Transpo Notes

o t e s o n T r a n s p o r t a t i o n L a w

San Beda College of Law A. D. AVILA | H. MORAA 1

LAW O TRASPORTATIO AD PUBLIC UTILITIES

CHAPTER 1 Contract of Transportation person obligates himself to transport persons or property from one place to another for a consideration. 2 KIDS:

1. CARRIAGE OF PASSEGERS

Parties: common carrier & passenger (carried gratuitously or not)

Perfection:

> contract to carry (agreement to carry the passenger at some future date) consensual contract and perfected by mere consent * AIRCRAFT perfected even without issuance of ticket as long as there was already meeting of minds with respect to the subject matter and consideration > contract of carriage

real contract; not until the facilities of the carrier are actually used can the carrier be said to have assumed the obligation of the carrier; perfected by actual use. * AIRCRAFT perfected if it was established that the passenger had checked in at the departure counter, passed through customs and immigration, boarded the shuttle bus and proceeded to the ramp of the aircraft and baggage already loaded to the aircraft. * Public Utility Bus or Jeepneys once it stops it is in effect making a continuous offer to riders; perfected when passenger is already attempting to board the vehicle * TRAINS perfected when a person:

a. purchased a ticket/ possess sufficient fare with which to pay for his passage b. presented himself at the proper place and in a proper manner to be transported

c. has a bona fide intention to use facilities of the carrier

2. CARRIAGE OF GOODS

Parties: shipper & carrier

Perfection:

> contract to carry goods consensual > contract of carriage - act of delivery of goods (goods are unconditionally placed in the possession and control of the carrier and upon their receipt by the carrier for transportation) CARRIER:

Common carriers (CC) (1732)

persons, corporations, firms or associations engaged in the business of carrying or transporting passengers or goods or both, by land, water, or air, for compensation, offering their services to the public. (NOT the means of transportation)

one that holds itself out as ready to engage in the transportation of goods for hire as a public employment and not as a casual occupation.

Tests for determining WON a party is a common carrier of goods:

1. He must be engaged in the business of carrying goods for others as a public employment, and must hold himself out as ready to engage in the transportation of goods for persons generally as a business and not as a casual occupation.

2. He must undertake to carry good of the kind to which his business is confined.

3. he must undertake to carry by the method by which his business is conducted and over his established roads

4. transportation must be for hire. Characteristics of Common carriers (CC):

no distinction between one whose principal business is the transportation of



persons/goods and one who does such as an ancillary business

still a CC even if services offered to a limited clientele

pipeline operators are CCs not necessarily motor vehicles

CHARTER PARTY:

- contract by which an entire ship or some principal part thereof is let by the owner to another person for a specified time or use. 2 types:

1. Contract of affreightment involves the use of shipping space on vessels leased by the owner in part or as a whole, to carry goods for another - CC = observe extraordinary diligence; in case of loss, deterioration or destruction of goods of goods, CCs are presumed to be at fault or have acted negligently 2. Charter by demise/ Bareboat Charter whole vessel is let to the charterer with a transfer to him of its entire command and possession and consequent control over its navigation including the master and the crew who are his servants. - charter includes both vessel and crewCC becomes private carrier (PC) insofar as that particular voyage is concerned - if PC- ordinary diligence in the carriage of goods will suffice - PC = undertaking is a single transaction, not a part of the general business or occupation, although involving the carriage of goods for a fee; NO presumption of negligence applies whosoever alleges damage to or deterioration of the goods carried has the burden of proving that the cause was the negligence of the carrier. CCs v. Towage, Arrastre and Stevedoring

Towage- a vessel is hired to bring another vessel to another place e.g. a tugboat may be hired by CC to bring the vessel to a port (operator of tugboat not CC) Arrastre operators functions has nothing to do with the trade and business of navigation nor to

the use or operation of vessels. Services are not maritime. Stevedoring- involves the loading and unloading of coastwise vessels calling at the port. >>> Common carriers are public utilities, impressed with public interest and concern subject to regulation by the state. REGISTERED OWER RULE

- the registered owner of a vehicle is liable from any damage caused by the negligent operation of the vehicle although the same was already sold or conveyed to another person at the time of the accident.

- The registered owner is liable to the injured party subject to his right of recourse against the transferee or the buyer

- Applicable in case of lease - Registered owner not liable if vehicle was

taken from him without his knowledge and consent.

- Applicable to people involved on a kabit

system (arrangement whereby a person who has been granted a certificate of public convenience allows other persons who own motor vehicles to operate them under his license, sometimes for a fee or percentage of the earnings --- contrary to public policy) parties to the kabit system cannot

invoke the same as against each other either to enforce their illegal agreement or to invoke the same to escape liability --- pari delicto rule

having entered into an illegal contract, neither can seek relief from the courts and each must bear the consequences of his acts

also applicable to aircrafts and vessels basic rule that no person can operate a common carrier without securing a certificate of public convenience and necessity.



CHAPTER 2

OBLIGATIOS OF THE PARTIES

I. Obligations of the carrier

A. DUTY TO ACCEPT A common carrier granted a certificate of public convenience is duty bound to accept passengers or cargo without any discrimination.

It is illegal for domestic ship operators to refuse to accept or carry passengers or cargo without just cause. (Section 16, RA 9295)

In air transportation, passengers with confirmed tickets who were not allowed to board are provided with denied boarding compensation and priority boarding rules. No compensation for refusal if it is because of 1) government requisition of the space, 2) substitution of equipment of lesser capacity when required by operational and or safety and/or other causes beyond the control of the carrier, and 3) if arrangements have been made for the passenger to take another flight in a comparable air transportation which will arrive not later than three hours after the time of flight on which the confirmed space is held is supposed to arrive. (Civil Aeronautics Board Economic Regulation)

a. Grounds for valid refusal to accept goods

1. dangerous objects or substances including dynamites and other explosives 2. goods are unfit for transportation 3. acceptance would result in overloading 4. contrabands or illegal goods 5. goods injurious to health 6. goods will be exposed to untoward danger like flood, capture by enemies and the like 7. goods like livestock will be exposed to diseases 8. strike 9. failure to tender goods on time

In Fisher v. Yangco, factors in determining reasonable discrimination include, 1) suitability to the vessel for the transportation of such products; 2) reasonable possibility of danger or disaster resulting from their transportation in the form and under the conditions in which they are offered for

carriage; and 3) the general nature of the business done by the carrier. (1) Hazardous and Dangerous Substances Carrier not properly equipped to transport dangerous chemicals or explosives may validly refuse to accept the same for transport. Those which are not authorized by the Maritime Industry Authority to carry such goods may also validly refuse the same for transport. There must be a Special Permit to Carry from the MARINA. (2) Unfit for Transport Carriers may refuse to accept goods that are unfit for transportation (by nature be unfit for transportation or are unfit because of improper packaging or defect in their containers). However, carriers may accept the goods and limit its liability by stipulation. If by reason of well-founded suspicion of falsity in the declaration as to the contents of the package carrier should decide to examine and investigate it in the presence of witnesses, with the shipper and consignee in attendance. If declaration of shipper is true, expenses occasioned by the examination and of repacking the packages shall be for the account of the carrier Even if the cause of the loss, destruction or deterioration of the goods should be caused by the character of the goods, or the faulty nature of the packing or of the containers, the common carrier must exercise due diligence to forestall or lessen the loss. B. DUTY TO DELIVER THE GOODS a. Time of Delivery Where a carrier has made an express contract, the goods must be delivered within a specified time otherwise he is liable for any delay (indemnity for damages). In the absence of any agreement, goods must be delivered at its destination within a reasonable time (depending on the attending circumstances, nature of the goods). b. Consequences/Effects of Delay Excusable delays in carriage suspend, but do not generally terminate, the contract of carriage; when the cause is removed, the master must proceed



