CHAPTER V: COMMON ANF PRIVATE
APPLICABILITY OF THE CIVIL CODE, COC,
CARRIERS
A. DISTINCTIONS BETWEEN COMMON AND
PRIVATE CARRIERS
Under NCC:
Common carriers: extraordinary diligence;
presumption exists that the carrier was
negligent.
Private carriers: due diligence; required is
ordinary fault in order to incur liability.
ART 1732, NCC: Common carriers are:
 Persons, corporations or associations
 Engaged in the business of carrying or
transporting passengers or goods or both
 By land, water or air
 For compensation
 Offering their services to the public
Private carrier is a carrier which is not a public
carrier,
B.
COGSA AND SPECIAL LAWS ON CARRIAGE
Civil Code: limited in application to domestic
carriage of goods by water by a common
carrier; CoC suppletorliy applicable.
COGSA: vessels engaged in foreign trade,
regardless of the destination of the vessel.
CoC: private carriers in transportation of
merchandise in for a commercial purpose,
except when the parties stipulate to apply NCC
or COGSA.
DILIGENCE REQUIRED:
NCC: Extraordinary diligence
ART 1734: Common carriers responsible for loss,
damage or deterioration of goods UNLESS the
cause is:
 Flood, storm, lightning or other calamities
 Act of a public enemy in war
 Act or omission of the shipper or owner of
the goods
 Character of or defects in the goods
 Order or act of public authorities
ART 1735: Presumption of negligence in case of
loss, damage or deterioration; they must prove
they exercised extraordinary diligence.
ART 1745: Stipulations contrary to public policy:
 Risks of transport borne by the shipper
 Waiver of liability of carrier
 No diligence required to be observed
 Degree of diligence to be observed is
less than good father or man of ordinary
prudence
 Common carrier not responsible for acts
or omissions of employees
 Liability of carrier with regard to thieves
or robbers who did not act with grave or
irresistible force is diminished
 Common carrier is not responsible for the
loss or destruction of hoods on account
of defects of the vehicle
COGSA: Due diligence
SEC 3: Carrier is bound to, before and at the
beginning of the voyage, exercise due
diligence to:
 Make the ship seaworthy
 Properly man and equip the same
 Make the storage of the goods fit and
safe for its reception and preservation
Due diligence:
 More merely praiseworthy or sincere,
though unsuccessful effort
 But such an intelligent and efficient
attempt to make the ship seaworthy
 As far as diligence can serve
CODE OF COMMERCE: Ordinary Diligence
ART 362. Carrier shall be liable for losses and
damages if proven that they are caused by his
negligence or failure to take precautions which
usage and established among careful persons.
EXC: shipper committed fraud in the bill of
lading, unavoidable accident, or nature of the
goods.
C. IMMUNITIES OF THE CARRIER UNDER VARIOUS
LAWS
NCC exculpatory clauses:
ART 1734, as discussed.
COGA exculpatory clauses:
SEC 4(2): Neither the carrier nor the ship shall be
responsible for:
 Act, neglect or default of the master,
mariner, pilot or servants of the carrier in
navigation
 Fire; EXC: caused by fault of the carrier
 Perils and dangers of the sea
 Act of god
 Act of war
 Act of public enemies
 Arrest and seizure under legal process
 Quarantine
 Act or omission of the shipper
 Strikes or lockouts
 Riots and civil commotions
 Saving of life or property at sea
 Wastage due to nature of goods
 Insufficiency in packing or marks
 Other causes arising without the fault
and privity of the carrier
COC exculpatory causes:
ART 361: Merchandise are transported at the risk
of the shipper. EXC: contrary stipulation.
ART 362: Carrier is responsible if it is negligent or
failed to take the necessary precautions usually
adopted by careful persons. EXC: shipper
committed fraud in the bill of lading.
Civil Code, burden of proof:
Common carriers are presumed to have been
at fault or to have acted negligently. EXC: if
they prove they exercised extraordinary
diligence.
COGSA, burden of proof: DURATION OF CARRIER’S DUTY

