Transportation Law Reviewer SAN BEDA

San Beda College of Law 54
MEMORY AID IN COMMERCIAL LAW

TRANSPORTATION LAWS
CONTRACT OF TRANSPORTATION/
CARRIAGE
A contract whereby a person, natural
or juridical, obligates to transport
persons, goods, or both, from one
place to another, by land, air or water,
for a price or compensation.
Cla!"#a$!on%
1. Common or Private
2. Goods or Passengers
. !or a fee "for hire# or Gratuitous
$. %and, &ater'maritime, or Air
(. )omestic'inter*island'coastwise
or +nternational'foreign
+t is a relationship which is imbued
with the public interest.
COMMON CARRIER
Persons, corporations, ,rms or
associations engaged in the business
of carrying or transporting passengers
or goods or both, by land, water, or air,
for compensation, o-ering their
services to the public "Art. 1.2, Civil
Code#.
Art. 1.2 of the /ew Civil Code
avoids any distinction between one
whose principal business activity is the
carrying of persons or goods or both
and one who does such carrying only
as an ancillary activity "sideline#. +t
also avoids a distinction between a
person or enterprise o-ering
transportation service on a regular or
scheduled basis and one o-ering such
service on an occasional, episodic or
unscheduled basis.
/either does the law distinguish
between a carrier o-ering its services
to the general public that is the
general community or population and
one who o-ers services or solicits
business only from a narrow segment
of the general population.
A person or entity is a common
carrier even if he did not secure a
Certi,cate of Public Convenience ")e
Gu0man vs. CA, 112 3C4A 112#.
+t ma5es no distinction as to the
means of transporting, as long as it is
by land, water or air. +t does not
provide that the transportation should
be by motor vehicle. "!irst Philippine
+ndustrial Corporation vs. CA#
6ne is a common carrier even if he
has no ,7ed and publicly 5nown route,
maintains no terminals, and issues no
tic5ets "Asia %ighterage 3hipping, +nc.
vs. CA#.
C&a'a#$e'!$!#%
1. 8nderta5es to carry for all people
indi-erently and thus is liable for
refusal without su9cient reason
"%astimoso vs. )oliente, 6ctober
2:, 1;11#<
2. Cannot lawfully decline to accept
a particular class of goods for
carriage to the prejudice of the
tra9c in these goods<
. /o monopoly is favored "=atangas
>rans. vs. 6rlanes, (2 P?+% $((#<
$. Provides public convenience.
PRI(ATE CARRIER
6ne which, without being engaged in
the business of carrying as a public
employment, underta5es to deliver
goods or passengers for compensation.
"?ome +nsurance Co. vs. American
3teamship Agency, 2 3C4A 2$#
TESTS W)ET)ER CARRIER IS
COMMON OR PRI(ATE%
>he 3C in !irst Philippine +ndustrial
Corporation vs. CA "1;;(# reiterated
the following tests@
COMMERCIAL LAW COMMITTEE
C?A+4PA436/@ Garny %uisa Alegre A33>. C?A+4PA436/@ Bayson 6C3 4amos A)P@ =eatri7 +. 4amos 38=BAC> ?AA)3@
Darichelle )e Eera "/egotiable +nstruments %aw#< Bose !ernando %lave "+nsurance#< Aldrich )el 4osario ">ransportation %aws#<
3hirley Dae >abangcura, =on Eincent Agustin "Corporation %aw#< Farl 3teven Co "3pecial %aws#< Bohn %emuel Gatdula "=an5ing %aws#< 4obespierre C8 "%aw
on +ntellectual Property#
1. +t must be engaged in the
business of carrying goods for
others as a public employment
and must hold itself out as ready
to engage in the transportation of
goods generally as a business
and not as a casual occupation<
2. +t must underta5e to carry goods
of the 5ind to which its business
in con,ned<
. +t must underta5e to carry by the
method by which his business is
conducted and over its
established roads< and
$. >he transportation must be for
hire.
+n /ational 3teel Corp. vs. CA "1;;.#
the 3C held that the true test of a
common carrier is the carriage of
goods or passengers provided it has
space for all who opt to avail
themselves of its transportation for a
fee.

