negligently in case of death of, or injury to its passengers, it being its
duty to prove that it exercised extra-ordinary diligence; (4) a carrier is
Safety of the passengers xxx so it is the same rule for carriage of
passengers as in carriage of goods, there is the presumption of
negligence on the part of the carrier. So to rebut that presumption, they
have to prove that they observed extraordinary diligence, under Article
1733 and 1755 of the Civil Code. So let’s go to cases on nature of
responsibility, definitions.
Article 1733. Common carriers, from the nature of their
business and for reasons of public policy, are bound to observe
extraordinary diligence in the vigilance over the goods and for
the safety of the passengers transported by them, according to
all the circumstances of each case.
Such extraordinary diligence in the vigilance over the goods is
further expressed in articles 1734, 1735, and 1745, Nos. 5, 6,
and 7, while the extraordinary diligence for the safety of the
passengers is further set forth in articles 1755 and 1756.
Article 1755. A common carrier is bound to carry the
passengers safely as far as human care and foresight can
provide, using the utmost diligence of very cautious persons,
with a due regard for all the circumstances.
Landicho v. BTC
Discussion:
So in this case the supreme court said A common carrier is duty bound
to safely transport its passengers from point of origin to place of
destination, but the duty does not encompass all the risks of a
passenger in transit (common carrier is not an insurer of all risks). A
carrier cannot be charged with all the diligence for each and every
passenger. It is enough that its employees see to it that the passenger
places himself safely in the vehicle, that it is operated carefully, and that
the vehicle is perfectly alright, so as to avoid mishaps. That is the ruling
in that case.
Isaac v. A.L. Ammen
No discussion –
Laguna v. Tiongson
Discussion:
The certain general principles were laid down by the Supreme Court.
So now we go to the breach on the part of the common carrier. In
Laguna v. Tiongson, it was stated that: certain general principles must
be borne in mind, namely: (1) the liability of a carrier is contractual and
arises upon its breach of the obligation, and there is a breach if it fails
to exercise extraordinary diligence according to all the circumstances of
each case; (2) a carrier is obliged to carry its passengers with the utmost
diligence of a very cautious person, having due regard for all the
circumstances; (3) a carrier is presumed to be at fault or to have acted
not an insurer against all risks of travel (Isaac vs. A.L. Ammen
Transportation Co., Inc., G.R. No. L-9671, August 28, 1957); and (5)
that a carrier shall not be responsible for events which could not be
foreseen, or which, though foreseen, were inevitable (Alfaro vs. Ayson,
54 O.G. 7922). [gi copy lang nako ni from the Laguna case btw kay naay
mga part jud nga inaudible L). So when these certain requirements are
required on the common carrier, what defense is available to a common
carrier? Fortuitous events. But as we already know, if you are asking for
an exception, you have to comply with the requirements of the fortuitous
event.
BTC v. Caguimbal
Discussion:
So in that case the supreme court said that the court need not make an
express finding of fault or negligence on the part of the carrier in order
to hold it responsible because of the presumption of negligence. You
just have to prove that there is a contract and there is a breach. Diba so
now it is incumbent for the common carrier to prove that there was no
negligence, in fact there was an exercise of extraordinary diligence. So
because the basic rule is negligence must be proved in court, it must
be properly pleaded and proven but in the case of common carrier, it is
already presumed, it is already stipulated that negligent jud ka because
there was death or injury. As a general rule, if you’re the plaintiff, you
file your case and you prove that case. The burden of proof is on you.
So in that case it is preponderance of evidence diba. It is not for the
defendant to prove the case for you. So By the contract of carriage, the
carrier assumes the express obligation to transport the passenger to his
destination safely and to observe extraordinary diligence with a due
regard for all the circumstances, and any injury that might be suffered
by the passenger is right away attributable to the fault or negligence of
the carrier (Article 1756, new Civil Code). This is an exception to the
general rule that negligence must be proved, and it is therefore
incumbent upon the carrier to prove that it has exercised extraordinary
diligence as prescribed in Articles 1733 and 1755 of the new Civil Code.
Gatchalien v. Delim
Discussion:
So in that case the Supreme Court said no valid waiver of cause of
action could be made by the petitioner. The petitioner could not have
fully understood the import of the waiver made because she was still
reeling from the accident, the joint affidavit that was made by her was
made how many days? After the accident? Three days.
Cathay Pacific v. Vasquez
Discussion:
But whatever the reason was, the Vasquezes have every right to deny
the upgrade xxx (inaudible sound)… So in that case the Supreme Court
said the breach of contract is defined as the "failure without legal reason
to comply with the terms of a contract." It is also defined as the "failure,
without legal excuse, to perform any promise which forms the whole or
part of the contract." The breach of contract of carriage consisted in
either the bumping off of a passenger with confirmed reservation or the
downgrading of a passenger’s seat accommodation from one class to
a lower class. In this case, what happened was the reverse. So the
supreme court said there was a breach of contract because they are
not complying the terms under contract stated in the boarding passes
of the passengers. But in this case the Supreme Court said okay there
was a breach of contract but there was no bad faith because wala man
sila na-injure.
1
To reiterate the definition:
Breach of Contract – is defined as the "failure without legal reason to
comply with the terms of a contract." It is also defined as the "failure,
without legal excuse, to perform any promise which forms the whole or
part of the contract."
RECAP:
So again we still apply Art. 1732 on the definition of Common Carrier
and 1733 on the requirement in observing extraordinary diligence for
the safety of the passengers transported by them according to the
circumstances of each case. Relate those articles to 1755 and 1756.
But as we have discussed in the cases before, it is still basically
dependent on facts and circumstances of each case.
1756 deals with the presumption of negligence:
Article 1756. In case of death of or injuries to passengers,
common carriers are presumed to have been at fault or to have
acted negligently, unless they prove that they observed
extraordinary diligence as prescribed in articles 1733 and 1755.
Hence here you don’t need to prove that the Common Carrier was
negligent. It is already presumed to be negligent. Just prove that there
is already a contract between the passenger and the common carrier
and that there was a breach of that contract in the form of the death or
injury of the passenger.
If there is that presumption of negligence, are they automatically liable?
NO. Because similar as to the case in the carriage of goods, take into
account here that just because there is that presumption, there is no
automatic liability. The effect only is that the burden of proof is shifted
to the Common Carrier that it was not negligent and it exercised
extraordinary diligence.
Now please remember that Tiongson case where we talked about the
breach of contract of carriage of passenger.
Also in the BPCOM case, we discussed the nature of contract of
carriage. According to that case, under the contract of carriage, the
carrier assumes the obligation to transport the passenger to his
destination SAFELY and to observe extraordinary diligence with due
regard to the circumstances. Any injury that may be suffered by the
passenger is right away attributable to the fault or negligence of the
carrier.
Remember the Cathay Pacific Case:
Cathay Pacific vs Vasquez
We note that in all their pleadings, the Vazquezes never denied that
they were members of Cathay’s Marco Polo Club. They knew that as
members of the Club, they had priority for upgrading of their seat
accommodation at no extra cost when an opportunity arises. But, just
like other privileges, such priority could be waived. The Vazquezes
should have been consulted first whether they wanted to avail
themselves of the privilege or would consent to a change of seat
accommodation before their seat assignments were given to other
passengers.
Hence there was a violation of the contract of carriage in this case.
Here, the basis of the breach was that the travel documents they had
showed that they had explicitly chosen that they chose to fly business
class. However in this case, Cathay did not act in bad faith so there was
only the award of nominal damages.
Singapore Airlines v Andion Fernandez
DISCUSSION:
So what is the breach here?
When an airline issues a ticket to a passenger, confirmed for a particular
flight on a certain date, a contract of carriage arises. The passenger
then has every right to expect that he be transported on that flight and
on that date. If he does not, then the carrier opens itself to a suit for a
breach of contract of carriage.
SC held that the contract of air carriage is a peculiar one. Imbued with
public interest, the law requires common carriers to carry the
passengers safely as far as human care and foresight can provide,
using the utmost diligence of very cautious persons with due regard for
all the circumstances. In an action for breach of contract of carriage, the
aggrieved party does not have to prove that the common carrier was at
fault or was negligent. All that is necessary to prove is the existence of
the contract and the fact of its non-performance by the carrier.
Since Singapore airlines here did not transport Andion on the said terms
agreed on, there was clearly a breach of contract of carriage.
Japan Airlines v Asuncion
DISCUSSION:
So there was no breach here because it is not within the ambit of the
contract of carriage entered into by Jpn Airlines and the respondents to
make sure that they will be admitted to the country.
They cannot interfere with or influence the immigration authorities. That
is no longer part of the contract between the passenger and the
common carrier hence that’s why the SC said that you cannot sue for
damages because it was not the obligation of Jpn Airlines to do so.
In this case, no obligation on part of Jpn Airlines that respondent is
cleared by the immigration authorities.
Japan Airlines v Simangan
DISCUSSION:
Here there was breach of contract of carriage.
So in this case, gipa-naog siya. But he was allowed to be rebooked the
next day, but he did not agree to that. Now comparing this with the
Asuncion case, there Jpn Airlines did not interfere, but diri nag-interfere
jud sila with the travel documents. But the SC here said that as a
common carrier, it is not for you to interfere. So they cannot use that as
a defense nga gipa-naog siya because they thought he was carrying
fake documents here.
Northwest v Hashan
DISCUSSION:
Here there was a breach of contract of carriage.
From the circumstances, it is clear that the flight was overbooked and
so there was a breach because there were NOT TRANSPORTED TO
THEIR DESTINATION AS AGREED UPON BY THE AIRLINE. Gipa-
baba gani sila.
Sps. Fernando v Northwest (note the ruling of this
case with respect to the factual circumstances and
whether such would constitute breach)
DISCUSSION:
2

So here they were not able to board the plane and had to depart on the
next day. Those are the circumstances here and the SC said that it IS
NOT JUST ABOUT THE FACT THAT JESUS FERNANDO SUFFERED
STRESS just because of the change of plans,etc.
Aside from all of that, the SC noted how the employees of the airlines
treated the Fernandos.
So here the SC said that there was breach of contract for failure of the
employees of the airlines to provide the proper assistance to avoid any
inconvenience. The way the employees in this case failed to exercise
utmost diligence expected of it.
Passengers do not contract merely for transportation. They have the
right to be treated by the employees with kindness, respect, courtesy,
and due consideration. Common carriers are required to be responsible
for the acts of their employees.
So we already discussed that in the case of Laguna v Tiongson, the
common carrier is not responsible for events which cannot be foreseen
AND if such were foreseen, but they are inevitable.
So as with any exempting circumstances, you have to still comply with
all the requisites of the exempting circumstances for you to be
exonerated. You have to prove that the event is really a fortuitous one
based on the following characteristics:
1. The cause of the incident must be independent of human will or will
of the carrier;
2. The incident must have been impossible to foresee or if foreseen,
impossible to avoid;
3. The incident must be such as to render impossible for the carrier to
carry its obligation in a normal manner;
4. Carrier must be free from participation in the aggravation of the injury
resulting to the passengers
Juntilla v Fontanar
DISCUSSION:
So even if the tires of the jeep were new (as raised as a defense by the
common carrier), it must be noted that the jeep here was still crowded
and that it was moving too fast beyond the speed limits.
And even if some of the characteristics of a fortuitous event were
present, absent was the last requisite which was the absence of the
carrier from participation in the aggravation of the resulting damage or
injury.
Yobido vs CA
A fortuitous event is possessed of the following characteristics: (a) the
cause of the unforeseen and unexpected occurrence, or the failure of
the debtor to comply with his obligations, must be independent of
human will; (b) it must be impossible to foresee the event which
constitutes the casofortuito, or if it can be foreseen, it must be
impossible to avoid; (c) the occurrence must be such as to render it
impossible for the debtor to fulfill his obligation in a normal manner; and
(d) the obligor must be free from any participation in the aggravation of
the injury resulting to the creditor. As Article 1174 provides, no person
shall be responsible for a fortuitous event which could not be foreseen,
or which, though foreseen, was inevitable. In other words, there must
be an entire exclusion of human agency from the cause of injury or loss.
Under the circumstances of this case, the explosion of the new tire may
not be considered a fortuitous event. There are human factors involved
in the situation. The fact that the tire was new did not imply that it was
entirely free from manufacturing defects or that it was properly mounted
on the vehicle. Neither may the fact that the tire bought and used in the
vehicle is of a brand name noted for quality, resulting in the conclusion
that it could not explode within five days’ use. Be that as it may, it is
settled that an accident caused either by defects in the automobile or
through the negligence of its driver is not a caso fortuito that would
exempt the carrier from liability for damages.
There is a provision under the Civil Code on the duration of
responsibility of common carrier of goods but in the carriage of
passengers there is no such provision so we have to look at the cases
to know when does this responsibility begins and ends and why is it
important to know the duration of the responsibility because that is when
you can say that the common carrier is responsible for the death, injury
of the passenger. If the death or injury occurs beyond that duration, then
there is no responsibility on the part of the common carrier.
La Mallorca vs CA - When Liability Starts and Ends
Discussion:
It has been recognized as a rule that the relation of carrier and
passenger does not cease at the moment the passenger alights from
the carrier's vehicle at a place selected by the carrier at the point of
destination, but continues until the passenger has had a reasonable
time or a reasonable opportunity to leave the carrier's premises. And,
what is a reasonable time or a reasonable delay within this rule is to be
determined from all the circumstances. Thus, a person who, after
alighting from a train, walks along the station platform is considered still
a passenger. So also, where a passenger has alighted at his destination
and is proceeding by the usual way to leave the company's premises,
but before actually doing so is halted by the report that his brother, a
fellow passenger, has been shot, and he in good faith and without intent
of engaging in the difficulty, returns to relieve his brother, he is deemed
reasonably and necessarily delayed and thus continues to be a
passenger entitled as such to the protection of the railroad and
company and its agents.
In the present case, the father returned to the bus to get one of his
baggages which was not unloaded when they alighted from the bus.
Raquel, the child that she was, must have followed the father. However,
although the father was still on the running board of the bus awaiting for
the conductor to hand him the bag or bayong, the bus started to run, so
that even he (the father) had to jump down from the moving vehicle. It
was at this instance that the child, who must be near the bus, was run
over and killed. In the circumstances, it cannot be claimed that the
carrier's agent had exercised the "utmost diligence" of a "very cautions
person" required by Article 1755 of the Civil Code to be observed by a
common carrier in the discharge of its obligation to transport safely its
passengers. In the first place, the driver, although stopping the bus,
nevertheless did not put off the engine. Secondly, he started to run the
bus even before the bus conductor gave him the signal to go and while
the latter was still unloading part of the baggages of the passengers
Mariano Beltran and family. The presence of said passengers near the
bus was not unreasonable and they are, therefore, to be considered still
as passengers of the carrier, entitled to the protection under their
contract of carriage.
PAL Vs CA - Reiteration of La Mallorca Vs CA
Discussion:
The contract of air carriage is a peculiar one. Being imbued with public
interest, the law requires common carriers to carry the passengers
3
safely as far as human care and foresight can provide, using the utmost
diligence of very cautious persons, with due regard for all the
circumstances.
The position taken by PAL in this case clearly illustrates its failure to
grasp the exacting standard required by law. Undisputably, PAL's
diversion of its flight due to inclement weather was a fortuitous event.
Nonetheless, such occurrence did not terminate PAL's contract with its
passengers. Being in the business of air carriage and the sole one to
operate in the country, PAL is deemed equipped to deal with situations
as in the case at bar. What we said in one case once again must be
stressed, i.e., the relation of carrier and passenger continues until the
latter has been landed at the port of destination and has left the carrier's
premises. Hence, PAL necessarily would still have to exercise
extraordinary diligence in safeguarding the comfort, convenience and
safety of its stranded passengers until they have reached their final
destination. On this score, PAL grossly failed considering the then
ongoing battle between government forces and Muslim rebels in
Cotabato City and the fact that the private respondent was a stranger
to the place.
Picart Vs Smith - Test of Negligence
Discussion:
The test by which to determine the existence of negligence in a
particular case may be stated as follows: Did the defendant in doing the
alleged negligent act use that person would have used in the same
situation? If not, then he is guilty of negligence. The law here in effect
adopts the standard supposed to be supplied by the imaginary conduct
of the discreet paterfamilias of the Roman law. The existence of
negligence in a given case is not determined by reference to the
personal judgment of the actor in the situation before him. The law
considers what would be reckless, blameworthy, or negligent in the man
of ordinary intelligence and prudence and determines liability by that.
The question as to what would constitute the conduct of a prudent man
in a given situation must of course be always determined in the light of
human experience and in view of the facts involved in the particular
case. Abstract speculations cannot here be of much value but this much
can be profitably said: Reasonable men govern their conduct by the
circumstances which are before them or known to them. They are not,
and are not supposed to be, omniscient of the future. Hence they can
be expected to take care only when there is something before them to
suggest or warn of danger. Could a prudent man, in the case under
consideration, foresee harm as a result of the course actually pursued?
If so, it was the duty of the actor to take precautions to guard against
that harm. Reasonable foresight of harm, followed by ignoring of the
suggestion born of this prevision, is always necessary before
negligence can be held to exist. Stated in these terms, the proper
criterion for determining the existence of negligence in a given case is
this: Conduct is said to be negligent when a prudent man in the position
of the tortfeasor would have foreseen that an effect harmful to another
was sufficiently probable to warrant his foregoing conduct or guarding
against its consequences.
Sy Vs Malate Taxi
Discussion:
The pertinent, provisions of the new Civil Code under the heading
Common Carriers, are the following:
ART. 1733. Common carriers, from the nature of their business and for
reason of public policy, are bound to observe extraordinary diligence in
the vigilance over the goods and for the safety of the passengers
transported by them, according to all the circumstances of each case.
Such extraordinary diligence in the vigilance over the goods is further
expressed in articles 1734, 1735, and 1745, Nos. 5, 6, and 7, while the
extraordinary diligence for the safety of the passengers is further set
forth in articles 1755 and 1756.
ART. 1755. A common carrier is bound to carry the passengers to safety
as far as human care and foresight can provide, using the utmost
diligence of very cautious persons, with a due regard for all the
circumstances.
ART. 1756. In case of death of or injuries to passengers, common
carriers are presumed to have been at fault or to have acted negligently,
unless they prove that they observed extraordinary diligence as
prescribed in articles 1733 and 1755. (Emphasis supplied.)
Evidently, under these provisions of law, the court need not make an
express finding of fault or negligence on the part of the defendant
appellant in order to hold it responsible to pay the damages sought for
by the plaintiff, for the action initiated therefor is based on a contract of
carriage and not on tort. When plaintiff rode on defendant-appellant's
taxicab, the latter assumed the express obligation to transport him to
his destination safely, and to observe extraordinary diligence with a due
regard for all the circumstances, and any injury that might be suffered
by the passenger is right away attributable to the fault or negligence of
the carrier (Article 1756, supra). This is an exception to the general rule
that negligence must be proved, and it was therefore incumbent upon
the carrier to prove that it has exercised extraordinary diligence as
prescribed in Articles 1733 and 1755 of the new Civil Code. It is
noteworthy, however, that at the hearing in the lower court defendant-
appellant failed to appear and has not presented any evidence at all to
overcome and overwhelm the presumption of negligence imposed upon
it by law; hence, there was no need for the lower court to make an
express finding thereon in view of the provisions of the aforequoted
Article 1756 of the new Civil Code.
PAL vs NLRC - Defense of Due Diligence Not
Available
Discussion:
It would be grossly unfair to order petitioners to reinstate him back to
his work as pilot. The nature of employment of herein private
respondent necessitates that he should not violate the liquor ban as
provided for in the Basic Operations Manual in order to protect not only
the interest of the company but the public as well. Private respondent is
a risk and liability rather than an asset to petitioner PAL.
The business of petitioner Philippine Airlines is such that whenever a
passenger dies or is injured the presumption is, it is at fault
notwithstanding the fact that it has exercised due diligence of a good
father of a family in the selection and supervision of its employees.
Thus, extraordinary measures and diligence should be exercised by it
for the safety of its passengers and their belongings. Needless to state,
a pilot must be sober all the time for he may be called upon to fly a plane
even before his regular scheduled hours, otherwise so many lives will
be in danger if he is drunk. It would be unjust for an employer like herein
petitioner PAL to be compelled to continue with the employment of a
person whose continuance in the Service is obviously inimical to its
interest.
Take note in this case that the defense that the employer exercised due
diligence of a good father of a family in the selection and supervision of
its employees will not be available for a common carrier in case of
breach of the contract of carriage.
4