with the voyage and make delivery. During the detention or delay, vessel continues to be liable as a common carrier, not a warehouseman, and remains duty bound to exercise extraordinary diligence. If common carrier negligently delays in transporting the goods, a natural disaster shall not free it from responsibility. If common carrier delays , without just cause, in transporting the goods or changes the stipulated or usual route, the contract limiting its liability cannot be availed of in case of the loss, destruction, or deterioration of the goods. (1) Abandonment In case of delay through the fault of the carrier, the consignee may refuse to accept the goods or may leave the goods in the hands of the carrier. It must be communicated to the carrier in writing. This right must be exercised between the time of delay and before the arrival of the goods at its destination. The carrier must pay the full value of the goods as if they had been lost or mislaid. If abandonment is not made, indemnification for the losses and damages by reason of the delay cannot exceed the current price which the goods would have on the day and at the place they are to be delivered. The value of the goods which the carrier must pay in case of loss or misplacement shall be that what is declared in the bill of lading. Consignee must not defer the payment of the expenses and transportation charges of the goods otherwise carrier may demand the judicial sale of the goods. (2) Rights of Passengers in Case of Delay As to the rights and duties of the parties strictly arising out of delay, the Civil Code is silent. However, the Code of Commerce provides for such a situation: ARTICLE 698. In case a voyage already begun should be interrupted, the passengers shall be obliged to pay the fare in proportion to the distance covered, without Right to recover for

losses and damages if the interruption is due to fortuitous event of force majeure, but with a right to indemnity if the interruption should have been caused by the captain exclusively. If the interruption should be caused by the disability of the vessel and a passenger should agree to await the repairs, he may not be required to pay any increased price of passage, but his living expenses during the stay shall be for his own account. In case the vessel is not able to depart on time and the delay is unreasonable, the passenger may opt to have his/her ticket immediately refunded without any refund service fee from the authorized issuing/ticketing office. C. WHERE AND TO WHOM DELIVERED a. Place Goods should be delivered to the consignee in the place agreed upon by the parties. The shipper may change the consignment of the goods provided that at the time of ordering the change of the consignee the bill of lading signed by the carrier be returned to him, in exchange for another wherein the novation of the contract appears. The expenses occasioned by the change shall be for the account of the shipper. b. Consignee Delivery must generally be made to the owner or consignee or to someone lawfully authorized by him to receive the goods for his account or to the holder of the negotiable instrument. c. Delay to Transport Passengers Effects of delayed and unfinished voyage in inter-island vessels:

vessel can not continue or complete her voyage for any cause carrier is under obligation to transport the passenger to his/her destination at the expense of the carrier including free meals and lodging before the passenger is transported to his/her destination; the passenger may opt to have his/her ticket refunded in full if the cause of the unfinished voyage is due to the negligence of the carrier or to an amount that will suffice to defray transportation cost at the shortest possible



route if the cause of the unfinished voyage is fortuitous event.

vessel is delayed in arrival at the port of destination free meals during mealtime

delay in departure at the point of origin due to carriers negligence; fortuitous event - free meals during mealtime; carrier not obliged to serve free meals

carrier is not obliged to inform passengers of sailing schedule of the vessel

B.DUTY TO EXERCISE EXTRAORDINARY DELIGENCE Goods should be delivered in the same condition that they were received and to transport the passengers without encountering any harm or loss. 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. (Civil Code) a. Presumption of Negligence Two conditions for the birth of the presumption of negligence:

1. there exists a contract between the passenger or the shipper and the common carrier

2. the loss, deterioration, injury or death took place during the existence of the contract

Doctrine of Proximate Cause there is presumption of negligence If the goods are lost, destroyed or deteriorated, common carriers are presumed to have acted negligently, unless they prove that they observed extraordinary diligence. 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. b. Duration of Duty (1) Carriage of Goods ARTICLE 1736. The extraordinary responsibility of the common carrier lasts from the time the goods are unconditionally placed in the possession of, and received by the carrier for transportation until the same are delivered,

actually or constructively, by the carrier to the consignee or to the person who has a right to receive them ARTICLE 1737. The common carriers duty to observe extraordinary diligence over the goods remains in full force and effect even when they are temporarily unloaded or stored in transit, unless the shipper or owner has made use of the right of stoppage in transitu. (common carrier becomes a warehouseman ordinary diligence) ARTICLE 1738. The extraordinary liability of the common carrier continues to be operative even during the time the goods are stored in a warehouse of the carrier at the place if destination, until the consignee has been advised of the arrival of the goods and has had reasonable opportunity thereafter to remove them or otherwise dispose of them. (2) Carriage of Passengers By trains the extraordinary responsibility of common carrier commences the moment the person who purchases the ticket (or a token or card) from the carrier presents himself at the proper place and in a proper manner to be transported with a bona fide intent to ride the coach. * Mere purchase of a ticket does not of itself create the relation of carrier and passenger but it is an element in the inception of the relation. * A proper person who enters upon the carriers premises (station, ticketing office, or waiting room) with the intention of becoming a passenger will ordinarily be viewed as assuming the status of a passenger. * One who goes to the railroad station to inquire as to the possibility of securing passage on a freight train, which he knows, by the rules of the company, is not allowed to carry passengers, and to secure passage thereon if possible, is not entitled to the rights of a passenger but is a mere trespasser. * One who rides upon any part of the vehicle or conveyance which is unsuitable or dangerous, or



which he knows is not intended for passengers, is not presumed to be a passenger. * One who secures free passage by fraud or stealth is precluded from recovery for injuries sustained through the negligence of the carrier, for he has not assumed the status of a passenger. * A person riding on a freight train, on a drivers pass or similar arrangement, to look after livestock being transported and as incident to such transportation is, generally regarded as a passenger for hire. * Motor vehicles like jeepneys and buses are duty bound to stop their conveyances for a reasonable length of time in order to afford passengers an opportunity to board and enter, and they are liable for injuries suffered by boarding passengers resulting from the sudden starting up or jerking of their conveyances while they do so. Once a public utility bus or jeepney stops, it is making a continuous offer to bus riders. Duty to exercise utmost diligence with respect to passengers will not ordinarily terminate until the passenger has, after reaching his destination, safely alighted from the carriers conveyance or had a reasonable opportunity to leave the carriers premises. E. DEFENSES OF COMMON CARRIERS 1. Flood, storm, earthquake, lightning, or other natural disaster or calamity 2. Act of the public enemy in war, whether international or civil 3. Act or omission of the shipper or owner of the goods 4. The character of the goods or defects in the packing or in the containers 5. Order or act of competent public authority 6. Exercise of extraordinary diligence Fortuitous Event to be a valid defense must be established to be the proximate cause of the loss Requisites: 1. The cause of the unforeseen and the unexpected occurrence, or of the failure of the debtor to comply with his obligation, must be independent of the human will

2. It must be impossible to foresee the event which constitutes the caso fortuito, or if it can be foreseen, it must be impossible to avoid 3. The occurrence must be such as to render it impossible for the debtor to fulfill his obligation in a normal manner 4. The obligor (debtor) must be free from any participation in or the aggravation of the injury resulting to the creditor In order for the common carrier to be exempted from responsibility, the natural disaster must have been the proximate and only cause of the loss. However, the common carrier must exercise due diligence to prevent or minimize loss before, during and after the occurrence of flood, storm or other natural disaster in order that the common carrier may be exempted from liability for the loss, destruction, or deterioration of the goods. Fire not considered as a natural calamity or disaster Fire caused by lightning a natural calamity Hijacking does not fall under the categories of exempting causes; the common carrier is presumed to be at fault or to have acted negligently unless there is a proof of extraordinary diligence on its part Mechanical defects damage or injury resulting from mechanical defects is not a damage or injury that was caused by fortuitous event; carrier is liable to its passengers for damages caused by mechanical defects of the conveyance (breakage of a faulty drag-link spring, fracture of the vehicles right steering knuckle, defective breaks) Pages 123-190 Juntilla v. Fontanar Tire-blowouts was not considered as fortuitous event although it was alleged that the tires were in good condition; no evidence was presented to show that the evidence were due to adverse road conditions the carrier must prove all angles. The explosion could have been caused by too much air pressure injected into the tires and the fact that the jeepney was overloaded and speeding at the time of the accident.



b. OTHER INVALID DEFENSES 1. Damage to cargo due to EXPLOSION of another cargo not attributable to peril of the seas or accidents of navigation. 2. Damage by WORMS and RATS resulting to damage to cargoes cant be cited as an excuse by the carrier. 3. Damage by WATER through a port which had been left open or insufficiently fastened on sailing. 4. Carrier cannot escape liabilities to third persons if damage was caused by BARRATRY where the master or crew of the ship committed unlawful acts contrary to their duties includes theft and fraudulently running the ship ashore. Cases:

1. Problem: A carrier bus on its way to its destination encountered an engine failure, thus, it has to be repaired for 2 days. And while in the repair shop, a typhoon came resulting to the spoilage of cargoes. Answer: A typhoon although a natural disaster, is not a valid defense if it is shown that it was not the only cause of the loss. Especially when the facts indicate that the typhoon was foreseeable and could have been detected through the exercise of reasonable care. Cargoes should have been secured while the bus was being repaired for 2 days.