COMMON
CARRIER
PRI(ATE
CARRIER
1. As to availability
?olds himself
out for all
people
indiscriminat
ely
Contracts
with
particular
individuals or
groups only
2. As to reGuired diligence
A7traordinary
diligence is
reGuired
6rdinary
diligence is
reGuired
. As to regulation
3ubject to
3tate
regulation
/ot subject
to 3tate
regulation
$. 3tipulation limiting
liability
Parties may
not agree on
limiting the
Parties may
limit the
carrierCs
carrierCs
liability
e7cept when
provided by
law
liability,
provided it is
not contrary
to law,
morals or
good
customs
(. A7empting circumstance
Prove
e7traordinary
diligence and
Art. 1.,
/CC
caso fortuito,
Art. 11.$
/CC
1.Presumption of negligence
>here is a
presumption
of fault or
negligence
/o
presumption
of fault or
negligence
..Governing law
%aw on
common
carriers
%aw on
obligations
and
contracts
GO(ERNING LAWS
A* Do+e$!#/!n$e',!land/#oa$w!e
Applicable to %and, &ater, and Air
transportation
1. Civil Code * primary
2. Code of Commerce "Arts. $;,
.;, (.*.$, (2:, 2:1*2$(# *
suppletory
B* In$e'na$!onal/fo'e!gn/o-e'ea
.Fo'e!gn #o/n$'0 $o P&!l!11!ne2
Applicable to &ater'maritime and Air
transportation
>he law of the country of destination
generally applies.
1. Civil Code * primary
2. Code of Commerce * suppletory
. 6thers * suppletory
a. &ater'maritime@ Carriage of
Goods by 3ea Act "C6G3A#
b. Air@ &arsaw Convention
I* NEW CI(IL CODE
.A'$* 4567,45332
RE89IREMENT OF
E:TRAORDINARY DILIGENCE
4endition of service with the greatest
s5ill and utmost foresight. ")avao
3tevedore Co. v. !ernande0#
Rationale:
1. !rom the nature of the business
and for reasons of public policy
"Art. 1.#
2. 4elationship of trust
. =usiness is impressed with a
special public duty
$. Possession of the goods
(. Preciousness of human life
A common carrier is not an absolute
insurer of all ris5s of travel.
CO(ERAGE
1. Eigilance over goods "Arts. 1.$*
1.($#< and
2. 3afety of passengers "Arts. 1.((*
1.1#.
PASSENGER
A person who has entered into a
contract of carriage, e7press or
implied, with the carrier. >hey are
entitled to e7traordinary diligence from
the common carrier.
>he following are not considered
passengers, and are entitled to
ordinary diligence only@
a. 6ne who has not yet boarded any
part of a vehicle regardless of
whether or not he has purchased
a tic5et<
b. 6ne who remains on a carrier for
an unreasonable length of time
after he has been a-orded every
safe opportunity to alight<
c. 6ne who has boarded by fraud,
stealth, or deceit<
d. 6ne who attempts to board a
moving vehicle, although he has
a tic5et, unless the attempt be
with the 5nowledge and consent
of the carrier<
e. 6ne who has boarded a wrong
vehicle, has been properly
informed of such fact, and on
alighting, is injured by the carrier<
f. +nvited guests and
accommodation passengers.
"%ara vs. Ealencia#
g. 6ne who rides any part of the
vehicle which is unsuitable or
dangerous or which he 5nows is
not designed or intended for
passengers.
DEFENSES OF A COMMON CARRIER
IN T)E CARRIAGE OF GOODS
1. CA36 !64>8+>6'!64CA DABA84A
Re;/!!$e%
a. Dust be the pro7imate and only
cause of the loss
b. A7ercise of due diligence to
prevent or minimi0e the loss before,
during or after the occurrence of the
disaster "Art. 1.;#
c. Carrier has not negligently
incurred in delay in transporting the
goods "Art. 1.$:#
!ire is not considered a natural
disaster or calamity as it arises almost
invariably from some act of man.
"Aastern 3hipping %ines +nc. vs. +AC#
Dechanical defects are not force
majeure if the same was discoverable
by regular and adeGuate inspections.
(Notes and Cases on the Law on
Transportation and Public Utilities,
Aquino, T. & ernando, R.P. !""# ed.
p.$!"%$!!&
2. AC>3 6! P8=%+C A/ADH
Re;/!!$e%
a. Dust be the pro7imate and only
cause of the loss
b. A7ercise of due diligence to
prevent or minimi0e the loss before,
during or after the act causing the
loss, deterioration or destruction of
the goods "Art. 1.;#
. /AG%+GA/CA 6! >?A 3?+PPA4 64
6&/A4
a. 3ole and pro7imate cause@
absolute defense
b. Contributory@ partial defense.