Article 1758. When a passenger is carried gratuitously, a
stipulation limiting the common carrier's liability for negligence
is valid, but not for wilful acts or gross negligence.
The reduction of fare does not justify any limitation of the
common carrier's liability.
Lara Vs Valencia - Only Ordinary Diligence is
Required
Discussion:
It therefore appears that the deceased, as well his companions who
rode in the pick-up of defendant, were merely accommodation
passengers who paid nothing for the service and so they can be
considered as invited guests within the meaning of the law. As
accommodation passengers or invited guests, defendant as owner and
driver of the pick-up owes to them merely the duty to exercise
reasonable care so that they may be transported safely to their
destination. Thus, "The rule is established by the weight of authority that
the owner or operator of an automobile owes the duty to an invited guest
to exercise reasonable care in its operation, and not unreasonably to
expose him to danger and injury by increasing the hazard of travel. This
rule, as frequently stated by the courts, is that an owner of an
automobile owes a guest the duty to exercise ordinary or reasonable
care to avoid injuring him. Since one riding in an automobile is no less
a guest because he asked for the privilege of doing so, the same
obligation of care is imposed upon the driver as in the case of one
expressly invited to ride" (5 Am. Jur., 626-627). Defendant, therefore, is
only required to observe ordinary care, and is not in duty bound to
exercise extraordinary diligence as required of a common carrier by our
law (Articles 1755 and 1756, new Civil Code).
We may rather attribute the incident to lack of care on the part of the
deceased considering that the pick-up was open and he was then in a
crouching position. Indeed, the law provides that "A passenger must
observe the diligence of a good father of a family to avoid injury to
himself" (Article 1761, new Civil Code), which means that if the injury to
the passenger has been proximately caused by his own negligence, the
carrier cannot be held liable.
Article 1759. Common carriers are liable for the death of or
injuries to passengers through the negligence or wilful acts of
the former's employees, although such employees may have
acted beyond the scope of their authority or in violation of the
orders of the common carriers.
This liability of the common carriers does not cease upon proof
that they exercised all the diligence of a good father of a family
in the selection and supervision of their employees.
Take note that the defense that the employer exercised due diligence
of a good father of a family in the selection and supervision of its
employees is available only in quasi delicts.
Article 1760. The common carrier's responsibility prescribed in
the preceding article cannot be eliminated or limited by
stipulation, by the posting of notices, by statements on the
tickets or otherwise.
Bataclan Vs Medina
Discussion:
ART. 1759. Common carriers are liable for the death of or injuries to
passengers through the negligence or willful acts of the former's
employees, although such employees may have acted beyond the
scope of their authority or in violation of the order of the common
carriers.
This liability of the common carriers does not cease upon proof that they
exercised all the diligence of a good father of a family in the selection
and supervision of their employees.
ART. 1763. A common carrier responsible for injuries suffered by a
passenger on account of the willful acts or negligence of other
passengers or of strangers, if the common carrier's employees through
the exercise of the diligence of a good father of a family could have
prevented or stopped the act or omission.
The burning of the bus can also in part be attributed to the negligence
of the carrier, through is driver and its conductor. According to the
witness, the driver and the conductor were on the road walking back
and forth. They, or at least, the driver should and must have known that
in the position in which the overturned bus was, gasoline could and must
have leaked from the gasoline tank and soaked the area in and around
the bus, this aside from the fact that gasoline when spilled, specially
over a large area, can be smelt and directed even from a distance, and
yet neither the driver nor the conductor would appear to have cautioned
or taken steps to warn the rescuers not to bring the lighted torch too
near the bus. Said negligence on the part of the agents of the carrier
come under the codal provisions above-reproduced, particularly,
Articles 1733, 1759 and 1763.
MRR Vs Ballesteros
Discussion:
Another defense put up by petitioner is that since Abello was not its
employee it should not be held responsible for his acts. This defense
was correctly overruled by the trial court, considering the provisions of
Article 1763 of the Civil Code and section 48 (b) of the Motor Vehicle
Law, which respectively provide as follows:
Art. 1763. A common carrier is responsible for injuries suffered by a
passenger on account of the wilfull acts or negligence of other
passengers or of strangers, if the common carrier's employees through
the exercise of the diligence of a good father of a family could have
prevented or stopped the act or omission.
Sec. 48(b). No professional chauffeur shall permit any unlicensed
person to drive the motor vehicle under his control, or permit a person,
sitting beside him or in any other part of the car, to interfere with him in
the operation of the motor vehicle, by allowing said person to take hold
of the steering wheel, or in any other manner take part in the
manipulation or control of the car.
After analyzing the facts and the law applicable, he reached the
conclusion that the acts of the bus personnel, particularly "in allowing
Mr. Abello to drive despite two occasions when the bus stopped and the
regular driver could have taken over, constitute reckless imprudence
and wanton injurious conduct on the part of the MRR employees."
Fortune Express Vs CA
Discussion:
Question: Is the failure to post guards an omission of the duty to
exercise the diligence of a good father of the family which could have
prevented the killing of Atty. Caorong?
Answer: The fact that defendant, through Operations Manager
Diosdado Bravo, was informed of the rumors that the Moslems intended
5
to take revenge by burning five buses of defendant is established since
the latter also utilized Crisanto Generalaos as a witness. Yet despite
this information, the plaintiffs charge, defendant did not take proper
precautions. Consequently, plaintiffs now fault the defendant for
ignoring the report. Their position is that the defendant should have
provided its buses with security guards. To our mind, the diligence
demanded by law does not include the posting of security guards in
buses. It is an obligation that properly belongs to the State. In other
words, the presence of a security guard is not a guarantee that the
killing of Atty. Caorong would have been definitely avoided.
Accordingly, the failure of defendant to accord faith and credit to the
report of Mr. Generalao and the fact that it did not provide security to its
buses cannot, in the light of the circumstances, be characterized as
negligence.
The death of Atty. Caorong was an unexpected and unforseen
occurrence over which defendant had no control. Atty. Caorong
performed an act of charity and heroism in coming to the succor of the
driver even in the face of danger. He deserves the undying gratitude of
the driver whose life he saved. No one should blame him for an act of
extraordinary charity and altruism which cost his life. But neither should
any blame be laid on the doorstep of defendant. His death was solely
due to the willful acts of the lawless which defendant could neither
prevent nor stop.
LRT Vs Navidad
Discussion:
The law requires common carriers to carry passengers safely using the
utmost diligence of very cautious persons with due regard for all
circumstances. Such duty of a common carrier to provide safety to its
passengers so obligates it not only during the course of the trip but for
so long as the passengers are within its premises and where they ought
to be in pursuance to the contract of carriage. The statutory provisions
render a common carrier liable for death of or injury to passengers:
(a) through the negligence or wilful acts of its employees or
(b) on account of wilful acts or negligence of other passengers or of
strangers if the common carriers employees through the exercise of due
diligence could have prevented or stopped the act or omission.
In case of such death or injury, a carrier is presumed to have been at
fault or been negligent, and by simple proof of injury, the passenger is
relieved of the duty to still establish the fault or negligence of the carrier
or of its employees and the burden shifts upon the carrier to prove that
the injury is due to an unforeseen event or to force majeure. In the
absence of satisfactory explanation by the carrier on how the accident
occurred, which petitioners, according to the appellate court, have failed
to show, the presumption would be that it has been at fault, an exception
from the general rule that negligence must be proved.
The foundation of LRTAs liability is the contract of carriage and its
obligation to indemnify the victim arises from the breach of that contract
by reason of its failure to exercise the high diligence required of the
common carrier. In the discharge of its commitment to ensure the safety
of passengers, a carrier may choose to hire its own employees or avail
itself of the services of an outsider or an independent firm to undertake
the task. In either case, the common carrier is not relieved of its
responsibilities under the contract of carriage.
Recap:
Remember 1760 and 1759:
Article 1759. Common carriers are liable for the death of or
injuries to passengers through the negligence or wilful acts of
the former's employees, although such employees may have
acted beyond the scope of their authority or in violation of the
orders of the common carriers.
This liability of the common carriers does not cease upon proof
that they exercised all the diligence of a good father of a family
in the selection and supervision of their employees.
Article 1760. The common carrier's responsibility prescribed in
the preceding article cannot be eliminated or limited by
stipulation, by the posting of notices, by statements on the
tickets or otherwise.
1763 is on the responsibility of a common carrier over the strangers and
co-passengers which resulted to injuries to other passengers.
Article 1763. A common carrier is responsible for injuries
suffered by a passenger on account of the wilful acts or
negligence of other passengers or of strangers, if the common
carrier's employees through the exercise of the diligence of a
good father of a family could have prevented or stopped the act
or omission.
There is that responsibility if there is a showing that the common
carrier’s employees in the exercise of the due diligence of a good father
of a family COULD HAVE PREVENTED OR STOPPED the act or
omission of the said other passenger or stranger.
Under 1761 and 1762 it is now with respect to the duty of the passenger:
Article 1761. The passenger must observe the diligence of a
good father of a family to avoid injury to himself.
Article 1762. The contributory negligence of the passenger
does not bar recovery of damages for his death or injuries, if the
proximate cause thereof is the negligence of the common
carrier, but the amount of damages shall be equitably reduced.
Let’s discuss now the cases.
Dangwa vs. CA
Discussion:
The contention of petitioners that the driver and the conductor had no
knowledge that the victim would ride on the bus, since the latter had
supposedly not manifested his intention to board the same, does not
merit consideration. When the bus is not in motion there is no necessity
for a person who wants to ride the same to signal his intention to board.
A public utility bus, once it stops, is in effect making a continuous offer
to bus riders. Hence, it becomes the duty of the driver and the
conductor, every time the bus stops, to do no act that would have the
effect of increasing the peril to a passenger while he was attempting to
board the same. The premature acceleration of the bus in this case was
a breach of such duty.
It is the duty of common carriers of passengers, including common
carriers by railroad train, streetcar, or motorbus, to stop their
conveyances a reasonable length of time in order to afford passengers
an opportunity to board and enter, and they are liable for injuries
6
suffered by boarding passengers resulting from the sudden starting up As to Duration The No provision of law,
or jerking of their conveyances while they are doing so.
of extraordinary BUT WE LOOK AT
Further, even assuming that the bus was moving, the act of the victim responsibility responsibility of JURISPRUDENCE:
in boarding the same cannot be considered negligent under the the common
circumstances. As clearly explained in the testimony of the aforestated carrier lasts Responsibility does
witness for petitioners, Virginia Abalos, the bus had "just started" and
"was still in slow motion" at the point where the victim had boarded and
from the time not cease at the
was on its platform. the goods are moment the
unconditionally passenger alights
So the ruling of SC here was that there was no contributory negligence placed in the from the carrier’s
on the part of the passenger.
possession of, vehicle at a place
So it is ordinary for the passenger to try to board the vehicle that is in and received by selected by the
slow-motion and in doing so it is not considered a negligent act on the the carrier for carrier at the point of
part of the passenger. The bus driver and conductor should be aware transportation destination, but
of such an ordinary practice of the passenger and they should have
exercised extraordinary diligence to ensure the safety and convenience
until the same continues until the
of the passenger. are delivered, passenger has had a
actually or reasonable time or
Further, the victim here was already considered a passenger. SC said constructively, reasonable
that the victim by already stepping on the platform of the bus is already
considered a passenger and is thus entitled to all the rights and
by the carrier to opportunity to leave
protection pertaining to such a contractual relation. the consignee, the current premises
or to the person
Isaac v. Al Ammen who has a right
Discussion: to receive them
(1736)
Contributory negligence means:
1. The common carrier was negligent
2. The passenger was also negligent
(note
3. The liability of the common carrier shall be equitable reduced jurisprudence
on the
In this case, the passenger’s arm was extended outside the bus. MATTER OF
However the SC held that such contributory negligence on the part of
the passenger would not completely exempt the common carrier from
CONTROL;
liability. Rather, the amount of damages recoverable shall be equitably when the
reduced (under Art. 1762 of the NCC). common carrier
is still in control
NOTE: there is a prevailing rule that it is negligence per se for a
passenger to protrude any part of its body.
or in
possession of
COMPARING CARRIAGE OF GOODS vs. CARRIAGE the goods and
OF PASSENGERS therefore there
is still
GOODS PASSENGERS responsibility
Diligence Extraordinary Extraordinary on their part)
Required Diligence Diligence (1733,
(1733, 1734, 1755, 1756) (also take note
1735) of 1737, 1738
Presumption Arises when the Arises when there is re: goods in
of Negligence goods are death of or injuries of transit and
destroyed, lost, the passenger goods in
or deteriorated customs
When such Exempting There is no such warehouse)
presumption causes under provision on the 5 Responsibility Go back to The same with
of negligence art. 1734 (which exempting as to the acts 1745: Carriage of Goods
DOES NOT is an exclusive circumstances. BUT or omission of Any of the (but under art. 1759)
ARISE list) the discussion of the the employees following or Common carriers
SC said that similar are liable for the
fortuitous event can stipulations death of or injuries to
be raised as a shall be passengers through
defense pursuant to considered the negligence or
provisions on unreasonable, wilful acts of the
ObliCon unjust and former's employees,

7
 contrary to although such but not for wilful acts
public policy: employees may or gross negligence.
xxx (5) That the have acted beyond
common carrier the scope of their The reduction of fare
shall not be authority or in does not justify any
responsible for violation of the limitation of the
the acts or orders of the common carrier's
omission of his common carriers liability.
or its (1758)
employees
Negligence on It can be a The passenger must
the part of the cause that can observe the
shipper or the be invoked by diligence of a good
passenger the common father of a family to
carrier so that avoid harm or injury
the upon himself.
presumption of The contributory
So now we go to Maritime Commerce
negligence will negligence of the
not apply passenger does not
Maritime Law – is a system of laws pertaining to affairs
(1734). bar recovery of
of the sea, ships, crews, and navigation for the
damages for his
convenience of persons and property.
NOTE: it should death or injuries, if
be the the proximate cause
The law that we will look into is the NCC, Code of
proximate and thereof is the
Commerce, COGSA, and other related laws.
only cause of negligence of the
the loss, common carrier, but
So before we discuss maritime law, we have to
deterioration, or the amount of
understand the real and hypothecary nature of a Maritime
destruction of damages shall be
Contract. This means that in maritime law, the liability of
the goods equitably reduced.
a common carrier, vessel-owner, or agent in connection
(1762)
with losses related to maritime contracts or arising from
Whether or NO. stipulation NO. stipulation that
the operation of such vessel is confined and limited to the
not diligence that there is no there is no diligence
vessel as well as its equipment, freight, insurance if any
can be diligence at all at all is
for such obligations which stands for guarantee for their
dispensed is unreasonable,
settlement. This is the DOCTRINE OF LIMITED
with unreasonable, unjust, and contrary
LIABILITY.
unjust, and to public policy.
contrary to
There is liability when on the part of the common carrier,
public policy.
vessel-owner or agency in connection with losses related
Whether or Can be IT CANNOT BE
to contracts entered in to, it is limited to the vessel and
not degree of allowed, but it LESSENED/CANN
this is because of the risk attending maritime commerce.
diligence may must be in OT BE DISPENED
be lessened writing, has a (1757)
(meaning that consideration,
the CC does and it should be
not have to reasonable, – it is defined under Presidential Decree 474, section 3
exercise just, and not
extraordinary contrary to Definition of VESSEL [PD 474 Sec. 3] - Any: barge, lighter, bulk
carrier, passenger ship, freighter, tanker, container ship, fishing boat or
diligence) public policy. other artificial contrivance utilizing any source of motive power,
Liability Is allowed. Is allowed. designed, used or capable of being used as a means of water
lessened in When a passenger transportation operating either as common contract carrier,
including fishing vessels, except:
case of Agreement is carried
breach/ limiting liability gratuitously, a a. those owned and/or operated by the AFP and by foreign
is allowed stipulation limiting governments for military purposes, and
(1748 and the common
b. bancas, sailboats and other waterborne contrivance of less
1749) carrier's liability for than 3 gross tons capacity and not motorized
negligence is valid,