2. Problem: A passenger told the driver that

he has valuable items in his bag which was placed under his feet and he asked the driver (to which he is seated near) to watch for the bag while he is asleep. (a) There have been incidents of throwing

of stones at passing vehicles in the North Express Way. While the bus was traversing the super highway, a stone hurled from the overpass and hit the passenger resulting to injuries. Can the passenger hold the bus liable for damages? Answer: Yes. The incident was foreseeable due the prior incidents of stone hurling. The bus should have exercised utmost diligence and employed adequate precautionary

measures to secure safety of passengers since the incident was foreseeable. . HOWEVER, if the stone throwing was entirely unforeseeable and the carrier exercised the utmost diligence, then, the bus cant be held liable. Nonetheless, the burden of proof Is on the carrier to prove such exercise of diligence. It is up to the carrier to overthrow the presumption of negligence. If the passenger decides to file a case, al the passenger has to do is to prove that she was a passenger of the bus and that she suffered injuries while on board the bus.

(b) Supposing that there were armed men who staged a hold-up while the bus was speeding along the highway. One of them stole the passengers bag and wallet while pointing a gun him. Is the bus liable? Answer: No. Hand-carried luggages are governed by necessary deposit. Besides, theft with use of arms or through irresistible force is a force majeure which exempts carriers from liability.

3. Hi-jacking cannot exculpate the carrier from liability if it is shown that the employees of the carrier were not overwhelmed by the hijackers and that there was no showing of irresistible force. Since, there were 4 employers while there were only 2 hijackers and only one of them was armed with bladed weapon. ON THE OTHER HAND, a hijacking by 3 armed men is an event which is considered to be beyond the control of the carrier. Thus, the carrier may be adjudged from liability if it can be proven that the hijacking was unforeseeable.

c. PUBLIC ENEMY - presupposes a state of war and refers to the government of a foreign nation at war with the country to which the carrier belongs, though not



necessarily with that to which the owner of the gods owes allegiance. - Thieves, rioter, and insurrectionists are not included. They are merely private depredators for whose acts a carrier is answerable. - Rebels in insurrection against their own government are generally not embraced in the definition of public enemy. However, if the rebels hold a portion of territory, they have declared their impendence, cast off their allegiance and has organized armed hostility to the government, and the authority of the latter is at the time overthrown, such an uprising may take on the dignity of a civil war, and so matured and magnified, the parties are belligerent and are entitled to belligerent rights. - Depredation by pirates (which are enemy of all civilized nation) excuses the carrier from liability. - Common carriers may be exempted from responsibility only if the act of the public enemy has been the proximate and only cause of the loss. Moreover, due diligence must be exercised to prevent or at least minimize the loss before, during

and after the performance of the act of the public

enemy in order that the carrier may be exempted from liability for the loss, destruction, or deterioration of the goods. d. IMPROPER PACKING Character of the goods and defects in the packaging or in the containers are defenses available to the common carrier. Similarly, the Carriage of Good b Sea Act provides that carrier shall not liable for: (1) wastage in bulk or weight or any damages arising form the inherent defect, quality or vice of goods; (2) insufficiency of packing; (3) insufficiency or inadequacy of the marks, or (4) latent defects no discoverable by due diligence. However, NCC likewise provides: Art. 1742. Even if the loss, destruction, or

deterioration of the goods should be caused by

the character of the goods, or the faulty nature

of the packing or the containers, the common

carrier must exercise due diligence to forestall

or lessen the loss.

Thus, if the carrier accepted the goods knowing the fact of improper packing or even if the

carrier does not know but the defect was

nonetheless apparent upon ordinary

observation, it is not relived form liability for loss or injury to goods resulting therefrom. Cases:

1. Problem: A carrier knowing that some of a cargo of sacks of rice had big holes and others had openings just loosely tied with strings resulting to the spillage of rice during the trip. Thus, there was shortage in the delivery of the cargoes. When sued due to the shortage, the carrier interposed a defense that it was not liable since the shortage was due to the defective condition of the sacks. Decide. Answer: Carrier must still exercise extraordinary diligence if the fact of improper packing is known to the carrier or its servants, or apparent upon ordinary observation. If the carrier accepted the cargo despite such defects, the carriers becomes liable for the damage resulting therefrom. Apply Article 1742.

e. ORDER OF PUBLIC AUTHORITY Art. 1743. If through the order of public authority the goods are seized or destroyed, the common carrier is not responsible, provided said public authority had power to issue order.

Cases: 1. Carrier was not excused from liability

since the order of an acting mayor was not considered as a valid order of a public authority. It is required that public authority who issued the order must be duly authorized to issue the order.

2. Carriage of Goods by Sea Act provides that carrier shall not responsible for loss or damage resulting from arrest or restraint of princes, rulers, or people, or seizure under legal process and from quarantine restrictions.

F. DEFESES I CARRIAGE OF PASSEGERS

- Primary defense of carrier is exercise of extraordinary diligence in transporting passengers. Even if there is a fortuitous event, the



carriers must also present proof of exercise of extraordinary diligence.

Art. 1759. Common carriers are liable for the

death of or injuries to passengers through the

negligence or willful acts of the carriers

employees, although such employees may have

acted beyond the scope of their authority or in

violation of the orders of the common carriers.

The liability does not cease even upon proof

that they exercised diligence in the selection

and supervision of their employees.

Art. 1763. Carrier is responsible for injuries

suffered by a passenger on account of the

willful acts or negligence of other passengers or

of strangers, if the common carriers employees

through the exercise of the diligence of a good

father of a family could have prevented or

stopped the act or omission.

a. Employees - Carrier is liable for the acts of its

employees. It cant escape liability by claiming that it exercised due diligence in supervision and selection of its employees (unlike in quasi-delicts).

Reasons for the rule: 1. Undertaking of the carrier requires that its

passenger that full measure of protection afforded by the exercise of high degree of care prescribed by law, inter alia from violence and insults at the hands of strangers and other passengers, but above all, from the acts of the carriers own servants.

2. The liability of the carrier for the servants violation of duty to performance of his contract to safely transport the passenger, delegating therewith the duty of protecting the passenger with utmost care prescribed by law.

3. As between the carrier and the passenger, the former must bear the risk of wrongful acts or negligence of the carriers employees against passenger, since it, and not the passenger, has the power to select and remove them.

b. Other Passengers and Third Persons

With respect to acts of strangers and other passengers resulting in injury to apassenger, the availability of such defense is also subject to the exercise of a carrier of due diligence to prevent or stop the act or omission. Negligence of the carrier need not be the sole cause of the damage or injury to the passenger or the goods. The carrier would still be liable even if the contractual breach concurs with the negligent act or omission of another person.

