, the claim against the carrier for
(non-delivery or loss).
damage or average be found therein upon opening the
packages, may be made, provided that the indications of the
*the 1 year period may be
damage or average which gives rise to the claim cannot be
ascertained from the outside part of such packages, in which extended upon express
case the claim shall be admitted only at the time of receipt. agreement for a
reasonable period
After the periods mentioned have elapsed, or the
transportation charges have been paid, no claim shall be
admitted against the carrier with regard to the condition in Q: What if the carrier stops 5 times and commences voyage
which the goods transported were delivered. for 5 times?
Q: In what instances notice is NOT needed? A: If the consignee did not file notice the only result is the
presumption that the goods were delivered in the condition
A: that they were received on board. And he can still file an
action at all times. He could file action anytime for as long as
1. No loss or damage to the goods the action is filed within the prescriptive period.
2. Delay of delivery of the goods
3. Misdelivery Q: When will the issue of paying the transportation charges
4. Joint survey or inspection and expenses not apply under Art. 366?
INSTANCES WHEN CONSIGNEE IS BARRED FROM A: If the transportation charges and expenses were PREPAID
PRESENTING CLAIM FOR DAMAGES by the shipper or the consignee at the port of loading of the
cargo, the pre-payment of transportation charges and
Q: What are the instances when consignee is barred from expenses will not preclude the consignee or the shipper from
presenting any claim or recover damages? availing of the action against the carrier.
1. Failing to file notice A: Art. 366 requires the consignee to view the condition of
2. Payment of freight charges after filing of notice the goods before he pays the transportation charges. If they
were prepaid, there was no occasion for the consignee to
The consignee must have known of the condition of the view the condition of the goods at the port of discharge.
goods to see whether it is in good order or condition or not.
Law says that the filing of notice should be made on the last Under Art. 366, it speaks only of damage to cargo or
opportunity that the vessel should have delivered the goods condition of the goods. It does not extend to losses. COGSA,
on the other hand, extends to both damage and losses.
Q: Who are the persons who can give notice or file notice?
Q: What if the freight was paid first before the filing of
A: notice?
1. to provide carrier an opportunity to look for the lost (c) Perils, dangers, and accidents of the sea or other
goods navigable water;
2. to discover who was at fault (d) Act of God;.
3. in case of transshipment, to determine, when and (e) Act of war;.
where damage occurred (f) Act of public enemies;
(g) Arrest or restraint of princes, rulers, or people, or
IMMUNITIES AVAILABLE UNDER COGSA seizure under legal process;
(h) Quarantine restrictions;.
Q: What is the importance of Sec. 4 of COGSA? (i) Act or omission of the shipper or owner of the goods, his
agent or representative;.
A: It contains policy-based defenses in order to avoid liability. (j) Strikes or lockouts or stoppage or restraint of labor from
whatever cause, whether partial or general: Provided, that
Q: Enumerate the immunities. nothing herein contained shall be construed to relieve a
carrier from responsibility for the carrier's own acts;.
A: They may either be: 5. Neither the carrier nor the ship shall in any event be or
become liable for any loss or damage to or in connection with
1. legal the transportation of goods in an amount exceeding $500 per
2. illegal package of lawful money of the United States, or in case of
3. due to the fault of the carrier goods not shipped in packages, per customary freight unit, or
the equivalent of that sum in other currency, unless the
(k) Riots and civil commotions;. nature and value of such goods have been declared by the
shipper before shipment and inserted in the bill of lading.
(l) Saving or attempting to save life or property at sea; This declaration, if embodied in the bill of lading, shall be
prima facie evidence, but shall not be conclusive on the
RATIO: The lives of the people are more important than the carrier
goods on board.
By agreement between the carrier, master or agent of the
(m) Wastage in bulk or weight or any other loss or damage carrier, and the shipper another maximum amount than that
arising from inherent defect, quality, or vice of the goods; mentioned in this paragraph may be fixed: Provided, that
such maximum shall not be less than the figure above named.
(n) Insufficiency of packing; In no event shall the carrier be liable for more than the
amount of damage actually sustained..
Q: What are the options of carrier in case of insufficiency of
packing? Neither the carrier nor the ship shall be responsible in any
event for loss damage to or in connection with the
A: transportation of the goods if the nature or value thereof has
been knowingly and fraudulently misstated by the shipper in
1. accept and reject the bill of lading..
2. reject and ask the shipper to repack
3. if there is apparent damage, yet the carrier accepts, 6. Goods of an inflammable, explosive, or dangerous nature
he is liable to the shipment whereof, the carrier, master or agent of the
carrier, has not consented with knowledge of their nature
(o) Insufficiency or inadequacy of marks;. and character, may at any time before discharge be landed at
(p) Latent defects not discoverable by due diligence; and any place or destroyed or rendered innocuous by the carrier
(q) Any other cause arising without the actual fault and without compensation, and the shipper of such goods shall
privity of the carrier and without the fault or neglect of the be liable for all damages and expenses directly or indirectly
agents or servants of the carrier, but the burden of proof arising out of or resulting from such shipment. If any such
shall be on the person claiming the benefit of this exception goods shipped with such knowledge and consent shall
to show that neither the actual fault or privity of the carrier become a danger to the ship or cargo, they may in like
nor the fault or neglect of the agents or servants of the manner be landed at any place, or destroyed or rendered
carrier contributed to the loss or damage. innocuous by the carrier without liability on the part of the
carrier except to general average if any (transport of
3. The shipper shall not be responsible for loss or damage dangerous goods and cargoes)
sustained by the carrier or the ship arising or resulting from
any cause without the act, or neglect of the shipper, his Q: What is the extent of liability of carrier?
agents, or his servants.
A: As to the value of damages or general average
4. Any deviation in saving or attempting to save life or
property at sea, or any reasonable deviation shall not be INSTANCES OF REASONABLE DEVIATION
deemed to be an infringement or breach or this Act or of the
contract of carriage, and carrier shall not be liable for any loss Q: Give instances of reasonable deviation.
or damage resulting therefrom: Provided, however, that if the
deviation is for the purpose of loading or unloading cargo or A:
passengers it shall, prima facie, be regarded as unreasonable. 1. to save life
(reasonable deviation) 2. to avoid an arrest from the port
3. by reason of liberty to deviate under the provisions
Q: Is deviation a breach of contract? or stipulations in the contract (must be done for a
valid purpose)
Q: Thus, what are the possible defenses of carrier in the A: They refer solely and exclusively to those merchant ships
event of an action for recovery of loss or damage under which are engaged in the transportation of passengers and
COGSA? freight from one port to another or from one place to
another.
A:
1. Exercise of due diligence Q: Is a minor craft used for the transportation of
2. The 18 immunities merchandise by sea and to make voyages from one port to
another of these Islands, equipped and victualed for this
purpose by its owner considered a vessel?
BOOK III
MARITIME COMMERCE A: Yes.
TITLE I
REQUISITES TO BE A MARITIME VESSEL
ARTICLE 573 Merchant vessels constitute property which NON-INCLUSION FROM WORD VESSEL
may be acquired and transferred by any of the means
recognized by law. The acquisition of a vessel must be Q: What are not included in the term “vessels” under the
included in a written instrument, which shall not produce Code of Commerce?
any effect with regard to third persons if not recorded in the
registry of vessels. The ownership of a vessel shall A:
also be acquired by the possession thereof in good faith for
three years, with a good title duly recorded. 1. Warships
2. Those accessory to another as in the kinds of
In the absence of any of these requisites, uninterrupted lifeboats, launches, etc.
possession for ten years shall be necessary in order to 3. Pleasure crafts
acquire ownership. 4. Pontoons (flat-bottomed boat)
5. Health service and harbor police vessels
A captain cannot acquire by prescription the ship of which 6. Floating storehouse, warships, or patrol vessels
he is in command. 7. Coastguard vessels
8. Fishing vessels
PURPOSE OF BOOK 3 OF CODE OF COMMERCE 9. Tow boats
10. Any other aircraft destined to other causes:
Q: What is the purpose of Book 3 of the Code of Commerce? a. Coast and geodetic survey
b. Scientific research and exploration
A: It is intended to define the law relative to vessels, and the c. Craft engaged in loading and discharge of
vessels, and the vessels intended in that book are as such as vessels from ship to shore or docks or in
the run by masters having special training, with the elaborate transshipment
apparatus of crew and equipment indicated in the Code.
A: Vessels include every sort of boat, or other artificial Q: What is the force of certificate of ownership of vessels?
contriviance used, or capable of being used, as means of
transportation on water. A: The person in whose name a vessel is registered and to
whom is issued a certificate of ownership is presumed to
Q: What is the requisite in order to acquire vessel on 3 years have the legal title thereto but said documents issued relating
possession? to the proprietorship of a vessel are not conclusive proof
against the real owner. They are mere prima facie evidence.
A:
RULE ON SALE OF VESSEL
1. The ownership of vessel may be acquired by the
continuous possession thereof for 3 years Q: What is the rule on sale of vessel?
2. Possession must be based upon good faith
A: In absence of stipulation to the contrary, the ownership of
Q: What kind of property are vessels? the thing sold passes to the vendee upon actual or
constructive delivery thereof.
A: Although vessels or ships, whether moved by steam or by
sail, partake to a certain extent of the nature and conditions NOTE: There is nothing in the law that prohibits the parties
of real property, on account of their value and importance in from entering into an agreement that violation of the terms
world of commerce, yet vessels shall be considered as of the contract would cause cancellation thereof, even
personal property under the Civil Code and the common law. without court intervention.
Q: Are vessels required to be registered under the Tariff and IMPORTANCE OF REGISTRATION
Customs Code?
Q: Why is registration in the registry important?
A: Since vessels are considered personal property, they are
subject to mortgage agreeably to the provisions of the A: It is indispensable in order that the purchaser’s right may
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Chattel Mortgage Law. be maintained against a claim filed by 3 person. In other
words, it is important to determine the conflicting rigths over
Q: What is the difference between chattel mortgage of a the vessel.
vessel and chattel mortgage of other personalty?
Q: Why can’t the captain acquire the vessel by prescription?
A:
A: Because of the nature of possession of the captain is such
Chattel mortgage of a vessel Chattel mortgage of other that he is only an agent of the owner, a depositary of the
personalty vessel, and a depositary can never acquire the thing
It is not necessary for a deposited by prescription.
chattel mortgage of a vessel
to be noted in the Register of
Deeds
This has been amended by R.A. 1407 and R.A. 6106. When a vessel, while in a voyage, should become useless for
navigation, the captain shall report the matter to the judge
ART. 575 Part owners of the vessels shall enjoy the right of or court of competent jurisdiction of the port of arrival,
preemption and redemption in sales made to strangers, but should she be in the Philippines; and should she be in a
they can only exercise it within the 90 days following the foreign port, to the Filipino consul should there be one, or to
registration of the sale in the registry and by delivering the the judge or court or local authority in the absence of the
price at once. former; and the consul, or the judge or court, or in their
absence, the local authority shall order an examination of
Q: What if the documents are not recorded in the registry? the vessel to be made.
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A: They do not produce any legal effect against 3 persons; If the consignee or the insurer should reside at said port, or
hence, the time does not run except from the same date in should have representatives there, they must be cited in
which the corresponding inscription is made. order to take part in the proceedings on account of whom it
may concern.
ART. 576 The rigging, masts, stores and engine of a steamer
of the vessel shall always be understood as included in the Q: Give the instance where the sale can be made by the
sale thereof if at the time of the sale, they are owned by the captain.
vendor.
A: The sale of the vessel solicited by the captain must not be
The arms, munitions of war, provisions and fuel shall not be affected or consented to, unless the said vessel is in the
considered as included in the sale. condition of being useless for navigation, nor can it be sold in
an amount less than ¾ of its approved value.
"b. The instrument of mortgage, lien or encumbrance shall SECTION 2. The provisions of Commonwealth Act
be recorded in the registry of vessels in the order of their Numbered Six hundred six, as amended by Republic Act
reception and shall show: Numbered Nine hundred thirteen; the Code of Commerce,
particularly Articles 580 and 584 thereof; and all other Acts,
1. The name of the vessels; Executive Orders and regulations inconsistent herewith are
2. The name of the parties; hereby repealed or modified accordingly.
3. The time and date of reception of the instrument;
4. The interest in the vessel transferred or affected; and
5. The amount and date of maturity of any mortgage.
ART. 581. If the proceeds of the sale are not sufficient to pay
A copy of the instrument of mortgage shall be furnished the all the creditors included in one number or grade, the
Central Bank of the Philippines. amount shall be divided among them pro rata.
"c. Any mortgage, lien or encumbrance constituted in ART. 582. After the bill of judicial sale at public auction has
accordance with this Act is a preferred mortgage and shall been executed and recorded in the registry of vessels, all
constitute a maritime lien upon the mortgaged vessel in the other liabilities of the vessel in favor of the creditors shall be
amount of the outstanding mortgage indebtedness secured considered cancelled.
by such vessel.
But if the sale should have been voluntary, and made while
"d. A preferred mortgage shall have priority over all claims the vessel was on voyage, the creditors shall retain their
against the vessel, except the following preferences in the rights againts the vessels until her return to the port of her
order stated: registry, and 3 months after the record sale in the registry of
vessels, or after her arrival.
1. Judicial costs of the proceedings;
2. Taxes due the Philippine Government; Art. 583. If the ship being on a voyage the captain should
3. Salaries and wages of the Captain and Crew of the vessel find it necessary to contract one or more of the obligations
during its last voyage; mentioned in subdivisions 8 and 9 of article 580, he shall
4. General average or salvage including contract salvage; apply to the judge or court if he is in the Philippine territory,
bottomry loans; and indemnity due shippers for the value of and otherwise to the Filipino consul, should there be one,
goods transported but which were not delivered to the and in his absence, to the judge or court or proper local
consignee; authority, presenting the certificate of the registry of the
vessel by virtue of a declaration of unseaworthiness.
Q: What is the reason of the law under this provision? Q: What are the similarities between vessels and real
properties?
A: Generally, the captain of the vessel is not its real owner,
but a person of confidence of the shipowner, possessing A:
further the technical requisites in which in his duties are
required. The captain, once in a voyage, is the supreme chief 1. That the ownership of both is evidenced by a
of the embarkation, and for this reason he would be certificate of ownership
prejudicing seriously the creditors of the vessel should he 2. That any conveyance of both, to be effective against
incur unjustifiable indebtedness. In order that this abuse may third persons, must be registered in their respective
be avoided, the Code establishes the limitation in the above property registry.
article
PERSONS WHO TAKE PART IN MARITIME COMMERCE
ART. 584. The vessels subject to the liability for the credits
mentioned in Art. 580 may be attached and judicially sold in Art. 586. The owner of a vessel and ship agent shall be
the manner prescribed in Art. 579, in the port in which they civilly liable for the acts of the captain and for the
may be found, at the instance of any of the creditors; but if obligations contracted by the latter to repair, equip, and
they should be loaded and ready to sail, the attachment provision the vessel, provided the creditors proves that the
cannot take place except for debts contracted by reason of amount claimed was invested therein.
the preparation and provisioning of the vessel for the
voyage, and even then the attachment shall be dissolved if By agent is understood the person entrusted with the
any person interested in her sailing should give bond for the provisioning of a vessel, or who represents her in the port in
return of the vessel within the period fixed in the certificate which she happens to be.
of navigation, binding himself to pay the debt, in so far as it
may be legal, should the vessel fail to do so, even if his Q: Who are the persons who participate in the Code of
failure may have been caused by fortuitous events. Commerce?
A: The ship agent is solidarily liable with its principal. A: No. Under American jurisprudence, from which our Civil
Insolvency of the principal has no bearing on the liability of Code provisions on common carriers are taken, a common
the ship agent. But abandonment is allowed. The ship agent carrier undertaking to carry a special cargo or chartered to a
may exempt itself by abandoning the vessel with all the special person only, becomes a private carrier. As a private
equipment and freightage earned during the voyage. carrier, a stipulation exempting the owner from liability for
the negligence of its agent is not against public policy and is
Concept of a husbanding agent deemed valid.