8
Article 574. Builders of vessels may employ the materials and
follow, with respect to their construction and rigging, the
systems most suitable to their interests. Ship owners and
seamen shall be subject to what the laws and regulations of the
public administration on navigation, customs, health, safety of
vessels, and other similar matters.
Article 585. For all purposes of law not modified or restricted
by the provisions of this Code, vessels shall continue to be
considered as personal property.
However do take note of art. 573 as to ownership and acquisition of
vessels:
Article 573. Merchant vessels constitute property which may
be acquired and transferred by any of the means recognized by
law. The acquisition of a vessel must appear in a written
instrument, which shall not produce any effect with respect to
third persons if not inscribed in the registry of vessels.
The ownership of a vessel shall likewise be acquired by
possession in good faith, continued for three years, with a just
title duly recorded. In the absence of any of these requisites,
continuous possession for ten years shall be necessary in order
to acquire ownership.
A captain may not acquire by prescription the vessel of which
he is in command.
Acquisition through prescription:
By prescription:
a. 3 years – if possession thereof was in good faith with just title duly
recorded, or
b. 10 years – in the absence of above requisites
When you look at acquisition of ownership of the vessel, please take
note it says that it may be acquired by any means provided by the law
hence please note art 712 of the NCC:
1. By any means recognized by law [Art. 712 Civil Code]:
a. By law [sale or dacion en pago]
b. By donation
c. By testate or intestate succession
d. In consequence of certain contracts
e. By tradition
Note also 575 and 576:
Article 575. Co-owners of vessels shall have the right of
repurchase and redemption in sales made to strangers, but they
may exercise the same only within the nine days following the
inscription of the sale in the registry, and by depositing the price
at the same time.
Article 576. In the sale of a vessel it shall always be understood
as included the rigging, masts, stores and engine of a streamer
appurtenant thereto, which at the time belongs to the vendor.
The arms, munitions of war, provisions and fuel shall not be
considered as included in the sale.
The vendor shall be under the obligation to deliver to the
purchaser a certified copy of the record sheet of the vessel in
the registry up to the date of the sale
Also note 575:
Article 577. If the alienation of the vessel should be made while
it is on a voyage, the freightage which it earns from the time it
receives its last cargo shall pertain entirely to the purchaser,
and the payment of the crew and other persons who make up
its complement for the same voyage shall be for his account.
If the sale is made after the vessel has arrived at the port of its
destination, the freightage shall pertain to the vendor, and the
payment of the crew and other individuals who make up its
complement shall be for his account, unless the contrary is
stipulated in either case.
Note also these provisions:
Article 578. If the vessel being on a voyage or in a foreign port,
its owner or owners should voluntarily alienate it, either to
Filipinos or to foreigners domiciled in the capital or in a port of
another country, the bill of sale shall be executed before the
consul of the Republic of the Philippines at the port where it
terminates its voyage and said instrument shall produce no
effect with respect to third persons if it is not inscribed in the
registry of the consulate. The consul shall immediately forward
a true copy of the instrument of purchase and sale of the vessel
to the registry of vessels of the port where said vessel is
inscribed and registered.
In every case the alienation of the vessel must be made to
appear with a statement of whether the vendor receives its price
in whole or in part, or whether he preserves in whole or in part
any claim on said vessel. In case the sale is made to a Filipino,
this fact shall be stated in the certificate of navigation.
When a vessel, being on a voyage, shall be rendered useless
for navigation, the captain shall apply to the competent judge
on court of the port of arrival, should it be in the Philippines; and
should it be in a foreign country, to the consul of the Republic
of the Philippines, should there be one, or, where there is none,
to the judge or court or to the local authority; and the consul, or
the judge or court, shall order an examination of the vessel to
be made.
If the consignee or the insurer should reside at said port, or
should have representatives there, they must be cited in order
that they may take part in the proceedings on behalf of whoever
may be concerned.
Article 579. After the damage to the vessel and the impossibility
of her being repaired, in order to continue the voyage had been
shown, its sale at public auction shall be ordered, subject to the
following rules:
1.The hull of the vessel, its rigging, engines, stores, and other
articles shall be appraised, after making an inventory, said
proceedings to be brought to the notice of the persons who may
wish to take part in the auction.
9
2.The order or decree ordering the auction to be held shall be
posted in the usual places, an announcement thereof to be
inserted in the Official Gazette and in two of the newspapers of
the largest circulation of the port where the auction is to be held,
should there be any. The period which may be fixed for the
auction shall not be less than twenty days.
3. These announcements shall be repeated every ten days, and
their publication shall be made to appear in the records.
4. The auction shall be held on the day fixed, with the formalities
prescribed in the common law for judicial sales.
5. If the sale should take place while the vessel is in a foreign
country, the special provisions governing such cases shall be
observed
Note also the case of Rubiso vs. Rivera wherein the SC held that the
requisite of registration in the registry of the purchase of a vessel is
necessary and indispensable in order for the purchaser’s right may be
maintained against a claim filed by a 3rd person. This is required by code
of commerce and act no. 1900.
Art. 586: The shipowner and ship agent shall be civilly liable for
the acts of the captain and for the obligations contracted by the
latter to repair, equip, ad provision the vessel, provided the
creditor proves that the amount claimed was invested for the
benefit of the same.
By ship agent is understood the person entrustedwith provisio
ning or representing the vessel in the port which it may be
found.
The ship agent must be qualified to trade and must be recorded in the
merchant’s registry of the province.
Even if the Ship agent acts on behalf of the shipowner or as agent of
charter, he will still be considered ship agent as long as he is entrusted
with provisioning or representing the vessel.
Art 587: The ship agent shall also be civilly liable for the
indemnities in favor of third persons which may arise from the
conduct of the captain in the care of the goods which he loaded
on the vessel; but he may exempt himself therefrom by
abandoning the vessel with all her equipment and the freight it
may have earned during the voyage.
The term "ship agent" as used in the foregoing provision is broad
enough to include the ship owner. Hence, both the ship owner and ship
agent are civilly and directly liable for the indemnities in favor of third
persons, which may arise from the conduct of the captain in the care of
goods transported, as well as for the safety of passengers transported.
Navierro – refers to the person undertaking the voyage, who in one
case may be the owner and in another the charterer. Under the Code,
the owner of the vessel is civilly liable for the acts of the captain; and
can only escape from this civil liability by abandoning his property in the
ship and any freight that he may have earned on the voyage. (Standard
Oil v. Lopez)
In case of collisions, abandonment may be availed of under Article 837.
Abandonment as a remedy:
• is equivalent to an offer of the value of the vessel or
equipment and freight earned for exemption from liability.
• It is an indispensable requirement to enjoy the benefits of the
Doctrine of Limited liability
• Can only be exercised by the shipowner and Ship agent
• Must be done in the instances provided by law and cannot be
disallowed or refused.
• It is exercised under art 587, 590 and 837.
• It cannot apply where the liability is due to the concurrent fault
or negligence of the shipowner or agent. It can only be
availed to avoid liability arising from the conduct of the
captain. In such a case, article 587 cannot be applied. The
Provisions of the Civil Code on Common Carriers will be
applied.
Doctrine of Limited Liability is also called as the “no vessel, no liability
doctrine”. The shipowners or agents liability is merely coextensive with
his interest in the vessel such that a total loss thereof results in its
extinction.
Doctrine of Limited Liability will not apply in the following:
1. Repairs and provisioning of the vessel before the loss of the
vessel; (Art. 586)
2. Insurance proceeds. If the vessel is insured, the proceeds will
go to the persons entitled to claim from the shipowner;
(Vasquez v. CA)
3. Workmen’s Compensation cases (now Employees’
Compensation under the Labor Code); (Oching v. San Diego)
4. When the shipowner is guilty of fault or negligence; Note: But
if the captain is the one who is guilty, doctrine may still be
invoked, hence, abandonment is still an option.
5. Private carrier; or
6. Voyage is not maritime in character.
Art 588: Neither the shipowner nor the ship agent shall be liable
for the obligations contracted by the captain, if the latter
exceeds the powers and privileges pertaining to him by reason
of his position or conferred upon him or conferred upon him by
the former. Nevertheless, if the amounts claimed were invested
for the benefit of the vessel, the responsibility therefor shall
devolve upon its owner or agent.
Art 590: The co-owners of the vessel shall be civilly liable, in
proportion of their interest in the common fund, for the results
of the acts of the captain, referred to in Art 587.
Each co-owner may exempt himself from this liability by the
abandonment, before a notary, of the part of the vessel
belonging to him.
POWERS AND DUTIES OF THE SHIP AGENT:
1. Ship agent shall represent the ownership of the vessel and
may, in his own name and in such capacity, take judicial and
extrajudicial steps in matters relating to commerce;
2. The ship agent may discharge the duties of captain of the
vessel if qualified under the qualifications of the captain;
3. The ship agent shall designate and come to terms with the
captain, and shall contract in the name of the owners;
10
 4. The ship agent may order a new voyage, or make contract
for a new charter, or insure the vessel if authorized by the
owner;
5. Render an account of the results of each voyage;
6. Shall indemnify the Captain for all the expenses he may have
incurred;
7. May at his discretion discharge the captain and members of
the crew whose contracts are not for a definite period or
voyage, before the vessel sets sail.
Art 595. The ship agent, whether he is at the same time the
owner of the vessel, or a manager for an owner or for a
association of co-owners, must have the capacity to trade and
must be recorded in the merchant’s registry of the province.
The ship agent shall represent the ownership of the vessel and
may, in his own name and in such capacity, take judicial and
extrajudicial steps in matters relating to commerce
Art 596. The ship agent may discharge the duties of captain of
the vessel, subject in every case to the provision of Art 609.If
two or more co-owners apply for the provision of captain, the
disagreement shall be decided by a vote of the members; and
if the vote should result in a tie, it shall be decided i favour of
the co-owner having the larger interest in the vessel. If the
interests of the applicants should be equal, ad there should be
a tie, the matter shall be decided by lot.
Art 597. The ship agent shall designate and come to terms with
the captain, and shall contract in the name of the owners, who
shall be bound in all that refer to repairs, details of equipment,
armament, provisions of food and fuel, and freight of the vessel,
and, in general, in all that relate to the requirements of
navigation.
Art 598. The ship agent may not order a new voyage, or make
contract for a new charter, or insure the vessel, without the
authorization of its owner or resolution of the majority of the co-
owners, unless these powers were granted him in the certificate
of his appointment. If he insures the vessel without
authorization therefore, he shall be subsidiarily liable for the
solvency of the insurer.
Art 599. The ship agent managing for an association shall
render to his associates an account of the results of each
voyage of the vessel, without prejudice to always having the
books and correspondence relating to the vessel and to its
voyages at their disposal.
Art 602. The ship agent shall indemnify the captain for all the
expenses he may have incurred with funds of his own or of
others, for the benefit of the vessel.
Art 603. Before the vessel sets out to sea the ship agent may
at his discretion discharge the captain and members of the crew
whose contracts are not for a definite period or voyage, paying
them the salaries earned according to their contracts, and
without any indemnity whatsoever, unless there is an express
and specific agreement in respect thereto.
Aboitiz v. New India
Topic: Application of the doctrine of limited liability.
Contention: Petitioner seeks the referral of this case to the Court En
Banc alleging that our May 2, 2006 Decision modified or reversed the
doctrines in GAFLAC and Monarch, where we ruled that petitioner’s
liability was limited to the claimants’ pro rata share in the
insurance proceeds in view of the doctrine of limited liability.
Court ruling:
The weather was moderate when M/V P. Aboitiz sank. Both the trial and
appellate courts also ruled that the M/V P. Aboitiz sank due to its
unseaworthiness and not due to typhoon.
To limit petitioner’s liability to the amount of the insurance proceeds, it
has the burden of showing that the unseaworthiness of the vessel was
not due to its fault or negligence.
In this case: But it failed to do so. Where the shipowner fails to
overcome the presumption of negligence, the doctrine of limited liability
cannot be applied.
Aboitiz Shipping v Equitable
Court Ruling: The instant petitions provide another occasion for the
Court to reiterate the well-settled doctrine of the real and hypothecary
nature of maritime law.
As a general rule: a ship owners liability is merely co-extensive with
his interest in the vessel, except where actual fault is attributable to the
shipowner. Thus, as an exception to the limited liability doctrine, a
shipowner or ship agent may be held liable for damages when the
sinking of the vessel is attributable to the actual fault or negligence of
the shipowner or its failure to ensure the seaworthiness of the vessel.
In this case: The instant petitions cannot be spared from the application
of the exception to the doctrine of limited liability in view of the
unanimous findings of the courts below that both Aboitiz and the crew
failed to ensure the seaworthiness of the M/V P. Aboitiz.
Class Discussion:
So in this case the supreme court said that you cannot apply the ruling
in the Guclac case because there was no finding of negligence on the
part of Aboitiz, Here Limited liability rule cannot be applied where there
is negligence.
Distinctions:
Captain Master
one who governs vessels: that one who commands smaller
navigate the high seas, or of ships engaged exclusively in
large dimensions and the coastwise trade
11
 importance [although engaged
in coastwise trade]
Note:
For purposes of Maritime Commerce, ―captainǁ and ―masterǁ have
the same meaning, both being the chiefs and commanders of vessels
What are the qualifications of a captain or masters of a vessel?
[Article 609 of the Code of Commerce]
• Filipino
• Legal capacity to bind himself
• Proof that they have skill, capacity, and qualification required
to command and direct a vessel as established by: marine
laws, ordinances or regulations those of navigation
• Not disqualified according to the same for the discharge of
the duties of that position
Coastwise Lighterage v. Court of Appeals
Jesus R. Constantino, the patron of the vessel "Coastwise 9" admitted
that he was not licensed. The Code of Commerce, which subsidiarily
governs common carriers (which are primarily governed by the
provisions of the Civil Code) provides:
Art. 609. — Captains, masters, or patrons of vessels must be Filipinos,
have legal capacity to contract in accordance with this code, and prove
the skill capacity and qualifications necessary to command and direct
the vessel, as established by marine and navigation laws, ordinances
or regulations, and must not be disqualified according to the same for
the discharge of the duties of the position. . . .
Clearly, petitioner Coastwise Lighterage's embarking on a voyage with
an unlicensed patron violates this rule.
It cannot safely claim to have exercised extraordinary diligence, by
placing a person whose navigational skills are questionable, at the helm
of the vessel which eventually met the fateful accident. It may also
logically, follow that a person without license to navigate, lacks not just
the skill to do so, but also the utmost familiarity with the usual and safe
routes taken by seasoned and legally authorized ones. Had the patron
been licensed, he could be presumed to have both the skill and the
knowledge that would have prevented the vessel's hitting the sunken
derelict ship that lay on their way to Pier
As a common carrier, petitioner is liable for breach of the contract of
carriage, having failed to overcome the presumption of negligence with
the loss and destruction of goods it transported, by proof of its exercise
of extraordinary diligence.
Discussion:
So in this case the supreme court said that embarking with unlicensed
captain is a violation of the law of code of commerce.
Inter-Orient Maritime v. NLRC
The captain of a vessel is a confidential and managerial employee
within the meaning of the above doctrine.
A master or captain, for purposes of maritime commerce, is one who
has command of a vessel. A captain commonly performs three (3)
distinct roles:
1. he is a general agent of the shipowner;
2. he is also commander and technical director of the vessel; and
3. he is a representative of the country under whose flag he navigates.
Of these roles, by far the most important is the role performed by the
captain as commander of the vessel; for such role (which, to our mind,
is analogous to that of "Chief Executive Officer" [CEO] of a present-day
corporate enterprise) has to do with the operation and preservation of
the vessel during its voyage and the protection of the passengers (if
any) and crew and cargo.
In his role as general agent of the shipowner, the captain has authority
to sign bills of lading, carry goods aboard and deal with the freight
earned, agree upon rates and decide whether to take cargo.
The ship captain, as agent of the shipowner, has legal authority to enter
into contracts with respect to the vessel and the trading of the vessel,
subject to applicable limitations established by statute, contract or
instructions and regulations of the shipowner.
To the captain is committed the governance, care and management of
the vessel. Clearly, the captain is vested with both management
and fiduciary functions.
Inherent Power of Captain
ARTICLE 610. The following powers shall be inherent in the
position of captain, master or patron of a vessel:
1. To appoint or make contracts with the crew in the absence of
the ship agent, and to propose said crew, should said agent be
present; but the ship agent may not employ any member
against the captain's express refusal.
2. To command the crew and direct the vessel to the port of its
destination, in accordance with the instructions he may have
received from the ship agent.
3. To impose, in accordance with the contracts and with the
laws and regulations of the merchant marine, and when on
board the vessel, correctional punishment upon those who fail
to comply with his orders or are wanting in discipline, holding a
preliminary hearing on the crimes committed on board the
vessel on the seas, which crimes shall be turned over to the
authorities having jurisdiction over the same at the first port
touched.
4. To make contracts for the charter of the vessel in the absence
of the ship agent or of its consignee, acting in accordance with
the instructions received and protecting the interests of the
owner with utmost care.
5. To adopt all proper measures to keep the vessel well supplied
and equipped, purchasing all that may be necessary for the
purpose, provided there is no time to request instruction from
the ship agent.
6. To order, in similar urgent cases while on a voyage, the
repairs on the hull and engines of the vessel and in its rigging
and equipment, which are absolutely necessary to enable it to
continue and finish its voyage; but if he should arrive at a point
where there is a consignee of the vessel, he shall act in
concurrence with the latter.
Duties of a Captain
12