G. PASSEGERS BAGGAGES

Rules that are applicable to goods that are being shipped are also applicable to baggage delivered to the custody of the carrier. Arts. 1733. 1734 and 1736 of Civil Code are applicable. However, if the luggage was hand-carried, Arts. 1998, 2000-2003 shall apply. Art. 1998. The deposit of effects made by the

travellers in hotels or inns shall also be

regarded as necessary. The keepers of hotels or

inns shall be responsible for them as

depositaries, provided that notice was given to

them, or to their employees, of the effects

brought by the guests and that, on the part of

the latter, they take the precautions which said

hotel-keepers or their substitutes advised

relative to the care and vigilance of their

effects. (1783)

Art. 2000. The responsibility referred to in the

two preceding articles shall include the loss of,

or injury to the personal property of the guests

caused by the servants or employees of the

keepers of hotels or inns as well as strangers;

but not that which may proceed from any force

majeure. The fact that travellers are

constrained to rely on the vigilance of the

keeper of the hotels or inns shall be considered

in determining the degree of care required of

him. (1784a)

Art. 2001. The act of a thief or robber, who has

entered the hotel is not deemed force majeure,

unless it is done with the use of arms or through

an irresistible force. (n)

Art. 2002. The hotel-keeper is not liable for

compensation if the loss is due to the acts of the



guest, his family, servants or visitors, or if the

loss arises from the character of the things

brought into the hotel. (n)

Art. 2003. The hotel-keeper cannot free himself

from responsibility by posting notices to the

effect that he is not liable for the articles

brought by the guest. Any stipulation between

the hotel-keeper and the guest whereby the

responsibility of the former as set forth in

articles 1998 to 2001 is suppressed or

diminished shall be void. (n)

Cases: 1. Despite the fact that the carrier gave

notice that it shall not be liable for baggage brought in by passengers, the carrier is still liable for lost hand-carried luggage since it is governed by rules on necessary deposits. Under Art. 20000, the responsibility of the depositary includes the loss of property of the guest caused by strangers but not that which may proceed from force majeure. Moreover, article 2001 considers theft as force majeure if it is done with use of arms or through irresistible force.

2. Even if the passenger did not declare his baggage nor pay its charges contrary to the regulations of the bus company, the carrier is still liable in case of loss of the baggage. Since, it has the duty to exercise extraordinary diligence over the baggage that was turned over to the carrier or placed in the baggage compartment of the bus. The non-payment of the charges is immaterial as long as the baggage was received by the carrier for transportation.

II. OBLIGATIONS OF SHIPPER, CONSIGNEE and PASSENGER.

A. Negligence of Shipper or Passenger The obligation to exercise due diligence is not limited to the carrier. The shipper is obliged to exercise due diligence in avoiding damage or injury. Nevertheless, contributory negligence on the part of the shipper/ passenger would only mitigate the carriers liability; it is not a total excuse.

However, if the negligence of the shipper/ passenger is the proximate and only cause of the loss, then, the carrier shall not be liable. The carrier may overcome the presumption of negligence and any be able to prove that it exercised extraordinary diligence in handling the goods or in transporting the passenger. The carrier may be able to prove that the only cause of the loss of the goods is any of the following: 1. Failure of the shipper to disclose the

nature of the goods; 2. Improper marking or direction as to the

destination; 3. Improper loading when he assumes such

responsibility. The shipper must likewise see to it that the goods are properly packed; otherwise, liability of the carrier may either be mitigated or barred depending on the circumstances. Art. 1741. If the shipper or owner merely

contributed to the loss, destruction or

deterioration of the goods, the proximate

cause thereof being the negligence of the

common carrier, the latter shall be liable in

damages, which however, shall be equitably

reduced.

Art. 1761. The passenger must observe the

diligence of a good father of a family to avoid

injury to himself.

Art. 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.

a. Last Clear Chance

A negligent carrier is liable to a negligent passenger in placing himself in peril, if the carrier was aware of the passengers peril, or should have been aware of it in the reasonable exercise of due care, had in fact an opportunity later than that of the passenger to avoid an accident.



Last clear chance applies in a suit between the owners and drivers of colliding vehicles. It does no tarise where a passenger demands responsibility from the carrier to enforce its contractual obligations. For it would be inequitable to exempt the negligent driver of the carrier and its owner on the ground that the other driver was likewise guilty of negligence.

b. Assumption of Risk

Carriers are not insurers of the lives of their passengers. Thus, in air travel, adverse weather conditions or extreme climatic changes are some of the perils involved in air travel, the consequence of which the passenger must assume or expect.

However, there is no assumption of risk in a case wherein a passenger boarded a carrier that was filled to capacity. The act of the passenger in taking the extension chair does not amount to implied assumption of risk. Case: Although, there is a sign in the bus that says: do not talk to the driver while the bus is in motion, otherwise, the company would not assume responsibility for any accident:. Nonetheless, the passengers dared the driver to race with another bus, as the bus speeds up in the attempt to overtake the other bus, it failed to slow down. As a result, the bus turns turtle causing the death and injuries to passengers. Is the bus company liable? Answer: Yes. The bus company is obligated to exercise utmost diligence in carrying passengers. This liability cannot be eliminated or limited by simply posting notices. The passenger cannot be said to have assumed the risk of being injured when he urged the driver to accept the dare. At most, the passengers can only be said to be guilty of contributory negligence which would mitigate the liability of the driver, since the proximate cause of the accident was the drivers willful and reckless act in running the race with the other bus.

B. FREIGHT a. Amount to be Paid

Common carriers are subject to heavy regulations with respect to rates that they are charging to the public. The regulation of rates is founded upon the

valid exercise of the Police Power of the state in order to protect the public from arbitrary and excessive rates while maintaining the efficiency and quality of services rendered. The fixing of just and reasonable rates involves a balancing of investor and the consumer interest. Although the consideration that should be paid to the carrier is still subject to the agreement between parties, what can be agreed upon should not be beyond the maximum amount fixed by appropriate government agency.

b. Who will pay. Although either of the shipper or the consignor may pay the freight before or at time the goods are delivered to the carrier for shipment, nonetheless, it is the consignor (whom the contract of carriage is made) who is primarily liable for the payment of freight whether or not he is the owner of the goods. The obligation to pay is implied from the mere fact that the consignor has placed the goods with the carrier for the purpose of transportation.

c. Time to pay. Code of Commerce provides that payment should be made within 24-hours from the time of delivery in the absence of any agreement between the parties. 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.

(1) Carriage of Passengers by Sea With respect to carriage of goods by sea, the tickets are purchased in advance. Carriers are not supposed to allow passengers without tickets. The carrier shall collect/ inspect the passengers ticket within one hour from vessels departure as not to disrupt resting or sleeping passengers. If the vessel is not able to depart on time and the delay is unreasonable, the passenger may opt to have his/ her ticket refunded without refund service fee. Delayed voyage means late departure of the vessel from its port of origin and/ or late arrival of the vessel to its port of destination. Unreasonable



delay means the period of time that has lapsed without just cause and is solely attributable to the carrier which has prejudiced the transportation of the passenger and/ or cargoes to their port of destination. A passenger who failed ot board the vessel can refund or revalidate the ticket subject to surcharges. Revalidation means the accreditation of the ticket that is not used and intended to be used for another voyage.

(2) Carriers Lien If consignor or the consignee fails to pay the consideration for the transportation of goods, the carrier may exercise his lien in accordance with Art. 375 of Code of Commerce: ARTICLE 375. The goods transported shall be especially bound to answer for the cost of transportation and for the expenses and fees incurred for them during their conveyance and until the moment of their delivery. This special right shall prescribe eight days after the delivery has been made, and once prescribed, the carrier shall have no other action than that corresponding to him as an ordinary creditor.

C. DEMURRAGE Demurrage is the compensation provided for the contract of affreightment for the detention of the vessel beyond the time agreed on for loading and unloading. It is the claim for damages for failure to accept delivery. In broad sense, very improper detention of a vessel may be considered a demurrage. Technically, liability for demurrage exists only when expressly stipulated in the contract. Using the term in broader sense, damages in the nature of demurrage are recoverable for a breach of the implied obligation to load or unload the cargo with reasonable dispatch, but only by the party to whom the duty is owed and only against on who is a party to the shipping contract. Notice of arrival of vessels or conveyances, or their placement for purposes of unloading is often a condition precedent to the right to collect demurrage charges.



CHAPTER 3

EXTRAORDIARY DILIGECE

I. RATIONALE A common carrier is bound to carry the passengers safely as far a human care and foresight provide, using the utmost diligence of very cautious persons, with due regard for all circumstances. Extraordinary diligence: Calculated to protect the passengers from the tragic mishaps that frequently occur in connection with rapid modern transportation. II. HOW DUTY IS COMPLIED WITH Common carrier binds itself to carry the passengers safely as far as human care and foresight can provide, using the utmost diligence of a very cautious person, with due regard for all the circumstances.