Shipper has the burden of proving that the

cargo was received by the carrier in good
NCC: From the time the goods are placed in the
condition and was damaged upon delivery.
possession of the carrier until delivery to the
This is satisfied upon showing the bill of lading. consignee or person to receive them, actual or
constructive.
The carrier then has the burden of proving that
it exercised due diligence to prevent damage Common carrier’s duty stops upon unloading
or that the loss was occasioned by the due to exercise of right to stoppage in transitu.
excepted causes.
Duty continues even upon storage of goods in
a warehouse, until the consignee is advised of
the same and had reasonable opportunity to
COC, burden of proof:
remove or dispose of them.
Private carrier then burdened to prove that the
damage suffered was due to fortuitous event,
force majeure or other defects of the goods. COGSA: Duty covers the period from the time
when the goods are loaded to the time when
Shipper also burdened to prove that the
they are discharged from the ship.
damage occurred on account of the carrier’s
negligence.

COC: From the moment of receipt of the

merchandise, personal or constructive, at the
place intended for such receipt.
D. STIPULATION LIMITING THE CARRIER’S LIABILITY DELAY AND DEVIATION

CARGO LIMITATION NCC:

Delay or change in the stipulated or usual route

without just cause bars the availment of the
NCC:
stipulations on limitation of liability,
Stipulation reducing the common carrier’s
liability to a degree less than extraordinary
diligence must be: COGSA:

 In writing Deviations for saving life or property at sea or

 Signed by the shipper or owner any reasonable deviation shall not be deemed
 Supported by valuable consideration an infringement of COGSA and the contract.
 Reasonable, just and not contrary to
Deviation for loading or unloading passengers
public policy
or goods is presumed unreasonable.
ART 1745, as discussed.

In case when the carrier refuses to carry the

goods if there is no stipulation on limitation of
liability, such agreements entered into may be
annulled by the shipper or owner.
COC:
No deviation may be made upon the agreed
route EXC for force majeure. If done without
cause, then responsibility lies upon carrier for
any loss, damage or deterioration.

If cause is force majeure and it resulted to

COGSA: increase in transportation charges, then carrier
shall be reimbursed.
Neither the carrier nor ship is liable for loss or
damage exceeding $500 per package, or if not
shipped per package, per customary freight
unit. EXC: value of the goods are declared and
stated in the bill of lading.

COC:

Value that must be paid by the carrier is that

which appears in the bill of lading.
E. LAW OF DESTINATION AS THE APPLICABLE LAW
COGSA: The law of the country to which the
goods are to be transported shall govern the
liability of the common carrier for loss,
destruction or deterioration.
CARRIER’S RESPONSIBILITIES FOR PASSENGER
BAGGAGES
If in the custody of the passenger or his
employees:
 Carrier responsible as depository
o if passenger informs them of such
baggage; and
o passenger take the precautions
common carrier advised relative
to the care of the baggage
 Common carrier is liable as depository in
case of loss or injury of baggage, EXC:
force majeure.
 Considered as force majeure is the acts
of thieves or robbers provided that it be
effected with the use of arms or through
irresistible force
 Common carrier not liable if damage is
due to the acts of the passenger or his
family or servants, or the character of the
baggage
 Common carrier may not free himself
from liability by posting notices to the
effect that he is not liable for the
baggage
If not in the custody of the passenger:
 If in the custody of the carrier, then he
shall exercise extraordinary diligence in
the care of the goods
F. PASSENGERS ON SEA VOYAGE
CIVIL CODE
Common carriers are bound to:
 Carry passengers as safely as human
care and foresight can provide
 Using the utmost diligence of very
cautious persons
 With due regard for all circumstances
Death or injuries to passengers are presumed to
be the fault of the carrier.
The responsibility of a common carrier may not
be limited by stipulation, posting of notices or
statement of tickets.
EXC: When a passenger is carried gratuitously
(does not include mere reduction in fare rate).
EXC to EXC: willful acts or gross negligence.
Common carriers shall be liable for death or
injury through the willful or negligent acts of its
employees, EVEN IF they have acted beyond
the scope of their duties or in violation of the
carrier’s orders.
Defense of diligence of a good father in the
selection and supervision shall NOT prosper.
Passenger required to exercise diligence of a
good father of a family to avoid injury to himself.
Contributory negligence of the passenger shall
not bar recovery if the proximate cause of the
injury or death was the negligence of the
common carrier; damages are to be reduced.
Common carrier not liable for injuries suffered
by passengers on account of willful acts of the
passengers or strangers. EXC: if the carrier or
employees, through the diligence of a good
father, could have prevented or stopped the
act or omission.
Acceptance of “objectionable persons” is valid
when there is reasonable ground to believe that
convenience and safety of passengers will be
endangered by such person who presents
himself for transportation.
Acceptance of an intoxicated person depends
upon the degree: if there is reasonable ground
to believe that he will be disagreeable or
annoying to the other passengers, he may be
denied transportation.
Persons with sickness or infirmities may be
refused EXC when accompanied by someone
competent to render them assistance.
A contract of carriage ends not at the moment
the passenger alights from the vehicle, but
upon reasonable time for the passenger to
leave the premises of the carrier.
COC:
If the passenger is late, or leaves without
permission of the captain, the captain may
continue with the voyage and demand full
passage price.
Transfer of right to passage issued to a specific
person may not be transferred. EXC: consent of
the consignee or the captain.
If death of a passenger occurs prior to the
beginning of the voyage, the heirs are only
obliged to pay half the fare.
Suspension of voyage, remedies available:
1. Caused by exclusive fault of the captain
or ship agent
 Refund of fares
 Recovery of losses and damages
2. Caused by fortuitous events
 Only return of the fare
Interruption in the voyage shall entitle the
passengers to pay only amount proportionate
to the distance already traveled. Damages is
fault of captain.
In case of disability of the vessel requiring
repairs, a passenger may not be obliged to pay
additional fare, but his living expenses shall be
on his own account.
Damages may be recovered upon delay if
caused by the exclusive fault of the captain or
agent AND had reached 10 days.
Minimum damages for death: 12k, to be
awarded even if there are mitigating
circumstances.
Factors to be considered by the court in fixing
the amount:
 Life expectancy of the deceased or the
beneficiary
 Pecuniary loss of the beneficiary
 Loss of support
 Loss of service
 Loss of society
 Mental suffering of beneficiaries
 Medical and funeral expenses
Moral damages are normally not recoverable in
cases of breach of contract of transportation.
EXC:
 Mishap results in the death of a
passenger; OR
 It is proven that the carrier is guilty of
fraud or bad faith, even if death does not
result
Bad faith: wanton, reckless, oppressive
conduct, at the very least requires malice.
Exemplary damages, imposed for example or
correction for the public good, require that the
carrier acted in a wanton, fraudulent, reckless
or malevolent manner.
Attorney’s fees are recoverable when:

 Exemplary damages are awarded

 Defendant’s act or omission compelled
the plaintiff to litigate
 Defendant acted in gross and evident
bad faith in refusing to satisfy a valid
claim
 Separate civil action
 At least double judicial costs are
awarded
 Court deems it just and equitable
CHAPTER VI: PERSONS WHO TAKE PART
IN MARITIME COMMERCE
Shipowner and agent are liable for:
 Acts of the captain
o EXC: when captain exceeds his
power and privileges
 Contracts entered into by the captain
for repair, equipment and provision of
the vessel
 Indemnities in favor of third persons for
acts of the captain to take care of the
goods in the ship
 Damages to third persons for tort
committed by the captain
o EXC: damages due to collision
 Damages in case of collision due or
negligence or want of skill of the crew
Liability of shipowner in case of bareboat
charter: Still liable as his name appears in the
certificate of registration, which third parties
may look into.
LIMITED LIABILITY RULE
Civil liabilities incurred by the shipwoners shall
be limited to the value of the vessel with all its
appurtenances and freightage.
Owner v Agent
Owner: one who may be subjected to a liability
which is ordinarily assertable against one having
or claiming to have dominion over the subject.
Agent: one entrusted with the provisioning of
the vessel, or the one who represents here in the
port where she happens to be.
The limited liability doctrine applies only to
injuries and deaths caused by the negligence
of the CAPTAIN only. It does not apply when
such is caused by the fault or negligence of the
shipowner.
EXC to limited liability: cases under the
workmen’s compensation and in case of
repairs.
Crew’s contract is not for a fixed period or
voage:
Crew may be terminated at any time before
the voyage begins and salaries earned shall be
paid according to their contracts.
FI discharged during voyage, they shall receive
salary until they return on the port where the
contract is made. EXC: there is just cause
discharge.
Crew’s contract is for a fixed period or voyage:
Crew whose contracts are for a definite period
may not be discharged until after fulfillment of
their contract. EXC:
 Insubordination in serious matters
 Robber
 Theft
  Habitual drunkenness Requisites for force majeure to be exculpatory:
 Damage caused to the vessel through
 Event was the proximate and ONLY
malice or proven negligence
cause of the loss
 Common carrier exercised due diligence
to prevent or minimize loss
Three books required in maritime navigation:
 No delay on the part of the carrier
1. Logbook  Captain made a protest with the
 Enter daily the condition of the competent authority at the first port he
atmosphere, prevailing winds, touched within the 24 hours following his
course of the vessel, distance arrival
covered and other incidents of
navigation
2. Accounting book Formalities in case the vessel has gone through
 All amounts collected and paid hurricane or when the captain believes the
for the account of the vessel, cargo has suffered damage:
sources of collection and
 Captain must make a protest before
amounts paid, and names of all
competent authority at the first port he
members of the crew and their
touches
respective wages
 Such must be within 24 hours from the
3. Freight book
time of his arrival
 Entry and exit of goods, stating
 He must ratify the same within 24 hours
their marks and packages, name
upon arrival at the port of destination
of shippers and consignees and
 He must immediately proceed with the
the port of loading and unloading
proof of facts
of he packages.