INSTANCES OF VALID ABANDONMENT Q: Explain the real and hypothecary rule in Maritime law.
Q: What are the instances in which abandonment is A: To offset against the innumerable hazards and perils in sea
allowed? voyages and to encourage ship building and marine
commerce, it was deemed necessary to confine the liability of
A: The Principle of Limited Liability of a shipowner or ship- the owner or agent arising from the operation of the ship to
agent is provided for in but 3 articles of the Code of the vessel, equipment and freight, or insurance if any, so that
Commerce: if shipowner or agent abandon the ship, equipment and
freight, his liability would be extinguished. By abandonment,
a. Art. 587-civil liability for the indemnities in favor of the the agent or owner exempts himself from liability, thus,
captain in the vigilance over the goods and for the safety avoiding the possibility of risking his whole fortune in the
of the passengers in maritime transportation. business.
b. Art. 590- civil liability of the co-owners of the vessel in
the proportion of their contribution to the common fund Q: The liability of shipowner and ship agent is limited to the
for the results of the acts of the captain in the vigilance amount of interest in said vessel such that where vessel is
over the goods and for the safety of passengers in entirely lost, the obligation is extinguished. The interest
maritime transportation. extends to what object?
c. Art. 837- civil liability incurred by the shipowners in cases
of maritime collisions. A:
ABANDONMENT IN ABANDONMENT IN MARINE NOTE: Under 588, the shipowner and the shipagent are not
MARITIME COMMERCE INSURANCE liable for the obligations contracted by the captain if he
Who makes the abandonment exceeds his authority, unless the amounts claimed were
Abandonment is made by the Abandonment is made by the invested for the benefit of the vessel. However, under Art.
shipowner or ship agent insured, not necessarily the 1759, NCC, the ship owner is liable for the death of or injuries
shipowner or ship agent to the passengers which are caused by the negligence or
What is abandoned? willful acts of his EEs although such EEs may have acted
The thing abandoned is the The things insured, not beyond the scope of their authority or in violation of the
vessel, with her necessarily the vessel are orders of the shipowner
appurtenances and freight abandoned
Basis of the breach of maritime contract Art. 589. If two or more persons should be part owners of a
The basis of the breach of Constructive total loss in merchant vessel, an association shall be presumed as
maritime contract arising which the loss, injury, established by the part owners.
from the conduct of the expenses to be suffered
captain in the vigilance over more than ¾ of the value of This association shall be governed by the resolutions of a
the goods and for the safety the thing insured which is majority of the members.
of passengers abandoned
Purpose A majority shall be the relative majority of the voting
To limit the civil liability of To recover from the insurer members.
the shipowner or ship agent indemnity for a total loss,
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to 3 persons to the value of although the thing insured If there should be only two part owners, in case of
the vessel with her does not suffer actual total disagreement the vote of the member having the largest
appurtenances and freight loss interest shall be decisive. If the interests are equal, it shall
be decided by lot.
Requisites in abandonment in marine insurance
The representation of the smallest part in the ownership
shall have one vote; and proportionately the other part
Q: What are the requisites in abandonment in marine
owners as many votes as they have parts equal to the
insurance?
smallest one.
A:
A vessel cannot be detained, attached or levied upon execu-
tion in her entirety for the private debts of a part owner, but
1. There must be an actual relinquishment of claim of
ownership of the thing abandoned the proceedings shall be limited to the interest the debtor
may have in the vessel, without interfering with her
2. There must be constructive total loss, in which the
navigation.
loss, injury or expenses to be suffered be more than
¾ of the value of the thing abandoned
3. Abandonment must be neither partial nor NOTE: If there should be only 2 part owners whose interest
are equal, in case of disagreement, the management of a
conditional
merchant ship shall be decided by lot. But if one owns ¼
4. Abandonment must be made within reasonable time
after receipt of reliable information of constructive interest and the other ¾ interest in the vessel, then the vote
total loss of the member having the largest interest shall be decisive.
5. Notice of abandonment to insurer, whether oral or
Art. 590. The co-owners of a vessel shall be civilly liable, in
in writing, must be explicit, and must specify the
particular cause of abandonment; provided that if the proportion of their contribution to the common fund,
A: The liabilities under this article is essentially contractual in The agent shall represent the ownership of the vessel, and
character incurred by virtue of a resolution of the majority of may in his own name and in such capacity take judicial and
the co-owners and different from those incurred under Art. extrajudicial steps in all that relates to commerce.
590. which are considered as maritime liens, thus, it cannot
be considered limited by the abandonment of the vessel nor REQUISITES TO BE A SHIP AGENT
are extinguished by the loss of the ship.
Q: What are the conditions in order that a person may
NOTE: As a general rule, the owners of the vessel and the discharge the duty of a ship agent?
vessel itself are liable for the necessary repairs. Naturally the
total destruction of the vessel extinguishes the maritime A:
liens, as there is no longer any res to which it can attach. But
the total destruction of the vessel does not affect the liability 1. To possess legal capacity to engage in commerce
of the owners for repairs on the vessel completed before its 2. To be recorded in the commercial registry of the
loss. province
Art. 592. The resolutions of the majority with regard to the NOTE: His representation is limited and cannot be transferred
repair, equipment, and provisioning of the vessel in the port to other persons nor his powers to exceed those conferred
of departure shall bind the minority, unless they renounce upon him.
their participation therein, which must be acquired by the
other part owners after a judicial appraisement of the value When powers are assumed without due authorization, he
of the portion or portions assigned. must be liable for the damage which may have occurred.
If the interest of the petitioners should be the same, and Art. 598. The agent cannot order a new voyage, nor make
there should be a tie, the matter shall be decided by lot. contracts for a new charter, nor insure the vessel, without
the authority of her owner or by virtue of a resolution of the
QUALIFICATIONS OF A SHIP CAPTAIN majority of the co-owners, unless these powers were
granted him in the certificate of his appointment.
Q: What are the qualifications of a captain of a vessel?
If he should insure the vessel without authority therefor he
A: shall be subsidiarily liable for the solvency of the
underwriter.
1. Filipino citizen;
2. Legal capacity to contract; Art. 599. The managing agent of an association, shall give
3. Must have passed the required physical and mental his co-owners an account of the results of each voyage of
examinations required for licensing him as such. (Art. the vessel, without prejudice to always having the books
609) and correspondence relating to the vessel and to its voyages
at their disposal.
NOTE: If the ship agent possesses such qualifications, he may
perform the duties of both ship agent and captain Art. 600. After the account of the managing agent has been
simultaneously. As to the co-owners applying for the position approved by a relative majority, the co-owners shall satisfy
of captain, it is perfectly understood that the candidates must the expenses in proportion to their interest, without
possess the qualifications required of a captain. prejudice to the civil or criminal actions which the minority
may deem fit to institute afterwards.
THREEFOLD CHARACTER OF THE CAPTAIN
In order to enforce the payment, the managing agents shall
Q: What is the nature of position or the 3-fold character? be entitled to an executory action, which shall be instituted
by virtue of a resolution of the majority, and without further
A: proceedings than the acknowledgment of the signatures of
the persons who voted for the resolution.
1. General agent of the shipowner;
2. Technical director of the vessel; Q: What is the effect of the Rules of Court in this provision?
3. Representative of the government of the country
under whose flag he navigates. A: The executory action (accion ejecutiva) has been rendered
obsolete by the Civil Procedure and by the Rules of Court.
INHERENT POWERS OF A CAPTAIN
Art. 601. Should there be any profits, the co-owners may
Q: What are his inherent powers? demand of the managing agent the amount due them, by
means of an executory action without further requisite than
A: the acknowledgment of the signatures in the instrument
approving the account.
1. Appoint crew in the absence of ship agent;
2. Command the crew and direct the vessel to its port Art. 602. The agent shall indemnify the captain for all the
of destination; expenses he may have made from his own funds or from
3. Impose correctional punishment on those who, those of other persons, for the benefit of the vessel.
while on board vessel, fail to comply with his orders
or are wanting in discipline; Q: In order that expenses may be reimbursed, what must be
4. Make contracts for the charter of vessel in the done?
absence of ship agent.
A: The ship agent may at his discretion discharge the captain Is this discharge lawful?
provided, however, that the contract for services of the
captain did not state fixed period or voyage. The ship agent is A: Yes. Under Art. 607, he will not be deprived of his office as
liable to pay the salaries earned according to their contract, captain except for such causes as are comprised under Art.
but without indemnity whatsoever. 605. in mentioning the causes for the lawful discharge
includes insubordination in serious matters.
The captain shall continue to receive his salary until his return
to the port where the contract was made unless there should What right can he demand from the ship agent before being
be just motive for the discharge. discharged?
Art. 604. If the captain or any other member of the crew A: A, being a part owner, may not be discharged without the
should be discharged during the voyage, they shall receive ship agent returning to him the amount of his interest
their salary until their return to the place where the contract therein.
was made, unless there are good reasons for the discharge,
all in accordance with Art. 636 et seq. of this Code. Q: How shall his right be appraised in the absence of an
agreement?
A captain of a steamer, discharged without legal cause at a
port other than that in which his services were contracted A: In the absence of any agreement by the parties, the
for, may recover salary up to the latter place. amount of interest which A may demand to be returned to
him by the ship agent, shall be appraised by the experts
Art. 605. If the contracts of the captain and members of the appointed in the manner established in the Rules of Court.
crew with the agent should be for a definite period or
voyage, they cannot be discharged until the fulfillment of Art. 608. In case of the voluntary sale of the vessel, all
their contracts, except for reasons of insubordination in contracts between the agent and captain shall terminate,
serious matters, robbery, theft, habitual drunkenness, and reserving to the latter his right to the indemnity which may
damage caused to the vessel or to its cargo by malice or be proper, according to the agreements made with the
manifest or proven negligence. agent.
Where a contract is for a definite period or voyage, the The vessel sold shall remain subject to the security of the
members of the crew may not be discharged until after the payment of said indemnity if, after the action against the
fulfillment of their contract, except: vendor has been instituted, the latter should be insolvent.
Art. 610. The following powers are inherent in the position of Art. 611. In order to comply with the obligations mentioned
captain or master of a vessel: in the foregoing article, and when he has no funds and does
A: Although the duties of enumerated in Art. 612 of the Code A: The duties of a captain of the vessel is essentially personal
of Commerce are inherent in the master, the civil liability due to the confidence given to him arising from the fact that
arising from the non-fulfillment thereof is not limited to him, he possesses the required technical ability and that he is the
since while the master is responsible to ship agent, the latter, man worthy of the trust of the shipowner.
in turn, is liable to third persons, as clearly provided in Art.
618 of the said Code expressly mentions such duties Art. 616. If the provisions and the fuel of the vessel are
enumerated in Art. 612. consumed before arriving at the port of destination, the
captain shall order, with the consent of the offficers of the
RESPONSIBILITY OF MASTER WHEN THERE ARE PILOTS same, to make the nearest port to get a supply of either, but
if there are persons on board who gave provisions of their
Q: What is the extent of the responsibility of the master of a own, he may compel them to turn over said provisions for
vessel when there are pilots? the common consumption of all persons on board, paying
the price thereof at the same time, or, at the latest, at the
A: Pilots are responsible for full knowledge of the channel first port where the vessel may arrive.
and of the navigation only so far as they can accomplish it
through the officers and crew of the ship and cannot be held Art. 617. The captain may not contract loans on respondentia
responsible for damage when the evidence shows that the secured by the cargo, and should he do so the contract shall
officers and crew of the ship failed to obey their orders. be void.
Art. 613. A captain who navigates for freight in common or Neither may he borrow money on bottomry for his own
on shares may not make any separate transaction for his own transactions, except on the portion of the vessel he owns,
account, and should he do so the profits shall belong to the provided no money has been previously borrowed on the
other persons interested, and the losses shall be borne by him whole vessel, and provided there does not exist any other
alone. kind of lien or obligation chargeable against the vessel. When
Art. 618. The captain shall be civilly liable to the ship agent Q: Is the ship owner liable for crimes and quasi-crimes?
and the latter to the third persons who may have made
contracts with the former - A: It is well and good that the shipowner be not held
criminally liable for such crimes or quasi-crimes. However, he
1. For all the damages suffered by the vessel and its cannot be excused from liability for the damage and harm
cargo by reason of want of skill or negligence on his which, in consequence of those acts, may be suffered by the
rd
part. If a misdemeanor or crime has been 3 parties who contracted with the captain, in his double
committed he shall be liable in accordance with the capacity agent and subordinate of the ship owner himself.
Penal Code.
2. For all the thefts and robberies committed by the Q: What is the reason for imposition of liability on owner for
crew, reserving his right of action against the guilty damages suffered by third persons occasioned by the acts of
parties. the captain?
3. For the losses, fines, and confiscations imposed on
account of violation of the laws and regulations of A: To place the primary liability upon the person who has
customs, police, health, and navigation. actual control over the conduct of the voyage and who has
4. For the losses and damages caused by mutinies on the most capital embarked in the venture, namely, the owner
board the vessel, or by reason of faults committed of the ship, leaving him to obtain recourse, from other
by the crew in the service and defense of the same, individuals who have been drawn into the venture as
if he does not prove that he made full use of his shippers. The shippers and passengers in making contracts
authority to prevent or avoid them. with the captain do so through the confidence they have in
5. For those arising by reason of a misuse of powers the shipowner who appointed him. They presume that the
and nonfulfillment of the duties which pertain to owner made a most careful investigation before appointing
him in accordance with Articles 610 and 612. him. Besides, they could not obtain complete security,
6. For those arising by reason of his going out of his inasmuch as the shipowner can, whenever he sees fit,
course or taking a course which, in the opinion of appoint another captain instead.
the officers of the vessel, at a meeting attended by
the shippers or supercargoes who may be on board, Q: State the distinction between liability for lawful and
he should not have taken without sufficient cause. unlawful acts?
No exception whatsoever shall exempt him from A: The lawful acts and obligations of the captain beneficial to
his obligation. the vessel may be enforced as against the agent/owner for
the reason that such obligations arise from the contract of
7. For those arising by reason of his voluntarily agency (provided that the captain does not exceed his
entering a port other than his destination, with the authority). On the other hand, as to any liability incurred by
exception of the cases or without the formalities the captain through his unlawful acts, the ship agent is simply
referred to in Article 612. subsidiarily liable.
8. For those arising by reason of the nonobservance of
the provisions contained in the regulations for EXTENT OF LIABILITY OF CAPTAIN
lights and maneuvers for the purpose of preventing
collisions. Q: Explain the extent of the liabilities of captain.
Art. 619. The captain shall be liable for the cargo from the NOTE: Amended by Arts. 1733-1763
time it is turned over to him at the dock or afloat alongside
the vessel at the port of loading, until he delivers it on the PRESUMPTION OF NEGLIGENCE ON THE PART OF COMMON
shore or on the discharging wharf at the port of unloading, CARRIERS
unless otherwise expressly agreed on.
Q: When are the common carriers presumed to be
This has been amended by: negligent?
Q: What is force majeure? A: Irrespective of the amount of damages involved, the action
must be filed in the Court of First Instance since this is an
A: Broadly speaking, it applies to natural accidents, such as admiralty case in which the Justice of the Peace of Court or
those caused by lightning, earthquake, tempests, public the Municipal Court has no jurisdiction.
enemy, etc.
Art. 621. A captain who borrows money on the hull, engine,
§ Winds of 11 miles per hour, although stronger than the rigging, or tackle of the vessel, or who pledges or sells
average 4-6 miles per hour then prevailing in the port merchandise or provisions outside of the cases and without
where the lighter sank on the night in question, cannot the formalities prescribed in this Code, shall be liable for the
be classified as storm. principal, interest, and costs, and shall indemnify for the
§ Accoriding to PAG-ASA, the winds should have a velocity damages he may cause.
from 55 to 74 miles per hour
He who commits fraud in his accounts shall reimburse the
Q: What are the requisites for force majeure be an amount defrauded, and shall be subject to the provisions of
exempting circumstance? the Penal Code.