- The duty even extends to the members of the crew or complement operating the carrier.

A reasonable man or a good father of a family in the position of the carrier must exercise extraordinary diligence in the performance of his contractual obligation.

- Whether or not a reasonable man, exercising extraordinary diligence, could have foreseen and prevented the damage or loss that occurred.

III. EFFECT OF STIPULATION A. GOODS The law allows a stipulation whereby the carrier will exercise a degree of diligence which is less than extraordinary with respect to goods.

Art. 1744. A stipulation between the

common carrier and the shipper owner

limiting the liability of the former for the

loss, destruction, or deterioration of the

goods to a degree less than extraordinary

diligence shall be valid, provided it be:

1. In writing, signed by the shipper/owner;

2. Supported by a valuable consideration

other than the service rendered by the

common carrier (-ote: Typically

fare/freight); and

3. Reasonable, just and contrary to public

policy.

B. PASSENGERS There can be no stipulation lessening the utmost diligence that is owed to passengers.

Art. 1757. The responsibility of a common

carrier for the safety of passengers as

required in Arts. 1733 and 1755 cannot be

dispensed with or lessened by stipulation,

by the posting of notices, by statements on

tickets, or otherwise. (-ote: Absolute;

extraordinary at all times.)

Gratuitous passenger A stipulation limiting the common carriers liability for negligence is valid, but not for willful acts of gross negligence. The reduction of fare does not justify any limitation. IV. EXTRAORDINARY DILIGENCE IN CARRIAGE BY SEA A. SEAWORTHINESS

a.) Warranty of Seaworthiness of Ship Extraordinary diligence requires that the ship which will transport the passengers and goods is seaworthy. Seaworthiness of the vessel is impliedly warranted. The carrier shall be bound before and at the beginning of the voyage to exercise due diligence to make the ship seaworthy. b.) No duty to inquire Because of the implied warranty of seaworthiness, shippers of goods, when transacting with common carriers, are not expected to inquire into the vessels seaworthiness, genuineness of its licenses and compliance with all maritime laws. Passengers cannot be expected to inquire everytime they board a common carrier, whether the carrier possesses the necessary papers or that all the carriers employees are qualified.



It is the carrier that carries such burden of proving that the ship is seaworthy. Presentation of certificates of seaworthiness is not sufficient to overcome the presumption of negligence. c.) Meaning of Seaworthiness A vessel must have such degree of fitness which an owner who is exercising extraordinary diligence would require his vessel to have at the commencement of the voyage, having regard to all the probable circumstances of it. This includes fitness of the vessel itself to withstand the rigors of voyage, fitness of the vessel to store the cargoes and accommodate passengers to be transported and that it is adequately equipped and properly manned. General Test of Seaworthiness: Whether the ship and its appurtenances are reasonably fit to perform the service undertaken.

Example: The carrier was able to establish that the ship itself was seaworthy because the records reveal that the vessel was drydocked and inspected by the Phil. Coast Guard before its first destination.

A warranty of seaworthiness requires that it be properly laden, and provided with a competent master, a sufficient number of competent officers and seamen, and the requisite appurtenances and equipment. The carrier shall be bound before and at the beginning of the voyage to exercise due diligence to: 1. Make the ship seaworthy; 2. Properly man, equip, and supply the ship;

3. Make all parts of the ship in which goods are carried, fit and safe for their reception, carriage, and preservation.

The carrier shall properly and carefully load, handle, stow, carry, keep, care for, and discharge the goods carried. The ship must be cargoworthy. The ship must be efficiently strong and equipped to carry the particular kind of cargo which she has contracted to carry and her cargo must be so loaded that it is safe for her to proceed on her voyage. The vessel must be adequately equipped and properly manned. On top of regular maintenance and inspection, Captains, masters or patrons of vessels must prove the skill, capacity, and qualifications necessary to command and direct the vessel. If the owner of a vessel desires to be the captain without having the legal qualifications, he shall limit himself to the financial administration of the vessel and shall entrust the navigation to a qualified person. It is not an excuse that the carrier cannot afford the salaries of competent and licensed crew or that latter is unavailable.

B. OVERLOADING Duty to exercise due diligence likewise includes the duty to take passengers or cargoes that are within the carrying capacity of the vessel. C. PROPER STORAGE The vessel itself may be suitable for the cargo but this is not enough because the cargo must also be properly stored. Cargo must generally not be placed on deck. The carrying of deck cargo raises the presumption of unseaworthiness unless it can be shown that the deck cargo will not interfere with the proper management of the ship. D. NEGLIGENCE OF CAPTAIN AND CREW Failure on the part of the carrier to provide competent captain and crew should be distinguished from the negligence of the said captain and crew, because the latter is covered by the Limited Liability Rule (liability of the shipowner may be limited to the value of the



vessel). If the negligence of the captain and crew can be traced to the fact that they are really incompetent, the Limited Liability Rule cannot be invoked because the shipowner may be deemed negligent. a.) Rules on passenger safety (Read Memorandum Circular No. 114: p. 204) E. DEVIATION AND TRANSSHIPMENT

a.) Deviation If there is an agreement between the shipper and the carrier as to the road over which the conveyance is to be made (subject to the approval by the Maritime Industry Authority), the carrier may not change the route, unless it be by reason of force majeure. Without this cause, he shall be liable for all the losses which the goods may suffer, aside from paying the sum stipulated for that case. When on account of the force majeure, the carrier had to take another route which resulted to an increase in transportation charges, he shall be reimbursed upon formal proof. b.) Transshipment The act of taking cargo out of one ship and loading it into another; to transfer goods from the vessel stipulated in the contract of affreightment to another vessel before the place of destination named in the contract has been reached. Transshipment of freight without legal excuse is a violation of the contract and subjects the carrier to liability if the freight is lost even by a cause otherwise excepted.

V. EXTRAORDINARY DILIGENCE IN CARRIAGE BY LAND A. CONDITION OF VEHICLE Common carriers that offer transportation by land are similarly required to make sure that the vehicles that they are using are in good order and condition. Rule on Mechanical Defects If the carriers will replace certain parts of the motor vehicle, they are

duty bound to make sure that the parts that they are purchasing are not defective. Hence, it is a long-standing rule that a carrier cannot escape liability by claiming that the accident that resulted because of a defective break or tire is due to a fortuitous event. This is true even if it can be established that the tire that was subject of a blow-out is brand new. The duty to exercise extraordinary diligence requires the carrier to purchase and use vehicle parts that are not defective. B. TRAFFIC RULES The carrier fails to exercise extraordinary diligence if it will not comply with basic traffic rules. The Civil Code provides for a presumption of negligence in case the accident occurs while the operator of the motor vehicle is violating traffic rules. In cases involving breach of contract of carriage, proof of violation of traffic rules confirms that the carrier failed to exercise extraordinary diligence. C. DUTY TO INSPECT There is no unbending duty to inspect each and every package or baggage that is being brought inside the bus or jeepney. The carrier is duty bound to conduct such inspection depending on the circumstances. VI. EXTRAORDINARY DILIGENCE IN CARRIAGE BY AIR The aircraft must be in such a condition that it must be able to withstand the rigors of flight. Airworthiness An aircraft, its engines propellers, and other components and accessories, are of proper design and construction, and are safe for air navigation purposes, such design and construction being consistent with accepted engineering practice and in accordance with aerodynamic laws and aircraft science. Proof of airworthiness is not by itself sufficient to prove exercise of extraordinary diligence. The fact that the flight was cancelled due to fortuitous event does not mean that the carriers duty already ended. The carrier is still obligated to



look after the convenience and comfort of the passenger. A. INSPECTION Is the duty of the carrier to make inquiry as to the general nature of the articles shipped and of their value before it consents to carry them; and its failure to do so cannot defeat the shippers right to recovery of full value of the package if lost, in the absence of showing of fraud or deceit on the part of the shipper. Where a common carrier has reasonable ground to suspect that the offered goods are of a dangerous character, the carrier has the right to know the character of such goods and to insist inspection, if reasonable and practical under the circumstances, as a condition of receiving and transporting such goods. To be subjected to unusual search, other than the routinary inspection procedure customarily undertaken, there must exist proof that would justify cause for apprehension that the baggage is dangerous as to warrant exhaustive inspection, or even refusal to accept carriage of the same.