Formalities in case the vessel if wrecked and the

Civil liabilities of a captain
captain is saved along or with part of his crew:
 Negligence or want of skill
 Protest within 24 hours (same as above)
 Thefts and robberies committed by the
 Sworn statement of the facts
crew
 Authority or consul must verify the facts,
 Losses, fines and confiscations for
receiving testimony from the crew and
violation of rules and regulations
the passengers saved
 Loss or damage caused by fault of the
 Authority must take other steps to
crew
ascertain the facts
 Misuse of powers and non-fulfillment of
 Authority shall record the result of the
obligations
proceedings in the logbook
 Deviation
 Authority must deliver the original records
 Damage caused by voluntary entry into
of the proceedings to the captain
a port not his destination
 Captain must ratify the protest at his
 Failure to observe provisions of the law
point of destination within 24 hours
Duration of liability: From the time cargo is
turned over to him at the dock or afloat
alongside the vessel at the port of loading, until
he delivers it on the shore or on the discharging
wharf at the port of unloading
Conflict between the sailing mate and captain:
 Mate shall state to the captain the
proper observations in the presence of
other officers
 Should the captain still disagree, sailing
mate shall make the proper protest in the
log book, signed by him and another
officer
 Sailing mate shall thereafter obey the
captain
Kinds of seaman’s contract:
1. Per voyage, where compensation is fixed
at a certain amount for the entire
voyage regardless of duration
2. By the month, where compensation is
fixed at a certain sum each month, for as
many months as the voyage may take
3. On shares or on freight, in which the
seaman is promised to be paid a part of
the resultant profits of the voyage
Formalities required in a seaman’s contract:
 In writing and in accordance with the
standards set by POEA
 Signed by the parties
 Approved by POEA
 Read to the seaman concerned
A seaman may not rescind his contract, with the
EXC of a legal impediment. He cannot pass
from the service of one vessel to another
without obtaining the written consent of the
captain, otherwise:
 The second contract is void
 The captain has the choice either:
o To force him to fulfill the service
o To look for a person to substitute
the seaman at the latter’s
expense
 Loss of wages from the first contract
Just causes for the discharge of a seaman
DURING VOYAGE:
 Perpetration of a crime which disturbs
order in the vessel
 Repeated insubordination, want of
discipline or non-fulfillment of the service
 Repeated incapacity or negligence
 Habitual drunkenness
 Any occurrence which incapacitates a
seaman to perform the work entrusted to
him
 Desertion
Before voyage, however, a captain may,
without giving any reason, refuse to permit a
seaman to go on board the vessel and leave
him on land. However, the captain is obligated
to pay him wages as if he had rendered
services. Source of payment:
 Funds of the vessel if the reason is
prudent and in the interest and safety of
the goods and vessel
 Personal funds of the captain if otherwise
During voyage, the captain may not abandon
any member of his crew. EXC: when the latter
commits a crime, imprisonment and delivery to
the competent authority in the first port
touched is a matter obligatory to the captain.
Just causes for revocation of voyage:
 Declaration of war or interdiction of
commerce with the territory where the
vessel was bound
 Blockade of the port of destination
 Breaking out of an epidemic
 Prohibition to receive in the port the
goods which make up the cargo of the
vessel
 Detention or embargo of the vessel by
order of the government
 Inability of vessel to navigate
Compensation in case of revocation without
just cause:
Before the voyage:
 Monthly compensation: wages seaman
has earned plus an indemnity of one
month’s salary
 Amount fixed by voyage: wages earned
plus equivalent of one month’s salary,
computed on the basis of the
approximate number of days the
voyage would have taken
During the voyage:
 Monthly compensation: amount that he
might have earned had the vessel
proceeded to the port of destination,
plus the passage to the said port
 Amount fixed per voyage: entire amount
fixed for the voyage, plus passage to the
port of destination
Change in destination:
Agreement to change: wages shall not be
reduced even if voyage is shortened, but
wages should be increased if voyage is
lengthened.
Disagreement: seamen should be paid what
they have earned plus indemnity of half a
month’s salary.
In cases when the revocation happens before
voyage, GR is that the seamen are entitled to
wages for service they have rendered. EXC:
 Payment by month: Revocation is due to
detention or embargo of the vessel or
any other cause independent of the will
of the ship agent, entitled to half a
month’s wage
o If detention is more than 3 months,
contract is deemed rescinded
o Seamen should be paid in full
what they are entitled should the
contract have not been revoked
 Fixed amount by voyage: members
entitled to wages for the entire fixed
amount
 If the disability of the vessel is due to the
lack of skill of the captain, engineer or
sailing mate, other members of the crew
entitled to damages
Total loss of the cargo and vessel shall extinguish
all rights of the crew to recover wages and the
agent to recover advances made.
Workmen’s Compensation Act: Loss of cargo
and vessel shall not extinguish the shipowner’s
liability to pay compensation for the death or
injuries of the crew.
Death of seaman during voyage,
compensation:
Natural death:
 On wages: Wages earned up to the time
of death
 Fixed amount for voyage: half the
amount if he died on the voyage out;
whole amount f he died on the return trip
 On shares: entire portion due
If death occurred in defense of the vessel,
seaman is considered as living, and full amount
of wages is to be paid.
Same for a person captured while defending
the vessel. EXC: he is captured by carelessness
or by accidents not related to the service.
Suicide: shipowner not liable. EXC: insanity.

The wages of the crew constitute a lien over the

vessel. The same lien shall lose preference upon
beginning of a new voyage.

All money claims arising from employer-

employee transaction shall be filed within 3
days from the time the cause of action
accrued.

All claims under the Workmen’s Compensation

Act shall be filed within 1 year from the
occurrence of the injury or death.