"Art. 1.$1#
$. C?A4AC>A4 6! >?A G66)3 64
)A!AC>3 +/ >?A PACF+/G 64 +/ >?A
C6/>A+/A4
Aven if the damage should be caused
by the inherent defect'character of the
goods, the common carrier must
e7ercise due diligence to forestall or
lessen the loss. "Art. 1.$2#
>he carrier which, 5nowing the fact of
improper pac5ing of the goods upon
ordinary observation, still accepts the
goods notwithstanding such condition,
is not relieved of liability or loss or
injury resulting therefrom. "3outhern
%ines, +nc. v. CA, $ 3C4A 2(2#
(. 64)A4 64 AC> 6! P8=%+C
A8>?64+>H
3aid public authority must have the
power to issue the order "Art. 1.$#.
ConseGuently, where the o9cer acts
without legal process, the common
carrier will be held liable. "Gan0on v.
CA 111 3C4A 1$1#
)iligence in the selection and
supervision of employees under Article
212: of the Civil Code cannot be
interposed as a defense by the
common carrier because the liability of
the carriers arises from the breach of
the contract of carriage. >he defense
under said articles is applicable to
negligence in Guasi*delicts under Art.
21.1. ")el Prado v. Danila Alectric Co.,
(2 Phil ;::#
LIABILITY OF A COMMON CARRIER
FOR
DEAT) OR IN<9RIES TO
PASSENGERS D9E TO ACTS OF ITS
EMPLOYEES AND OT)ER
PASSENGERS OR STRANGERS
FOR ACTS
OF ITS
EMPLOYEES
FOR ACTS
OF OT)ER
PASSENGE
RS OR
STRANGER
S
4eGuired diligence and
defense
A7traordinary
diligence
6rdinary
diligence
/ature of liability
>ort<
however,
>he
employee
must be on
duty at the
time of the
act.
"Daranan v.
Pere0#
/ot
absolute<
limited by
Art. 1.1
>he carrier is liable when its
personnel allowed a passenger to drive
the vehicle causing it to collide with
another vehicle resulting to the injuries
su-ered by the other passengers.
"D44 vs. =allesteros, 11 3C4A 1$1#
San Beda College of Law 5=
CARRIAGE OF GOODS CARRIAGE OF
PASSENGERS
Pa'$!e
1. Common carrier
2. 3hipper
. Consignee
1. Common carrier
2. Passenger
Ca/e of l!a>!l!$0
)elay in delivery, loss,
destruction, or deterioration
of the goods
)eath or injury to the
passengers
D/'a$!on of l!a>!l!$0
!rom 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 the right to
receive them. "Art. 1.1#
+t remains in full force and
e-ect 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. "Art. 1..#
+t continues to be operative
even during the time the
goods are stored in a
warehouse of the carrier at
the place of destination until
the consignee has bee
advised of the arrival of the
goods and has had
reasonable opportunity
thereafter to remove them or
otherwise dispose of them.
"Art. 1.2#
)elivery of goods to the
custom authorities is not
delivery to the consignee. "%u
)o v. =inamira, 1:1 Phil 12:#
>he duty of a common
carrier to provide safety to
its passengers so obligates it
not only during the course of
the trip, but for so long as
the passengers are within its
premises and where they
ought to be in pursuance to
the contract of carriage.
"%4>A v. /avidad, I2::J#
All persons who remain on
the premises within a
reasonable time after leaving
the conveyance are to be
deemed passengers, and
what is a reasonable time or
a reasonable delay within
this rule is to be determined
from all the circumstances,
and includes a reasonable
time to see after his baggage
and prepare for his
departure. "%a Dallorca v. CA,
1. 3C4A .; < Abioti0
3hipping Corporation v. CA,
1.; 3C4A ;(#
+t is the duty of common
carriers of passengers to
stop their conveyances a
reasonable length of time in
order to a-ord passengers an
opportunity to enter, and
they are liable for injuries
San Beda College of Law 5?
su-ered from the sudden
starting up or jer5ing of their
conveyances while doing so.