CHAPTER 4

BILL OF LADIG I. COCEPTS, DEFIITIO AD KIDS

Bill of Lading (BOL)- a written acknowledgement, signed by the master of a vessel or other authorized agent of the carrier, that he has received the described goods from the shipper, to be transported on the expressed terms to be described the place of destination, and to be delivered to the designated consignees of the parties. It operates as a (1) RECEIPT (2) as a CONTRACT (3) as a DOCUMENT OF TITLE. A BOL is not necessary for the perfection of a contract of carriage. Thus, the obligation to exercise extraordinary diligence by the carrier is still required even if there is no bill of lading. In the absence of the bill of lading, disputes shall be determined on the basis of the provisions in the New Civil Code and suppletorily by the Code of Commerce. KINDS of BILL of LADING

1. Clean Bill of Lading

Does not contain any notation indicating any defect in the goods.

2. Foul Bill of Lading

One that contains the abovementioned notation.

3. Spent Bill of Lading

The goods are already delivered but the bill of lading was not yet returned (upon delivery, the carrier is supposed to retrieve the covering bill of the goods)

4. Through Bill of Lading

Issued by a carrier who is obliged to use the facilities of other carriers as well as his own facilities for the purpose of transporting the goods from the city of the seller to the city of the buyer, which BOL is honored by the second and other interested carriers who dont issue their own BOL.

5. On Board Bill

-states that the goods have been received on board the vessel which is to carry the goods. -apparently guarantees the certainty of shipping as well as the seaworthiness of the vessel to carry the goods.

6. Received for Shipment Bill

-states that the goods have been received for shipment with or without specifying the vessel by which the goods are to be shipped. -issued when conditions are not normal and there is insufficiency of shipping space.

7. Custody Bill of Lading

The goods are already receied by the carrier but the vessel indicated therein has not yet arrived in the port.

8. Port Bill of Lading

The vessel indicated in the BOL that will transport the goods is already in the port.

EFFECTIVITY of BOL- upon its delivery to and acceptance by the shipper. The acceptance of the bill without dissent raises the presumption that all the terms therein were brought to the knowledge of the shipper and agreed to by him, and in the absence of fraud or mistake, he is stopped thereafter from denying that he assented to such claims. THE 3-FOLD ATURE OF THE BILL OF

LADIG

I. RECEIPT- as comprehending all methods of transportation, a BOL may be defined as a written acknowledgement of the receipt of goods and an agreement to transport an to deliver them at a specified place to a person named or on his order. Other terms, shipping receipts, forwarders receipts, and receipts for transportation. (SC) the designation however is not material, and neither is the form of the instrument. If it contains an acknowledgement by the carrier of the receipt of goods for transportation it is, in legal effect a BOL. II. CONTRACT - it expresses the terms and conditions of the agreement between the parties; names the parties; includes consignees etc. It is the law between the parties bound by its terms and conditions. It is to be construed liberally in favor of the shipper who adhered to such bill as it is a contract of adhesion. The only participation of the party is the signing of his signature or his adhesion thereto. ART. 24 (NCC). In all contractual property or other relations, when one of the parties is at a disadvanatge on account of his moral dependence, ignorance indigence, mental weakness, tender age and other handicap, the court must be vigilant for his protection.



It is covered by the parol evidence rule, that the terms of the contract are conclusive upon the parties and evidence aliunde is not admissible to vary or contradict a complete enforceable agreement. If mistake was alleged, it must be timely raised in the pleadings and it must be a mistake of fact mutual to the parties. The BOL is the legal evidence of the contract and the entries thereof constitutes prima facie evidence of the contract. All the essential elements of a valid contract (cause, consent, object) are present when such bill are issued. BASIC STIPULATIONS (for overland transpo, maritime commerce and airline transpo of passengers, please refer to the textbook for the codal pp. 267-275) PROHIBITED AND LIMITING STIPULATION 1. Exempting the carrier from any and all liability for loss or damage occasioned by its own negligence - INVALID as it is contrary to public policy. 2. Parties may stipulate that the diligence to be exercised by the carrier for the carriage of goods be less than extraordinary diligence if it is (a) in writing and signed by both parties (b) supported by a valuable consideration other than the service rendered by the common carrier ( c ) the stipulation is just, reasonable and not contrary to law. 3. Providing an unqualified limitation of such liability to an agreed valuation - INVALID 4. Limiting the liability of the carrier to an agreed valuation unless the shipper declares a higher value and pays a higher rate of freight- VALID and ENFORCEABLE. III. AS A DOCUMENT OF TITLE ART 1507 (-CC). A document of title in which it is

stated that the goods referred to therein will be

delivered to the bearer or to the order of any

person named in such document is a negotiable

document of title.

If the document of title contains the required words of negotiability to make the instrument negotiable under Article 1507 of the NCC, the

document remains to be negotiable even if the words not negotiable or non negotiable are places thereon a. Bearer document- negotiated by delivery b. Order document- negotiated by indorsement of the specified person so named Effects of negotiation. Negotiation of the document has the effect of manual delivery so as to constitute the transferee the owner of the goods. RECOVERY OF DAMAGES FROM

CARRIER FOR CARRIAGE OF GOODS:

1. Inter-island - if goods arrived in damaged condition (Art. 366): a. If damage is apparent, the shipper must file a

claim immediately (it may be oral or written); b. If damage is not apparent, he should file a claim

within 24 hours from delivery. The filing of claim under either (1) or (2) is a condition precedent for recovery. If the claim is filed, but the carrier refuses to pay: enforce carriers liability in court by filing a case:

a. within 6 year, if no bill of lading has been issued; or b. within 10 years, if a bill of lading has been issued.

2. Overseas where goods arrived in a damaged condition from a foreign port to a Philippine port of entry: (COGSA) a. upon discharge of goods, if the damage is

apparent, claim should be filled immediately; b. if damage is not apparent, claim should be filled

within 3 days from delivery. Filing of claim is not a condition precedent, but an action must be filed against the carrier within a period of 1 year from discharge; if there is no delivery, the one-year period starts to run from the day the vessel left port (in case of undelivered or lost cargo), or from delivery to the arrastre (in case of damaged cargo). Where there was delivery to the wrong person, the prescriptive period is 10 years because there is a violation of contract, and the carriage of goods by sea act does not apply to misdelivery. (Ang v. American SS Agencies (19 SCRA 631)



CARRIAGE OF GOODS BY SEA ACT (C.A.

o. 65)

F COGSA is applicable in international maritime commerce. It can be applied in domestic sea transportation if agreed upon by the parties. (paramount clause) F COGSA is suppletory to the Civil Code and the Code of Commerce in the Carriage of goods from foreign ports to the Philippines. F Under the Sec. 4 (5), the liability limit is set at $500 per package unless the nature and value of such goods is declared by the shipper. This is deemed incorporated in the bill of lading even if not mentioned in it (Eastern Shipping v. IAC, 150 SCRA 463).

Note that Art. 1749 of the NCC applies to inter-island trade.

Prescriptive periods

F Suit for loss or damage to the cargo should be brought within one year after: a. delivery of the goods; or b. the date when the goods should be delivered.

(Sec. 3[6]) The one-year prescriptive period is suspended by: 1. express agreement of the parties (Universal Shipping Lines, Inc. v. IAC, 188 SCRA 170) 2. when an action is filed in court until it is dismissed. (Stevens & Co. v. ordeutscher Lloyd, 6 SCRA 180)

WARSAW COVETIO of 1929

WHE APPLICABLE:

Applies to all international transportation of person, baggage or goods performed by aircraft for hire. International transportation means any transportation in which the place of departure and the place of destination are situated either: 1. within the territories of two High Contracting Parties regardless of whether or not there be a break in the transportation or transshipment, or 2. within the territory of a single High Contracting Party, if there is an agreed stopping place within a territory subject to the sovereignty, mandate or authority of another power, even though that power is not a party to the Convention.