ARTICLE 612. The following obligations shall be inherent in the
office of captain:
1. To have on board before starting on a voyage a detailed
inventory of the hull, engines, rigging, spare-masts, tackle, and
other equipment of the vessel; the royal or the navigation
certificate; the roll of the persons who make up the crew of the
vessel, and the contracts entered into with them; the lists of
passengers; the bill of health; the certificate of the registry
proving the ownership of the vessel and all the obligations which
encumber the same up to that date; the charter parties or
authenticated copies thereof; the invoices or manifests of the
cargo, and the memorandum of the visit or inspection by
experts, should it have been made at the port of departure.
2. To have a copy of this code on board.
3. To have three folioed and stamped books, placing at the
beginning of each one a memorandum of the number of folios
it contains, signed by the maritime authority, and in his absence
by the competent authority.
In the first book, which shall be called "log book," he shall enter
day by day the condition of the atmosphere, the prevailing
winds, the courses taken, the rigging carried, the power of the
engines used in navigation, the distances covered, the
maneuvers executed, and other incidents of navigation; he shall
also enter the damage suffered by the vessel in her hull,
engines, rigging, and tackle, no matter
what its cause may be, as well as the impairment and damage
suffered by cargo, and the effect and importance of the jettison,
should there be any; and in cases of serious decisions which
require the advice or a meeting of the officers of the vessel, or
even of the crew and passengers, he shall record the decisions
adopted. For the information indicated he shall make use of the
binnacle book and of the steam of engine book kept by the
engineer.
In the second book called the "accounting book," he shall record
all the amounts collected and paid for the account of the vessel,
entering specifically article by article, the source of the collection
and the amounts spent for provisions, repairs, acquisitions of
equipment or goods, fuel, food, outfits, wages, and other
expenses of whatever nature they may be. He shall furthermore
enter therein a list of all the members of the crew, stating their
domiciles, their wages and salaries, and the amounts they may
have received on account, directly or by delivery to their
families.
In the third book, called "freight book," he shall record the
loading and discharge of all the goods, stating their marks and
packages, names of the shippers and of the consignees, ports
of loading and unloading, and the freightage they give. In this
same book he shall record the names and places of sailing of
the passengers, the number of packages in their baggage, and
the price of passage.
4. Before receiving cargo, to make with the officers of the crew
and two experts, if required by the shippers and passengers, an
examination of the vessel, in order to ascertain whether it is
water-tight, with the rigging and engines in good condition, and
with the equipment required for good navigation, preserving
under his responsibility a certificate of the memorandum of his
inspection, signed by all those who may have taken part therein.
The experts shall be appointed, one by the captain of the vessel
and another by those who request its examination, and in case
of disagreement a third shall be appointed by the marine
authority of the port or by the authority, exercising his functions.
5. To remain constantly on board the vessel with the crew while
the cargo is being taken on board and to carefully watch the
stowage thereof; not to consent to the loading of any
merchandise or matter of a dangerous character, such as
inflammable or explosive substances, without the precautions
which are recommended for their packing, handling and
isolation; not to permit the carriage on deck of any cargo which
by reason of its arrangement, volume, or weight makes the work
of the sailors difficult, and which might endanger the safety of
the vessel; and if, on account of the nature of the merchandise,
the special character of the shipment, and principally the
favorable season in which it is undertaken, merchandise may
be carried on deck, he must hear the opinion of the officers of
the vessel and have the consent of the shippers and of the ship
agent.
6. To demand a pilot at the expense of the vessel whenever
required by the navigation, and
principally when he has to enter a port, canal, or river, or has to
take a roadstead or anchoring place with which neither he nor
the officers and crew are acquainted.
7. To be on deck on reaching land and to take command on
entering and leaving ports, canals,
roadsteads, and rivers, unless there is a pilot on board
discharging his duties. He shall not spend the night away from
the vessel except for serious causes or by reason of official
business.
8. To present himself, when making a port in distress, to the
maritime authority if in the Philippines and to the consul of the
Republic of the Philippines if in a foreign country, before
twentyfour hours have elapsed, and to make a statement of the
name registry, and port of departure of the vessel, of its cargo,
and the cause of arrival which declaration shall be visaed by the
authority or the consul, if after examining the same it is found to
be acceptable, giving the captain the proper certificate proving
his arrival in distress and the reasons therefor. In the absence
of the maritime authority or of the consul, the declaration must
be made before the local authority.
9. To take the necessary steps before the competent authority
in order to record in the certificate of the vessel in the registry
of vessels the obligations which he may contract in accordance
with Article 583.
10. To place under good care and custody all the papers and
belongings of any members of the crew who might die on the
vessel, drawing up a detailed inventory, in the presence of
passengers, or, in their absence, of members of the crew as
witnesses.
11. To conduct himself according to the rules and precepts
contained in the instructions of the ship agent, being liable for
all that which he may do in violation thereof.
13

12. To inform the ship agent from the port at which the vessel
arrives, of the reason of his arrival, taking advantage of the
semaphore, telegraph, mail, etc., as the case may be; to notify
him of the cargo he may have received, stating the names and
domiciles of the shippers, freightage earned, and amounts
borrowed on bottomry loan; to advise him of his departure, and
of any operation and date which may be of interest to him.
13. To observe the rules with respect to situation, lights and
maneuvers in order to avoid collisions.
14. To remain on board, in case the vessel is in danger, until all
hope to save it is lost, and before abandoning it, to hear the
officers of the crew, abiding by the decision of the majority; and
if the boats are to be taken to, he shall take with him, before
anything else, the books and papers, and then the articles of
most value, being obliged to prove, in case of the loss of the
books and papers, that he did all he could to save them.
15. In case of wreck, to make the proper protest in due form at
the first port of arrival, before the competent authority or the
Philippine consul, within twenty-four hours, specifying therein all
the incidents of the wreck, in accordance with subdivision 8 of
this article.
16. To comply with the obligations imposed by the laws and
regulations on navigation, customs, health, and others.
Others
ARTICLE 622. If while on a voyage the captain should learn of
the appearance of privateers or men of war against his flag, he
shall be obliged to make the nearest neutral port, inform his
agent or shippers, and await an occasion to sail under convoy,
or until the danger is over or he has received express orders
from the ship agent or the shippers.
ARTICLE 623. If he should be attacked by a privateer, and,
after having tried to avoid the encounter and having resisted the
delivery of the effects of the vessel or its cargo, they should be
forcibly taken away from him, or he should be obliged to deliver
them, he shall make an entry thereof in his freight book and
shall prove the fact before the competent authority at the first
port he touches. cdasia After the force majeure has been
proved, he shall be exempted from liability.
ARTICLE 624. A captain whose vessel has gone through a
hurricane or who believes that the cargo has suffered damages
or averages, shall make a protest thereon before the competent
authority at the first port he touches, within twenty-four hours
following his arrival and shall ratify it within the same period
when he arrives at his destination, immediately proceeding with
the proof of the facts, and he may not open the hatches until
after this has been done. The captain shall proceed in the same
manner, if, the vessel having been wrecked; he is saved alone
or with part of his crew, in which case he shall appear before
the nearest authority, and make a sworn statement of facts. The
authority or the consul shall verify the said facts receiving sworn
statements of the members of the crew and passengers who
may have been saved; and taking such other steps as may
assist in arriving at the facts he shall make a statement of the
result of the proceedings in the log book and in that of the sailing
mate, and shall deliver to the captain the original record of the
proceedings, stamped and folioed, with a memorandum of the
folios, which he must rubricate, in order that it may be presented
to the judge or court of the port of destination. The statement of
the captain shall be accepted if it is in accordance with those of
the crew and passengers; if they disagree, the latter shall be
accepted, always saying proof to the contrary.
ARTICLE 625. The captain, under his personal responsibility as
soon as he arrives at the port of destination, should get the
necessary permission from the health and customs officers, and
perform the other formalities required by the regulations of the
administration, delivering the cargo without any defalcation, to
the consignee, and in a proper case, the vessel, rigging, and
freightage to the ship agent. If by reason of the absence of the
consignee or on account of the nonappearance of a legal holder
of the bills of lading, the captain should not know to whom he is
to legally make the delivery of the cargo, he shall place it at the
disposal of the proper judge or court or authority, in order that
he may determine what is proper with regard to its deposit,
preservation and custody.
Maritime Protest
ARTICLE 624. A captain whose vessel has gone through a
hurricane or who believes that the cargo has suffered damages
or averages, shall make a protest thereon before the competent
authority at the first port he touches, within twenty-four hours
following his arrival and shall ratify it within the same period
when he arrives at his destination, immediately proceeding with
the proof of the facts, and he may not open the hatches until
after this has been done.
The captain shall proceed in the same manner, if, the vessel
having been wrecked; he is saved alone or with part of his crew,
in which case he shall appear before the nearest authority, and
make a sworn statement of facts.
The authority or the consul shall verify the said facts receiving
sworn statements of the members of the crew and passengers
who may have been saved; and taking such other steps as may
assist in arriving at the facts he shall make a statement of the
result of the proceedings in the log book and in that of the sailing
mate, and shall deliver to the captain the original record of the
proceedings, stamped and folioed, with a memorandum of the
folios, which he must rubricate, in order that it may be presented
to the judge or court of the port of destination.
The statement of the captain shall be accepted if it is in
accordance with those of the crew and passengers; if they
disagree, the latter shall be accepted, always saying proof to
the contrary.
Definition:
Maritime Protest –
• It is a written statement under oath
• Made by the captain or master of the vessel
• After the occurrence of an accident or disaster
• In which the vessel or cargo is lost or injured
• With respect to circumstances attending such occurrence
Purpose: It is usually intended to show:
14
That the loss or damage resulted from a peril of the sea, or some other
cause for which neither the master or owner was responsible. It
concludes with the protestation against any liability of the owner for
such loss or damage.
Examples of Instances When Maritime Protest May be Filed:
• When the vessel has gone through a hurricane
• When the captain believes that cargo has suffered damages
or averages
• If the vessel has been wrecked
Procedure - Duties of the Captain whose Vessel has gone through
a Hurricane or whose Cargo has Suffered Damages or Averages
[Art. 624 of the Code of Commerce]
• He shall make a PROTEST thereon before a competent
authority at the first port he touches within hours following his
arrival
• He must RATIFY it within 24 hours when he arrives at the
place of destination where he must proceed immediately with
the proof of the facts
• He must not open the hatches until all of the above is done
Should the Statement of the Captain be Believed?
YES - if it is in accordance with those of the crew and pax
NO – if the crew and pax disagree
Always saving proof to the contrary
Haverton Shipping v. NLRC
In declaring that copy of the Official Entry in the Ship's Log Book was
not legally binding for being hearsay, public respondents overlooked the
fact that under our laws the ship's captain is obligated to keep a "log
book" where, among others, he records the decisions he has adopted.
Even according to the law of the vessel's registry, that book is also
"required by law" as disclosed by the entry itself.
There is no controversy as to the genuineness of the said entry. The
vessel's log book is an official record and entries made by a person in
the performance of a duty required by law are prima facie evidence of
the facts stated therein
It is true that the Affidavits of Candelaria and Espiritu, dated April 4 &
11, 1983, were submitted
Discussion:
Log book is official record entries made by the person required by law
are prima facie evidence of the facts stated therein.
The liabilities of the captain and masters of vessels 614, 615, 618, 619
to 620 of the Code of Commerce. The duration of liability of captain is
stated under Article 619 of the Code of Commerce it is from the time
it is turned over to him at the dock or afloat along the port side the vessel
at the port of loading until he delivers it on the shore or at the
discharging wharf at the port of unloading unless otherwise expressly
agreed upon;
ARTICLE 614. A captain who, having made an agreement to
make a voyage, should not fulfill his obligation, without being
prevented by an accident case or by force majeure, shall pay
for all the losses his action may cause, without prejudice to
criminal penalties which may be proper.
ARTICLE 615. Without the consent of the agent, the captain
can not have himself substituted by another person; and should
he do so, besides being liable for all the acts of the substitute
and bound to the indemnities mentioned in the foregoing article,
the substitute as well as the captain may be discharged by the
agent.
ARTICLE 616. If the provisions and fuel of the vessel are
consumed before arriving at the port of destination, the captain
shall decide, with the consent of the officers of the same, to
make the nearest port to get a supply of either; but if there are
persons on board who have provisions of their own he may
force them to turn said provisions over for the common
consumption of all persons on board, paying the price thereof
immediately, or at the latest, at the first port reached.
ARTICLE 617. The captain can not contract loans on
respondentia, and should he do so the contracts shall be void.
Neither can he borrow money on bottomry for his own
transactions, except on the portion of the vessel he owns,
provided no money has been previously borrowed on the whole
vessel, and provided there does not exist any other kind of lien
or obligation thereon. When he is permitted to do so, he must
necessarily state what interest he has in the vessel.
In case of violation of this article the principal, interest, and costs
shall be charged to the private account of the captain, and the
agent may furthermore have the right to discharge him.
ARTICLE 618. The captain shall be civilly liable to the agent,
and the latter to the third persons who may have made contracts
with the former —
1. For all the damages suffered by the vessel and his cargo by
reason of want of skill or negligence on his part. If a
misdemeanor or crime has been committed he shall be liable in
accordance with the Penal Code.
2. For all the thefts committed by the crew, reserving his right of
action against the guilty parties.
3. For the losses, fines, and confiscations imposed an account
of violation of the laws and regulations of customs, police,
health, and navigation.
4. For the losses and damages caused by mutinies on board
the vessel, or by reason of faults committed by the crew in the
service and defense of the same, if he does not prove that he
made full use of his authority to prevent or avoid them.
5. For those arising by reason of an undue use of powers and
non-fulfillment of the obligations which are his in accordance
with Articles 610 and 612.
6. For those arising by reason of his going out of his course or
taking a course which he should not have taken without
sufficient cause, in the opinion of the officers of the vessel, at a
meeting with the shippers or supercargoes who may be on
board.
No exception whatsoever shall exempt him from this obligation.
15