Compensation and benefits for death: heirs

and beneficiaries shall receive $50k and $7k for
each child under 21 years old, but not
exceeding four children, and $1k for funeral
and burial expenses. EXC: doubled if the death
occurs in a declared war zone or war risk area.
CHAPTER VII: COMMERCIAL
TRANSPORTATION UNDER THE CODE
OF COMMERCE
Commercial contract of transportation,
requisites:
 Involves merchandise or any object of
commerce; OR
 Regardless of the object, the carrier is a
merchant or customarily engaged in
transportation for the public
A. BILLS OF LADING
Bill of lading must include:
 Name and domicile of shipper, carrier
and person to whose order the goods
are addressed
 Description of the goods
 Cost of transportation
 Date on which shipment is made
 Place of delivery to the carrier
 Place and time delivery is made to the
consignee
 Damages to be paid by the carrier in
case of delay
Bill of lading
 Written acknowledgement
 Signed by the captain of the vessel
 Stating receipt of goods described, from
the shipper, to be transported in the
terms therein expressed to the place of
destination
 To the consignee named therein
B. RIGHTS AND OBLIGATIONS OF SHIPPER AND
CARRIER
Responsibility of the carrier begins at the
moment he receives the merchandise, actual
or constructive, at the place dictated for such
receipt, until its arrival at the place of delivery
and after the consignee is given a reasonable
opportunity to examine the goods and take
them away.
Carriers may object to packages which appear
to be unfit for transportation. If insisted upon, the
carrier is exempt from all liability IF objections
are made in the bill.
If there is suspicion of falsity in the contents of
the package, the carrier shall investigate the
same in the presence of witnesses, the shipper
and consignee. If the latter are not available,
then before a notary public.
If declaration is correct, repackaging expenses
are to be shouldered by the carrier. Otherwise,
borne by the shipper.
C. SHIPPER DOES NOT BEAR RISK
Shipper bears risk of transportation ONLY in
cases of force majeure and fortuitous events.
Stipulation making the shipper bear all risks is
invalid.
To free itself from liability, carrier must prove that
damage is caused by fortuitous events.
To hold the carrier liable, the damages to the
goods must be proved by the shipper to be due
to the fault or negligence of the carrier.
D.CARRIAGE OF CARGO ON DECK
Master is responsible for the safe and proper
stowage of cargo; he is bound to secure all
cargo safely under the deck.
If cargo is stored on deck without the shipper’s
consent, then he carrier the same at his own risk
(force majeure not proper defense). EXC: if the
shipper consents.
E. CLAIM FOR DAMAGE WITHIN 24 HOURS
24 hours from the receipt of merchandise
(actual possession of consignee), a claim
against the carrier for damage arises IF the
damage cannot be ascertained from the
outside part of the package. If ascertainable
from the package, it must be made at the time
of receipt.
Purpose: to enable the carrier to verify all claims
and if necessary to fix responsibility and secure
evidence as to the nature and extent of the
alleged damage to the goods.
24 hours is a condition precedent, not a period
of limitation.
Action for breach of bill of lading must be filed
within 10 years.
G. RULES ON DELIVERY
Goods must be delivered at the same condition
in which they were received. Partial delivery
may be refused if proven that the same may not
be used without the missing parts.
Unreasonable delay in delivery, demand and
refusal to deliver is required to constitute a
conversion.
Delivery must only be made to the consignee.
EXC: when the consignee cannot be found at
the residence indicated or if he refuses to pay
charges and expenses, the same may be
consigned with the municipal judge.