>he duty which the carrier of
passengers owes to its
patrons e7tends to persons
boarding the cars as well as
to those alighting therefrom
")angwa >rans Co., +nc. vs.
CA 2:2 3C4A (.$#.
P'e/+1$!on of negl!gen#e
Art.1.( Civil Code
4eason@ As to when and how
goods were damaged in
transit is a matter peculiarly
within the 5nowledge of the
carrier and its employees.
"Dirasol v. )ollar, ( P?+%
12$#
Dere proof of delivery of
goods to a carrier in good
order and the subseGuent
arrival of the same goods at
the place of destination in
bad order ma5es for a prima
facie case against the carrier.
"Coastwise %ighterage Corp.
v. CA, 2$( 3C4A .;1#
Art.1.(( Civil Code
4eason@ >he contract
between the passenger and
the carrier imposes on the
latter the duty to transport
the passenger safely< hence
the burden of e7plaining
should fall on the carrier.
San Beda College of Law 3@
Defene
1. 6rdinary circumstance@
A7ercise of
e7traordinary diligence
"Art. 1.(#
2. 3pecial circumstances@
a. !lood, storm,
earthGua5e, lighting,
or other natural
disaster or calamity
"plus force majeure#
b. Act of the public
enemy in war,
whether
international or civil
c. Act or omission of
the shipper or the
owner of goods
d. >he character of
the goods or defects
in the pac5ing or in
the containers
e. 6rder or act of
competent public
authority "Art. 1.$#
1.A7ercise of
e7traordinary
diligence "Art. 1.(1#
2.Caso fortuito
(al!d $!1/la$!on
1. 4eduction of degree of
diligence to ordinary
diligence, provided it be@
a#+n writing, signed by the
shipper or owner<
b#3upported by a valuable
consideration other
than the service
rendered by the
carriers< and
c#4easonable, just and
not contrary to public
policy. "Art. 1.$$#
2. !i7ed amount of liability@ A
contract ,7ing the sum to be
recovered by the owner or
shipper for the loss,
destruction or deterioration
of the goods, if it is
reasonable and just under the
circumstances and has been
fairly and freely agreed upon.
"Art. 1.(:#
. %imited liability for delay@
An agreement limiting the
common carrierCs liability for
delay on account of stri5es or
riots "Art. 1.$2#
$. 3tipulation limiting liability
to the value of the goods
appearing in the bill of lading,
unless the shipper or owner
declares a greater value. "Art.
1.$;#
>he diligence reGuired in
the carriage of the goods
may be reduced by only one
degree, from e7traordinary to
ordinary diligence or
diligence of a good father of a
family. "Art. 1.$$, Art. 1.$(,
no. $#
3tipulation limiting liability
when a passenger is carried
gratuitously, but not for
willful acts or gross
negligence. "Art. 1.(2#
(o!d $!1/la$!on
1. >hat the goods are
transported at the ris5 of the
owner or shipper<
2. >hat carrier will not be
liable for any loss,
of the goods<
. >hat the carrier need not
observe any diligence in the
custody of the goods<
$. >hat the carrier shall
e7ercise a degree of
diligence less than that of a
good father of a family over
the movable transported<
(. >hat the carrier shall not
be responsible for the acts or
omissions of his or its
employees<
1. >hat the carrierCs liability
for acts committed by
thieves or robbers who do
not act with grave or
irresistible threat, violence or
force is dispensed with or
diminished<
.. >hat the carrier is not
responsible for the loss,
of the goods on account of
the defective condition of
the car, vehicle, ship or
other eGuipment used in the
contract of carriage. "Art.
1.$(#
)ispensing with or lessening
the e7traordinary
responsibility of a common
carrier for the safety of
passengers imposed by law
by stipulation, by posting of
notices, by statements on
tic5ets or otherwise. "Art.
1.(.#
R9LES ON PASSENGERSA BAGGAGE
IN T)E
C9STODY OF
T)E
PASSENGER
S
.)AND,
CARRIED2
IN T)E
C9STODY
OF T)E
COMMON
CARRIER
.C)ECBED,
IN2
Legal na$/'e of $&e
>aggage
/ecessary
deposit
Considered
as KgoodsL
Re;/!'ed d!l!gen#e >0
$&e #o++on #a''!e'
)iligence of a
depositary
"ordinary
diligence#
A7traordina
ry diligence
A11l!#a>le '/le
Arts. 1;;2
and 2:::*
2::
Arts. 1.*
1.(
CONC9RRING CA9SES OF ACTION
ARISING FROM T)E NEGLIGENT
ACT OF T)E COMMON CARRIER
1. Culpa contractual "breach of
contract#
6nly the carrier is primarily liable and
not the driver, because there is no
privity between the driver and the
passenger.