7. For those arising by reason of his voluntarily entering a port
other than his destination, with the exception of the cases or
without the formalities referred to in Article 612.
8. For those arising by reason of the non-observance of the
provisions contained in the regulations for lights and evolutions
for the purpose of preventing collisions.
ARTICLE 619. The captain shall be liable for the cargo from the
time it is turned over to him at the dock, or afloat alongside the
ship, at the port of loading until he delivers it on the shores or
on the discharging wharf, of the port of unloading unless the
contrary has been expressly agreed upon.
Sweet lines v Court of Appeals
Discussion:
So, in that case the SC applied Art 614 of the Code of
Commerce which says that a captain having agreed to make a voyage
fails to fulfill his undertaking without being prevented by force majeure
shall indemnify all the losses which his failure may cause without
prejudice to criminal penalties which may be proper.
The next topic is Discharge by Ship Owner or agent of the
captain; So, what are the rules in relation to Discharge by shipowner
or ship agent; Article 603 of the Code of Commerce; Article 604;
Article 605;
ARTICLE 603. Before a vessel goes out to sea the agent shall
have at his discretion, a right to discharge the captain and
members of the crew whose contract did not state a definite
period nor a definite voyage, paying them the salaries earned
according to their contracts, and without any indemnity
whatsoever, unless there is a special and specific agreement in
respect thereto.
ARTICLE 604. If the captain or any other member of the crew
should be discharged during the voyage, they shall receive their
salary until the return to the place where the contract was made,
unless there are good reasons for the discharge, all in
accordance with Articles 636 et seq. of this Code.
ARTICLE 605. If the contracts of the captain and members of
the crew with the agent should be for a definite period or
voyage, they can not be discharged until the fulfillment of their
contracts, except for reasons of insubordination in serious
matters, robbery, theft, habitual drunkenness, and damage
caused to the vessel or to its cargo by malice or manifest or
proven negligence.
The First situation: if the contract did not state that a definite or definite
voyage what is the rule, can you discharge the captain? - YES, but there
is that payment of salaries according to their contract; So the rule is that
the captain or any member of the crew may be discharged at the
discretion of the shipowner or shipagent; before the vessel goes out of
see and with payment of salaries earned according to the contracts;
What if the contract stated a Definite period or Definite voyage, what is
the general rule? The Rule is that they cannot be discharged until the
fulfillment of their contract. Except for reasons of insubordination,
serious matters, robbery, theft, habitual drunkeness and damage
caused to the vessel or to its cargo by malice or manifest or proven
negligence.
Madrigal Case
Discussion:
So the list on the reasons for the discharge when the contract states a
definite period or definite voyage seems to be *wait muna class haha*
closed list; the ruling under the case of Madrigal the reasons for the
discharge as to insubordination, robbery, theft, habitual drunkenness
damage caused to vessel blahblahblah if any of these reasons are not
present then the discharge may be considered as not allowed under Art
605 of the Code of Commerce; SC said that not having been discharged
for any of the causes enumerated in Art 605 the respondents are
entitled to the amounts they respectively seek to collect from the
petitioner;
What about if it is the Captain who effects the discharge? What
could be the grounds for discharging the sailor or crew or
member? by the captain?
Under Art 637 of this case there is Code of commerce. So just look
at that Article;
ARTICLE 637. Neither can the captain discharge a sailor during
the time of his contract except for sufficient cause, the following
being considered as such:
1. The perpetration of a crime which disturbs order on the
vessel.
2. Repeated offenses of insubordination, against discipline, or
against the fulfillment of the service.
3. Repeated incapacity or negligence in the fulfillment of the
service to be rendered.
4. Habitual drunkenness.
5. Any occurrence which incapacitates the sailor to carry out the
work under his charge, with the exception of the provisions
contained in Article 644.
6. Desertion.
The captain may, however, before setting out on a voyage and
without giving any reason whatsoever, refuse to permit a sailor
he may have engaged from going on board and may leave him
on land, in which case he will be obliged to pay him his wages
as if he had rendered services.
This indemnity shall be paid from the funds of the vessel if the
captain should have acted for reasons of prudence and in the
interest of the safety and good service of the former. Should this
not be the case, it shall be paid by the captain personally.
After the vessel has sailed, and during the voyage and until the
conclusion thereof, the captain can not abandon any member
of his crew on land or on the sea, unless, by reason of being
guilty of some crime, his imprisonment and delivery to the
competent authority is proper in the first port touched, which will
be obligatory on the captain.
Far Eastern Shipping v CA
Discussion:
When we discuss Harbor Pilots they are not the same as a captain or
master of the vessel but they are discussed in Maritime Commerce for
they are those people who like for example there is a foreign vessel
they guide the foreign vessel in the particular place where it is so that;
because diba they are the ones who know the place. So there are cases
where compulsory pilotage is being done; liek the city of manila in this
16
case so if there is compulsory pilotage, it is required that the pilot guide
the vessel into or out of the ports and the captain or the master will have
to let him do his duty at that time;
Further, in this case there is a discussion as to whether or not the
captain of the vessel vests total control of the vessel when there is
compulsory pilotage such that there would be no liability on his part in
case there is negligence on the part of the pilot; because I think there
was a discussion that there was compulsory pilotage and there was
negligence on the part of the pilot so there is liability on the part of the
Pilot; so in this case; there is a discussion on whether who is liable the
pilot or the master of the vessel or the shipowner; so you read this case
plz.
Harbor Pilots under this case; so here we have the definition of what a
pilot is and it is quite common for states and localities to provide for
compulsory pilotage on safety loss have been acted? requiring vessels
approaching ports with certain exceptions to take on board pilots duly
licensed under local law; the purpose of these laws is to create a body
of seamen thoroughly acquainted with the harbor meaning the local
place to pilot vessels seeking to enter or depart and thus protect life and
property from the dangers of navigation;
so on the matter of the relationship of the master and the pilot please
take note that: generally speaking the pilot supersedes the master for
the time being so at the time that he is there he supersedes the master
in the command and navigation of the ship precisely because of
his presumed expertise and knowledge of the place diba? So, his
orders must be obeyed in all matters connected with navigation he
becomes the master throughout the ship; he should give all directions
as to speed, ports, stopping, and reversing anchoring and the like but
the SC said even if that is the case, even if the pilot supersedes the
master at the time the master is in command of the vessel and he is not
expected to rely on the pilot blindly. thats why in the case of far eastern
there was a discussion on the liability of the master as well; because
there was a finding that he was also negligent he did not...the master is
not wholly absolved of his duties while the pilot is onboard of vessel and
being advised or offers the judgements to him, he is still in command of
the vessel; except in so far as damage is concerned? and must cause
the ordinary work of the vessel to be properly carried on and the usual
precautions taken so if he sees that the pilot is nag tuga-tuga negligent
diay sya so you are still the master of the vessel you should not rely on
the pilot blindly; that is the ruling in far Eastern v CA;
Where a compulsory pilot is in charge of the ship; the master being
required to permit him to navigate; if the master observed that the pilot
is incompetent or physically incapable then it is the duty of the master
to refuse to permit the pilot to act; but if no such reasons are present
then the master is justified in relying upon the pilot, but not blindly;
As to ship owner and pilot also read Far Eastern v CA; A Pilot is
personally liable for damages caused by his own negligence or default
to the owners of the vessel and to 3rd parties for damages sustained in
a collision; such negligence of the pilot in the performance of duties
constitutes a maritime tort.
Officers and the Crew
Article 648 of the Code of Commerce tells us that the complement of
the vessel includes all persons on board; from captain to cabin boy, to
crew sailing mates, engineer, stokers and other employees on board
not having specific destinations but it shall not include passengers or
other persons whom the vessel is transporting so for the sailing mate;
Please read Articles 627-631 on duties and liabilities of a sailing mate,
second mate Art 632-633, Marine Engineer Art 632.
For the crew please read: Art 634 - Formalities of contract with the
crew, 635 duties and liabilities, 624 and 645 rights of the crew in
case of sickness injury or death, 636 637 rights in case of
dismissal causes for discharge, 638 640 641 - revocation of
voyage, 636 - change of destination, 640 loss of vessel and 647
rescission of contracts; so please read those provisions.
ARTICLE 624. A captain whose vessel has gone through a
hurricane or who believes that the cargo has suffered damages
or averages, shall make a protest thereon before the competent
authority at the first port he touches within the twenty-four hours
following his arrival, and shall ratify it within the same period
when he arrives at the place of his destination, immediately
proceeding with the proof of the facts, it not being permitted to
open the hatches until this has been done.
The captain shall proceed in the same manner if, the vessel
having been wrecked, he is saved alone or with part of his crew,
in which case he shall appear before the nearest authority, and
make a sworn statement of the facts.
The authority or the consul abroad shall verify the said facts,
receiving a sworn statement of the members of the crew and
passengers who may have been saved, and taking the other
steps which may assist in arriving at the facts, drafting a
certificate of the result of the proceedings in the log book and in
that of the sailing mate, and shall deliver the original records of
the proceedings to the captain, stamped and folioed, with a
memorandum of the folios, which he must rubricate, for their
presentation to the judge or court of the port of destination.
The statement of the captain shall be believed if it is in
accordance with those of the crew and passengers; if they
disagree, the latter shall be accepted, unless there is proof to
the contrary.
ARTICLE 625. The captain, under his personal liability, as soon
as he arrives at the port of destination, obtains the necessary
permission from the health and customs officers and fulfills the
other formalities required by the regulations of the
administration, shall turn over the cargo, without any
defalcation, to the consignees, and, in a proper case, the
vessel, rigging, and freights to the agent.
If, by reason of the absence of the consignee or on account of
the nonappearance of a legal holder of the invoices, the captain
does not know to whom he is to make the legal delivery of the
cargo, he shall place it at the disposal of the proper judge or
court or authority, in order that he may decide with regard to its
deposit, preservation, and custody.
SECTION III
Officers and Crews of Vessels
ARTICLE 626. In order to be a sailing mate it shall be
necessary:
1. To have the conditions required by the marine or navigation
laws or regulations.
2. Not to be disqualified in accordance therewith for the
discharge of the position.
17
ARTICLE 627. The sailing mate, as the second chief of the
vessel and unless the agent orders otherwise, shall take the
place of the captain in cases of absence, sickness, or death,
and shall then assume all his powers, obligations, and
responsibilities.
ARTICLE 628. The sailing mate must supply himself with charts
of the waters which are to be navigated, with the maps and
quadrants or sextants which are in use and which are necessary
for the discharge of his duties, being liable for the accidents
which may arise by reason of his fault in this matter.
ARTICLE 629. The sailing mate shall personally and specially
keep a book folioed and stamped on all its pages, called the
"binnacle book", with a memorandum at the beginning stating
the number of folios it contains, signed by the competent
authority, and shall enter therein daily the distance and course
travelled, the variations of the needle, the leeway, the direction
and force of the wind, the condition of the atmosphere and of
the sea, the rigging set, the latitude and longitude observed, the
number of furnaces fired, the steam pressure, the number of
revolutions, and under the name of "incidents" the revolutions
made, the meetings with other vessels, and all the particulars
and accidents which may occur during the voyage.
ARTICLE 630. In order to change the course and to take the
one most convenient for a good voyage of the vessel, the sailing
mate shall come to an agreement with the captain. If the latter
should object, the sailing mate shall make the remarks he may
consider necessary in the presence of the other officers of the
vessel. If the captain should still insist on his objection, the
sailing mate shall make the proper protest, signed by him and
by another one of the officers in the log book, and shall obey
the captain, who shall be the only one liable for the
consequences of his order.
ARTICLE 631. The sailing mate shall be liable for all the
damages suffered by the vessel and cargo by reason of his
negligence or want of skill, without prejudice to the criminal
liability which may arise, if a felony or misdemeanor were
committed. aisadc
ARTICLE 632. It shall be the duty of the second mate:
1. To watch over the preservation of the hull, and rigging of the
vessel, and to take charge of the tackle and equipment which
make up her outfit, suggesting to the captain the repairs
necessary and the replacement of the goods and implements
which are rendered useless and lost.
2. To take care that the cargo is well arranged, keeping the
vessel always ready for evolutions.
3. To preserve order, discipline, and good service among the
crew, requesting the necessary orders and instructions of the
captain, and quickly informing him of any occurrence in which
the intervention of his authority may be necessary.
4. To assign to each sailor the work he is to do on board, in
accordance with the instructions received, and see that it is
exactly and carefully carried out.
5. To take charge by inventory of the rigging and all the
equipments of the vessel, if it should be laid up, unless the
agent has ordered otherwise.
With regard to engineers the following rules shall govern:
1. In order to be taken on board as a marine engineer forming
part of the complement of a merchant vessel it shall be
necessary to possess the qualifications which the laws and
regulations require, and not to be disqualified in accordance
therewith to hold said position. Engineers shall be considered
as officers of the vessel, but they shall exercise no command
nor intervention except that which refers to the motive power.
2. When there are two or more engineers on one vessel, one of
them shall be the chief, and the other engineers and all the
personnel of the engines shall be under his orders; he shall
furthermore have the motive power under his charge, as well as
the spare pieces, instruments, and implements belonging
thereto, the fuel, the lubricating material and, finally, all which
comes under the jurisdiction of an engineer on board a vessel.
3. He shall keep the engines and boilers in good condition and
in state of cleanliness, and shall order what may be proper in
order that they may always be ready for regular use, being liable
for the accidents or damages which may arise by reason of his
want of skill or negligence to the motive apparatus, or to the
vessel and cargo, without prejudice to the criminal liability which
may be proper if a felony or misdemeanor is proven.
4. He shall make no change in the motive apparatus, nor shall
he repair the averages he may have noticed in the same, nor
change the normal speed of its movement without the prior
authority of the captain, to whom, if he should object to their
being made, he shall state the reasons he may deem proper in
the presence of the other engineers or officers; and if,
notwithstanding this, the captain should insist on his objection,
the chief engineer shall make the proper protest, entering the
same in the engine book, and shall obey the captain, who shall
be the only one liable for the consequences of his order.
5. He shall inform the captain of any average which may occur
to the motive apparatus, and shall inform him when it may be
necessary to stop the engines for some time, or when any other
incident occurs in his department of which the captain should
be immediately informed, frequently advising him furthermore
of the consumption of fuel and lubricating material.
6. He shall keep a book or registry called the "Engine Book," in
which there shall be entered all the data that refer to the work
of the engines, such as, for example, the number of furnaces
fired, the steam pressure in the boilers and cylinders, the
vacuum in the condenser, the temperatures, the degree of
saturation of the water, the consumption of fuel and lubricating
material, and under the heading of "Noteworthy occurrences"
the average and imperfections which occur in the engines and
boilers, the causes therefor, and the means employed to repair
18
the same. There shall also be stated, taking the information
from the binnacle book, and direction of the wind, the rigging
set, and the speed of the vessel.
ARTICLE 633. The second mate shall take command of the
vessel in case of the impossibility or disability of the captain and
sailing mate, assuming in such case their powers and liability.
ARTICLE 634. The captain may make up his crew with the
number he may consider advisable, and in the absence of
Spanish * sailors he may ship foreigners residing in the country,
the number thereof not to exceed one-fifth of the total crew. If in
foreign ports the captain should not find a sufficient number of
Spanish * sailors, he may make up the crew with foreigners, with
the consent of the consul or marine authorities.
The agreements which the captain may make with the members
of the crew and others who go to make up the complement of
the vessels, to which reference is made in Article 612, must be
reduced to writing in the account book without the intervention
of a notary public or clerk, signed by the parties thereto, and
vised by the marine authority if they are executed in Spanish *
territory, or by the consuls or consular agents of Spain * if
executed abroad, stating therein all the obligations which each
one contracts and all the rights they acquire, said authorities
taking care that these obligations and rights are recorded in a
concise and clear manner, which will not give rise to doubts or
claims. cd
The captain shall take care to read to them the articles of this
Code, which concern them, stating that they were read in the
said document.
If the book includes the requisites prescribed in Article 612, and
there should not appear any signs of alterations in its clauses,
it shall be admitted as evidence in questions which may arise
between the captain and the crew with regard to the
agreements contained therein and the amounts paid on account
of the same.
Every member of the crew may request a copy of the captain,
signed by the latter, of the agreement and of the liquidation of
his wages, as they appear in the book.
ARTICLE 635. A sailor who has been contracted to serve on a
vessel can not rescind his contract nor fail to comply therewith
except by reason of a legitimate impediment which may have
occurred.
Neither can he pass from the service of one vessel to another
without obtaining the written consent of the vessel on which he
may be.
If, without obtaining said permission, the sailor who has signed
for one vessel should sign for another one, the second contract
shall be void, and the captain may choose between forcing him
to fulfill the service to which he first bound himself or look for a
person to substitute him at his expense.
Said sailor shall furthermore lose the wages earned on his first
contract to the benefit of the vessel for which he may have
signed.
A captain who, knowing that a sailor is in the service of another
vessel, should have made a new agreement with him, without
having requested the permission referred to in the foregoing
paragraphs, shall be personally liable to the captain of the
vessel to which the sailor first belonged for that part of the
indemnity, referred to in the third paragraph of this article, which
the sailor could not pay.
ARTICLE 636. Should a fixed period for which a sailor has
signed not be stated, he can not be discharged until the end of
the return voyage to the port where he enrolled.
ARTICLE 637. Neither can the captain discharge a sailor during
the time of his contract except for sufficient cause, the following
being considered as such:
1. The perpetration of a crime which disturbs order on the
vessel.
2. Repeated offenses of insubordination, against discipline, or
against the fulfillment of the service.
3. Repeated incapacity or negligence in the fulfillment of the
service to be rendered.
4. Habitual drunkenness.
5. Any occurrence which incapacitates the sailor to carry out the
work under his charge, with the exception of the provisions
contained in Article 644.
6. Desertion.
The captain may, however, before setting out on a voyage and
without giving any reason whatsoever, refuse to permit a sailor
he may have engaged from going on board and may leave him
on land, in which case he will be obliged to pay him his wages
as if he had rendered services.
This indemnity shall be paid from the funds of the vessel if the
captain should have acted for reasons of prudence and in the
interest of the safety and good service of the former. Should this
not be the case, it shall be paid by the captain personally.
After the vessel has sailed, and during the voyage and until the
conclusion thereof, the captain can not abandon any member
of his crew on land or on the sea, unless, by reason of being
guilty of some crime, his imprisonment and delivery to the
competent authority is proper in the first port touched, which will
be obligatory on the captain.
ARTICLE 638. If, the crew having been engaged, the voyage is
revoked by the will of the agent or of the charterers before or
after the vessel has put to sea or if the vessel is in the same
manner given a different destination than that fixed in the
agreement with the crew, the latter shall be indemnified
because of the rescission of the contract according to the case,
viz:
1. If the revocation of the voyage should be decided before the
departure of the vessel from the port, each sailor engaged shall
be given one month's salary, besides what may be due him in
19
accordance with his contract, for the services rendered to the
vessel up to the date of the revocation.
2. If the agreement should have been for a fixed amount for the
whole voyage, there shall be graduated what may be due for
said month and days, calculating the same in proportion to the
estimated duration of the voyage, in the judgment of experts, in
the manner established in the law of civil procedure; and if the
proposed voyage should be of such short duration that it is
calculated at one month more or less, the indemnity shall be
fixed for fifteen days, discounting in all cases the sums
advanced.
3. If the revocation should take place after the vessel has put to
sea, the sailors engaged for a fixed amount for the voyage shall
receive the salary which may have been offered them in full as
if the voyage had terminated, and those engaged by the month
shall receive the amount corresponding to the time they might
have been on board and to the time they may require to arrive
at the port of destination, the captain being obliged,
furthermore, to pay said sailors the passage to the said port or
to the port of sailing of the vessel, as may be convenient for
them.
4. If the agent or the charterers of the vessel should give said
vessel a destination other than that fixed in the agreement, and
the members of the crew should not agree thereto, they shall
be given by way of indemnity half the amount fixed in case No.
1, besides what may be owed them for the part of the monthly
wages corresponding to the days which have elapsed from the
date of their agreements.
If they accept the change, and the voyage, on account of the
greater distance or for other reasons, should give rise to an
increase of wages, the latter shall be privately regulated, or
through amicable arbitrators in case of disagreement. Even
though the voyage may be to a nearer point, this shall not give
rise to a reduction in the wages agreed upon.
If the revocation or change of the voyage should originate from
the shippers or charterers, the agent shall have a right to
demand of them the indemnity which is justly due.
ARTICLE 639. If the revocation of the voyage should arise from
a just cause independent of the will of the agent or charterers,
and the vessel should not have left the port, the members of the
crew shall not have any other right than to receive the wages
earned up to the day on which the revocation took place.
ARTICLE 640. The following shall be just causes for the
revocation of the voyage:
1. A declaration of war or interdiction of commerce with the
power to whose territory the vessel was bound.
2. The blockade of the port of destination or the breaking out of
an epidemic after the agreement.
3. The prohibition to receive in said port the goods which make
up the cargo of the vessel.
4. The detention or embargo of the same by order of the
Government, or for any other reason independent of the will of
the agent.
5. The inability of the vessel to navigate. cdasia
ARTICLE 641. If, after a voyage has been begun, any of the
first three causes mentioned in the foregoing article should
occur, the sailors shall be paid at the port the captain may deem
it advisable to make for the benefit of the vessel and cargo,
according to the time they may have served thereon; but if the
vessel is to continue the voyage, the captain and the crew may
mutually demand the enforcement of the contract.
In case of the occurrence of the fourth cause, the crew shall
continue to be paid half wages, if the agreement is by month but
if the detention should exceed three months, the engagement
shall be rescinded and the crew shall be paid what they should
have earned, according to the contract, if the voyage had been
made. And if the agreement had been made for a fixed sum for
the voyage, the contract must be complied within the terms
agreed upon.
In the fifth case, the crew shall not have any other right than be
entitled to recover the wages earned; but if the disability of the
vessel should have been caused by the negligence or lack of
skill of the captain, engineer, or sailing mate, they shall
indemnify the crew for the loss suffered, always reserving the
criminal liability which may be proper.
ARTICLE 642. If the crew has been engaged to work on shares
they shall not be entitled, by reason of the revocation, delay, or
greater extension of the voyage, to anything but the
proportionate part of the indemnity paid into the common funds
of the vessel by the persons liable for said occurrences.
ARTICLE 643. If the vessel and her freight should be totally lost,
by reason of capture or wreck, all rights of the crew to demand
any wages whatsoever shall be extinguished, as well as that of
the agent for the recovery of the advances made.
If a portion of the vessel or freight should be saved, or part of
either, the crew engaged on wages, including the captain, shall
retain their rights on the salvage, so far as they go, on the
remainder of the vessel as well as value of the freightage or the
cargo saved; but sailors who are engaged on shares shall not
have any right whatsoever to the salvage of the hull, but only on
the portion of the freightage saved. If they should have worked
to collect the remainder of the ship-wrecked vessel, they shall
be given an award in proportion to the efforts made and to the
risks encountered in order to accomplish the salvage.
ARTICLE 644. A sailor who falls sick shall not lose his right to
wages during the voyage, unless the sickness is the result of
his own fault. At any rate, the costs of the attendance and cure
shall be defrayed from the common funds, in the form of a loan.
If the sickness should be caused by an injury received in the
service or defense of the vessel the sailor shall be attended and
cured from the common funds, there being deducted before
20
anything else from the proceeds of the freight, the cost of the
attendance and cure.
ARTICLE 645. If a sailor should die during the voyage his heir
shall be given the wages earned and not received, according to
his engagement and the reason for his death, namely —
If he should have died a natural death and should have been
engaged on wages there shall be paid what may have been
earned up to the date of his death.
If the engagement had been made for a fixed sum for the whole
voyage there shall be paid half the amount earned if the sailor
died on the voyage out, and the whole amount if he died on the
return voyage.
And if the engagement had been made on shares and the death
should have occurred after the voyage was begun, the heirs
shall be paid the entire portion due the sailor; but should the
latter have died before the departure of the vessel from the port,
the heirs shall not be entitled to claim anything.
If the death should have occurred in the defense of the vessel,
the sailor shall be considered as living, and his heirs shall be
paid, at the end of the voyage, the full amount of wages or the
full part of the profits due him as to the others of his grade.
The sailor shall likewise be considered as present in the event
of his capture when defending the vessel, in order to enjoy the
same benefits as the rest; but should he have been captured on
account of carelessness or other accident not related to the
service, he shall only receive the wages due up to the day of his
capture.
ARTICLE 646. The vessel with her engines, rigging, equipment,
and freights shall be liable for the wages earned by the crew
engaged per month or for the trip, the liquidation and payment
ought to take place between one voyage and the other.
After a new voyage has been undertaken, credits such as the
former shall lose their right of preference.
ARTICLE 647. The officers and the crew of the vessel shall be
exempted from all obligations contracted, if they deem it proper,
in the following cases:
1. If, before the beginning of the voyage, the captain attempts
to change it, or there occurs a naval war with the power to which
the vessel was destined.
2. If a disease should break out and be officially declared
epidemic in the port of destination.
3. If the vessel should change owner or captain.
ARTICLE 648. By the complement of a vessel shall be
understood all the persons embarked, from the captain to the
cabin boy, necessary for the management, evolutions, and
service, and there shall, therefore, be understood as included
in the complement the crew, sailing mates, engineers, stokers,
and other persons not having a specific name; but there shall
not be included the passengers nor the persons the vessel is
only transporting.
Supercargo- persons specially employed by owner of the cargo to take
charge of and to sell to the best advantage merchandise which have
been shipped, to purchase returning cargoes and to receive freight;
649, 651, on super cargoes.
Let's go to Special Contracts in Maritime Commerce; Charter
parties;
We already discussed charter parties during the first part of our
discussions when we discussed the case of Planters Products v
CA right? and we already said that a charter party is a contract by which
an entire ship or some principal part thereof is left by the owner to
another person for a specified time or use.
Contract of affreightment - by which the owner of the ship lets the
whole or a part; to a merchant or other person, for the carriage of the
goods for a particular voyage in consideration of payment of freight.
2 types:
Contract of Affreightment - Which involves the use of shipping space
on vessels leased by the owner in part or as a whole or
Charter by Demise or Bareboat charter - which involves the vessel
transferred to him of entire command and possession and consequent
control over navigation including the master and the crew who are his
servants; the contract of affreightment which refers to the vessel only
may be a Time charter or Voyage charter;
It is only when the charter includes both the vessel and that’s in a
bareboat or demise that the common carrier becomes private;
So persons who may make charter; or who may enter into charter
parties; or these contracts where you lease the vessel or you lease the
vessel AND the crew; that is basically what a charter party is. so who
may make charter? owner of the vessel of course; he or she may enter
into a charter with the charterer; Under Art 654 of the Code of
Commerce the broker may intervene in the execution of the charter.
The charterer may even sub-charter it is under Article 679 of the Code
of Commerce; part-owners are not precluded from chartering the
vessel so Art 590; So Ipa rent niya ba! kinsa may pwede pa rent?
ARTICLE 590. The owners of a vessel shall be civilly liable in
the proportion of their contribution to the common fund, for the
results of the acts of the captain, referred to in Article 587.
Each part owner may exempt himself from this liability by the
abandonment before a notary of the part of the vessel belonging
to him.
ARTICLE 654. The charter parties executed with the
intervention of a broker, who certifies to the authenticity of the
signatures of the contracting parties made in his presence, shall
be full evidence in court; and if said signatures should not agree
the ones identical with the signatures the broker must keep in
his registry, if kept in accordance to law, shall be final.
21
The contracts shall also be admitted as evidence, even though
a broker has not taken part therein, if the contracting parties
acknowledge the signatures to be the same as their own.
Should no broker have taken part in the charter party and
should the signatures not have been acknowledged, doubts
shall be decided by what is provided for in the bill of lading, and
in the absence thereof by the proofs submitted by the parties.
3. Obligations of Charterers
ARTICLE 679. The charterer of an entire vessel may subcharter
the whole or part thereof for the amounts he may consider most
convenient, without the captain being allowed to refuse to
receive on board the freight delivered by the second charterers,
provided the conditions of the first charter are not changed, and
that the person from whom the vessel is chartered be paid the
full price agreed upon even though the full cargo is not
embarked, with the limitation established in the next article.
When you look at Art 598; the ship agent it may enter into contracts for
a new charter but it must be duly authorized to do so; Captain or Master
may enter into valid and binding charter parties but only in the absence
of ship agent or consignee and only in accordance with the instructions
received and protecting the owners interest; thats Art 610 of the Code
of Commerce; since the charter party is the contract then as a requisite
for its validity there must be consent from the contracting parties and
there has to be that vessel which will be the object of the contract and
the rest will be the freight and consideration and there is compliance
with requirements of Art 652 of the Code of Commerce; These are
the formal requirements under Art 652; Further take note of the
Essential requirements under the Code of Commerce;
ARTICLE 598. The agent can not order a new voyage, nor
make contracts for a new charter, nor insure the vessel, without
the authority of her owner or by virtue of a resolution of the
majority of the co-owners, unless these privileges were granted
him in the certificate of his appointment. cdasia
If he should insure the vessel without authority therefor he shall
be secondarily liable for the solvency of the underwriter.
ARTICLE 610. The following powers are inherent in the position
of captain or master of a vessel:
1. To appoint or make contracts with the crew in the absence of
the agent and propose said crew, should said agent be present;
but the agent shall not be permitted to employ any member
against the captain's express refusal.
2. To command the crew and direct the vessel to the port of its
destination, in accordance with the instructions he may have
received from the agent.
3. To impose, in accordance with the agreements and the laws
and regulations of the merchants marine, on board the vessel,
correctional punishment upon those who do not comply with his
orders or who conduct themselves against discipline, holding a
preliminary investigation on the crimes committed on board the
vessel on the high seas, which shall be turned over to the
authorities, who are to take cognizance thereof, at the first port
touched.
4. To make contracts for the charter of the vessel in the absence
of the agent or of her consignee, acting in accordance with the
instructions received and protecting the interests of the owner
most carefully.
5. To adopt all the measures which may be necessary to keep
the vessel well supplied and equipped, purchasing for the
purpose all that may be necessary, provided there is no time to
request instructions of the agent.
6. To make, in similar urgent cases and on a voyage, the repairs
to the hull and engines of the vessel and to her rigging and
equipment which are absolutely necessary in order for her to be
able to continue and conclude her voyage; but if she should
arrive at a point where there is a consignee of the vessel, he
shall act in concurrence with the latter.
TITLE III
Special Contracts of Maritime Commerce
SECTION I
Charter Parties
1. Forms and Effects of Charter Parties
ARTICLE 652. A charter party must be drawn in duplicate and
signed by the contracting parties, and when either does not
know how or can not do so, by two witnesses at their request.
The charter party shall include, besides the conditions
unrestrictedly stipulated, the following statements:
1. The kind, name, and tonnage of the vessel.
2. Her flag and port of registry.
3. The name, surname, and domicile of the captain.
4. The name, surname, and domicile of the agent, if the latter
should make the charter party.
5. The name, surname, and domicile of the charterer, and if he
states that he is acting by commission, that of the person for
whose account he makes the contract.
6. The port of loading and unloading.
7. The capacity, number of tons or weight, or measure which
they respectively bind themselves to load and transport, or
whether it is the total cargo.
8. The freightage to be paid, stating whether it is to be a fixed
amount for the voyage or so much per month, or for the space
to be occupied, or for the weight or measure of the goods of
which the cargo consists, or in any other manner whatsoever
agreed upon.
9. The amount of primage to be paid to the captain.
10. The days agreed upon for loading and unloading.
11. The lay days and extra lay days to be allowed and the rate
of demurrage.
ARTICLE 659. The merchandise sold by the captain to
pay for the necessary repairs to the hull, machinery or
equipment, or for unavoidable and urgent requirements,
shall pay freight.
The price of this merchandise shall be fixed according to
the success of the voyage, namely:
1. If the vessel should arrive safely at the port of
destination, the captain shall pay the price which the sale
of merchandise of the same kind brings at that port.
22
2. If the vessel should be lost, the captain shall pay the
price said merchandise would have brought in the sale.
The same rule shall be observed in the payment of the
freight which shall be in full if the vessel arrives at her
destination, and in proportion to the distance covered if
she should be lost beforehand.
So there are some terms stated in Art 652 like:
Primage - that is payment for the use of the equipment belonging to the
captain;
Freight - is the charter price or money compensation to be paid for the
utilization of the vessel and the charterer
Please take note of the Rules under Art 659 of the Code of Commerce;
So ang code of commerce class mu ambak gyud na sya wa tay
mabuhat mao na gyud na sya
so Art 659; as to when freight shall accrue;
May/PayWay??di ko marinig guys sorry pero parang: Playdays?
bsta ___ day is the period of time stipulated for loading or unloading
Demurrhage - money you pay when you go beyond the time for the
loading or unloading; so it is the amount stipulated in the charter party
to be paid by charterer or shipper to the ship owner for any delay in the
staying of the ship so naa na sya sa port adn then nadugay ang loading
and unloading beyond the period of time stated in the charter party so
you have to pay demurahe. So this is paid by the shipper to the ship
owner because na delay and wala kahawa dayun ang ship;
Freight - liability fo the charterer to the ship owner where the charterer
claims to occupy the leased portion of the vessel.
Ouano v CA
Thank you let's continue next week!
Let’s discuss Caltex v. Sulpicio case
Caltex v. Sulpicio
Discussion by Atty. Cantano:
Okay, so there was a charter party agreement and it was a contact of
affreightment which is a voyage charter limited to that voyage and by
the nature of that contact and by the nature of the entity or the party to
the contract the said arrangement did not absolve the common carrier
from liability and did not make him or convert it into a private carrier. But
the charterer was not made liable in that case. Correct? Yes, ma’am.
Santiago Lighterage v. Court of Appeals
Discussion:
Okay so there was a stipulation in the charter party which provided the
seaworthiness and there was a discussion there on how seaworthiness
is determined also cargo-worthiness so you just read that case in
relation to the discussion on the stipulation to provide seaworthiness in
the charter party.
Charter party – rights and obligations of the ship owner, captain please
read article 669 to 678 of the code of commerce.
PART 2
RIGHTS AND OBLIGATIONS OF SHIPOWNERS
ARTICLE 669. The shipowner or the captain shall observe in
charter parties the capacity of the vessel or that expressly
designated in its registry, a difference greater than 2 per cent
between that stated and her true capacity not being permissible.
If the shipowner or the captain should contract to carry a greater
amount of cargo than the vessel can carry in view of her
tonnage, they shall indemnify the shippers whose contracts
they do not fulfill for the losses they may have caused when by
reason of their default, according to the following cases, viz:
If the vessel has been chartered by one shipper only, and there
should appear to be an error or fraud in her capacity, and the
charterer should not wish to rescind the contract, when he has
a right to do so, the freightage shall he reduced in proportion to
the cargo which the vessel can not receive, the person from
whom the vessel is chartered being furthermore obliged to
indemnify the charterer for the losses he may have caused him.
If, on the contrary there should be several charter parties, and
by reason of want of space all the cargo contracted for cannot
be loaded, and none of the charterers desires to rescind the
contract, preference shall be given to the person who has
already loaded and arranged the freight in the vessel, and the
rest shall take the places corresponding to them in the order of
the dates of their contracts.
Should there be no priority, the charterers may load, if they
wish, in proportion to the amounts of weight or space for which
each may have contracted, and the person from whom the
vessel was chartered shall he obliged to indemnify them for
losses and damages.
ARTICLE 670. If the person from whom the vessel is chartered,
after receiving a part of the freight, should not find sufficient to
make up at least three-fifths of the amount which the vessel may
hold, at the price he may have fixed, he may substitute for the
transportation another vessel inspected and declared suitable
for the same voyage, the expenses of transfer and the increase
in the price of the charter, should there be any, being for his
account. Should he not be able to make this change, he shall
undertake the voyage at the time agreed upon; and should no
time have been fixed, within fifteen days from the time the
loading began, unless otherwise stipulated.
If the owner of the part of the freight already loaded should
procure some more at the same price and under similar or
proportionate conditions to those accepted for the freight
received, the person from whom the vessel is chartered or the
captain can not refuse to accept the rest of the cargo; and
should he do so, the shipper shall have a right to demand that
the vessel put to sea with the cargo which it may have on board.
ARTICLE 671. After three-fifths of the vessel has been loaded,
the person from whom she is chartered may not, without the
consent of the charterers or shippers, substitute the vessel
designated in the charter party by another one, under the
penalty of making himself thereby liable for all the losses and
damages occurring during the voyage to the cargo of those who
did not consent to the change.
23
ARTICLE 672. If the vessel has been chartered in whole, the
captain may not, without the consent of the charterer, accept
cargo from any other person; and should he do so, said
charterer may oblige him to unload it and to indemnify him for
the losses suffered thereby.
ARTICLE 673. The person from whom the vessel is chartered
shall he liable for all the losses caused to the charterer by
reason of the voluntary delay of the captain in putting to sea,
according to the rules prescribed, provided he has been
requested, notarially or judicially, to put to sea at the proper
time.
ARTICLE 674. If the charterer should carry to the vessel more
cargo than that contracted for, the excess may be admitted in
accordance with the price stipulated in the contract, if it can be
well stowed without injuring the other shippers; but if in order to
load it, the vessel would be thrown out of trim, the captain must
refuse it or unload it at the expense of its owner.
In the same manner, the captain may, before leaving the port,
unload merchandise clandestinely placed on board, or transport
them, if he can do so with the vessel in trim, demanding by way
of freightage the highest price which may have been stipulated
for said voyage.
ARTICLE 675. If the vessel has been chartered to receive the
cargo in another port, the captain shall appear before the
consignee designated in the charter party; and, should the latter
not deliver the cargo to him, he shall inform the charterer and
wait his instructions, the lay days agreed upon or those allowed
by custom in the port beginning to run in the meantime, unless
there is an express, agreement to the contrary.
Should the captain not receive an answer within the time
necessary therefor, he shall make efforts to find freight; and
should he not find any after the lay days and extra lay days have
elapsed, he shall make a protest and return to the port where
the charter was made.
The charterer shall pay the freightage in full, discounting that
which may have been earned on the merchandise which may
have been carried on the voyage out or on the return trip, if
carried for the account of third persons.
The same shall be done if a vessel, having been chartered for
the round trip, should not be given any cargo on its return.
ARTICLE 676. The captain shall lose the freightage and shall
indemnify the charterers if the latter should prove, even against
the certificate of inspection, if one has been made at the port of
departure, that the vessel was not in a condition to navigate at
the time of receiving the cargo.
ARTICLE 677. The charter party shall subsist if a declaration of
war or a blockade should take place during the voyage, the
captain not having any instructions from the charterer. In such
case the captain must proceed to the nearest safe and neutral
port, requesting and awaiting orders from the shipper, and the
expenses and salaries paid during the detention shall be paid
as general average.
If, by orders of the shipper, the cargo should be discharged at
the port of arrival, the freightage for the voyage out shall be paid
in full.
ARTICLE 678. If the time necessary, in the opinion of the judge
or court, to receive the orders of the shipper should have
elapse, without the captain having received any instructions, the
cargo shall be deposited, and it shall be liable for the payment
of the freightage and expenses on its account during the delay,
which shall be paid from the proceeds of the part first sold.
The rights and obligations of the charterers article 679, 667 of the Code
of Commerce.
PART 3
OBLIGATIONS OF CHARTERERS
ARTICLE 679. The charterer of an entire vessel may sub-
charter the whole or part thereof on such terms as he may
consider most convenient, the captain not being allowed to
refuse to receive on board the freight delivered by the second
charterers, provided that the conditions of the first charter are
not change, and that the price agreed upon is paid in full to the
person from whom the vessel is chartered, even though the full
cargo is not embarked, with the limitation established in the next
article.
ARTICLE 680. A charterer who does not complete the full cargo
he bound himself to ship shall pay the freightage of the amount
he fails to ship, if the captain does not take other freight to
complete the load of the vessel, in which case the first charterer
shall pay the difference, should there be any.
ARTICLE 681. If the charterer should load goods different from
those stated at the time of executing the charter party, without
the knowledge of the person from whom the vessel was
chartered or of the captain, and should thereby give rise to
losses, by reason of confiscation, embargo, detention, or other
causes, to the person from whom the vessel was chartered or
to the shippers, the person giving rise thereto shall be liable with
the value of his shipment and furthermore with his property, for
the full indemnity to all those injured through his fault.
ARTICLE 682. If the merchandise should have been shipped
for the purpose of illicit commerce, and were taken on board
with the knowledge of the person from whom the vessel was
chartered or of the captain, the latter, jointly with the owner of
the same, shall be liable for all the losses which may be caused
the other shippers; and even though it may have been
stipulated, they can not demand any indemnity whatsoever from
the charterer for the damaged caused to the vessel.
ARTICLE 683. In case of making a port to repair the hull,
machinery, or equipment of the vessel, the shippers must await
until the vessel is repaired, being permitted to unload it at their
own expense should they deem it proper.
If, for the benefit of the cargo subject to deterioration, the
shippers or the court, or the consul, or the competent authority
in a foreign country, should order the merchandise to be
unloaded, the expenses of unloading and reloading shall be for
the account of the former.
24
ARTICLE 684. If the charterer, without the occurrence of any of
the cases of force majeure mentioned in the foregoing article,
should wish to unload his merchandise before arriving at the
port of destination, he shall pay the full freightage, the expenses
of the arrival made at his request, and the losses and damages
caused the other shippers, should there be any.
ARTICLE 685. In charters for transportation of general freight,
any of the shippers may unload the merchandise before the
beginning of the voyage, paying one-half of the freightage, the
expense of stowing and restowing the cargo, and any other
damage which for his reason he may cause the other shippers.
ARTICLE 686. After the vessel has been unloaded and the
cargo placed at the disposal of the consignee, the latter must
immediately pay the captain the freightage due and the other
expenses for which said cargo may be liable.
The primage must be paid in the same proportion and at the
same time as the freightage, all the changes and modifications
to which the latter should be subject also governing the former.
ARTICLE 687. The charterers and shippers may not abandon
merchandise damaged on account of inherent defect or
fortuitous event, for the payment of the freightage and other
expenses.
The abandonment shall be proper, however, if the cargo should
consist of liquids and they have leaked out, nothing remaining
in the containers but one-fourth part of their contents.
On rescission read article 688, 689, 690 of the code of commerce who
can rescind? The charterer or the shipowner or rescission may be
based on other grounds. So if that is the ground, for rescission then
there is an effect so if there is the abandonment of charter before
loading, the effect is that the charterer must pay one half of freight
agreed upon. If it is if the ground xxx vessel blah blah blah he will be
indemnified by owner for damages suffered so you just take note of the
grounds for rescission and the effect if that is the ground for rescission.
Also if there is a failure of charter, this is on the grounds on rescission
by the ship owner the failure of charter to place cargo alongside vessel,
termination of extra lay days, just take note of the effects.
PART 4
TOTAL OR PARTIAL RESCISSION OF CHARTER PARTIES
ARTICLE 688. A charter party may be rescinded at the request
of the charterer:
1. If before loading the vessel he should not agree with that
stated in the certificate of tonnage, or if there should be an error
in the statement of the flag under which she sails.
2. If the vessel should not be placed at the disposal of the
charterer within the period and in the manner agreed upon.
3. If after the vessel has put to sea, she should return to the port
of departure, on account of risk from pirates, enemies, or bad
weather, and the shippers should agree to unload her.
In the second and third cases the person from whom the vessel
was chartered shall indemnify the charterer for the voyage out.
4. If the charter should have been made by the months, the
charterers shall pay the full freightage for one month, if the
voyage is for a port in the same waters, and for two months, if
for a port in different waters.
From one port to another of the Philippines and adjacent
islands, the freightage for one month only shall be paid.
5. If the vessel should make a port during the voyage in order
to make urgent repairs, and the
charterers should prefer to dispose of the merchandise.
When the delay does not exceed thirty days, the shippers shall
pay the full freightage for the voyage out. Should the delay
exceed thirty days, they shall only pay the freightage in
proportion to the distance covered by the vessel.
ARTICLE 689. At the request of the person from whom the
vessel is chartered the charter party may be rescinded:
1. If the charterer, at the termination of the extra lay days, does
not place the cargo alongside the vessel.
In such case the charterer must pay half the freight stipulated,
besides the demurrage due for the lay days and extra lay days.
2. If the person from whom the vessel was chartered should sell
it before the charterer has begun to load it, and the purchaser
should load it for his own account.
In such case the vendor shall indemnify the charterer for the
losses he may suffer. If the new owner of the vessel should not
load it for his own account, the charter party shall be respected,
and the vendor shall indemnify the purchaser if the former did
not inform him of the charter pending at the time of making the
sale.
ARTICLE 690. The charter party shall be rescinded and all
actions arising therefrom shall be
extinguished, if, before the vessel puts to sea from the port of
departure, any of the following cases should occur:
1. A declaration of war or interdiction of commerce with the
power to whose ports the vessel was to make its voyage.
2. A condition of blockade of the port of destination of said
vessel, or the breaking out of an epidemic after the contract was
executed.
3. The prohibition to receive at the said port the merchandise
constituting the cargo of the vessel.
4. An indefinite detention, by reason of an embargo of the
vessel by order of the government, or for any other reason
independent of the will of the ship agent.
5. The inability of the vessel to navigate, without fault of the
captain or ship agent.
The unloading shall be made for the account of the charterer.
25
ARTICLE 691. If the vessel cannot put to sea on account of the
closing of the port of departure or any other temporary cause,
the charter shall remain in force, with neither one of the
contracting parties having a right to claim damages.
The subsistence and wages of the crew shall be considered as
general average.
During the interruption, the charterer may at the proper time and
for his own account, unload and load the merchandise, paying
demurrage if he delays the reloading after the cause for the
detention has ceased.
ARTICLE 692. A charter party shall be partially rescinded,
unless there is an agreement to the contrary, and the captain
shall only be entitled to the freightage for the voyage out, if, by
reason of a declaration of war, closing of ports, or interdiction of
commercial relations during the voyage, the vessel should
make the port designated for such a case in the instructions of
the charterer.
So we said that we are now discussing special contracts under maritime
commerce and we already discussed charter party. So by now you
should that charter party is lease of the vessel or the lease of the vessel
including the crew. So we go to bill of lading and you should know that
we are now discussing a different kind of contract different from a
charter party agreement. Okay? So we already discussed in general
what is a bill of lading
Bill of Lading: it is a written acknowledgment signed by the master of
the vessel or authorized agent of the carrier that he has received the
described goods from the shipper to be transported on the expressed
terms to the described place or destination and to be delivered there to
the designated consignee or parties.
So there are different kinds of bill of lading please just take note. A
bill of lading may be:
1.) Negotiable; or
2.) Non-negotiable
3.) Clean – there is a notation indicating defect in the goods we
know that there should a notation to that defect otherwise
there is a presumption.. diba we already discussed that
before that you receive it in good condition, diba you did not
put any notations in the bill of lading or whatever, the
presumption is you received it in a good condition, you have
no issue regarding the quality of the goods when it was
received by you.
4.) Foul – there is that notation
5.) On board – is if it is stated that the goods have been received
on the board the vessel which is the carrier of the goods
receive for shipment the goods have been received for
shipment with or without specifiying the vessel but which the
goods are to be shipped.
6.) Spent – the goods are already delivered but the Bill of lading
was not returned.
7.) Through – on issued by the carrier who is obliged to use the
facilities of other carriers as well as its own facilities for the
purpose of transporting the goods from the safety of the seller
to safety of the buyer which bill of lading is honored by the
second and other xxx carriers who do not issue their own bill
of lading.
8.) Custody – bill of lading;
9.) Port – bill of lading
So please just take note of the kinds of bill of lading.
So, in general, a bill of lading operates as a receipt, a contract or a
document of title. Receipt meaning it is a receipt of the goods shipping
and contract transport and deliver the same as it is stipulated. As a
contract, stipulates the rights and obligations assumed by the parties.
Beign a contract, it is a law within a parties and they are bound to
comply as long as it is not contract to law, good moral, public order and
public policy, good order, good customs. In general, they are
considered as contracts of adhesion and so it is more liberally construed
in favor of the shipper who is in the hands of the carrier.
So bill of lading as receipt, a contract and document of title. Let’s
discuss the cases.
Keng Hua Paper Products v. Court of Appeals
Question by Atty. Cantano: Unsa diay gusto sa iyaha diay?
A: The damages that it caused after….
Q: Specifically, what?
A: The demurrage
Q: Which is what? Payment for what?
A: Payment for… or allowance or compensation for the delay xxx
Atty: Diba mao na ilang dili gusto bayaran they are saying they should
not pay because in the first place, the liability to pay is stipulated in the
bill of lading and they are saying they did not or that the bill of lading is
not valid or not binding to them. Correct? That’s why we are discussing
it now.. So…
A: So the Keng Hua is not correct in saying that the bill of lading is not
binding.
Q: Why?
A: Keng Hua here actually accepted the bill of lading and therefore they
are bound to it because Keng Hua… the Supreme Court was not
persuaded of the argument of Keng Hua that they did not actually
accept the bill of lading however they just physically accepted it. The
supreme court emphasized that the inaction of such long period
conveys the clear inference that is accepted the terms and conditions
that is stipulated in the bill of lading without reservations.
Therefore they are bound to pay the demurrage under the bill of lading.
Discussion: okay so please take note that in this case the Supreme
Court discussed the two functions of bill of lading which are:
1.) The receipt of the goods shipped;
2.) And it is a contract by which three parties, mainly the shipper, the
carrier and the consignee undertake specific responsibilities and
26
assume stipulated obligations. A bill of lading delivered and accepted
constitutes the contract of carriage even though not signed because the
acceptance of the paper containing the terms of the proposed contract
generally constitutes an acceptance of the contract and of all its terms
and conditions of which the acceptor has actual or constructive notice.
Please take note of that statement in that case.
In a nutshell, the acceptance of the Bill of Lading by the shipper and the
consignee with full knowledge of its contents gives rise to the
presumption that the same is a perfected and binding contract. In this
case, it was held that the Bill of lading was valid and perfect contract
between the shipper, the consignee and the carrier. Section 17 of the
bill of lading provided that the shipper and the consignee are liable for
the payment of demurrage for the failure to discharge the container or
shipment beyond the grace period allowed by xxx. So applying that
stipulation in the bill of lading, which was deemed and accepting and
binding in this case, the courts found Keng Hua liable for the said
charges. Having been accorded opportunity to examine the Bill of
Lading, Keng Hua did not immediately object to or dissent from any term
or stipulation therein. It was only six months later when they raised an
objection to the said stipulation of the charges. So they cannot do that
after accepting the Bill of Lading, receiving the notices, failing to object,
they cannot now deny that it is bound by the terms of the Bill of Lading.
If it did not intentionally bound, it would not have waited for six months
to lapse before bringing the matter to the attention of Sea Land. The
most logical reaction in such a case is to immediately verify the matter
with the other parties involved in this case however, petitioner
unreasonably detained the vessel to the latter’s prejudice so it has to
pay the charges for detaining the vessel and delaying in the discharge
of the cargo.
Iron Bulk Shipping v. Remington
Discussion:
So Keng Hua discussed the bill of lading as contracts and the
stipulations therein.
In this case, there is a discussion on the bill of lading as a receipt and it
says that the bill of lading operates both as a receipt and as contract. It
is a receipt for the goods shipped and a contract to transport. As a
receipt it provides the date of shipment, describes the goods, quantity,
weight, dimension, identification marks, conditions, quality and value.
As a contract, it makes the contracting parties which includes the
consignee, fixes the rule, destination, freight rate or charges or
stipulates the rights and obligations assumed by the parties. Here, it
does not matter that it was alleged that the Bill of Lading was considered
as pro forma. Do you know what is pro forma, right? It’s just a form.
They provided it for you ba unya kopyahon nalang ninyo. So just
because gi kopya siya from the code of commerce does not mean that
it is not binding to the parties especially if there was no protest nor
notations made on the Bill of Lading to indicate that there was
something wrong with the receipt. Diba, you receive it, the Bill of Lading,
the receipt for that for the goods but you did not say anything, so the
presumption is you received in good condition.
MOF Company v. Shin Tang
Discussion:
Okay so please take note in this case the Supreme Court said that a
consignee, although not a signatory to the contract of carriage between
the shipper and the carrier becomes a party to the contract by reason
of either: a.) relationship of agency between consignee and shipper or
unequivocal; or b.) unequivocal acceptance of the bill of lading,
delivered to the consignee with full knowledge of its contents; or c.)
availment of the stipulations in favor of a third party, when that
consignee and third person demand before the carrier the fulfillment the
stipulation made by the shipper in the consignee’s favor specifically the
delivery of goods or cargos shipped. In this case, the consignee denied
having participated in that contract and denied it authorized Mala
Trading to ship the goods on its behalf or that it got xxx of the bill of
lading over the shipment or that it demanded the release of the cargo
so there is nothing to make them liable in this case the MOF did not
adduce any credible evidence to show that it was the consignee who
furnished all the details indicated in the Bill of Lading and that Shenyang
consented the shipment caused. There is also nothing in the records
which would indicate that Shenyang was the agent of Mala Trading or
that it exercised any act that would bind it as a consignee so it cannot
be bound by the terms and conditions of the bill of lading which is not a
party to or has no participation unsa na nga principle sa contracts???
(lol…)
Okay, bill of lading is also a proof or evidence. It is legal evidence of the
contract but it is not necessary for perfection. So where do you get that?
Article 353 of the Code of Commerce. Legal Evidence of the contract
between the shipper and the carrier shall be the bills of lading. Also,
Article 709 of the Code of Commerce, a bill of lading drawn up blah blah
shall be proof as between all those interested in the cargo between the
latter and the insurers. But it is not necessary for its perfection. In fact,
in the absence of the Bill of Lading, you can provide other proofs in
support of your claim. It is also actionable document in PhilAmGen v.
Sweet Lines, 1992 case. It is categorized as actionable document under
the Rules of Court. So by now you should already know, diba the
requirement in case of actionable document, what do you do? So if it is
an actionable document, you need to comply with the provision of the
Rules of Court as to how to properly plead and prove the document. It
is an evidence, it is covered by the parol evidence rule. But under that
rule, the terms of the contract are rendered conclusive upon the parties
and evidence aliunde is not admissible or evidence outside of the
contract is not admissible or contradict a complete and enforceable
agreement embodied in the document but there are exceptions to that
rule and if exceptions are not there, you cannot go beyond the terms of
the contract. So please just read Magellan v. Court of Appeals (1991).
Please take note of the provisions of the Code of Commerce on the
formalities stipulation required. Article 350, 352 on Law on
Transportation and Article 706 to 718 for Maritime Commerce, take note
of the formalities stipulations and other rules applying to Bills of Lading.
Formalities and other rules applying to Bills of Lading
ARTICLE 350. The shipper as well as the carrier of
merchandise or goods may mutually demand that a bill of lading
be made, stating:
1. The name, surname and residence of the shipper.
2. The name, surname and residence of the carrier.
3. The name, surname and residence of the person to whom
or to whose order the goods are to be sent or whether they are
to be delivered to the bearer of said bill.
4. The description of the goods, with a statement of their kind,
of their weight, and of the external marks or signs of the
packages in which they are contained.
5. The cost of transportation.
6. The date on which shipment is made.
27
7. The place of delivery to the carrier.
8. The place and the time at which delivery to the consignee
shall be made.
9. The indemnity to be paid by the carrier in case of delay, if
there should be any agreement on this matter.
ARTICLE 353. The legal evidence of the contract between
the shipper and the carrier shall be the bills of lading, by the
contents of which the disputes which may arise regarding their
execution and performance shall be decided, no exceptions
being admissible other than those of falsity and material error in
the drafting.
After the contract has been complied with, the bill of lading
which the carrier has issued shall be returned to him, and by
virtue of the exchange of this title with the thing transported, the
respective obligations and actions shall be considered
cancelled, unless in the same act the claim which the parties
may wish to reserve be reduced to writing, with the exception of
that provided for in Article 366.
In case the consignee, upon receiving the goods, cannot return
the bill of lading subscribed by the carrier, because of its loss or
of any other cause, he must give the latter a receipt for the
goods delivered, this receipt producing the same effects as the
return of the bill of lading.
ARTICLE 354. In the absence of a bill of lading, disputes shall
be determined by the legal proofs which the parties may present
in support of their respective claims, according to the general
provisions established in this Code for commercial contracts.
ARTICLE 355. The responsibility of the carrier shall
commence from the moment he receives the merchandise,
personally or through a person charged for the purpose, at the
place indicated for receiving them.
ARTICLE 356. Carriers may refuse packages which appear
unfit for transportation; and if the carriage is to be made by
railway, and the shipment is insisted upon, the company shall
transport them, being exempt from all responsibility if its
objections, is made to appear in the bill of lading.
ARTICLE 357. If by reason of well-founded suspicion of falsity
in the declaration as to the contents of a package the carrier
should decide to examine it, he shall proceed with his
investigation in the presence of witnesses, with the shipper or
consignee in attendance.
If the shipper or consignee who has to be cited does not attend,
the examination shall be made before a notary, who shall
prepare a memorandum of the result of the investigation, for
such purpose as may be proper.
If the declaration of the shipper should be true, the expense
occasioned by the examination and that of carefully repacking
the packages shall be for the account of the carrier and in a
contrary case for the account of the shipper.
ARTICLE 358. If there is no period fixed for the delivery of the
goods the carrier shall be bound to forward them in the first
shipment of the same or similar goods which he may make point
where he must deliver them; and should he not do so, the
damages caused by the delay should be for his account.
ARTICLE 359. If there is an agreement between the shipper
and the carrier as to the road over which the conveyance is to
be made, the carrier may not change the route, unless it be by
reason of force majeure; and should he do so without this
cause, he shall be liable for all the losses which the goods he
transports may suffer from any other cause, beside paying the
sum which may have been stipulated for such case.
When on account of said cause of force majeure, the carrier had
to take another route which produced an increase in
transportation charges, he shall be reimbursed for such
increase upon formal proof thereof.
ARTICLE 360. The shipper, without changing the place where
the delivery is to be made, may change the consignment of the
goods which he delivered to the carrier, provided that at the time
of ordering the change of consignee the bill of lading signed by
the carrier, if one has been issued, be returned to him, in
exchange for another wherein the novation of the contract
appears.
The expenses which this change of consignment occasions
shall be for the account of the shipper.
ARTICLE 361. The merchandise shall be transported at the risk
and venture of the shipper, if the contrary has not been
expressly stipulated. As a consequence, all the losses and
deterioration which the goods may suffer during the
transportation by reason of fortuitous event, force majeure, or
the inherent nature and defect of the goods, shall be for the
account and risk of the shipper. Proof of these accidents is
incumbent upon the carrier.
ARTICLE 362. Nevertheless, the carrier shall be liable for the
losses and damages resulting from the causes mentioned in the
preceding article if it is proved, as against him, that they arose
through his negligence or by reason of his having failed to take
the precautions which usage has established among careful
persons, unless the shipper has committed fraud in the bill of
lading, representing the goods to be of a kind or quality different
from what they really were.
If, notwithstanding the precautions referred to in this article, the
goods transported run the risk of being lost, on account of their
nature or by reason of unavoidable accident, there being no
time for their owners to dispose of them, the carrier may
proceed to sell them, placing them for this purpose at the
disposal of the judicial authority or of the officials designated by
special provisions.
28
ARTICLE 363. Outside of the cases mentioned in the second
paragraph of Article 361, the carrier shall be obliged to deliver
the goods shipped in the same condition in which, according to
the bill of lading, they were found at the time they were received,
without any damage or impairment, and failing to do so, to pay
the value which those not delivered may have at the point and
at the time at which their delivery should have been made.
If those not delivered form part of the goods transported, the
consignee may refuse to receive the latter, when he proves that
he cannot make use of them independently of the others.
ARTICLE 364. If the effect of the damage referred to in Article
361 is merely a diminution in the value of the goods, the
obligation of the carrier shall be reduced to the payment of the
amount which, in the judgment of experts, constitutes such
difference in value.
ARTICLE 365. If, in consequence of the damage, the goods
are rendered useless for sale and consumption for the purposes
for which they are properly destined, the consignee shall not be
bound to receive them, and he may have them in the hands of
the carrier, demanding of the latter their value at the current
price on that day.
If among the damaged goods there should be some pieces in
good condition and without any defect, the foregoing provision
shall be applicable with respect to those damaged and the
consignee shall receive those which are sound, this segregation
to be made by distinct and separate pieces and without dividing
a single object, unless the consignee proves the impossibility of
conveniently making use of them in this form.
The same rule shall be applied to merchandise in bales or
packages, separating those parcels which appear sound.
ARTICLE 366. Within the twenty-four hours following the
receipt of the merchandise, the claim against the carrier for
damage or average be found therein upon opening the
packages, may be made, provided that the indications of the
damage or average which gives rise to the claim cannot be
ascertained from the outside part of such packages, in which
case the claim shall be admitted only at the time of receipt.
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 which the goods
transported were delivered.
ARTICLE 367. If doubts and disputes should arise between
the consignee and the carrier with respect to the condition of
the goods transported at the time their delivery to the former is
made, the goods shall be examined by experts appointed by the
parties, and, in case of disagreement, by a third one appointed
by the judicial authority, the results to be reduced to writing; and
if the interested parties should not agree with the expert opinion
and they do not settle their differences, the merchandise shall
be deposited in a safe warehouse by order of the judicial
authority, and they shall exercise their rights in the manner that
may be proper.
ARTICLE 368. The carrier must deliver to the consignee,
without any delay or obstruction, the goods which he may have
received, by the mere fact of being named in the bill of lading to
receive them; and if he does not do so, he shall be liable for the
damages which may be caused thereby.
ARTICLE 369. If the consignee cannot be found at the
residence indicated in the bill of lading, or if he refuses to pay
the transportation charges and expenses, or if he refuses to
receive the goods, the municipal judge, where there is none of
the first instance, shall provide for their deposit at the disposal
of the shipper, this deposit producing all the effects of delivery
without prejudice to third parties with a better right.
ARTICLE 370. If a period has been fixed for the delivery of
the goods, it must be made within such time, and, for failure to
do so, the carrier shall pay the indemnity stipulated in the bill of
lading, neither the shipper nor the consignee being entitled to
anything else.
If no indemnity has been stipulated and the delay exceeds the
time fixed in the bill of lading, the carrier shall be liable for the
damages which the delay may have caused.
ARTICLE 371. In case of delay through the fault of the carrier,
referred to in the preceding articles, the consignee may leave
the goods transported in the hands of the former, advising him
thereof in writing before their arrival at the point of destination.
When this abandonment takes place, the carrier shall pay the
full value of the goods as if they had been lost or mislaid.
If the abandonment is not made, the indemnification for losses
and damages by reason of the delay cannot exceed the current
price which the goods transported would have had on the day
and at the place in which they should have been delivered; this
same rule is to be observed in all other cases in which this
indemnity may be due.
ARTICLE 372. The value of the goods which the carrier must
pay in cases if loss or misplacement shall be determined in
accordance with that declared in the bill of lading, the shipper
not being allowed to present proof that among the goods
declared therein there were articles of greater value and money.
Horses, vehicles, vessels, equipment and all other principal and
accessory means of transportation shall be especially bound in
favor of the shipper, although with respect to railroads said
liability shall be subordinated to the provisions of the laws of
concession with respect to the property, and to what this Code
established as to the manner and form of effecting seizures and
attachments against said companies.
ARTICLE 373. The carrier who makes the delivery of the
merchandise to the consignee by virtue of combined
agreements or services with other carriers shall assume the
29
obligations of those who preceded him in the conveyance,
reserving his right to proceed against the latter if he was not the
party directly responsible for the fault which gave rise to the
claim of the shipper or consignee.
The carrier who makes the delivery shall likewise acquire all the
actions and rights of those who preceded him in the
conveyance. The shipper and the consignee shall have an
immediate right of action against the carrier who executed the
transportation contract, or against the other carriers who may
have received the goods transported without reservation.
However, the reservation made by the latter shall not relieve
them from the responsibilities which they may have incurred by
their own acts.
ARTICLE 374. The consignees to whom the shipment was
made may not defer the payment of the expenses and
transportation charges of the goods they receive after the lapse
of twenty-four hours following their delivery; and in case of delay
in this payment, the carrier may demand the judicial sale of the
goods transported in an amount necessary to cover the cost of
transportation and the expenses incurred.
PART 6
BILLS OF LADING
ARTICLE 706. The captain of the vessel and the shipper shall
have the obligation of drawing up the bill of lading in which shall
be stated:
1. The name, registry, and tonnage of the vessel.
2. The name of the captain and his domicile.
3. The port of loading and that of unloading.
4. The name of the shipper.
5. The name of the consignee, if the bill of lading is issued in
the name of a specified person.
6. The quantity, quality, number of packages and marks of the
merchandise.
7. The freightage and the primage stipulated.
The bill of lading may be issued to bearer, to order, or in the
name of a specified person, and must be signed within twenty-
four hours after the cargo has been received on board, the
shipper being entitled to demand the unloading at the expense
of the captain should the latter not sign it, and, in every case,
the losses and damages suffered thereby.
ARTICLE 707. Four true copies of the original bill of lading shall
be made, and all of them shall be signed by the captain and the
shipper. Of these, the shipper shall keep one and send another
to the consignee; the captain shall take two, one for himself and
another for the ship agent.
There may also be drawn up as many copies of the bill of lading
as may be considered necessary by the person interested; but
when they are issued to order or to bearer, they shall be stated
in all the copies, be they the first four or the subsequent ones,
the destination of each one, stating whether it is for the agent,
for the captain, for the shipper, or for the consignee. If the copy
sent to the latter should have a duplicate, this circumstance and
the fact that it is not valid except in default of the first one must
be stated therein.
ARTICLE 708. Bills of lading issued to bearer and sent to the
consignee shall be transferable by actual delivery of the
instrument; and those issued to order, by virtue of an
indorsement.
In either case, the person to whom the bill of lading is
transferred shall acquire all the rights and actions of the
transferor or indorser with regard to the merchandise mentioned
in the same.
ARTICLE 709. A bill of lading drawn up in accordance with the
provisions of this title shall be proof as between all those
interested in the cargo and between the latter and the insurers,
proof to the contrary being reserved for the latter.
ARTICLE 710. If the bills of lading do not agree, and no change
or erasure can be observed in any of them, those possessed by
the shipper or consignee signed by the captain shall be proof
against the captain or ship agent in favor of the consignee or
shipper; and those possessed by the captain or ship agent
signed by the shipper shall be proof against the shipper or
consignee in favor of the captain or ship agent.
ARTICLE 711. The legitimate holder of a bill of lading who fails
to present it to the captain of the vessel before the unloading
obliging the latter thereby to unload it and place it in deposit,
shall be responsible for the expenses of warehousing and other
expenses arising therefrom.
ARTICLE 712. The captain may not by himself change the
destination of the merchandise. In
admitting this change at the instance of the shipper, he must
first take up the bill of lading which he may have issued, under
pain of being liable for the cargo to the legitimate holder of the
same.
ARTICLE 713. If before the delivery of the cargo a new bill of
lading should be demanded of the captain, on the allegation that
the failure to present the previous ones is due to their loss or to
any other just cause, he shall be obliged to issue it, provided
that security for the value of the cargo is given to his
satisfaction, but without changing the consignment, and stating
therein the circumstances prescribed in the last paragraph of
Article 707, under penalty, should he not so state, of being held
liable for said cargo if improperly delivered through his fault.
ARTICLE 714. If before the vessel puts to sea the captain
should die or should cease to hold his position through any
cause, the shippers shall have the right to demand of the new
captain the ratification of the first bills of lading, and the latter
must do so, provided that all the copies previously issued be
presented or returned to him, and it should appear from all
examination of the cargo that they are correct.
The expenses arising from the examination of the cargo shall
be defrayed by the ship agent, without prejudice to the right of
action of the latter against the first captain if he ceased to be
such through his own fault. Should said examination not be
made, it shall be understood that the new captain accepts the
cargo as it appears from the bills of lading issued.
30