2. The common carrier must have exercised due diligence (2) Act of the public enemy in war, whether international or
to prevent or minimize loss before, duiring and after the civil;
occurrence of a natural disaster
3. The common carrier must have not negligently incurred Article 1739. “In order that the common carrier may be
delay in the transportation. exempted from responsibility, the natural disaster must
4. The captain must have made a protest before the have been the proximate and only cause of the loss.
competent authority at the first port he touched within However, the common carrier must exercise due diligence
the 24 hours following his arrival, and should have to prevent or minimize loss before, during and after the
ratified it within the same period when he arrived at the occurrence of flood, storm or other natural disaster in order
point of her destination, proceeding immediately with that the common carrier may be exempted from liability for
the proof of the facts without opening the hatches not the loss, destruction, or deterioration of the goods. The
until after this has been done. same duty is incumbent upon the common carrier in case of
an act of the public enemy referred to in Article 1734, No.
Q: When should the claims be made? 2.”
Art. 624. A captain whose vessel has gone through a Q: What if the managing owner has reason to believe that it
hurricane or who believes that the cargo has suffered has been lost?
damages or averages, shall make a protest thereon before the
competent authority at the first port he touches within the A: He shall promptly send notice in writing to the Collector of
twenty-four hours following his arrival, and shall ratify it her home port giving advice of such loss and the probable
within the same period when he arrives at the place of his occasion therefor, stating the name of the vessel and the
destination, immediately proceeding with the proof of the names of all the persons on board, so far as the same can be
facts, it not being permitted to open the hatches until after ascertained, and shall furnish, upon request of the collector,
this has been done. such additional information shall be required.
The captain shall proceed in the same manner if, the vessel Art. 625. Upon arrival at the port of destination, the captain
having been wrecked, he is saved alone or with part of his shall, under his personal liability, turn over the cargo, without
crew, in which case he shall appear before the nearest any defalcation, to the consignees, and, in a proper case, the
authority, and make a sworn statement of the facts. vessel, rigging, and freights to the agent, after having
obtained the necessary permission from the health and
The authority or the consul abroad shall verify the said facts, customs officers and fulfilled the other formalities required by
receiving sworn statements of the members of the crew and the regulations of the administration.
passengers who may have been saved, and taking such other
steps as may help in arriving at the facts, he shall make a [If, by reason of the absence of the consignee or on account of
statement of the result of the proceedings in the log book and the nonappearance of a legal holder of the invoices, the
in that of the sailing mate, and shall deliver the original captain does not know to whom he is to make the legal
records of the proceedings to the captain, stamped and delivery of the cargo, he shall place it at the disposal of the
folioed, with a memorandum of the folios, which he must proper judge or court or authority, in order that he may
rubricate, for their presentation to the judge or court of the decide with regard to its deposit, preservation, and custody.]
port of destination.
NOTE: The first paragraph has been amended by Arts. 1736-
The statement of the captain shall be believed if it is in 1738, and 1753 of the Civil Code. The second paragraph is
accordance with those of the crew and passengers; if they repealed by the Rules of Court.
disagreed, the latter shall be accepted, unless there is proof to
the contrary. MANIFEST
HARBOR FEES A: Yes, such as when the loading or unloading takes place off-
shore or in midstream by using ligfhters (meaning shipside).
Q: What are harbor fees?
WHARFAGE v. BERTHING CHARGES
A: They are paid for the entrance into or departure from a port
of entry. Q: Distinguish wharfage from berthing charges.
TONNAGE FEES A:
A: They are levied on a vessel coming or mooring within A: It is not planted upon the condition that the pier be publicly
specified places or waters of a port owned. The charge is based on the fact that port facilities
afford benefits to the vessels and the maintenance and
Q: What are the reasons for the charges levied on the vessels development of the port, and the purchase, conditioning, and
and cargoes? replacement of the equipment thereof--all to enable such
vessels to make use of pier of wharfage the concern of the
A: A vessel ordinarily enters a harbor and lays anchor or moors government.
in a port to load, or unload or both. In doing so, the vessel
derives benefit from port facilities provided and maintained by CUSTOMS HAS JURISDICTION OVER SMUGGLING
the government.
Q: Who has jurisdiction over smuggling cases?
A vessel that anchors at Manila Bay to seek protection from a
storm is not charged with wharfage dues by the Bureau of A: It is the Collector of Customs, not the Regional Trial Court.
Customs. It is well-settled that the exclusive jurisdiction over seizure
and forfeiture cases vested in the Collector of Customs
But when a vessel anchors in the Bay and discharges or unloads precludes the RTC from assuming cognizance over such cases.
cargo, wharfage dues are forthwith collected.
Forfeiture proceedings are in the nature of proceedings in rem
Wharfage dues assessment are based on the quantity, weight, and are directed against the res. The fact that private
measure of the cargo received by the importer and/or respondent allegedly has no actually knowledge that the vessel
discharged by such vessel. was used illegally does not render the vessel immune from
forfeiture.
Q: May wharfages be collected even though the government
pier is not used?
a. Provide himself with maps and charts with A: The captain may at conserve all times his authority on
astronomical tables necessary for the discharge of board, and the sailing mate may evade the consequences
his duties; which the orders may bring, by making the proper protest.
b. Keep the Binnacle Book;
c. Change the course of the voyage on consultation Art. 631. The sailing mate shall be liable for all the damage
with the captain and the officers of the boat, caused to the vessel and cargo by reason of his negligence
following the decision of the captain in case of or want of skill, without prejudice to the criminal liability
disagreement; which may arise, if a felony or misdemeanor has been
d. Responsible for all the damages caused to the vessel committed.
and the cargo by reason of his negligence. (Arts. 628
- 631) Q: What is the liability of the sailing mate or pilot?
Q: Who is a second mate? Art. 633. The second mate shall take the command of the
vessel in case of the inability or disqualification of the
A: He takes command of the vessel in case of the inability or captain and sailing mate, assuming therefore their powers
disqualification of the captain and the sailing mate, assuming and responsibilities.
in such case their powers and responsibilities. Thus, he is
third in command. Art. 634. The captain may make up his crew with the number
he may consider advisable, and in the absence of Filipino
Q: What are the duties of a second mate? sailors he may ship foreigners residing in the country, the
number thereof not to exceed one-fifth of the total crew. If in
A: foreign ports the captain should not find a sufficient number
of Filipino sailors, he may make up the crew with foreigners,
1. Preserve the hull and rigging of the vessel; with the consent of the consul or marine authorities.
2. Arrange well the cargo;
3. Discipline the crew; The agreements which the captain may make with the
4. Assign work to crew members; members of the crew and others who go to make up the
5. Inventory the rigging and equipment of the vessel, if complement of the vessels, to which reference is made in
laid up. (Art. 632) Article 612 (obligations inherent in the office of captain) must
be reduced to writing in the account book without the
ENGINEERS intervention of a notary public or clerk of court, signed by the
parties thereto, and vised by the marine authority if they are
Q: Who are engineers? executed in Filipino territory, or by the consuls or consular
agents of the Philippines if executed abroad, stating therein
A: They are officers of the vessel but have no authority except all the obligations which each one contracts and all the rights
in matters referring to the motor apparatus. When two or they acquire, said authorities taking care that these
more are hired, one of them shall be the chief engineer. obligations and rights are recorded in a concise and clear
manner, which will not give rise to doubts or claims.
They are officers of the vessel and they can give orders and
intervene only in cases pertaining to the engine motor The captain shall take care to read to them the articles of this
apparatus of the vessel. Code which concern them, stating in the said document that
they were read.
Where the chief engineer on a steamer plying the Philippine
waters, caused the manhole plate of the vessel’s boiler to be If the book includes the requisites prescribed in Article 612,
removed under his supervision was performed in the manner and there should not appear any signs of alterations in its
customary upon such vessels and with reasonable care, he is entries, it shall be admitted as evidence in questions which
not guilty of reckless negligence for the death of a man who may arise between the captain and the crew with regard to
was scalded by water which splashed from the boiler through the agreements contained therein and the amounts paid on
the said manhole. account of the same.
Q: What are the duties of an engineer? Every member of the crew may demand of the captain a copy,
signed by the latter, of the agreement and of the liquidation
A: of his wages, as they appear in the book.
1. In charge of the motor apparatus, spare parts, and
other instruments pertaining to the engines; NOTE: The contract with a seaman has the nature of a lease of
2. Keep the engines and boilers in good condition; service, in virtue of which one person binds himself to perform
3. Not to change or repair the engine without authority or to do the services or works for which he has signed himself
of the captain; in the vessel in consideration of the compensation stipulated
4. Inform the captain of any damage to the motor
apparatus; Q: What is a Crew?
Neither can he pass from the service of one vessel to another 6. Desertion.
without obtaining the written consent of the vessel on which
he may be. The captain may, however, before setting out on a voyage
and without giving any reason whatsoever, refuse to permit a
If, without obtaining said permission, the sailor who has sailor whom he may have engaged to go on board, and may
signed for one vessel should sign for another one, the second leave him on land, in which case his wages have to be paid as
contract shall be void, and the captain may choose between if he had rendered services.
forcing him to fulfill the service to which he first bound
himself or look for a person to substitute him at his expense. The indemnity shall be paid from the funds of the vessel if the
Said sailor shall furthermore lose the wages earned on his first captain should have acted for reasons of prudence and in the
contract to the benefit of the vessel for which he may have interest of the safety and good service of the vessel. Should
signed. this not be the case, it shall be paid by the captain personally.
1. If the revocation of the voyage should be decided 1. A declaration of war or interdiction of commerce
before departure of the vessel from the port, each with the power to whose territory the vessel was
sailor engaged shall be given one month's salary, bound.
besides what may be due him, in accordance with his 2. The blockade of the port of its destination or the
contract, for the services rendered to the vessel up to breaking out of an epidemic after the agreement.
the date of the revocation. 3. The prohibition to receive in said port the goods
2. If the agreement should have been for a fixed which make up the cargo of the vessel.
amount for the whole voyage, what may be due for 4. The detention or embargo of the same by order of
said month and days shall be determined in the government, or for any other reason
proportion to the approximate duration of the independent of the will of the agent.
voyage, in the judgment of the experts, in the 5. The inability of the vessel to navigate.
manner established by the law of civil procedure; and
if the proposed voyage should be of such short
duration that it is calculated at approximately one
In case of the occurrence of the fourth cause, the crew shall TOTAL LOSS OF VESSEL
continue to be paid half wages, if the agreement is by month;
but if the detention should exceed three months, the contract Q: What is the effect of the total loss of the vessel?
shall be rescinded and the crew shall be paid what they
should have earned according to the contact, as if the voyage A: The total loss of the vessel, by reason of capture or wreck,
had been made. And if the agreement should be for a fixed extinguishes all contractual relations between the seamen and
sum for the voyage, the contract must be complied with in the the owner of the vessel or the person who contracted for their
terms agreed upon. services. The seamen in such case have not even the right to
demand the payment of the wages earned as in the case of
In the fifth case, the crew shall have no other right than to inability of the vessel to navigate; and likewise, the agent or
collect the wages earned; but if the disability of the vessel charterer who contracted for the services of the seamen is not
should have been caused by the negligence or lack of skill of entitled to the recovery of the advances made by him.
the captain, engineer, or sailing mate, they shall indemnify
the crew for the damages suffered, always without prejudice EFFECT OF WORKMEN’S COMPENSATION ACT
to the criminal liability which may be proper.
Q: Does total loss of the vessel and her cargo have any effect
EARNINGS OF CREW on the Workmen’s Compensation Act (Act No. 3428)?
Q: To what extent the crew is entitled for their earnings in A: No. Thus, if an accident is compensable under the Act No.
case of inability of the vessel to navigate? 3428, it must be compensated even the when workman’s right
is not recognized by other provisions of the Code of Commerce.
A: In case of the inability of the vessel to navigate, the crew is The reason behind this is that the Act No. 3428 was enacted by
only entitled to recover the wages earned. The law does not the legislature in abrogation of other existing laws
compel the owner or the charterer of the vessel who has
entered into contract for the services of the seamen to provide Art. 644. A sailor who falls sick shall not lose his right to
for the maintenance of the latter and their expenses necessary wages during the voyage, unless his sickness is the result of
to the port of sailing of the vessel. his own fault. At any rate, the costs of medical attendance
A: If an accident is compensable under the Act No. 3428, it Art. 646. The vessel with her engines, rigging, equipment, and
must be compensated even the when workman’s right is not freightage shall be liable for the wages earned by the crew
recognized by other provisions of the Code of Commerce. The engaged per month or for the trip, the liquidation and
reason behind this is that the Act No. 3428 was enacted by the payment to take place between one voyage and the other.
legislature in abrogation of other existing laws. After a new voyage has been undertaken, credits of such kind
pertaining to the preceding voyage shall lose the preference.
Art. 645. If a sailor should die during the voyage, his heirs
shall be given the wages earned and not received, according LIENS IN FAVOR OF THE CREW SUPERIOR TO SUBSEQUENT
to his contract and the cause of his death, namely --- MORTGAGE OR SALE OF THE VESSEL
If he died a natural death and was engaged on wages, that This article creates a lien upon a ship in favor of the crew
which may have been earned up to the date of his death shall engaged in the operation of the same and this lien in favor of
be paid. the crew takes certain preference in accordance with Art. 580.
If the contract was for a fixed sum for the whole voyage, half The crew, therefore, for their wages, etc, for the last voyage
the amount earned shall be paid if the sailor died on the have prior lien upon ship, to the lien created in the present
voyage out, and the whole amount if he died on the return case by the chattel mortgage.
voyage.
Art. 647. The officers and the crew of the vessel shall be
And if the contract was on shares and the death occurred exempted from all obligations contracted, if they deem if
after the voyage was begun, the heirs shall be paid the entire proper, in the following cases:
portion due the sailor; but if the latter died before the depar-
Q: When is rescission allowed? Art. 2270. The following laws and regulations are hereby
repealed:
A: It is understood that rescission in any of the foregoing cases
is allowable if the voyage has not yet started; after the voyage (1) Those parts and provisions of the Civil Code of 1889
has commenced, the contract can no longer be rescinded. which are in force on the date when this new Civil
Code becomes effective:
Art. 648. By the complement of a vessel shall be understood (2) The provisions of the Code of Commerce governing
all the persons embarked, from the captain to the cabin boy, sales, partnership, agency, loan, deposit and
necessary for the management, maneuvers, and service and guaranty;
therefore, in the complement shall be included the crew, (3) The provisions of the Code of Civil Procedure on
sailing mates, engineers, stockers, and others working on prescription as far as inconsistent with this Code; and
board not having specific names; but it shall not include the (4) All laws, Acts, parts of Acts, rules of court, executive
passengers or the persons whom the vessel is only orders, and administrative regulations which are
transporting. inconsistent with this Code. (n)
COMPLEMENT OF THE VESSEL Art. 651. Supercargoes cannot, without special authorization
or agreement, make any transaction for their own account
Q: Who constitutes the Complement of the Vessel? during the voyage, with the exception of the ventures which,
in accordance with the custom of the port of destination, they
A: All persons on board, from the captain to the cabin boy, are permitted to do.
necessary for the management, maneuvers, and service, thus
including the crew, the sailing mates, engineers, stokers and Neither shall they be permitted to invest in the return trip
other employees on board not having specific designations. It more than the profits from the ventures, unless there is a spe-
does not include the passengers or the persons whom the cial authorization therefor from the principals.
vessel is transporting.
Q: May supercargoes make any transaction of their own
Art. 649. Supercargoes shall discharge on board the vessel account in the outgoing voyage?
the administrative duties which the agent or shippers may
have assigned them; they shall keep an account and record of A: As a rule, supercargoes cannot make transactions for their
their transactions in a book which shall have the same own account during the voyage.
conditions and requisites as required for the accounting book
of the captain, and shall respect the latter in his duties as Q: What are the exceptions?
chief of the vessel.
A:
The powers and liabilities of the captain shall cease, when
there is a supercargo, with regard to that part of the adminis- 1. If there is authorization or expressed agreement
tration legitimately conferred upon the latter, but shall permitting supercargoes to make transactions for their
continue in force for all acts which are inseparable from his own account
authority and office. 2. If they make such kind of transactions involving
ventures which in accordance with the custom of the
SUPERCARGO port of destination they are permitted to do
A: An agent of the owner of the goods shipped as cargo on a A: Yes, they can invest in the return voyage but not more than
vessel, who has charge of the cargo on board, sells the same to the profit of the venture, unless there is an expressed
the best advantage in the foreign markets, buys cargo to be authorization from the principal.