Delay gives rise to the right of the consignee to
abandon the goods, and ask for the full value
thereof as if they are lost.
If no abandonment is availed of, the liability for
damages would be the difference between
current price and the price it might have had at
the time delivery was supposed to be made.
Carrier who makes delivery of merchandise by
virtue of combined agreements shall assume
obligations of those who preceded him, subject
to the right to proceed against them
(subrogation).
Consignees to whom shipment was made may
not defer the payment of expenses and trans-
portation charges after the lapse fo 24 hours.
Otherwise, the carrier may demand
extrajudicial sale of the goods.
Goods transported shall be bound to answer for
the cost of transpo and expenses, but this
special right prescribes in 30 days after delivery
is made.
CHAPTER VIII: SPECIAL CONTRACTS OF
MARITIME COMMERCE
Charter party: contract between the charterer
and shipowner, in which the former hires from
the latter the use of the ship, for a certain length
of time (time charter) or for a certain voyage
(voyage charter).
Kinds of charters:
Simple charter
 Shipper is concerned only with the
transport of his goods
o Does not concern himself with the
management of the ship
Demise/bareboat charter
 Owner completely relinquishes the
possession, command and navigation of
the vessel in favor of the demise
 Tantamount to, though just short of, an
outright transfer of ownership
Time charter
 Vessel is leased for a specific period of
time; the owner’s people continue to
navigate and manage the vessel
 Only carrying capacity is taken
Voyage charter
 Owner undertakes to provide a vessel for
carriage of goods on one or several
voyages between named ports
 Still manned and navigated by the crew
of the owner
Requisites of a charter party
 Drawn in duplicate
 Signed by the contracting parties EXC:
does not know how to do so, by two
witnesses at his request
 Shall contain:
o Kind, name and tonnage of vessel
o Flag and port of registry
o Name, surname and domicile of
the captain, ship agent, charterer
o Port of loading and unloading
o Capacity to be allotted
o Freightage to be paid, and basis
thereof
o Amount of primage
o Days agreed for loading and
unloading
o Lay days and extra lay days
allowed
Not all need be contained in the charter party,
it suffices that the name and nationality of the
ship, whereabouts of the ship, class of ship and
the tonnage thereof be stated.
Implied terms in contract:
Seaworthiness: degree of fitness which an
ordinary, careful and prudent man would
require his vessel to have at the
commencement of her voyage, having regard
to all probable circumstances of it.
Due dispatch and proper route: carrier
mandated to begin voyage at time agreed
upon and or 15 days after loading, if no time
had been agreed upon.
Lay days: period of time the shipper has at his
disposal for the loading and unloading of the
cargo.
If the same had passed or if not stated, when
the period set by usages in the port had passed,
captain shall be entitled to demand
demurrage for the lay days and extra lay days.
If the vessel DURING THE VOYAGE becomes
unseaworthy, the captain is obliged to charter
at his expense another one. He is obliged to
look at the port of arrival and also within 150km
therefrom.
If through indolence or malice, no vessel is
furnished, the shipper may charter a vessel
upon summary approval of the court.
If notwithstanding the diligence of the captain,
no vessel is found, the cargo shall be deposited
with the shipper, with no right of indemnity.
Does it pay freightage?
 Necessary payment of freightage,
expenses and average due the captain
 Payment of freight and expenses
thereon
 Consignee could not be found
 Consignee refuses to receive the cargo
 Goods deposited run the risk of
deteriorating, or otherwise for its
preservation