ARTICLE 715. Bills of lading will give rise to a most summary
action or to judicial, compulsion ("accion sumarisima o de
apremios"), according to the case, for the delivery of the cargo
and the payment of the freightage and the expenses thereby
incurred.
ARTICLE 716. If several persons should present bills of lading
issued to bearer or to order, indorsed in their favor, demanding
the same merchandise, the captain shall prefer, in making
delivery the person who presents the copy first issued, except
when the latter one was issued on proof of the loss of the first,
and both are presented by different persons.
In such case, as well as when only second subsequent copies,
issued without this proof, are presented, the captain shall apply
to the judge or court, so that he may order the deposit of the
merchandise and their delivery, through him, to the proper
person.
ARTICLE 717. The delivery of the bill of lading shall effect the
cancellation of all the provisional receipts of prior date given by
the captain or his subordinates for partial deliveries of the cargo
which may have been made.
ARTICLE 718. After the cargo has been delivered the bill of
lading which the captain signed, or at least the copy by reason
of which the delivery is made, shall be returned to him, with the
receipt for the merchandise mentioned therein.
The delay on the part of the consignee shall make him liable for
the damages which such delay may cause the captain.
RP (DOH) v Lorenzo Shipping
Discussion:
So the issue of the surrender of the Bill of Lading so please take note
of the provision in Article 353.
ARTICLE 353. The legal basis of the contract between the shipper
and the carrier shall be the bills of lading, by the contents of which all
disputes which may arise with regard to their execution and fulfillment
shall be decided without admission of other exceptions than forgery or
material errors in the drafting thereof.
After the contract has been complied with the bill of lading issued by the
carrier shall be returned to him, and by virtue of the exchange of this
certificate for the article transported, the respective obligations and
actions shall be considered as canceled, unless in the same act the
claims which the contracting parties desired to reserve are reduced to
writing, exception being made of the provisions of Article 366.
If in case of loss or for any other reason whatsoever, the consignee
cannot return upon receiving the merchandise the bill of lading
subscribed by the carrier, he shall give said carrier a receipt for the
goods delivered, this receipt producing the same effects as the return
of the bill of lading.
And that was discussed in the case of RP v Lorenzo Shipping.
The surrender of the original bill of lading is not a condition precedent
for a common carrier to be discharged of its contractual obligation. If the
surrender of the original Bill of Lading is not possible acknowledgement
of the delivery by signing the delivery receipt suffices and it was
respondent did in this case.
So let’s go to the provisions on when to file a claim against the carrier?
When is there a bill of lading and when is there no bill of lading?
Article 366 of the Code of commerce tells us that the filing of the claim
must be done immediately after receipt of the package if the damage is
apparent. So for such purpose the worth of claim may be made
sufficient in compliance or in substantial compliance with the law.
ARTICLE 366. Within the twenty-four hours following the receipt of the
merchandise a claim may be brought against the carrier on account of
damage or average found therein on opening the packages, provided
that the indications of the damage or average giving rise to the claim
cannot be ascertained from the exterior of said packages, in which case
said claim would only be admitted on the receipt of the packages. (So if
the damage is apparent, file a claim, which may be verbal, immediately
upon receipt)
After the periods mentioned have elapsed, or after the
transportation charges have been paid, no claim whatsoever shall
be admitted against the carrier with regard to the condition in
which the goods transported were delivered.
All claims are extinguished if the consignee receive the merchandise
and pays the charges without any protest.
Now, what is the purpose of these periods stated under Art. 366?
(1) To inform the carrier that the cargo has been damaged, and
that it is being charged with liability therefor; and
(2) To give it an opportunity to examine the nature and extent of
the injury.
This protects the carrier by affording it an opportunity to make an
investigation of a claim while the matter is fresh and easily investigated
so as to safeguard itself from false and fraudulent claims.
What is the nature of the litigation?
The filing of a claim with the carrier within the time limitation constitutes
a condition precedent to the accrual of a right of action against a carrier
for loss or damage to the goods.
So in this situation it is a condition precedent before you file a case
against the carrier. You must present a proof that you filed a claim or
give a notice immediately upon receipt of the package and you saw that
there is apparent damage. If it is not apparent you are given 24 hours
(Art. 366).
The burden of proof rests on the party claiming.
Philamgen v Sweet Lines
Discussion:
In Philamgen v Sweet Lines it was held by the Supreme Court that the
filing of a claim with the carrier within the time limitation under Art. 366
constitutes as a condition precedent to the accrual to the right of action
against a carrier for damages caused to the merchandise. The shipper
or consignee must allege and prove the fulfillment of the condition and
if he omits such allegation and proof right of action against that carrier
can accrue in his favor. Take note of this.
So as a requirement in Article 366 they are condition precedent and
they are not limitations of actions. Being a condition precedent there
must be compliance with the conditions before a suit for enforcement
can be instituted. Performance or fulfillment of the condition precedent
upon which the arrival of the action depends must be sufficiently allege
considering that the burden of proof to show that a party has a right of
action is upon the person initiation the suit.
Where the contract of shipment contains unreasonable requirements
that giving notice are injury to the giving of such notice is a condition
precedent to the action for loss or injury or to enforce the carriage
liability.
The reason for the rule is not to relieve the carrier from just liability but
reasonably to inform the carrier that a shipment has been damaged and
that it is charged with liability therefor and to give it an opportunity to
examine the nature and extent of the injury.
31