Art. 652 A charter party must be drawn in duplicate and CLASSIFICATION OF CHARTER PARTY
signed by the contracting parties, and when either does not
know how or is not able to do so, by two witnesses at his Q: What are the classes of charter party?
request.
A:
The charter party shall include, besides the condition
stipulated, the following circumstances: 1. As to capacity of the vessel:
1. The kind, name, and tonnage of the vessel. a. Total-when the whole vessel is chartered;
2. Her flag and port or registry. b. Partial-when only a portion of it.
3. The name, surname, and domicile of the captain.
4. The name, surname, and domicile of the agent, if 2. As regards the time:
the latter should make the charter party.
5. The name, surname, and domicile of the charterer, a. It may last up to a fixed day or for a determined
and if he states that he is acting by commission, number of days or months; or
that of the person for whose account he makes the b. For a voyage, either an outward or return or a
contract. round trip.
6. The port of loading and unloading.
7. The capacity, number of tons or weight, or 3. As to the freight-it is entered for while voyage or so
measure which they respectively bind themselves much per month during the period of navigation:
to load and transport, or whether it is the total
cargo. a. For a single amount for the whole cargo; or
8. The freightage to be paid, stating whether it is b. So much ton or volume.
to be a fixed amount for the voyage or so much per
month, or for the space to be occupied, or for the Q: Can the captain enter into a charter contract?
weight or measure of the goods of which the cargo
consists, or in any other manner whatsoever agreed A: YES provided that he is authorized.
upon.
9. The amount of primage to be paid the captain. Q: Can the charterer enter into a sub-charter contract?
10. The days agreed upon for loading and unloading.
11. The lay days and extra lay days to be allowed A: YES provided it is not prohibited. This is just like the rule in
and the rate of demurrage. lease.
A: It is a contract by virtue of which the owner or the agent of Q: What are the kinds of charter party?
the vessel leases for a certain price of the whole or a portion
of the vessel for the transportation of goods or persons from A:
one port to another.
A: They are days which follow after the lay days have elapsed. A: It refers to the vessel towed or pulled.
DEMURRAGE If the affreigtment was partial and not the charter of the
entire vessel, the charterer does not acquire the right to fix
Q: What is a demurrage? the date for the departure of the vessel, unless stipulated in
the contract.
A: It is the amount stipulated in the charter party to be paid
by the charterer or shipper to the ship owner for any delay in Art. 653. If the freight should be received without the
the sailing of his ship. Sum which is fixed by the contract of charter party having been signed, the contract shall be
carriage, or which is allowed, as remuneration to the owner understood as executed in accordance with what appears in
of a ship for the detention of his vessel beyond the number of the bill of lading, which shall be the only instrument with
days allowed by the charter party for loading and unloading regard to the freight to determine the rights and obligations
or for sailing; it is an extended freight or reward to the vessel of the ship agent, of the captain, and of the charterer.
in compensation for the earnings she is improperly caused to
lose CHARTER PARTY v. BILL OF LADING
A: While the outbreak of war absolved the ship carrying the a. Goods jettisoned for the common safety and never
flag of a belligerent nation from its obligation to carry the recovered;
cargo belonging to a subject of a neutral power to the port of b. Goods lost by reason of shipwreck or stranding;
another belligerent nation, it was nevertheless liable for the c. Goods seized by pirates or enemies.
cost of forwarding the cargo to another line, if the full freight
had been received by the ship at the commencement of the Art. 662 Should the vessel or the goods be recovered or the
voyage. effects of the shipwreck be salvaged, the freight
corresponding to the distance covered by the vessel
Art. 658 The freight shall accrue to the conditions stipulated transporting the cargo shall be paid; and if the vessel, after
in the contract, and should they not be expressed, or should being repaired, should transport the said cargo to the port
they be ambiguous, the ff. rules shall be observed: of destination, the full freight shall be paid, without
prejudice to what may be due by reason of the average.
a. Should the vessel have been chartered by months
or by days, the freight shall begin to run from the Art. 663 The goods which suffer deterioration or damage
day the loading of the vessel is begun. caused by inherent defects or bad quality and condition of
b. In charters made for a fixed period, the freight shall the packing, or fortuitous event, shall pay freight in full and
begin from that very day. as stipulated in charter party.
c. If the freight is charged according to weight, the
payment shall be made according to gross weight, Art. 664 The natural increase in weight or in size of the
including the containers, such as barrels or any goods loaded on the vessel, shall accrue to the benefit of
other objects in which the cargo is contained the owner and shall pay the corresponding freight fixed in
the contract for the same.
Art. 659 The goods sold by the captain to pay for the
necessary repairs of the hull, machinery or equipment, or Art. 665 The cargo shall be especially liable for the payment
for unavoidable and urgent needs, shall pay freight. of freight, for expenses and duties arising therefrom which
must be reimbursed by the shippers, as well as for the part
The price of these goods shall be fixed according to the of the general average which may correspond to it; but it
result of the voyage, namely: shall not be legal for the captain to delay the unloading by
reason of fear that the said obligation may not be complied
with.
Q: What are the expenditures for which the cargo is liable? Art. 668 Should the consignee be not found or should refuse
to receive the cargo, the judge or court, at the instance of
A: the captain, must order its deposit and the sale of what may
be necessary to pay the freight and other expenses on the
a. Payment of freight; same.
b. For expenses and duties arising there from which
must be reimbursed by the shippers; and The sale should likewise take place when the goods
c. For the part of the general average which they deposited run the risk of deteriorating or, on account of
correspond to it. their condition or for other reasons, the expenses of the
preservation and custody should be disproportionate to the
Q: A shipment of rice arrives in Manila from Thailand. The value thereof.
agreement between the supper and ship owner is that
freight was to be paid upon the discharge of the cargo. SALE OF CARGO BY THE CAPTAIN
Shipper however does not pay the freight but instead, offers
a bond. Yet, the owner of the vessel refuses to deliver the Q: What are the cases where the captain may request the
rice. May the charterer be ordered to deliver the rice upon sale of the cargo?
furnishing of the bond by the shipper.
A:
A: No, the fact that a bond has been given for the payment of
such freight does not make it compulsory for the carrier to 1. To pay the freight;
deliver the cargo before freight has actually been paid. 2. To pay the expenses and duties due to the cargo;
3. To pay the expenses and averages due to the cargo;
The fact that the freight was already included in the purchase 4. When the goods deposited run the risk of
price of the goods did not free the cargo of rice from the deteriorating or an account of their condition or for
carrier’s lien, if the freight has not yet been fully paid by the other reasons, the expenses of preservation and
charterer. custody should be disproportionate to the value
thereof;
STEVEDORING 5. Should the consignee be not found or should refuse
to receive the cargo, in which case the judge or court
Q: What is a stevedoring? at the instance of the captain, must order its deposit
and the sale of what may be necessary to pay freight
A: It refers to the carriage of goods from the warehouse or and other expenses on the sale.
pier to the holds of the vessel.
II. Rights and obligations of owners
Art. 666 The captain may request the sale of the cargo to
the amount necessary to pay the freight, expenses, and Art. 669. The shipowner of the captain shall observe in
averages due him, reserving the right to demand the charter parties the capacity of the vessel or that expressly
balance due him therefor, if the proceeds of the sale should designated in its registry, a difference greater than 2 per
not be enough to cover his credit. cent between that registered and her true capacity not
being permissible.
Art. 667 The goods loaded shall be liable in the first place for
the freight and expenses thereof during 20 days, to be If the shipowner or the captain should contract to carry a
counted from the date of their delivery or deposit. During greater amount of cargo than the vessel can carry, in view of
this period, the sale of the same may be requested, even her tonnage, they shall indemnify the shippers whose
though there should be other creditors and the case of contracts they do not fulfill for the losses they may have
insolvency of the shipper or consignee should occur. caused them by reason of their default, according to the
cases, viz:
The right, however, cannot be made use of on the goods
rd
which, after being delivered were turned over to a 3 If the vessel has been chartered by one shipper only, and
person without malice on the part of the latter by onerous there should appear to be an error or fraud in her capacity,
title. and the charterer should not wish to rescind the contract,
when he has a right to do so, the freightage shall be reduced
Amended by Art. 2241 of Civil Code which provides: Credits in proportion to the cargo the vessel cannot receive, the
for transportation upon the goods carried, for the price of person from whom the vessel is chartered being
If, on the contrary, there should be several charter parties, Art. 674. If the charterer should carry to the vessel more
and by reason of the want of space all the cargo contracted cargo than that contracted for, the excess may be admitted
for cannot be received, and none of the charterers desires to in accordance with the price stipulated in the contract if it
rescind the contract, preference shall be given to the person can be well stowed without incurring the other shippers, but
who has already loaded and arranged the cargo in the if in order to stow said cargo it should be necessary to stow
vessel, and the rest shall take the place corresponding to it in such manner as to throw the vessel out of trim the
them in the order of the dates of their contracts. captain must refuse it or unload it at the expense of its
owner.
Should there be no priority, the charterers may load, if they
wish, in proportion to the weight or space they may have The captain may likewise, before leaving the port, unload
engaged, and the person from whom the vessel was the merchandise clandestinely placed on board, or transport
chartered shall be obliged to indemnify them for losses and it, it he can do so and keep the vessel in trim, demanding by
damages. way of freightage the highest price which may have been
stipulated for said voyage.
Art. 670. If the person from whom the vessel is chartered,
after receiving a part of the cargo, should not find sufficient Art. 675. If the vessel has been chartered to receive the
to make up at least three fifths of the amount the vessel can cargo in another port, the captain shall appear before the
hold, at the price he may have fixed, he may substitute for consignee designated in the charter party, and should the
that transportation another vessel inspected and declared latter not deliver the cargo to him, he shall inform the
suitable for the same voyage, the expenses of transfer, and charterer and await his instructions, the lay days agreed
the increase in the price of the charter, should there be any, upon, or those allowed by custom in the port, beginning to
being for his account. Should he not be able to make this run in the meantime, unless there is an express agreement
change, the voyage shall be undertaken at the time agreed to the contrary.
upon; and should no time have been fixed, within fifteen
days from the time the loading began, should nothing to the Should the captain not receive an answer within the time
contrary have been stipulated. necessary therefore, he shall make efforts to find cargo; and
should he not find any after the lay days and extra lay days
If the owner of the part of the cargo already loaded should have elapsed, he shall make a protest and return to the port
procure some more at the same price and under similar or where the charter was made.
proportionate conditions to those accepted for the freight
received, the person from whom the vessel is chartered or The charterer shall pay the freightage in full, discounting
the captain may not refuse to accept the rest of the cargo; that which may have been earned on the merchandise
and should he do so, the charterer shall have a right to which may have been carried on the voyage out or on the
demand that the vessel put to sea with the cargo she may return trip, if carried for the account of third persons.
have on board.
The same shall be done if a vessel, having been chartered
Art. 671. After three-fifths of the vessel is loaded, the for the round trip, should not be given any cargo for her
person from whom she is chartered may not, without the return.
consent of the charterers or shippers, substitute the vessel
designated in the charter party with another one, under the Art. 676. The captain shall lose the freightage and shall
penalty of making himself thereby liable for all the losses indemnify the charterers if the latter should prove, even
and damages occurring during the voyage to the cargo of against the certificate of inspection, if one has been made at
those who did not consent to the change. the port of departure, that the vessel was not in a condition
to navigate at the time of receiving the cargo.
Art. 672. If the vessel has been chartered in whole, the
captain may not, without the consent of the person Art. 677. The charter party shall subsist if the captain should
chartering her, accept cargo from any other person; and not have any instructions from the charterer, and a decla-
should he do so, said charterer may oblige him to unload it ration of war or a blockade should take place during the
and to indemnify him for the losses suffered thereby. voyage.
Art. 673. The person from whom the vessel is chartered In such case the captain must proceed to the nearest safe
shall be liable for all the losses caused the charterer by and neutral port, requesting and awaiting orders from the
reason of the voluntary delay of the captain in putting to shipper; and the expenses and salaries accruing during the
sea, according to the rules prescribed, provided he has been detention shall be paid as general average.
Art. 688. A charter party may be annulled at the request of In such case the vendor shall indemnify the charterer for the
the charterer: losses he may suffer.
1. If before loading the vessel he should abandon the If the new owner of the vessel should not load it for his own
charter, paying half the freightage agreed upon; account the charter party shall be respected, and the vendor
2. If the capacity of the vessel should not agree with shall indemnify the purchaser if the former did not inform
that stated in the certificate of tonnage, or if there him of the charter pending at the time of making the sale.
be an error in the statement of the flag under
which she sails; Art. 690. The charter party shall be rescinded and all action
3. If the vessel should not be placed at the disposal of arising therefrom shall be extinguished if, before the vessel
the charterer within the period and in the manner puts to sea from the port of departure, any of the following
agreed upon; cases should occur:
4. If, after the vessel has put to sea, she should return
to the port of departure, on account of risk from 1. A declaration of war or interdiction of commerce
pirates, enemies, or bad weather, and the shippers with the power to whose ports the vessel was to
should agree to unload her. make its voyage.
2. A condition of blockage of the port of destination of
In the second and third cases the person from whom the said vessel, or the breaking out of an epidemic after
vessel was chartered shall indemnify the charterer for the the contract was executed.
losses he may suffer. 3. The prohibition to receive at the said port the mer-
chandise constituting the cargo of the vessel.
In the fourth case the person from whom the vessel was 4. An indefinite detention, by reason of an embargo
chartered shall have a right to the freightage in full for the of the vessel by order of the government, or for any
voyage out. other reason independent of the will of the ship
agent.
If the charter should have been made by the month, the 5. The inability of the vessel to navigate, without fault
charterers shall pay the full freightage for one month, if the of the captain or ship agent.
voyage is for a port in the same waters; and two months, if
for a port in different waters. The unloading shall be made for the account of the charter-
er.
Art. 692. A charter party shall be partially rescinded, unless In case of delay in the departure of the vessel, the
there is an agreement to the contrary, and the captain shall passengers have the right to remain on board and to be
only be entitled to the freightage for the voyage out, if, by furnished with food for the account of the vessel, unless the
reason of a declaration of war, closing of ports, or delay is due to fortuitous event or to force majeure. If the
interdiction of commercial relations during the voyage, the delay should exceed 10 days, the passengers have the right
vessel should make the port designated for such a case in to request the return of the fare, and if it is due to the
the instructions of the charterer. captain or ship agent exclusively, they may also demand
indemnity for damages.
V. Passengers on Sea voyages
A vessel exclusively devoted to the transportation of
Art. 693 Should the passage fare have not been agreed passengers must carry them directly to the ports or ports of
upon, the judge or court shall summarily fix it, after a destination, no matter what the number of passengers may
declaration of experts. be, making all the stops indicated in their itinerary.
Art. 694 Should the passenger not arrive on board at the PUBLICATION OF SCHEDULE OF ARRIVALS
time previously fixed, or should leave the vessel without AND DEPARTURES
permission from the captain when she is ready to leave the
port, the captain may continue the voyage and demand the Q: Is the ship owner required to publish schedule of arrivals
full passage fare. and departures of the vessel?
Art. 695 The right of passage, if issued to a specified person, A: There is no law which requires ship owners to publish a
may not be transferred without the consent of the captain schedule of the arrivals and departures of their vessels in the
or consignee different port of calls, and holds them liable for damages to
passengers for any deviation from said schedule.
Art. 696 If, before starting the voyage, the passenger should
die, his heirs shall be obliged only to pay half of the fare Although the Public Service Commission has no authority to
agreed upon. require steamship boats, motorboats, or motor vessels to
obtain certificates of public convenience or prescribe their
If, in the fare stipulated, the expenses of subsistence should definite route or line, the PSC has authority to prescribe the
be included, the judge or court, after hearing the experts if schedule of trips and the rates to be charged.
he considers it necessary, shall fix the amount to be left for
the benefit of the vessels. Art. 699Should the contract be rescinded before or after
starting the voyage, the captain shall have right to claim
Should another passenger be received in the place of the payment for what he may have furnished to the passengers.
deceased, no payment shall be made by the said heirs.