=asis@ Art.1.(;, /CC.
/o defense of due diligence in the
selection and supervision of
employees.
2. Culpa aquiliana "Guasi*delict#
>he carrier and driver are solidarily
liable as joint tortfeasors.
=asis@ Art. 212:, /CC.
)efense of due diligence in the
selection and supervision of employees
is available. A7ception@ maritime tort
resulting in collision. "'ee notes on
Collision#
. Culpa cri(inal "criminal negligence#
>he driver is primarily liable. >he
carrier is subsidiarily liable only if the
driver is convicted and declared
insolvent.
=asis@ Art. 1::, 4PC.
+n case of injury to a passenger due
to the negligence of the driver of the
bus on which he is riding and of the
driver of another vehicle, the drivers as
well as the owners of the two vehicles
are jointly and severally liable for
damages. +t ma5es no di-erence that
the liability of the bus driver and owner
springs from contract while that of the
owner and driver of the other vehicle
arises from Guasi*delict. "!abre vs. CA#
LIMITATIONS AS TO CARRIERAS
LIABILITY
IN(ALID AS
BEING
CONTRARY
TO P9BLIC
POLICY
(ALID C
ENFORCEA
BLE
1. 6ne
e7empting
the carrier
from any and
all liability for
loss or
damage
occasioned
by its own
negligence.
2. An
unGuali,ed
limitation of
liability to an
agreed
valuation.
1. 6ne
limiting the
liability of
the carrier
to an agreed
valuation,
unless the
shipper
declares a
higher value
and pays a
higher rate
of freight
"?.A.
?eacoc5
Company
vs.
Dacondray
M Company
+nc.#
?owever, the carrier cannot limit its
liability for injury to, or loss of, goods
shipped where such injury or loss was
caused by its own negligence.
"3hewaram vs. PA%, 1. 3C4A 1:1#
SPECIAL R9LES ON LIABILITES OF
AIRLINE CARRIERS
1. +n case of Night diversion due to bad
weather or other circumstances
beyond the pilotCs control, the relation
between the carrier and the passenger
continues until the latter has been
landed at the port of destination and
has left the carrierCs premises. >he
carrier should necessarily e7ercise
e7traordinary diligence in safeguarding
the comfort, convenience and safety of
its stranded passengers until they
have reached their ,nal destination.
"Philippine Airlines vs. CA, 221 3C4A
$2#
2. Aven where overboo5ing of
passengers is allowed as a commercial
practice, the airline company would
still be guilty of bad faith and still be
liable for damages if it did not properly
inform passenger that it could breach
the contract of carriage even if they
were con,rmed passengers. "Oalamea
vs. CA, 222 3C4A 2#
. An open*dated tic5et constitutes a
complete contract between the carrier
and passenger. ?ence, the airline
company is liable if it refused to
con,rm a passengerCs Night
reservation. "3ingson vs. CA, 222 3C4A
1$;#
$. An airline company which issued a
con,rmed tic5et to a passenger
covering successive trips on di-erent
airlines can be held liable for damages
occasioned by Kbumping o-L by one of
the successive airlines. "%ufthansa
German Airlines vs. CA, 22 3C4A 2;:#
(. An airline tic5et providing that
carriage by successive air carriers is to
be regarded as a Ksingle operationL is
to ma5e the issuing carrier liable for
the tortuous conduct of the other
carrier. A printed provision in the tic5et
limiting liability only to its own conduct
is not enough to rebut that liability.
"F%D 4oyal )utch Airlines vs. CA, 1(
3C4A 2.#
II* CODE OF COMMERCE
A* O(ERLAND TRANSPORTATION
.A'$* 64?,65?2
A11l!#a>!l!$0
1. )omestic land and water'maritime
transportation. (Pandect o)
Co((ercial Law and *urisprudence,
*ustice *ose +itu,, $--. ed.&
2. )omestic Air >ransportation.