Merchandise sold by the captain to pay for

necessary repairs: YES. Price of merchandise
depends upon the condition of the vessel upon
arrival:

 Safe arrival: price at which the

merchandise of the same kind is sold at
the port
 Vessel is lost: price realized from the sale
by the captain.

Jettisoned cargo: NO. Included in the general

average.

Lost cargo, due to shipwreck or stranding: NO. If

already paid in advance, it must be returned.

 If the cargo is redeemed or salvaged,

the freightage corresponding to the
distance covered by the vessel shall be
paid.

Damaged cargo: YES, if due to the inherent

defects or bad quality of the packaging or by
fortuitous event.

Increase in weight of the cargo: YES, as to the

increase, as this is for the benefit of the shipper.

Instances when consignment with the courts

may be made:

 When there are reasons for distrust that

the freightage, expenses and duties will
not be paid
 When the consignee could not be found
 Consignee refuses to receive the cargo

Instances when goods may be sold:

RIGHTS AND OBLIGATIONS OF THE SHIPOWNER
UNDER CHARTER PARTY
If the shipowner or captain contracts to carry
cargo greater than what the vessel can carry,
they shall indemnify the shippers whose
contract they cannot fulfill. Rules:
 One shipper only: if there is an error or
fraud in capacity and the whole cargo
cannot be carried, and the shipper does
not rescind the contract, the freightage
shall be reduced in proportion to the
cargo the vessel cannot load; damages
shall also be paid
 More than one shipper: preference is
given to him who has already loaded the
cargo in the vessel, and the rest shall
follow the order of the dates of their
contracts.
o If there is no order of preference,
the same may loaded in
proportion to the total weight of
all cargos.
If the contract does not cover at least 3/5 of the
capacity of the vessel, there may be
substitution of vessels, expenses of transfer
being on the account of the carrier. If no such
change is made, then he shall continue with the
voyage.
If 3/5 of the vessel if filled, there may be no
substitution unless there is consent of the
shipper.
OBLIGATIONS OF THE CHARTERER (see p647)
RESCISSION OF THE CHARTER PARTY
At the instance of the CHARTERER:
 Disagreement as to the tonnage
 Error in the statement of the flag
 Vessel not placed at the disposal of the
charterer at time and place agreed
upon
 Return to the port on account of risk of
pirates, enemies or bad weather
 In case of urgent repair and the
charterers prefer to dispose of
merchandise
At the instance of the SHIPOWNER:
 Charterer does not place the cargo at
the termination of extra lay days
(charterer must pay half the freightage)
 Owner sells the vessel prior to loading of
the cargo
Other cases:
 Declaration of war
 Interdiction of commerce
 Blockade at the port of destination
 Breaking out of an epidemic
 Prohibition to receive cargo at port of
destination
 Indefinite detention by reason of
embargo by governments
 Inability of vessel to navigate
BILLS OF LADING LOANS ON BOTTOMRY AND RESPONDENTIA

Three functions: Bottomry: contact in the nature of a mortgage

of a ship, on which the owner borrows money to
1. Evidence of the contract of
enable him to fit out the ship, with the stipulation
affreightment between the shipper and
that if the ship be lost in the course of the
the shipowner
voyage by any peril covered in the contract,
2. Document upon which the shipowner
the lender shall also lose his money. But if the
acknowledges receipt of the cargo by
ship arrives safely, then he shall receive back his
the shipowner
principal and the interest agreed upon, which is
3. Documents of title
usually very high.

Respondentia: contract made on the goods on

Bills of lading may be issued to bearer, to order board the ship, to be sold or exchanged during
or to a specified person. Only a bill issued to the course of the voyage; the lender must be
bearer or order is negotiable. paid his principal and interest, though the ship
perished, as long as the goods are saved.

Formal definition: Any loan which:

 under any condition whatever, the

repayment of the sum loaned and of
the premium stipulated depends upon
the safe arrival in the port of:
o the goods on which it is made or
o of the price they may receive in
case of accident, shall be
considered a loan on bottomry or
respondentia.

Nature:

Real: requires delivery of the amount loaned for

its perfection.

Unilateral: although there are reciprocal

benefits, the contract produces obligations only
for one party, the borrower, who must return the
amount loaned and the premium.

Aleatory: the lender runs known risks.

May be accomplished through:

 public instrument
 policy signed by contracting parties and
the broker taking part therein
  private instrument

Formalities:

 entry in the record of registry of vessels

o if made during voyage, then must
be registered within 8 days from
arrival
o if not accomplished, no effect as
to third persons

Requisites in the contract:

 kind, name and registry of the vessel

 name, surname and domicile of the
captain, person receiving the loan
 amount of loan and premium stipulated
 time for repayment
 goods pledged to secure payment
 voyage during which the risk is made to
run

CANNOT BE MADE on salaries of the crew or on

profits expected.

If it is proved that the loan greatly exceeded the

amount of the object liable for the loan on
account of fraudulent measures by the
borrower, the loan shall be valid as to the value
of the security. The excess shall be returned with
legal interest.

The period within which the lender runs the risk,

if there is no stipulation, must be until the vessel
drops anchor in the port of destination id it be
made upon the vessel; if made upon the
merchandise, then from the time they are
loaded into the short or wharf at the port of
shipment.