Art. 700 In all that relates to the preservation of order and
Art. 697 If before starting the voyage it should be suspended discipline on board the vessel, the passengers shall be under
through the exclusive fault of the captain or ship agent, the the control of the captain, without any distinction
passengers shall have the right to a refund of their fares and whatsoever.
to recover damages; but if the suspension is due to
fortuitous event, or to force majeure, or to any other cause Art. 701The convenience or the interest of the passengers
beyond the control of the captain or ship agent, the shall not obligate or empower the captain to stand in shore
or enter places which may take the vessel out of her course,
Art. 703A passenger shall be considered a shipper as to the A: B/L operates both as a receipt and as a contract; it is a
effect which he carries on board, and the captain shall not receipt for the goods shipped and a contract to transport and
be liable for what the former may keep under his immediate deliver the same as stipulated
and special custody, unless the damage arises from the act
of the captain or of the crew. A stipulation that a CC's liability is limited to the value of the
goods appearing in the B/L, unless the owner declares a
Art. 704 The captain, in order to collect the transportation greater value, is valid and binding
fares and expenses of sustenance, may retain the effects
belonging to the passenger, and in case of their sale, he shall BILL OF LADING v. CHARTER PARTY
be given preference over the other creditors, acting in the
same way in the collection of the freight. Q: State the difference between a Bill of Lading and a
Charter party?
Art. 705 In case of the death of a passenger during the
voyage, the captain shall be authorized, with regard to the A:
body, to take steps required by the circumstances, and shall
carefully take care of the papers and effects which may be Bill of Lading Charter Party
found on board belonging to the deceased, observing the Private receipt which the Entire or complete contract
previsions of case No. 10 of Art. 612 with regard to captain gives to accredit that
members of the crew. such goods belong to such
persons;
Art. 612. The following duties are inherent in the office of It is a real contract; it exists It is a consensual contract
captain: only after delivery of the which can be dissolved by
xxx goods to be transported is means of indemnity for
10. To put in a safe place and keep all the papers and made losses and damages
belongings of any members of the crew who might die on the
vessel, drawing up a detailed inventory, in the presence of 1. Each bill of lading is a contract and the parties
passengers as witnesses, and, in their absence, of members of thereto are bound by its terms but subject to the
the crew. provisions of Art. 1733 to 1759 of the new civil code.
xxxx 2. The shipper has the sole responsibility for the
quantity, description and condition of the cargoes
VI. Bills of Lading shipped in container vans, each container van
considered as a unit of transport. Containerization is
Art. 706. The captain and the shipper shall have the in line with the government policy, resulting in the
obligation of drawing up the bill of lading, in which shall be laudable decongestion of ports of entry.
stated: 3. Containerization was devised to facilitate the
expeditious and economic loading, carriage, and
1. The name, registry, and tonnage of the vessel. unloading of cargoes. Under this system, the shipper
2. The name of the captain and his domicile. loads his cargoes in a specially designed container,
3. The port of loading and that of unloading. seals the container and delivers it to the carrier for
4. The name of the shipper. transportation. The carrier does not participate in
5. The name of the consignee, if the bill of lading is the counting of the merchandise for loading into the
issued in the name of a specified person. container, the actual loading thereof nor the sealing
6. The quantity, quality, number of packages, and of the container. Having no actual knowledge of the
marks of the merchandise. kind, quantity or condition of the contents of the
7. The freightage and the primage stipulated. container, the carrier issues the corresponding bill of
lading based on the declaration of the shipper.
YtvâÄàtw wx WxÜxv{É V|ä|Ä 71
UNIVERSITY OF SANTO TOMAS
NOTES ON LAW ON TRANSPORTATION
Kenneth & King Hizon (2A)- UST Faculty of Civil Law
4. The bill of lading describes the cargo as a container whether executed or still to be performed. As long
simply and states the contents of the container as the subject matter thereof is maritime service or a
either as advised by the shipper or prefaced by the maritime transaction, then it is embraced within
phrase “said container.” such a concept.
f. An action based upon an oral contract for the
Q: What is the status of a stipulation that the carrier’s transportation of goods by water, the same is an
liability for loss or damage from any cause or for any reason action in admiralty which comes within the original
is limited to a specified sum? jurisdiction of the CFI irrespective of the value of the
cargo. Admiralty jurisdiction extends to all maritime
A: It is invalid being contrary to public policy unless the torts.
carrier could prove that it is reasonable and just under the
circumstances, and has been fairly and freely agreed upon. Q: Is an action based on oral contract of transportation of
goods by sea an action on admiralty, under the jurisdiction
Q: Can a defective and irregular bill of lading be cured by of the CFI or RTC?
other complementary documents?
A: It is an action in admiralty which comes under the original
A: If the bill of lading was defective and irregular upon its face and exclusive jurisdiction of the RTC irrespective of the value
in that it did not describe the weight or measurement of the of the cargo.
merchandise covered by it, such deficiency or defect was
cured by the insurance policy and the commercial invoice Q: Is an action brought for the enforcement of a maritime
wherein the missing details appeared with exactness, it being lien, on cargoes due to non-payment of a charter hire fee an
understood that such documents formed a group of action “quasi in rem”?
complementary documents, that defect of one of which being
deemed supplied by the other. A: Since the action is brought principally for the enforcement
of maritime lien against the property of defendants, in the
Q: What is the status of a stipulation limiting jurisdiction of nature and character of a proceeding “quasi in rem,”
courts of the Philippines? jurisdiction over one of the defendants is not essential. As
such, properties allegedly owned by him are primarily made
A: A stipulation in a BOL emitted in a foreign country to the liable.
effect that all disposition arising under the contract shall be
decided exclusively in the courts of the country wherein the WHEN ACTION NOT IN ADMIRALTY
contract is made cannot have the effect of defeating the
jurisdiction of the courts of the Philippines. Q: When is an action not admiralty?
a. A breach of contract of affreightment, whether A: A suit to recover amount not exceeding P2000 on account
evidenced by a bill of lading or a charter party is a of shortages and damages alleged to have arisen after the
case of admiralty. Admiralty has jurisdiction over all goods, which were shipped to the Philippines from the US,
maritime contracts, in whatever form, wherever, has been unloaded at the port, does not involve admiralty
they were executed or are to be performed, but not jurisdiction of the CFI.
over non-maritime contracts.
b. Cases of admiralty falls within the original A shipper may be held liable for freightage on BOL signed by
jurisdiction of the CFI to which the jurisdiction of the another person where the shipper appears as shipper or
justice of peace courts (including municipal courts) consignee, BOL where persons other than the former appear
does not extend and if the latter courts take as shipper, and bills of lading not signed by the shipper where
cognizance of such cases, they may be restrained by the testimonial evidence shows that the goods shipped
the writ of prohibition. actually belong to him as shipper.
c. All admiralty and maritime actions, where the
demand or claim exceeds P20,000.00 shall be under Art. 707 Four true copies of the original bill of lading shall
the exclusive original jurisdiction of the RTC. be made, and all of them shall be signed by the captain and
d. To give admiralty jurisdiction over a contract as by the shipper. Of these copies the shipper shall keep one
maritime, such contract must relate to the trade and and send another to the consignee; the captain shall take
business of the sea, it must be essentially and fully two, one for himself and the other for the ship agent.
maritime in its character; it must provide for
maritime services, maritime transactions or There may also be drawn as many copies of the bill of lading
maritime casualties. as may be considered necessary by the parties; but, when
e. The admiralty jurisdiction of a CFI extend over all they are issued to order or to bearer, there shall be stated in
maritime contracts in whatever form entered into, all the copies, be they the first four or the subsequent ones,
Q: Is a BOL issued to a specified person negotiable? Can it be The above article refers to the duty of the holder of the BOL
negotiated by indorsement? to present it to the captain before the unloading of the cargo
commenced.
A: Title to the goods described in the BOL running to the Art. 707 and 711 authorize the inference that the carrier is
consignee and not to his order nor to bearer cannot be not expected to give notice of the arrival of the goods
transferred by means of a mere indorsement by the because:
consignee directing a delivery of the goods and not
purporting to convey the property but may be transferred by 1. Requiring the shipper to send to the consignee a
the holder by delivery to a purchaser or done subject to the copy of a BOL, implies that notice of the shipment
provisions of Art. 1514 of NCC. shall come that way to the latter;
2. Presuming that the consignee has been so notified
The rightful holder of BOL drawn to the order of the shipper, tacitly, imposes on him the duty to watch for the
with drafts attached for collection, all of them properly arrival of the goods and compels him to take delivery
indorsed, has the legal title to the shipment covered by the therof before are unloaded under the penalty of
said documents and is entitled to maintain an action as real having to pay storage charges.
party in interest to recover the same.
Art. 706, specifying the data to be written on the BOL, does
C.I.F. PRICE not require the address of the consignee to be set further
therein. Hence, it would be absurd to impose the obligation
Q: Explain a C.I.F. price to notify where the address of the person to be notified is not
known but not until the consignee has been advised of the
A: Under an ordinary C.I.F. agreement, delivery to the buyer arrival of the goods and has had reasonable opportunity
is complete upon delivery of the goods to the carrier and thereafter to remove them or otherwise dispose of them, the
tender of the shipping and other documents required by the extraordinary liability of the common carrier continues to be
contract and the insurance policy taken in the buyer’s behalf. operative even during the time the goods are stored in a
warehouse of the carrier at the place of destination.
Art. 709 A bill of lading drawn up in accordance with the
provisions of this title shall be proof as between those inter- Art. 712 The captain may not himself change the destination
ested in the cargo and between the latter and the insurers, of the goods. In admitting this change at the instance of the
evidence to the contrary being reserved by the latter. shipper he must first take up the bills of lading he may have
issued, under penalty of being liable for the cargo to the
Art. 710 If the bills of lading do not agree, and no change or legitimate holder of the same.
erasure appears in any of them, those in the possession of
the shipper or consignee signed by the captain shall be The article has for its objection the prevention of frauds
proof against the latter or ship agent in favor of the which the captain of the vessel may commit by changing the
consignee or the shipper; and those possessed by the destination of the goods.
captain or ship agent signed by the shipper shall be proof
against the shipper or consignee in favor of the captain or CHANGE OF DESTINATION OF GOODS
ship agent.
Q: Can the destination of the goods be changed without
surrendering all the copies of the BOL to the captain?
A: The destination of the goods cannot be changed without Art. 718 After the cargo has been delivered, the bills of
the shipper returning to the captain all the copies signed by lading signed by the captain, or at least the copy under
him, otherwise the latter will be liable for the goods to the which the delivery is made, shall be returned to him with
legitimate holder of the BOL. the receipt for the goods mentioned therein.
Art. 713 If before the delivery of the cargo a new bill of The delay on the party of the consignee shall make him
lading should be demanded of the captain, on the allegation liable for damages which such delay may cause the captain.
that the failure to present the previous ones is on account of
their loss or for any other just cause, he shall be obliged to In as much as it is not easy to collect all the copies of the BOL
issue it, provided that security for the value of the cargo is issued and to avoid this inconvenience, it will be sufficient to
given to his satisfaction; but without changing the return to the captain only one of the copies thereof but with
consignment and stating therein the circumstances receipt for the goods made by the consignee.
prescribed in the last paragraph of Article 707, when dealing
with the bills of lading referred to therein, under penalty, Section I
should he not do so, of being liable for said cargo if LOANS ON BOTTOMRY AND RESPONDENTIA
improperly delivered through his fault.
Art. 719. A loan in which, under any condition whatever,
Art. 714 If before the vessel puts to sea the captain should the repayment of the sum loaned and of the premium
die or should cease to hold his position through any cause, stipulated depends upon the safe arrival in port of the goods
the shipper shall have the right to demand of the new on which it is made, or of the price they may receive in case
captain the ratification of the first bills of lading, and the of accident, shall be considered a loan on bottomry or
latter must do so, provided that all the copies previously respondentia.
issued be presented or returned to him, and it should
appear from an examination of the cargo that they are loan on bottomry
correct.
Q: What is a loan on bottomry?
The expenses arising from the examination of the cargo
shall be for the account of the ship agent, without prejudice A: A contract in the nature of a mortgage, by which the
to his right of action against the first captain, if he ceased to owner of the ship borrows money for the use, equipment and
be such through his own fault. Should said examination not repair of the vessel and for a definite term, and pledges the
be made, it shall be understood that the new captain ship (or the keel or bottom of the ship) as a security for its
accepts the cargo as it appears from the bills of lading. repayment, with maritime or extraordinary interest on
account of the maritime risks to be borne by the lender, it
Art. 715 Bills of lading will give rise to a most summary being stipulated that if the ship be lost in the course of the
action or judicial compulsion, according to the case, for the specific voyage or during the limited time, by any of the perils
delivery of the cargo and the payment of the freight and the enumerated in the contract, the lender shall also lose his
expenses thereby incurred. money.
Art. 716 If several persons should present bills of lading loan on respondentia
issued to bearer or to order, indorsed in their favor,
demanding the same goods, the captain shall prefer, in Q: What is a loan on respondentia?
making delivery, the person presenting the copy first issued,
except when the subsequent one was issued on proof of the A: When the loan is not made upon the ship, but on the
loss of the first one, and both are presented by different goods laden on board, and which are to be sold, or exhanged
persons. in the course of the voyage, the borrower’s personal
responsibilty is deemed the principal security for the
In such case, as well as when only second or subsequent performance of the contract which is therefore called
copies, issued without that proof, are presented, the captain respondentia. And in a loan upon respondentia, the lender
shall apply to the judge or court, so that he may order the must be paid his principal and interest, thought the ship
deposit of the goods, and their delivery, through his perishes, provided that the goods are saved. In most other
mediation, to the proper person. respects, the contracts of bottomry and of respondentia
stand substantially upon the same footing.
Art. 717 The delivery of the bill of lading shall produce the
cancellation of all the provisional receipts of prior date LOAN ON BOTTOMRY v. LOAN ON RESPONDENTIA
issued by the captain or his subordinates for partial
deliveries of the cargo which may have been made.
1. By means of a public instrument. The majority of the commentators opine that the requisites
2. By means of a policy signed by the contracting mentioned in the above article are indispensable under
parties and the broker taking part therein. penalty of being void, excepting those indicated in Nos. 1 and
3. By means of a private instrument. 5, as to them the opinions are divided.
Under whichever of these forms the contract is executed, it But the doubts would have been avoided, if in the article
shall be entered in the certificate of the registry of the another paragraph is added providing that the instrument
vessel and shall be recorded in the registry of vessels, lacking any of those requisites will be considered a simple
without which requisites the credits of this kind shall not loan of money with the current interest, without any lien on
have, with regard to other credits, the preference which, the effects for which it is given.
according to their nature, they should have, although the
obligation shall be valid between the contracting parties. Art. 722. The contracts may be made to order, in which case
they shall be transferable by indorsement, and the indorsee
The contracts made during a voyage shall be governed by shall acquire all the rights and shall incur all the risks
the provisions of Articles 583 and 611, and shall be effective corresponding to the indorser.
with regard to third persons from the date of their
execution, if they should be recorded in the registry of Art. 723. Loans may be made in effects and in goods, by
vessels of the port of registry of the vessel before the lapse fixing their value in order to determine the principal of the
of eight days following its arrival. If said eight days should loan.
elapse without the record having been made in the registry
of vessels, the contracts made during the voyage of a vessel Art. 724. The loans may be constituted jointly or separately:
shall produce no effect with regard to third persons, except
from the day and date of their inscription. 1. On the hull of the vessel.
2. On the rigging.
In order that the policy of the contracts executed in accor- 3. On the equipment, provisions, and fuel.
dance with No.2 may have binding force, they must conform 4. On the engine, if the vessel is a steamer.
to the registry of the broker who took part therein. With 5. On the merchandise loaded.
respect to those executed in accordance with No. 3 the
acknowledgment of the signature shall be required. If the loan is constituted on the hull of the vessel, the
rigging, equipment and other goods, provisions, fuel, steam
Contracts which are not reduced in writing shall not give rise engines, and the freightage earned during the voyage on
to judicial action. which the loan is made, shall also be considered as included
in the liability for the loan.