Transportation to be performed by several successive air carriers shall be deemed to be one undivided transportation, if it has been regarded by the parties as a single operation, whether it has been agreed upon under the form of a single contract or of a series of contracts, and it shall not lose its international character merely because one contract or a series of contracts is to be performed entirely within a territory subject to the sovereignty, suzerainty, mandate, or authority of the same High Contracting Party. (Art. 1)

OTE: Warsaw prevails over the Civil Code, Rules of Court and all laws in the Philippines since an international law prevails over general law.

WHE OT APPLICABLE:

1. If there is willful misconduct on the part of the carriers employees. The Convention does not regulate, much less exempt, carrier from liability for damages for violating the rights of its passengers under the contract of carriage (PAL v. CA, 257 SCRA 33). 2. when it contradicts public policy; 3. if the requirements under the Convention are not complied with. LIABILITY OF CARRIER FOR DAMAGES:

1. Death or injury of a passenger if the accident causing it took place on board the aircraft or in the course of its operations; (Art. 17) 2. Destruction, loss or damage to any luggage or goods, if it took place during the carriage; (Art. 18) and 3. Delay in the transportation of passengers, luggage or goods. (Art. 19)

OTE: The Hague Protocol amended the Warsaw Convention by removing the provision that if the airline took all necessary steps to avoid the damage, it could exculpate itself completely (Art. 20(1)). (Alitalia v. IAC, 192 SCRA 9)

LIMIT OF LIABILITY 1. passengers - limited to 250,000 francs

except: agreement to a higher limit

2. Goods and checked-in baggage - 250 francs/kg



except: consigner declared its value and paid a supplementary sum, carrier liable to not more than the declared sum unless it proves the sum is greater than its actual value.

3. hand-carry baggage - limited to 5,000 francs/passenger An agreement relieving the carrier from liability or fixing a lower limit is null and void. (Art. 23) Carrier not entitled to the foregoing limit if the damage is caused by willful misconduct or default on its part. (Art. 25) ACTIO FOR DAMAGES

1. Condition precedent A written complaint must me made within:

- 3 days from receipt of baggage - 7 days from receipt of goods - in case of delay, 14 days from receipt of baggage/goods

F otherwise the action is barred except in case of fraud on the part of the carrier. (Art. 26) 2. Jurisdiction - governed by domestic law 3. Venue at the option of the plaintiff:

a. court of domicile of the carrier; b. court of its principal place of business; c. court where it has a place of business through

which the contract has been made; d. court of the place of destination. (Art. 28)

4. Prescriptive period 2 years from: a. date of arrival at the destination b. date of expected arrival c. date on which the transportation stopped. (Art. 29)

5. Rule in case of various successive carriers,

a. In case of transportation of passengers the action is filed only against the carrier in which the accident or delay occurred unless there is an agreement whereby the first carrier assumed liability for the whole journey.

b. In case of transportation of baggage or goods i. the consignor can file an action against

the first carrier and the carrier in which the damage occurred

ii. the consignee can file an action against the last carrier and the carrier in which the damage occurred. These carriers are jointly and severally liable. (Art. 30)

Nota Bene: COGSA/WARSAW applies to foreign vessels or airplane or international travel Code of Commerce applies to inter-island or domestic travel. Bill of Lading as Document of Title (page 341) Bill of lading is a document of title under

the Civil Code. It can be a negotiable document of title.

A. -egotiability

- It is negotiable if it is deliverable to the bearer, or to the order of any person named in such document. (Art. 1507, Civil Code) a) Effect of Stamp or -otation -on--egotiable

the document remains to be negotiable even if the words not-negotiable or non-negotiable are placed thereon. - Art. 1510 (Civil Code)

B. How -egotiated

a) Bearer document (Art. 1508 and 1511) - may be negotiated be delivery

b) Order document (Sec. 38, NIL and Art. 1509, NCC) - can only be negotiated through the indorsement of the specified person so named. - such indorsement may be in blank, to bearer or to a specified person. Where a negotiable document of title is

transferred for value by delivery, and the endorsement of the transferor is essential for negotiation, the transferee acquires a right against the transferor to compel him to endorse the document. xxx (Art. 1515, Civil Code)

C. Effects of -egotiation

- has the effect of manual delivery so as to constitute the transferee the owner of the goods - results in the transfer of ownership because transfer of document likewise transfers control over the goods - refer to Art. 1513



CHAPTER 5

ACTIOS AD DAMAGES I CASE OF

BREACH

Cause of action of a passenger and shipper:

a) against common carrier based on culpa contractual or culpa aquiliana b) on the part of the driver based on either culpa delictual or culpa aquiliana

If the negligence of third persons concurs

with the breach, the liability of the third person who was driving the vehicle and/or his employer may be based on quasi delict.

Solidary liability - In case the negligence of the carriers

driver and a third person concurs, the liability of the parties carrier and his driver, third person is joint and several.

I. Notice of Claim and Prescriptive Period A. Overland Transportation of Goods and

Coastwise Shipping

a) When to file a claim with carrier - Art. 366 constitutes a condition precedent to the accrual of a right of action against a carrier for damage caused to the merchandise. Under Art. 366 of the Code of Commerce,

an action for damages is barred if the goods arrived in damaged condition and no claim is filed by the shipper within the following period:

1) immediately if damage is apparent; 2) within twenty four (24) hours from delivery if damage is not apparent

- the period does not begin to run until the consignee has received possession of the merchandise that he may exercise over it the ordinary control pertinent to ownership.

- This provision applies even to transportation by sea within the Phils. or coastwise shipping.

- does not apply to misdelivery of goods.

But the period prescribed in Art. 366 may be subject to modification by agreement of the parties.

b) Extinctive Prescription - six (6) years if there is no written contract - ten (10) years if there is written contract This rule likewise applies to carriage of

passengers for domestic transportation. B. International Carriage of Goods by Sea

A claim must be filed with the carrier within the following period:

1) if the damage is apparent the claim should be filed immediately upon discharge of the goods; or 2) within 3 days from delivery if damage is not apparent Filing of claim is not condition precedent.

Thus, regardless of whether the notice of loss or damage has been given, the shipper can still bring an action to recover said loss or damage within one year after the delivery of the goods.

a) Prescription Action for damages must be filed within a

period of one (1) year from discharge of the goods.

The period is not suspended by an extra-judicial demand.

Does not apply to conversion or misdelivery.

The one (1) year period refers to loss of goods and not to misdelivery.

- Damages arising from delay or late

delivery id not the damage or loss contemplated under the COGSA. The goods are not actually lost or damaged. The applicable period is ten (10) years.

This rule applies in collision cases. The one

(1) year period starts not from the date of the collision but when the goods should have been delivered, had the cargoes been saved.



Insurance

The insurer who is exercising its right of subrogation is also bound by the one (1) year prescriptive period.

However, it does not apply to the claim against the insurer for the insurance proceeds. The claim against the insurer is based on contract that expires in ten (10) years.

II. Recoverable Damages

Damages is the pecuniary compensation, recompense or satisfaction for an injury sustained, or as otherwise expressed, the pecuniary consequences which the law imposes for the breach of some duty or violation of some rights.

A. Extent of Recovery (Art. 220, CC)

Carrier in good faith is liable only to pay for the damages that are the natural and probable consequences of the breach of the obligation and which the parties have foreseen or could have reasonably foreseen at the time the obligation was constituted.

Carrier in bad faith or guilty of gross negligence liable for all damages, whether the same can be foreseen or not.

- The carrier who may be compelled to pay

has the right of recourse against the employee who committed the negligent, willful or fraudulent act.

B. Kinds of Damages

a) Actual or Compensatory Damages

only for the pecuniary loss suffered by him as he has duly proved 2 Kinds: 1. the loss of what a person already possesses (dao emrgente); 2. the failure to receive as a benefit that would have pertained to him (lucro cesante). Damages may be recovered: Art. 2205

(Civil Code) 1) For loss or impairment of earning capacity in cases of temporary or permanent personal injury; 2) For injury to the plaintiffs business standing or commercial credit.

Damages cannot be presumed. In case of goods the plaintiff is entitled to

their value at the time of destruction. For personal injury and even death the

claimant is entitled to all medical expenses as well as other reasonable expenses that he incurred to treat his or her relatives injuries.