Roldan v Lim Ponzo
Discussion:
So in that case the Supreme Court said that you cannot made a
complaint on the basis of failure to prove compliance with Art. 366
because this is a case of non-delivery of goods and Art. 366 will not
apply if the goods entrusted with the carrier is not delivered by the
carrier to the consignee.
Art. 366 is limited to cases of claims for damaged goods actually turned
over to the carrier and received by the consignee whether the damage
is apparent or not.
The objects sought to be attained by the requirement of the submission
of the claim in pursuance to Art. 366 is to have the consignee of the
goods entrusted to a carrier to make prompt demand for settlement of
allege damages suffered by the goods while in transit or so that the
carrier will be enable to verify all such things at the time of delivery or
within 24 hours thereafter and if necessary fix responsibility and secure
evidence as to the nature and extent of the allege damages to the goods
while the matter is still fresh in the mind of the parties.
Phil. Charter v Chemoil
Discussion:
Here the contention was there was a notice of claim but this was done
by a telephone call. So the Supreme Court said okay, the telephone call
was a substantial compliance to the rule that there must be a filing of a
claim or notice of claim under Art. 366. The problem was in this case
there was no proof that this telephone call was done within a period
provided under Art. 366, so within 24 hours.
Aboitiz v ICNA
Discussion:
So in this case, the court upheld the ruling that a telephone call was
enough as a substantial compliance and here while there is that 24-hour
period there are circumstances here according to the Supreme Court
which will make them rule that even if the follows was made two days
after it will still be considered as substantial compliance to Art. 366. Also
take note that in this case the supreme court had the occasion to rule
that this period of time—this requirement under art. 366 maybe
stipulated by the parties, it may be modified by the parties in the bill of
lading. So the Supreme Court said the periods as well as the manner of
giving notice maybe modified in the terms of the bill of lading as a
contract between the parties. That was also discussed in Philamgen v
Sweet Lines that these stipulations that these notices of claim may be
stipulated in the Bill of Lading.
Now if we say that this a condition precedent for the filing of the
case so what would be the prescriptive period?
Art. 1144. The case must be brought within 10 years from the time the
right of action accrues.
If there is a bill of lading 10 years.
No bill of lading 6 years.
5. Passengers on Sea Voyages
ARTICLE 693. Should the passage price not have been agreed
upon, the judge or court shall summarily fix it, after a statement
of experts.
ARTICLE 694. Should the passenger not arrive on board at the
time fixed, or should leave the vessel without permission from
the captain, when the latter is ready to leave the port, the
captain may continue the voyage and demand the full passage
price.
ARTICLE 695. The right to passage, if issued to a specified
person, can not be transferred without the consent of the
captain or of the consignee.
ARTICLE 696. If before beginning the voyage the passenger
should die, his heirs shall only be obliged to pay half of the
passage agreed upon.
If there should be understood in the price stipulated the
expenses of subsistence, the judge, or court, hearing experts if
he considers it necessary, shall fix the amount to be paid the
vessel.
Should another passenger be received in the place of the
deceased, nothing shall be paid by said heirs.
ARTICLE 697. If before beginning the voyage it should be
suspended through the sole fault of the captain or agent, the
passengers shall be entitled to have their passage refunded
and to recover for losses and damages; but if the suspension
was due to an accidental cause, or to force majeure, or to any
other cause beyond the control of the captain or agent, the
passengers shall only be entitled to the return of the passage
money. cd
ARTICLE 698. In case a voyage already begun should be
interrupted the passengers shall be obliged only to pay the
passage in proportion to the distance covered, and shall not be
entitled to recover for losses and damages if the interruption is
due to an accidental cause or to force majeure, but have a right
to indemnity if the interruption should have been caused by the
captain exclusively. If the interruption should be by reason of
the disability of the vessel, and the passenger should agree to
await her repair, he can not be required to pay any increased
price of passage, but his living expenses during the delay shall
be for his own account.
In case the departure of the vessel is delayed the passengers
have a right to remain on board and to be furnished with food
for the account of the vessel, unless the delay is due to an
accidental cause or to force majeure. If the delay should exceed
ten days, the passengers who request it shall be entitled to the
return of the passage; and if it were due exclusively to the
captain or agent they may furthermore demand indemnity for
losses and damages.
A vessel which is exclusively destined to the transportation of
passengers must take them directly to the port or ports of
destination, no matter what the number of passengers may be,
making all the stops indicated in her itinerary.
32
ARTICLE 699. After the contract has been rescinded, before or There must be a bearing No need
after the commencement of the voyage, the captain shall have risk, the existence of
a right to claim payment for what he may have furnished the which must be
passengers. established.
It must be executed in No need
accordance with the form
ARTICLE 700. In all that relates to the preservation of order and and manner required in Art
police on board the vessel the passengers shall conform to the 720 & 721 of the Code of
orders given by the captain, without any distinction whatsoever. Commerce