Q: What are the effects of registration?
If the loan is made on the cargo, all that which constitutes
A: the same shall be subject to the repayment; and if on a
particular object of the vessel or of the cargo, only the
1. the loan shall have, with regard to other credits, object concretely and specifically mentioned shall be liable.
the preference which, according to its nature, it
should have (Art. 580 - 8th in the order of Art. 725. No loans on bottomry may be made on the
preference) salaries of the crew or on the profits expected.
2. effective against third persons from the time of
execution/registration Q: What is the reason for the above rule?
Art. 721. In a contract on bottomry or respondentia the A: The salaries of the crew are not capital of the shipowner,
following must be stated: nor are future profits commercial effects.
ject
1. The kind, name, and registry of the vessel. Art. 726. If the lender should prove that he loaned an
2. The name, surname, and domicile of the captain. amount larger than the value of the object liable for the
3. The names, surnames, and domiciles of the person bottomry loan, on account of fraudulent measures
giving and the person receiving the loan.
The surplus principal shall be returned with legal interest for INSTANCES WHEN LOAN ON BOTTOMRY OR RESPONDENTIA
the entire time required for repayment. IS CONSIDERED AS SIMPLE LOAN
Q: A, shipowner, entered into a contract of loan on Q: What are the instances in which a loan on bottomry or
bottomry, with B for the amount of P500,000.00. It was respondentia may be considered a simple loan only?
proven by B that the value of the lost vessel is P300,000.00
on appraisal by experts and A employed fraudulent means A:
in borrowing money. Is the contract of bottomry valid? May
B still recover from A in spite of the total loss of the vessel? a. If the amount loaned is proved to be a larger
than the value of the object liable for the loan
A: Yes, the contract of loan on bottomry is valid but only for on account of fraudulent means employed by
the amount of P300,000.00 which is the appraised value of the borrower, the surplus principal is considered
the vessel loan. as simple loan to be returned with legal interest.
b. If the full amount of the loan given in order to
B can still recover the amount of P200,000.00, the surplus load the vessel should not be used for the cargo,
principal from A, with legal interest for the entire time or given on the goods if all of them could not
required for the payment. have been loaded, the balance is considered as
simple loan to be returned before starting the
Art. 727. If the full amount of the loan contracted in order voyage.
to load the vessel should not be used for the cargo, the c. It the effects on which the loan is taken be not
balance shall be returned before clearing. subjected to risk, the principal shall be
considered loan to be returned with legal
The same procedure shall be observed with regard to the interest.
goods taken as loan, if they were not loaded.
Art. 730. Loans made during the voyage shall have prefer-
Q: What is the reason for the law? ence over those made before the clearing of the vessel, and
they shall be graduated in the inverse order of their dates.
A: The rule of this article is reasonable because the amount
to which it refers has not been applied, voluntarily or The loans for the last voyage shall have preference over
involuntarily, for the purpose of the contract, and because by prior ones.
this way other contracts of different nature are avoided in
being included under the name of loan on bottomry. Should several loans have been made at the same port of
arrival under stress and for the same purpose, all of them
Art. 728. The loan which the captain takes at the point of shall be paid pro rata.
residence of the owners of the vessel shall only affect that
part thereof which belongs to the captain, if the other Q: What is the reason for the rule?
owners or their agents should not have given their express
authorization therefor or should not have taken part in the A: By virtue of these subsequent loans, the provisions ones
transaction. could exist and subsist, and without the former, the loans
with the vessel and its effects would have gone into the
If one or more of the owners should be requested to furnish bottom of the sea.
the amount necessary to repair or provision the vessel, and
they should not do so within twenty-four hours, the interest Q: The shipagent of S/S “Panay” which is making voyage
which the parties in default may have in the vessel shall be from Manila to Zamboanga contracted loan on the ship in
liable for the loan in the proper proportion. the ff. order: at Manila before clearing the vessel,
P20,000.00; Iloilo, the next port of embarkation, P10,000; at
Outside of the residence of the owners, the captain may Cebu, the port of embarkation preceding the final
contract loans in accordance with the provisions of Articles destination of the vessel, P100,000.00, form A,B, and C for
583 and 611. repair of the vessel to continue its voyage. Upon arrival at
Zamboanga, the vessel which was badly damaged and
Art. 729. Should the goods on which money is taken not be unable to make return was sold for P110,000.00. State the
subjected to risk, the contract shall be considered a simple disposition of the proceeds of the sale.
loan, with the obligation on the part of the borrower to
A: The bottomry taken at Zamboanga shall have priority of Art. 734. In case of shipwreck, the amount for the payment
preference of loans made during the voyage shall be of the loan shall be reduced to the reduced to the proceeds
graudated, in the inverse order of their dates. But the loan of the effects saved, after deducting the costs of the salvage
taken at Romblon on merchandise although named bottomry
loan is not in fact a loan bottomry but a loan on If the loan should be on the vessel or any of her parts, the
respondentia, and it stands on its sole preferential right on freight earned during the voyage for which said loan was
the merchandise independent of the bottomry loans taken at contracted shall also be liable for its payment, as far as it
Zamboanga and Iloilo. In the contract made in Iloilo, being may reach.
constituted on the hull of the loan, rigging, equipment, and
other effects, provisions, fuel, steam engines, and the freight Art. 735. If the same vessel or cargo should be the object of
earned during the voyage on which the loan is made. a loan on bottomry or respondentia and marine insurance,
the value of what may be saved in case of shipwreck shall be
Art. 731. The actions pertaining to the lender shall be divided between the lender and the insurerm in proportion
extinguished by the absolute loss of the goods on which the to the legitimate interest of each one, taking into
loan was made, if it arose from an accident of the sea at the consideration, for this purpose only, the principal with
time and during the voyage designated in the contract, and respect to the loan, and without prejudice to the right of
it is proven that the cargo was on board; but this shall not preference of other creditors in accordance with Art. 580.
take place if the loss was caused by the inherent defect of
the thing, or through the fault or malice, of the borrower, or Art. 736. If there should be delay in the repayment of the
barratry on the part of the captain, or if it was caused by principal and premiums of the loan, only the former shall
damages suffered by the vessel as a consequence of being bear legal interest.
engaged in contraband, or if it arose from having loaded the
merchandise on a vessel different from that designated in SECTION III
the contract, unless this change should have been made by MARINE INSURANCE
reason of force majeure. Proof of the loss as well as of the
existence of the vessel of the goods declared to the lender NOTE: Arts. 737 to 805 of the Code of Commerce have been
as the object of the loan is incumbent upon him who repealed by the “Insurance Act.”
received the loan.
A: Under this article, the money lender has agreed to run the
proper risks of the sea, but not those caused by the captain
or by the crew. The simple barratry of the captain having
been not distinguished from the fraudulent one, it must be
understood that the exception includes both of them.
The foregoing enumerated expenses may be considered also A: An extraordinary or accidental expense incurred during the
as averages when there is an express agreement including voyage in order to preserve the cargo, vessel or both, and all
them as averages damages or deterioration suffered by the vessel from
departure to the port of destination, and to the cargo from
Art. 808. Averages shall be: the port of loading to the port of consignment.
1. There must be a common danger- both the ship and Q: The steamer X en route from Masbate runs into a storm
cargo are subject to the same danger whether and the captain, as a measure of urgent necessity, jettisons
during the voyage, or in the port of loading or a part of cargo to lighten the vessel. What kind of average is
unloading; that the danger arises from accidents of this?
the sea, dispositions of the authority, or faults of
men A: This is a kind of general or gross average. All the persons
2. For the common safety, part of the vessel or cargo having an interest in the vessel and her cargo at the time of
or both is sacrificed deliberately the occurrence of the average shall contribute.
3. From the expenses or damages caused follows the
successful saving of the vessel and cargo. PROCEDURE FOR GROSS AVERAGE
4. The expenses or damages should have been incurred
or inflicted after taking proper legal steps and Art. 813. In order to incur the expenses and cause the
authority. damages corresponding to gross average, there must be a
resolution of the captain, adopted after deliberation with
Q: The vessel S/S Oriental left Manila bound for Cebu, with the sailing mate and other officers of the vessel, and after
stop-over at Tacloban. Upon leaving the latter port but still hearing the persons interested in the cargo who may be
within its waters, the ship ran aground and could not move present.
by its own power; hence, the shipowner had it refloated by
In the first case the minutes shall be signed by all the Art. 816. In order that the goods jettisoned may be included
persons present who could do so before taking action, if in the gross average and the owners thereof be entitled to
possible; and if not, at the first opportunity. In the second indemnity, it shall be necessary in so far as the cargo is con-
case, it shall be signed by the captain and by the officers of cerned that their existence on board be proven by means of
the vessel. the bill of lading; and with regard to those belonging to the
vessel, by means of the inventory prepared before the
In the minutes, and after the resolution, shall be stated in departure, in accordance with the first paragraph of Article
detail all the goods jettisoned, and mention shall be made 612.
of the injuries caused to those kept on board. The captain
shall be obliged to deliver one copy of these minutes to the Art. 816. In order that the goods jettisoned may be included
maritime judicial authority of the first port he may make, in the gross average and the owners thereof be entitled to
within twenty- four hours after his arrival, and to ratify it indemnity, it shall be necessary in so far as the cargo is con-
immediately under oath. cerned that their existence on board be proven by means of
the bill of lading; and with regard to those belonging to the
Art. 815. The captain shall direct the jettison, and shall vessel, by means of the inventory prepared before the
order the goods cast overboard in the following order: departure, in accordance with the first paragraph of Article
612.
1. Those which are on deck, beginning with those
which embarrass the maneuver or damage the Art. 817. If in the lightening a vessel on account of a storm,
vessel, preferring, if possible, the heaviest ones in order to facilitate its entry into a port or roadstead, part
with the least utility and value. of her cargo should be transferred to lighters or barges and
2. Those which are below the upper deck, always be lost, the owner of said part shall be entitled to
beginning with those of the greatest weight and indemnity, as if the loss had originated from a gross
smallest value, to the amount and number average, the amount thereof being distributed between the
absolutely indispensable. vessel and cargo from which it came.
If, on the contrary, the merchandise transferred should be
SIMPLE v. GROSS AVERAGE saved and the vessel should be lost, no liability may be
demanded of the salvage.
Q: Distinguish general average and simple or particular
average. Art. 818. If, as a necessary measure to extinguish a fire in
port, roadstead, creek, or bay, it should be decided to sink
A: any vessel, this loss shall be considered gross average, to
which the vessels saved shall contribute.
Section II A:
ARRIVALS UNDER STRESS
1. Captain should determine during the voyage if
Art. 819. If during the voyage the captain should believe there is well founded fear of seizure, privateers
that the vessel cannot continue the trip to the port of and other valid grounds;
destination on account of the lack of provisions, well- 2. Captain shall assemble the officers and summon
founded fear of seizure, privateers, or pirates, or by reason the persons interested in the cargo who may
of any accident of the sea disabling it to navigate, he shall attend the meeting but without a right to vote;
assemble the officers and shall summon the persons 3. The officers shall determine and agree if there is
interested in the cargo who may be present, and who may well-founded reason after examining the
attend the meeting without the right to vote; and if, after circumstances. The captain shall have the
examining the circumstances of the case, the reason should deciding vote;
be considered well-founded, the arrival at the nearest and 4. The agreement shall be drafted and the proper
most convenient port shall be agreed upon, drafting and minutes shall be signed and entered in the log
entering the proper minutes, which shall be signed by all, in book;
the log book. 5. Objections and protests shall likewise be
entered in the minutes.
The captain shall have the deciding vote, and the persons
interested in the cargo may make the objections and LAWFUL ARRIVAL UNDER STRESS
protests they may deem proper, which shall be entered in
the minutes in order that they may make use thereof in the Art. 820. An arrival shall not be considered lawful in the
manner they may consider advisable. following cases:
Arrival under stress 1. If the lack of provisions should arise from the
failure to take the necessary provisions for the
Q: What is arrival under stress? voyage according to usage and custom, or if they
should have been rendered useless or lost through
A: Also known as “ARRIBADA.” It is the arrival of a vessel at bad stowage or negligence in their care.
the nearest and most convenient port, if during the voyage 2. If the risk of enemies, privateers, or pirates should
the vessel cannot continue the trip to the port of destination not have been well known, manifest, and based on
on account of lack of provisions, well-founded fear of seizure, positive and provable facts.
privateers or pirates, or by reason of any accident of the sea 3. If the defector the vessel should have arisen from
disabling it to navigate. the fact that it was not repaired, rigged, equipped,
and prepared in a manner suitable for the voyage,
Q: What are the legitimate causes for such arrival? or from some erroneous order of the captain.
4. Whenever malice, negligence, want of foresight, or
A: lack of skill on the part of the captain exists in the
act causing the damage.
1. Lack of provisions
2. Well-founded fear of seizure, privateers or pirate NOTE: This article enumerates the instances when arrival
3. By reason of any accident of the sea disabling it to under stress is improper.
navigate
In a foreign port, it shall be the duty of the Filipino consul, SECTION III
where there is one, to give the authorization. COLLISIONS
In the first case, the expenses shall be for the account of the Art. 826. If a vessel should collide with another, through the
ship agent or owner, and in the second, they shall be fault, negligence, or lack of skill of the captain, sailing mate,
chargeable against the owners of the merchandise for or any other member of the complement, the owner of the
whose benefit the act was performed. vessel at fault shall indemnify the losses and damages
suffered, after an expert appraisal.
If the unloading should take place for both reasons, the
expenses shall be divided proportionately between the Q: What is collision?
value of the vessel and that of the cargo.
A: In its strict sense, collision means the impact of 2 vessels
REQUISITES FOR UNLOADING OF CARGO both moving and is distinguished from allusion, which
designates the striking of a moving vessel against one that is
Q: What are the requisites for the captain to unload the stationary.
cargo arriving under stress?
Art. 827. If the collision is imputable to both vessels, each Art. 830. If a vessel should collide with another through
one shall suffer its own damages, and both shall be fortuitous event or force majeure, each vessel and its cargo
solidarily responsible for the losses and damages occasioned shall bear its own damages.
to their cargoes.
If A collided with B because of strong hurricane which caused
If vessels A and B collided with each other through the fault the collision, each owner of the respective vessel and his
of their respective captains, each owner of the respective cargo shall suffer their respective damage
vessel shall suffer his own damage but both shall be solidarily
liable for the damage occasioned to their cargoes Art.831. If a vessel should be forced by a third vessel to
collide with another, the owner of the third vessel shall
Art. 828. The provisions of the preceding article are indemnify the losses and damages caused, the captain
applicable to the case in which it cannot be determined thereof being civilly liable to said owner.
which of the two vessels has caused the collision.
If A which was properly anchored at the port collided with COMPETENT PERSONS WHO CAN ADMIT THE PROTEST
and caused damage to vessel B, because of storm or force
majeure, vessels A and B shall suffer their own respective Q: Who are the competent persons who can admit protest?
damage. The injury occasioned in this case shall be
considered as a particular average of the vessel run into. A:
1. Justice of Peace, and in his absence
Art. 833. A vessel which, upon being run into, sinks 2. Auxiliary justice of peace
immediately, as well as that which, having been obliged to
make a port to repair the damages caused by the collision, is In case of an auxiliary justice of peace the ff. are the
lost during the voyage or is obliged to be stranded in order presumptions:
to be saved, shall be presumed as lost by reason of collision.
a. The justice of peace was absent
Art. 834. If the vessels colliding with each other should have b. Auxillary had authority to act
pilots on board discharging their duties at the time of the
collision, their presence shall not exempt the captains from Art. 836. With respect to damages caused to persons or to
the liabilities they incur, but the latter shall have the right to the cargo, the absence of a protest may not prejudice the
be indemnified by the pilots, without prejudice to the persons interested who were not on board or were not in a
criminal liability which the latter may incur. condition to make known their wishes.