In case of death the plaintiff is entitled to the amount that he spent during the wake and funeral of the deceased. But, expenses after the burial are not compensable.

- Read Art. 2206 (Civil Code)

The amount of fixed damages is now P50,000.00

1) Loss of earning capacity

Net Earning Capacity = Life Expectancy x [Gross Annual Income less Necessary Living Expenses] Life expectancy (2/3 x 80 age at death) Net earnings based on the gross income of

the victim minus the necessary incidental living expenses which the victim would have incurred if he were alive.

Amount of living expenses must be established. In the absence of proof, it is fixed at fifty (50%) of the gross income.

Rules on loss of earning applies when the

breach of the carrier resulted in the plaintiffs permanent incapacity.

2) Attorneys fees

- refer to Art. 2208 of the Civil Code - attorneys fees may be awarded in an action for breach of contract of carriage under par. 1,2,4,5,10 and 11 of Art. 2208. 3) Interests

12% per annum if it constitutes a loan or forbearance of money

6% per annum if it does not constitute loan or forbearance of money

12% - for final judgment b) Moral Damages



- Includes physical suffering, mental anguish, fright, serious anxiety, besmirched reputation, wounded feelings, moral shock, social humiliation and similar injury. - Though incapable of pecuniary computation, moral damages may be recovered if they were the proximate result of the defendants wrongful act or omission. - may be recovered when there is death or there is malice or bad faith. (in transportation of passengers) - Refer to Art. 2219 and 2220 - Generally, no moral damages may be awarded where the breach of contract is not malicious. c) ominal Damages

- Refer to Art. 2221-2223 (Civil Code) - the assessment of nominal damages is left to the discretion of the court - the award of nominal damages is also justified in the absence of competent proof of the specific amounts of actual damages suffered. - cannot co-exist with actual damages d) Temperate or Moderate Damages

- Art. 2224 provides: may be recovered when the court finds that

some pecuniary loss has been suffered but its amount can not, from the nature of the case, be provided with certainty.

- cannot co-exist with actual damages e) Liquidated Damages

those agreed by the parties to a contract, to be paid in case of breach thereof.

Ordinarily, the court cannot change the amount of liquidated damages agreed upon by the parties. However, Art. 2227 of the Civil Code provides that liquidated damages, whether intended as an indemnity or a penalty, shall be equitable reduced if they were iniquitous or unconscionable.

f) Exemplary or Corrective Damages

Requisites for the award of exemplary damages: 1. They may be imposed by way of example in addition to compensatory damages, and only after the claimants right to them has been established. 2. They cannot be recovered as a matter of right, their determination depending upon the amount of

compensatory damages that may be awarded to the claimant. 3. The act must be accompanied by bad faith or done in wanton, fraudulent, oppressive or malevolent manner. The award of exemplary damages in breach

of contract of carriage is subject to the provisions under Art. 2232-2235 of the Civil Code.



CHAPTER 6

MARITIME LAW General Concepts

The real and hypothecary nature of maritime law simply means that the liability of the carrier in connection with losses related to maritime contracts is confined to the vessel

Articles 837, 587, and 590 cover only: (1) liability to third persons, (2) acts of the captain, (3) collisions

Limited Liability Rule - No vessel, no liability - The total destruction of the vessel

extinguishes maritime liens because there is no longer any res to which it can attach

- The civil liability for collision is merely co-existent with the ship owners interest in the vessel

- EXCEPTIONS: 1. Where the injury or death to a

passenger is due either to the fault of the ship owner, or to the concurring negligence of the ship owner and the captain

2. Where the vessel is insured 3. In workmens compensation claims 4. Expenses for repairs and

provisioning of the ship prior to the departure thereof

a. Negligence the LLR applies if the

captain or the crew caused the damage or injury. However, if the failure to maintain the seaworthiness of the vessel can be ascribed to the ship owner alone or the ship owner concurrently with the captain, then the LLR cannot be invoked - The carrier is liable for the damages

to the full extent and not up to the value of the vessel if it was established that the carrier was guilty of negligence in allowing the captain and crew to do negligent acts during the voyage, in failing to maintain the ship as seaworthy and in allowing the ship to carry more passengers than it was allowed to carry

- LLR cannot be invoked in failure to maintain the seaworthiness of the vessel

- Authorizing the voyage notwithstanding its knowledge of a typhoon is tantamount to negligence exempts the case from the operation of LLR

b. Insurance claims - Total loss of the vessel did not

extinguish the liability of the carriers insurer; despite the loss of the vessel, its insurance answers for the damages that a ship owner or agent, may be held liable for by reason of the death of its passengers

c. Workmens compensation

- Even if the vessel was lost, the liability thereunder is still enforceable against the employer or ship owner

Abandonment

- Vessel, its appurtenances and the freightage

- An indispensable requirement before the ship owner or ship agent can enjoy the benefits of the LLR

- If the carrier does not want to abandon the vessel, then he is still liable even beyond the value of the vessel

Procedure for Enforcement

- In sinking of a vessel, the claimants or creditors are limited in their recovery to the remaining value of accessible assets

- In case of a lost vessel, there are the insurance proceeds and pending freightage for the particular voyage

- No claimant can be given precedence over the others by the simple expedience of having filed or completed its action earlier than the rest

Protests

- The written statement by the master of a vessel or any authorized officer, attested by proper officer or a notary, to the effect that damages has been suffered by the ship



- Protest is required in the following cases: 1. When the vessel makes an arrival

under stress 2. Where the vessel is shipwrecked 3. Where the vessel has gone

through a hurricane or the captain believes that the cargo has suffered damages or averages

4. Maritime collisions Philippine Shipping Company v. Vergara (1600)

Heirs of Delos Santos v. CA (51165)



CHAPTER 7

VESSELS

Definitions P.D. 474 a watercraft; any barge, lighter, bulk carrier, passenger ship freighter, tanker container ship, fishing boats, or other artificial contrivance utilizing any source of motive power, designed, used or capable of being used as means of transportation operating other as common contract carrier, including fishing vessels covered under P.D. 43 Except:

(i) Those owned and/or operated by the AFP and by foreign governments for military purposes

(ii) Bancas, sailboats and other waterbone contrivance of less than three gross tons capacity and not motorized

Lopez vs. Duruelo (29166, Oct. 22, 1928)

Construction, Equipment and Manning

- Subject to the rules issued by the MARINA

- Article 574, Code of Commerce Personal Property

- Under Article 416, Civil Code - Under Art 585, Code of Commerce: for all

purposes not modified or restricted; hence, there are rules that apply to real estate

- Ships or vessels, whether moved by steam or by sail, partake, to a certain extent, of the nature and condition of real property, on account of their value and importance in the world of commerce

- Art 573, Code of Commerce: transfer of vessels should be in writing and must be recorded in the appropriate registry

OWNERSHIP Acquisition

- Vessels may be acquired or transferred by any means recognized by law; may be sold, donated and may even be acquired through prescription

- Vessels that are under the jurisdiction of the MARINA can be transferred only with notice to said administrative agency

a. Prescription - Acquisition of a vessel must appear in a

written instrument, which shall not produce any effect with respect to third persons (Art. 573, Code of Commerce)

- Ownership shall be acquired by possession in good faith, continued for three (3) years, with a just title duly recorded

- In the absence of the aforementioned requisites, continuous possession for ten (10) years shall be necessary in order to acquire ownership.

- A captain may not acquire by prescription the vessel which he is in command

- Co-owners shall have the right of repurchase and redemption in sales made to strangers, but only within nine (9) days following the inscription of the sale in the registry, and by depositing the price at the same time

b. Sale - Includes the rigging, masts, stores and

engine of a steamer appurtenant thereto, which at the time belongs to the vendor

- Arms, munitions of war, provisions and fuel shall not be considered as included in the sale

- Obligation of the vendor 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

- If 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 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 persons shall be for his account, unless contrary is stipulated

REGISTRATION



- Registered through MARINA - The person who is the registered owner of

the vessel is presumed to be the owner of the vessel

- The sale or transfer of the vessel is not binding on third persons unless the same is registered

- Tariff and Customs Code: A certificate of Philippine registry confers upon the vessel the right to en

Transpo Notes

Documents