Must be recorded, In general, no requirement in simple

ARTICLE 701. The convenience or the interest of the loan
passengers shall not obligate nor empower the captain to stand
Need not be in writing Must be in writing
in shore or enter places which may take the vessel out of her
Preference is extended to Not the rule in simple loan
course, nor to remain in the ports he must or is under the the last lender if there are
necessity of touching for a period longer than that required for several lenders
the business of the navigation.
it must have a collateral May or may not have a collateral
The loss of collateral In general, it does not have such effect
ARTICLE 702. In the absence of an agreement to the contrary, extinguishes the loan
it shall be understood that the maintenance of the passengers
during the voyage is included in the price of the passage; but
should said maintenance be for the account of the latter, the
captain shall be under the obligation, in case of necessity, to
furnish them the victuals at a reasonable price necessary for
their maintenance.

ARTICLE 703. A passenger shall be looked upon as a shipper

in so far as the goods he carries on board are concerned, and
the captain shall not be liable for what said passenger may
preserve under his immediate and special custody unless the
damage arises from an act of the captain or of the crew.

ARTICLE 704. The captain, in order to collect the price of the

passage and expenses of maintenance, may retain the goods
belonging to the passenger, and in case of the sale of the same
he shall be given preference over the other creditors, acting in
the same way as in the collection of freight.

ARTICLE 705. In case of the death of a passenger during the

voyage the captain is authorized, with regard to the body, to
take the steps required by the circumstances, and shall
carefully take care of the papers and goods there may be on
board belonging to the passenger, observing the provisions of
Case No. 10 of Article 612 with regard to members of the crew.

ARTICLE 719. A loan on bottomry or respondentia shall be considered

that which the repayment of the sum loaned and the premium
stipulated, under any condition whatsoever, depends on the safe arrival
in port of the goods on which it is made, or of their value in case of
accident.

If the collateral is the vessel = bottomry; if collateral is goods =

respondentia.

So in order for you to understand Loan on Bottomry you compare it with

a simple loan.

Loan on Simple Loan

Bottomry/respondentia

33