Art. 835. The action for the recovery of losses and damages EXCUSABLE CONDITION OF A PERSON FOR MAKING
arising from collisions cannot be admitted if a protest or PROTEST
declaration is not presented within twenty-four hours
before the competent authority of the point where the A person who on account of a collision has suffered physical
collision took place, or that of the first port of arrival of the injuries sufficient to keep him in a hospital for many months
vessel, if in Philippine territory and to the consul of the is excused from the requirement to make protest within 24
Philippines, if it occurred in a foreign country. hours from collision.
WHEN PROTEST IS A CONDITION PRECEDENT Art. 837. The civil liability incurred by the shipowners in the
cases prescribed in this section, shall be understood as
Q: What are the cases where protest within 24 hours is limited to the value of the vessel with all its appurtenances
required as condition precedent? and freightage earned during the voyage.
A: The responsibility of the owner or agent of a vessel for the Art. 838. When the value of the vessel and her
damage caused by collision is extinguished where the said appurtenances should not be sufficient to cover all the
vessel is sunk and totally lost by reason of the collusion. liabilities, the indemnity due by reason of the death or
Where, however, such vessel is insured and the insurance is injury of persons shall have preference.
collected by the owner, the insurance substitutes the vessel
and the owner becomes responsible for the injuries caused to
the extent of the insurance collected. If the vessel was not Art. 839. If the collision should take place between
insured, then the freights earned shall answer for the civil Philippine vessels in foreign waters, of if having taken place
liability of the ship-owner. in the open seas, and the vessels should make a foreign
port, the Filipino consul in said port shall hold a summary
Q: If the vessel at fault has been sunk and its owner investigation of the accident, forwarding the proceedings to
collected insurance thereron, would this fact make any the Secretary of the Department of Foreign Affairs for
difference in his liability? continuation and conclusion.
The owners of the cargo shall defray all the expenses of this Should they not be present or should they have no legal
arrival as well as the payment of the freightage which, after representative, the liquidation shall be made by the consul
taking into consideration the circumstances of the case, may in a foreign port, and where there is none, by the competent
be fixed by agreement or by a judicial decision. judge or court, according to the laws of the country and for
the account of the proper party.
Art. 845. If on the vessel there should be no person
interested in the cargo who can pay the expenses and When the representative is a person well known in the place
freightage corresponding to the salvage, the competent where the liquidation is made, his intervention shall be
judge or court may order the sale of the part necessary to admitted and shall produce legal effects, even though he be
cover the same. This shall also be done when its authorized only by a letter of the ship agent, the shipper, or
preservation is dangerous, or when in a period of one year it the insurer.
should not have been possible to ascertain who are its
legitimate owners. Art. 848. Claims for averages shall not be admitted if they
do not exceed 5 per cent of the interest which the claimant
In both cases the proceedings shall be with the publicity and may have in the vessel or in the cargo if it be gross average,
formalities prescribed in Article 579, and the net proceeds of and 1 per cent of the goods damaged if particular average,
the sale shall be safely deposited, in the discretion of the deducting in both cases the expenses of appraisal, unless
judge or court, so that they may be delivered to the there is an agreement to the contrary.
legitimate owner thereof.
Art. 849. The damages, averages, loans on bottomry and
TITLE V respondentia and their premiums, and any other losses,
PROVISIONS COMMON TO ALL KINDS OF AVERAGES shall not earn interest by reason of delay until after the
lapse of the period of 3 days, to be counted from the day on
SECTION I which the liquidation may have been concluded and
PROOF OF LIQIIDATION OF AVERAGES communicated to the persons interested in the vessel, in the
cargo, or in both at the same time.
Art. 846. Those interested in the proof and liquidation of
averages may mutually agree and bind themselves at any Art. 850. If by reason of one or more accidents of the sea,
time with regard to the liability, liquidation and payment particular and gross averages of the vessel, of the cargo, or
thereof: of both, should take place on the same voyage, the
expenses and damages corresponding to each average shall
In the absence of agreements, the following rules shall be be determined separately in the port where the repairs are
observed: made, or where the merchandise is discharged, sold, or
utilized.
1. The proof of the average shall take place in the port
where the repairs are made, should any be For this purpose the captains shall be obliged to demand of
necessary, or in the port of unloading. the expert appraisers and of the contractors making the
2. The liquidation shall be made in the port of repairs, as well as of those appraising and taking part in the
unloading, if it is a Philippine port. unloading, repair, sale, or utilization of the merchandise,
3. If the average occurred outside of the jurisdictional that in their appraisements or estimates and accounts they
waters of the Philippines, or the cargo has been set down separately and accurately the expenses and
sold in a foreign port by reason of an arrival under damages pertaining to each average, and in those of each
stress, the liquidation shall be made in the port of average those corresponding to the vessel and to the cargo,
arrival. also stating separately whether or not there are damages
4. If the average has occurred near the port of proceeding from inherent defect of the thing and not from
destination, so that said port can be made, the accident of the sea; and in case there should be expenses
proceedings mentioned in rules 1 and 2 shall be common to the different averages and to the vessel and its
held there. cargo, the amount corresponding to each must be estimated
and stated distinctly.
Art. 847. In the case where the liquidation of the averages is
made privately by virtue of agreement, as well as when a
judicial authority intervenes at the request of any of the
parties interested who do not agree thereto, all of them
Art. 869. The experts whom the court or the persons CHAPTER II
interested may appoint, as the case may be, shall proceed DOCUMENTS OF CARRIAGE
with the examination and appraisement of the averages in Section I - Passenger Ticket
the manner prescribed in Arts. 853 and 854, Rules 2 to 7, Article 3
insofar as they are applicable.
1. For the carriage of passengers the carrier must deliver an
passenger ticket which shall contain the following
CONVENTION FOR THE UNIFICATION OF CERTAIN RULES particulars:-
RELATING TO INTERNATIONAL CARRIAGE BY AIR, SIGNED AT
WARSAW ON 12 OCTOBER 1929 (a) the place and date of issue;
(WARSAW CONVENTION) (b) the place of departure and of destination;(c) the
agreed stopping places, provided that the carrier
may reserve the right to alter the stopping places in
CHAPTER I case of necessity, and that if he exercises that right,
SCOPE – DEFINITIONS the alteration shall not have the effect of depriving
Article 1 the carriage of its international character;
(c) the name and address of the carrier or carriers;
1. This Convention applies to all international carriage of (d) a statement that the carriage is subject to the rules
persons, luggage or goods performed by aircraft for relating to liability established by this Convention.
Article 10 Article 13
1. The consignor is responsible for the correctness of the 1. Except in the circumstances set out in the preceding
particulars and statements relating to the goods which Article, the consignee is entitled, on arrival of the goods
he inserts in the air consignment note. at the place of destination, to require the carrier to hand
2. The consignor will be liable for all damage suffered by over to him the air consignment note and to deliver the
the carrier or any other person by reason of the goods to him, on payment of the charges due and on
irregularity, incorrectness or incompleteness of the said complying with the conditions of carriage set out in the
particulars and statements. air consignment note.
2. Unless it is otherwise agreed, it is the duty of the carrier
Article 11 to give notice to the consignee as soon as the goods
arrive.
1. The air consignment note is prima facie evidence of the 3. If the carrier admits the loss of the goods, or if the goods
conclusion of the contract, of the receipt of the goods have not arrived at the expiration of seven days after the
and of the conditions of carriage. date on which they ought to have arrived, the consignee
2. The statements in the air consignment note relating to is entitled to put into force against the carrier the rights
the weight, dimensions and packing of the goods, as well which flow from the contract of carriage.
as those relating to the number of packages, are prima
facie evidence of the facts stated; those relating to the Article 14
quantity, volume and condition of the goods do not
constitute evidence against the carrier except so far as The consignor and the consignee can respectively enforce
they both have been, and are stated in the air all the rights given them by Articles 12 and 13, each in his
consignment note to have been, checked by him in the own name, whether he is acting in his own interest or in the
presence of the consignor, or relate to the apparent interest of another, provided that he carries out the
condition of the goods. obligations imposed by the contract.
Article 12 Article 15
1. Subject to his liability to carry out all his obligations 1. Articles 12, 13 and 14 do not affect either the relations of
under the contract of carriage, the consignor has the theconsignor or the consignee with each other or the
right to dispose of the goods by withdrawing them at the mutual relations of third parties whose rights are derived
aerodrome of departure or destination, or by stopping either from the consignor or from the consignee.
them in the course of the journey on any landing, or by 2. The provisions of Articles 12, 13 and 14 can only be
calling for them to be delivered at the place of varied byexpress provision in the air consignment note.
destination or in the course of the journey to a person
other than the consignee named in the air consignment Article 16
note, or by requiring them to be returned to the
aerodrome of departure. He must not exercise this right 1. The consignor must furnish such information and
of disposition in such a way as to prejudice the carrier or attach to theair consignment note such documents as
APPLICATION OF WARSAW It is the period during which the baggage or goods are in the
charge of the carrier, whether in an airport or on board an
Q: WHEN IS THE WARSAW CONVENTION APPLICABLE? aircraft, or in the case of landing outside an airport, in any
place whatsoever
The Convention is applicable to:
1. International transport by air PERIOD FOR CLAIM FOR DAMAGES
2. Transport of persons, baggage, or goods
Q: When must an Action for damages be brought at the
§ The WC shall also apply to fortuitous transportation by option of the plaintiff?
aircraft performed by an air transportation enterprise.
A: It must be brought, either:
“INTERNATIONAL TRANSPORTATION BY AIR” UNDER THE
WARSAW CONVENTION 1. Before the court of the domicile of the carrier;
2. Court of principal place of business of carrier;
Under the Warsaw Convention, there are two categories of 3. Court where he has a place of business through
“international transportation by air”: which the contract has been made;
4. Before the court at the place of destination
1. That where the place of departure and the place of
destination are situated within the territories of two High LIMITATIONS IN LIABILITY UNDER THE
Contracting Parties regardless of whether or not there be CONVENTION
a break in the transportation or a transshipment; and
2. That where the place of departure and the place of The Convention provides for a limitation of liability:
destination are within the territory of a single High
Contracting Party if there is an agreed stopping place 1. For each passenger - limited to 250,000 francs
within a territory subject to the sovereignty, mandate or 2. For goods and checked in baggage – limited to 250
authority of another power, even though the power is francs per kilogram
not a party to the Convention. 3. For hand carry - limited to 5,000 francs per
passenger
LIABILITIES UNDER THE CONVENTION
Q: When can a common carrier not avail of this limitation?
Q: What are the liabilities under the convention?
A:
A: The liabilities are:
1. Willful misconduct
1. Damage sustained in the event of the death or 2. Default amounting to willful misconduct
wounding of a passenger taking place on board the 3. Accepting passengers without ticket
aircraft or in the course of any of the operations of 4. Accepting goods without airway bill or baggage
embarking or disembarking without baggage check
Failure to file written notice, no action shall lie against the A: The period during which the baggage or goods are in the
carrier, save in the case of fraud on his part. charge of the carrier, whether in an airport or on board an
aircraft, or, in case of a landing outside an airport, in any
The Warsaw Convention has the force and effect of a law in place whatsoever.
the Philippines, being a treaty commitment assumed by the
Philippine government. However, said convention does not It includes any transportation by land or water outside an
operate as an exclusive enumeration of the instances for airport if such takes place in the performance of a contract
declaring a carrier liable for breach of contract of carriage or for transportation by air, for the purpose of loading, delivery,
as an absolute limit of the extent of that liability. Even the or transshipment.
Warsaw Convention declares the carrier liable for damages in
the enumerated cases and certain conditions. It must not be 3. Delay in the transportation of passengers, baggage or
construed to preclude the operation of the Civil Code and goods. (Art. 19)
other pertinent laws.
EFFECT OF HAGUE PROTOCOL
It does not regulate, much less exempt, the carrier from
liability for damages for violating the rights of the passengers The Hague Protocol amended the WC by removing the
under the contract of carriage, especially if willful misconduct provision that if the airline took all necessary steps to avoid
on the part of the carrier’s employees is found or established. the damage, it could exculpate itself completely (Art. 20(1)).
(Alitalia vs. IAC, 192 SCRA 9)
NOTE: COGSA/ Warsaw- applies to foreign vessels or air
plane/ international travel. LIMIT OF LIABILITY (Art. 22, as amended by Guatemala
§ Code of Commerce – applies to inter-island /domestic Protocol, 1971; Alitalia vs. IAC)
travel
1. Passengers
GENERAL RULE: $100,000 per passenger
IMPORTANT CONCEPTS: EXCEPTION: Agreement to a higher limit
ACTION FOR DAMAGES Under a general pool partnership agreement, the ticket-
issuing airline is the principal in a contract of carriage while
Notice of Claim the endorsee-airline is the agent. The obligation of the
former remained and did not cease even when the breach
1. Notice of claim- A written complaint must me made occurred not on its own flight but on that of another airline
within: which had undertaken to carry the passengers to one of their
destinations.
a. 3 days from receipt of baggage
b. 7 days from receipt of goods JURISDICTION
c. In case of delay, 14 days from receipt of
baggage/goods Q: Which court has jurisdiction over actions for damages?
NOTE: The complaint is a condition precedent. Without the A: At the option of the plaintiff, the action for damages may
complaint, the action is barred except in case of fraud on the be filed in the:
part of the carrier. (Art. 26)
a. Court of domicile of the carrier;
Prescriptive Period b. Court of its principal place of business;
c. Court where it has a place of business through which
2. Prescriptive period- Action must be filed within 2 the contract has been made; or
years from: d. Court of the place of destination. (Art. 28(1))
a. date of arrival at the destination § It is the passenger’s “ultimate destination” not “an
b. date of expected arrival agreed stopping place” that determines the country
c. date on which the transportation stopped. where suit is to be filed.
(Art. 29) § The forum of action provided in Art. 28(1) is a matter of
jurisdiction rather than of venue. (Santos III vs.
Section 27. Port of Documentation Whenever in the Ship The purposes of PD 1521 are to accelerate the growth and
Mortgage Decree of 1978 the words "port of development of the shipping industry in the Philippines and
documentation" are used, they shall be deemed to mean to finance the acquisition, construction, purchase or initial
the port of registry of the vessel. operation of vessels.
Section 28. Instruments and Acts Validated All mortgages of Q: Who can be granted this assistance?
any vessel of any part thereof, and all documentations,
recordations, indorsements and indexing thereof, and A:
proceedings incidental thereto made or done, prior to the
effectivity of this Decree are declared valid to the extent 1. Filipino citizen
they would have been valid if the port or ports at which it 2. Corporate entity, 60% of which belongs to Filipinos
should have been documented in accordance with law; and
this Section is declared retroactive so as to accomplish such Q: What is the requirement of the law in order to obtain a
validations: Provided, That nothing herein contained shall loan from a local bank?
be construed to deprive any person of any vested right.
A:
Section 29. Repealing Clause The provisions of the New Civil
Code, the Code of Commerce, the Chattel Mortgage Law, 1. Natural person who is the owner of that vessel
the Revised Rules of Court and of such other laws, decrees, 2. Juridical entity like a shipping line registered as a
executive orders, rules and regulations which are in conflict corporation, in which case, 60% of the ownership
or inconsistent with the provisions of this Decree are hereby must belong to a Filipino
repealed, amended or modified accordingly. If for any
reason, any section, subsection, sentence, clauses or term of PURPOSES FOR OBTAINING A LOAN
this Decree is held to be unconstitutional such decision shall
not affect the validity of the other provisions of this Decree. Q: Again, what may be the purpose for obtaining a loan?
Section 30. Effectivity This Decree shall take a effect upon its
approval. A:
Done in the City of Manila, this 11th day of June, in the year 1. Purchasing another vessel
of Our Lord, nineteen hundred and seventy-eight. 2. To acquire another vessel
3. To construct another vessel
4. To manage or operate a shipping line
NATURE AND PURPOSE OF Q: What if the amount loaned was used for another
THE SHIP MORTGAGE DECREE OF 1978 purpose?
Q: What is the nature of this law? A: It will not fall under the Ship Mortgage Decree. It becomes
a simple loan even if the vessel on which that loan was
A: It is law on an action in rem in admiralty cases. obtained was a registered commercial vessel. It is the
purpose of the loan that determines the application of the
Q: What are Philippine Domestic vessels? ship mortgage decree.
A: PD 1521 recognizes the creation of preferred mortgage A: A preferred mortgage lien is one constituted for the
that must be satisfied prior to all other claims and it allows financing of the acquisition, purchase, construction and initial
for the arrest of the vessel which in effect treats the vessel operation of vessels under the provisions of PD 1521, and
itself as the defendant in an action. which complies with the following requisites:
Q: What if the vessel was subjected to a loan acquired under 1. It is recorded in the MARINA/COASTGUARD
Sec. 1? 2. Affidavit of good faith with the record of such good
faith and without any design to hinder, delay, or defraud
A: The vessel is deemed to be covered by a mortgage any existing future creditor of the mortgagor or any lien or
the mortgaged vessel; and
Q: What kind of mortgage? 3. The mortgagee does not stipulate the waiver of the
preferred status of his claim.
A: Being a personal property, it becomes a chattel mortgage 4. The mortgage must be valid.
but chattel mortgage of a ship. However, if the chattel 5. The mortgage includes the whole vessel of domestic
mortgage is registered with the Registry of Property or ownership.
Registry of Record, it becomes a preferred mortgage under
P.D. 1521 meaning, the preferred mortgage has the right to It enjoys the preference in the recovery of mortgage.
be respected and paid for with all priorities against all other It is the recording which makes it a preferred mortgage
claims against the vessel provided it is a registered mortgage
subject under the line of preference or preference of credits Q: What is a lien?
under Sec. 17.
A: It is an advantage.
ARREST OF VESSEL
Q: What are the requirements to qualify an action to be able
Q: What will happen once the loan is obtained and the to obtain an order of arrest from the court? What court has
vessel qualifies to have a preferred mortgage of her since jurisdiction?
the mortgage has been registered?
A: If the vessel is found, whether domestic or foreign, in
A: The owner of the vessel is protected under P.D. 1521 if it is Manila, then the motion for the arrest of the vessel must be
registered and becomes a preffered mortgage that particular filed in the RTC of Manila.
vessel may be arrested and sold at public auction so the
obligation of the vessel is paid off to the mortgagee. If the vessel could not be found at the moment when the
action is filed, then the action may be filed at the place of the
NOTE: plaintiff with the RTC or at the place of the defendant, if the
vessel is represented by a shipping line.
1. The vessel may be arrested, then
2. The vessel can be sold Q: Who has the preference?
A: If the vessel is protected under P.D. 1521 and becomes a Q: What are the 2 grounds under which you can file an
preferred mortgage, and the terms and conditions of the action in rem against the vessel?
preferred mortgage have been violated, the mortgage may
come to court by filing an action for the arrest of the vessel A:
known as an ACTION IN REM
1. Section 4- violation of the terms of the preferred
ACTION IN REM mortgage
2. Non-payment of necessaries that were supplied to
Q: What is an action in rem? the vessel under Section 21.
A: It is an action filed against the vessel only, it does not NOTE: This enumeration is exclusive
include the owner of the vessel for the comvenience of the
creditor. A maritime lien for necessaries
Q: What is a preferred mortgage lien? What are its Q: What is a maritime lien for necessaries?
requisites?
REMEDIES WHEM GROUNDS ARE VIOLATED GROUNDS FOR THE DISCHARGE OF ORDER OF ARREST
Q: What may be done if any of the grounds is violated? Q: What are the grounds for the discharge of the order of
arrest?
A:
A:
1. An action may be filed for judicial foreclosure of the
preferred mortgage a. If properly arrested but you post a counterbond or cash
2. Action for the recovery of the maritime liens deposit (double the amount)
3. Action for the arrest of the vessel for it to be sold b. The order of arrest was improperly or irregularly issued-
and such proceeds be applied to it. this time there is no counterbond that is necessary
because the vessel is not deemed to have been arrested
Q: Under the 2 grounds, what are the procedures to be c. There is no violation- in case the mortgagor can prove
fulfilled? that he has not violated the terms and conditions of the
mortgage
A:
Q: What is the purpose of the counterbond?
1. Filed a petition for the judicial foreclosure of a
Preferred Ship Mortgage. This is an action in rem in A: To furnish another security other than vessel. This takes
admiralty which is an action against the vessel itself the place of the vessel.
2. Applicant may then apply ex parte for an order for
the arrest of the mortgaged vessel or vessels If it was posted by a fake insurance company, the vessel will
3. Attach affidavits that the preferred mortgage or be arrested.
maritime liens were violated or unpaid and should
also file a bond subject to the discretion of the court If it is insufficient to cover the amount, the mortgagor must
but not beyond the claimed amount. be ordered to correct the deficiencies.
4. The court will issue an order of arrest against the
vessel only Q: Can it be sold on public auction to any buyer?
Q: What are the 2 kinds of bonds allowed to be posted? A: Yes, it could be a Filipino resident or a foreign buyer and
the sale to any of them would be considered a valid sale and
A: if the purchaser acquires the property free from all liens and
encumbrances.
1. Cash bond
2. Security bond NOTE: If there are pre-existing claims against the vessel,
under Sec. 17, it is provided that the pre-existing claims now
Q: Is arrest limited to Filipino vessels only? are removed from the vessel.
A: No, the arrest may include foreign domestic vessels as long Q: Who can bind in the foreclosure sale?
as it violated any of the 2 grounds.
A:
Q: What will happen after the sale of that vessel if the pre- Q: What are the claims preferred over a preferred mortgage
existing claims have been satisfied? lien?
A: All those pre-existing claims will be considered paid off A: The following claims are preferred over a preferred
and terminated. mortgage lien:
If they are not satisfied because the amount that resulted 1. Taxes (expenses and fees allowed and cost taxed by
from the sale is not sufficient to pay all of them, if all of them the court and taxes due to the government)
fall under the same category, then they are going to be paid 2. Crew’s wages
equally. 3. General average
4. Salvage, including contract salvage
If the claims are of different dates, the others will be paid in 5. Prior maritime liens (maritime liens arising prior in
accordance with preference under Sec. 17. time to the recording of the preferred mortgage
6. Damages arising from tort
Q: There are only 2 grounds for the order of arrest, can you 7. Prior preferred mortgage lien (preferred mortgage
arrest the vessel for any other ground? prior in time)
A: No, if not, you will have to attach the vessel in accordance The preferred mortgage lien or the amount of the mortgage
with the provision of the Rules of Court on Attachment. will then be paid after the above items have already been
complied with.
Q: If the claim is not fully paid, what happens to the
balance? If the proceeds of the sale should not be sufficient to pay all
creditors included in one number or grade the residue shall
A: The balance will now qualify as personal claim against the be divided among them pro rata.
owner of the vessel who owed you some money and this
should be known as Maritime Action in Personam against the All credits not paid, whether fully or partially shall subsist as
owner of the vessel that was sold on public auction after the ordinary credits enforceable by personal action against the
arrest of the vessel. debtor.
A: None since the vessel has been sold. The only possibility of COMMONWEALTH ACT NO. 146
recovery is the direct payment of claim THE PUBLIC SERVICE LAW
(As amended, and as modified particularly by
Q: Can you re-attach the vessel? PD No. 1, Integrated Reorganization Plan and EO 546)
A: No.
CHAPTER I
RECOGNITION OF A FOREIGN VESSEL ORGANIZATION
Q: For a foreign vessel to be recognized, what are the Section 1. This Act shall be known as the "Public Service
requisites? Act."
The Public Service Commission shall sit individually or as a Sec. 5. The Public Service Commissioner, the Associate
body en banc or in two divisions of three Commissioners Public Service Commissioners, and all other officers and
each. The Public Service Commissioner shall preside when employees of the Public Service Commission shall enjoy the
the Commission sits en banc and in one division. In the same privileges and rights as the officer and employees of
other division, the Associate Commissioner with seniority of the classified civil service of the Government of the
appointment in that division shall preside. Five Philippines. They shall also be entitled to receive from the
Commissioners shall constitute a quorum for sessions en Government of the Philippines their necessary traveling
When the exigency of the service so requires and with the Sec. 10. The Commission shall have its office in the City of
approval of the Secretary of Justice, and subject to the Manila or at such other place as may be designated, and
provisions of Commonwealth Act Numbered Two hundred may hold hearings on any proceedings at such times and
forty-six, as amended, funds may be set aside from the places, within the Philippines, as it may provide by order in
appropriations provided for the Commission and/or from writing: Provided, That during the months of April and May
the fees collected under Section forty of this Act to defray of each year, at least three Commissioners shall be on
the expenses to be incurred by the Public Service vacation in such manner that once every two years at least
Commissioner or any of the Associate Commissioners, three of them shall be on duty during April and May:
officers or employees of the Commission to be designated Provided, however, That in the interest of public service, the
by the Commissioner, with the approval of the Secretary of Secretary of Justice may require any or all the
Justice, in the study of modern trends in supervision and Commissioners not on duty to render services and perform
regulation of public services. (As amended by Republic Act their duties during the vacation months. (As amended by
No. 3792) Republic Act Nos. 176 and 3792)
Sec. 6. The Secretary of Justice, upon recommendation of Sec. 11. The Commission shall have the power to make
the Public Service Commissioner, shall appoint all needful rules for its Government and other proceedings not
subordinate officers and employees of the Commission as inconsistent with this Act and shall adopt a common seal,
may be provided in the Appropriation Act. The Public and judicial notice shall be taken for such seal. True copies
Service Commissioner shall have general executive control, of said rules and other amendments shall be promptly
direction, and supervision over the work of the Commission furnished to the Bureau of Printing and shall be forthwith
and of its members, body and personnel, and over all published in the Official Gazette.
administrative business. (As amended by Republic Act Nos.
178 and 3792) Approved: November 07, 1936
Sec. 8. The Commission shall furnish the Secretary such of AUTHORITY TO OPERATE PUBLIC SERVICES
its findings and decisions as in its judgment may be of
general public interest; the Secretary shall compile the same GR: No public service shall operate without having been
for the purpose of publication in a series of volumes to be issued a certificate of public convenience or a certificate of
designated "Reports of the Public Service Commission of the public convenience and necessity.
Philippines," which shall be published in such form and
manner as may be best adapted for public information and XPNS:
use, and such authorized publications shall be competent
evidence of the reports and decisions of the Commission a. Warehouses;
therein contained without any further proof or b. Animal drawn vehicles and bancas moved by oar or
authentication thereof. sail;
c. Airships, except for the fixing of maximum rates for
fare and freight;
A: It means a ship which has received injuries rendering her Q: What are the requisites?
incapable by navigation.
A:
Or, it is also defined as loss of a vessel at sea, either by being
swallowed up by the waves, running against a thing at sea, or a. Valid object of salvage;
on the coast. b. Object must have been exposed to marine peril (not
perils of the ship);
DERELICT c. Services rendered voluntarily (neither an existing
duty nor out of a pre-existing contract);
Q: What is derelict? d. Services are successful, total or partial.
A: A ship or her cargo which is abandoned and deserted at Sec. 2. If the captain of the vessel, or the person acting in his
sea by those who are in charge of it, without any hope of stead, is present, no one shall take from the sea, or from the
recovering it, or without any intention of returning to it. If shores or coast merchandise or effects proceeding from a
those in charge of the property left it with the intention of shipwreck or proceed to the salvage of the vessel, without
finally leaving it, it is a derelict and the change of their the consent of such captain or person acting in his stead.
intention and an attempt to return to it will not change its
nature EFFECTS OF SHIPWRECK
Example: a schooner which has capsized in the high seas, Q: What are the effects proceeding from a shipwreck?
deserted by her captain with no intention to return, is a
derelict A:
Q: What is the rule in case the vessel or its cargo is beyond Jetsam- goods which are cast into the sea and there sink and
the control of the crew? remain under water
Flotsam or flotsam- goods which float upon the sea when
A: A vessel though not abandoned, may be the subject of cast overboard;
salvage, if at the time the services were rendered there was a Ligan or Lagan – goods cast into the sea tied to a buoy, so
probable, threatening danger to the vessel or its cargo. If a that they may be found again by the owners
vessel towed is by this means aided in escaping present or
prospective danger, the service will be regarded as one of Q: What are the subjects of Salvage?
salvage, and the towage as merely incidental.
A:
SERVICE OF TOWAGE v. SERVICE OF SALVAGE
1. Ship itself;
Q: Distinguish service of towage and service of salvage. 2. Jetsam – goods which are cast into the sea, and
there sink and remain under water;
A: 3. Floatsam or Flotsam – goods which float upon the
SERVICE OF TOWAGE SERVICE OF SALVAGE sea when cast overboard;
If the towage is made not for If a vessel is aided by towing 4. Ligan or Lagan – goods cast into the sea tied to a
the purpose of aiding the to escape present or buoy, so that they may be found again by the
vessel from escaping present prospective danger, the owners (p.173, Judge Diaz).
or prospective danger but service shall be regarded as
taking it to some other place, one of salvage and, the Sec. 3. He who shall save or pick up a vessel or merchandise
then the service is one of towage is merely incidental at sea, in the absence of the captain of the vessel, owner, or
Sec. 9. If, during the danger, an agreement is entered into A: Public policy encourages the hardy and adventurous
concerning the amount of the reward for salvage or mariner to engage in these laborious and sometimes
assistance, its validity may be impugned because it is dangerous enterprises, and with a view to withdraw from him
excessive, and it may be required to be reduced to an every temptation to embezzlement and dishonesty, the law
amount proportionate to the circumstances. allows him, in case he is successful, a liberal compensation.
Sec. 12. If in the salvage or in the rendering of assistance Q: Are owners of the salving vessels entitled to salvage
different persons shall have intervened the reward shall be reward?
divided between them in proportion to the services which
each one may have rendered, and, in case of doubt, in equal A: The owners of the salving vessel has always been
parts. considered as entitled to salvage reward for the use of the
vessel in rendering salvage vessels, though he was not
Those who, in order to save persons, shall have been present when the salvage service was rendered.
exposed to the same dangers shall also have a right to Remuneration for salvage service is awarded to the owners of
participation in the reward. vessels, not because they are present or supposed to be
present when the service is rendered but on account of the
HOW TO ADJUST CONFLICTING RIGHTS OF DIFFERENT danger to which the service exposes their property and the
PARTIES OF SALVORS risk which they run of loss in suffering their vessels engaged
in such perilous undertaking.
Parties taking possession of an abandoned vessel or cargo
have a right to retain it until the salvage is completed, and no IN QUASI-CONTRACT OF TOWAGE THE
other person has the right to interfere with them provided CAPTAIN NOT ENTITLED TO PARTICIPATE IN THE
they are able to effect the salvage and are conducting the TOWAGE SERVICE PAYMENT
business with fidelity and vigor.
If there was no marine peril and the vessel was not a quasi-
But if their own means are inadequate they are bound to derelict, as to warrant a valid salvage claim for towing the
accept additional assistance, if offered. Those beginning a vessel. The plaintiff’s service to defendant in consenting to
salvage service, and in the successful prosecution of it, are plaintiff’s offer to tow the vessel, defendant thereby
entitled to be regarded as meritorious salvors of whatever is impliedly entered into a juridical relation to towage with the
preserved, when wrongfully interrupted in the work by others owner of the towing vessel, captained by plaintiff.
who complete the salvage.
Where the contract is one for towage, only the owner of the
WHEN SALVORS HAVE A RIGHT TO REWARD towing vessel, to the exclusion of the crew of said vessel may
IN SAVING PERSONS be entitled to renumeration. As the vessel owner had
expressly waived its claim for compensation, for the towage
Taking passengers from a sinking ship, without rendering any service rendered to defendant, it is clear that plaintiff, whose
service in rescuing the vessel, is not a salvage service being a right if at all depends upon and not separate from interest of
duty to humanity and not for reward. his employer is not entitled to payment for such towage
service.
The Salvage Act contemplates a divided services were
simultaneously imperiled and both are rescued about the Sec. 14. This Act shall take effect on its passage.
same time.
Enacted: February 4, 1916
Q: Will the refusal of salvors to sue affect the co-salvors?