(Co((ercial Law Re/iew, Cesar
+illanue/a, !""# ed.&

IMPORTANT CONCEPTS%
1. =ill of lading
2. 6bligations of the carrier
. 4ight of abandonment
$. /otice of damage
(. Combined carrier agreement
BILL OF LADING
>he written ac5nowledgment of
receipt of goods and agreement to
transport them to a speci,c place to a
person named or to his order.
Rules:
1. +t is not indispensable for the
creation of a contract of carriage.
"Compania Daritima vs. +nsurance
Company of /orth America, 12 3C4A
21#
2. Ambiguity is construed against the
carrier, the contract being one of
adhesion.
. >he consignee, although the
instrument is oftentimes drawn up only
by the consignor and carrier, becomes
bound by all the stipulations contained
therein by ma5ing a claim for loss on
the basis of said bill of lading. "3ea*
%and 3ervices +nc. vs. +AC#
$. >he right of a party to recover for
loss of shipment consigned to him
under a bill of lading drawn up only by
and between the shipper and the
carrier, springs from either a relation of
agency between him and the shipper,
or his status as stranger in whose favor
some stipulation is made in said
contract, and who becomes a party
thereto when he demands ful,llment of
that stipulation. "Art. 111 "2#,
"Dendo0a vs. PA% +nc.#
(. Acceptance of the bill of lading
without dissent raises the presumption
that all the terms therein where
brought to the 5nowledge of the
shipper and agreed to by him and, in
the absence of fraud or mista5e< he is
estopped from thereafter denying that
he assented to such terms. (Notes and
Cases on the Law on Transportation
and Public Utilities, Aquino, T. &
ernando, R.P. !""# ed. p.!0$&
B!nd%
1. 1n board * issued when the goods
have been actually placed aboard
the ship with very reasonable
e7pectation that the shipment is
as good as on its way.
2. Recei/ed * one in which it is stated
that the goods have been received
for shipment with or without
specifying the vessel by which the
goods are to be shipped.
. Ne,otiable * one 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 therein.
$. Non%ne,otiable * 6ne in which it is
stated that the goods referred to
therein will be delivered to a
speci,ed person.
(. Clean 2 6ne which does not
indicate any defect in the goods.
1. 3oul P 6ne which contains a
notation thereon indicating that
the goods covered by it are in bad
condition.
.. 'pent P 6ne which covers goods
that already have been delivered
by the carrier without a surrender
of a signed copy of the bill.
2. Throu,h P 6ne issued by the
carrier who is obliged to use the
facilities of other carriers as well as
his own facilities for the purpose of
transporting the goods from the
city of the seller to the city of the
buyer, which bill of lading is
honored by the second and other
interested carriers who do not
issue their own bills.
;. Custod4 P 6ne wherein the goods
are already received by the carrier
but the vessel indicated therein
has not yet arrived in the port.
1:. Port P 6ne which is issued by the
carrier to whom the goods have
been delivered, and the vessel
indicated in the bill of lading by
which the goods are to be shipped
is already in the port where the
goods are held for shipment.
F/n#$!on%
1. =est evidence of the e7istence of
the contract of carriage of cargo
"Art. (#
2. )ocument of title
. 4eceipt of cargo
$. Contract to transport and deliver
goods as stipulated
(. 3ymbol of the goods
OBLIGATIONS OF T)E CARRIER
A* D/$0 $o a##e1$ $&e good
56N6RAL RUL6: A common carrier
cannot ordinarily refuse to carry a
particular class of goods.
67C6PT81N: !or some su9cient
reason the discrimination against the
tra9c in such goods is reasonable and
necessary. "!isher vs. Hangco
3teamship Co. 1 Phil 1#.
+nstances when the carrier may
validly refuse to accept the goods
include the -@
1.# Goods sought to be transported are
dangerous objects, or substances
including dynamite and other
e7plosives
2.# Goods are un,t for transportation
.# Acceptance would result in
overloading
$.# Contrabands or illegal goods
(.# Goods are injurious to health
1.# Goods will be e7posed to untoward
danger li5e Nood, capture by enemies
and the li5e
..# Goods li5e livestoc5 will be e7posed
to disease
2.# 3tri5e
;.# !ailure to tender goods on time.
Aquino, T. & ernando, R.P. !""# ed.
p.09&
+n case of carriage by railway, the
carrier is e7empted from liability if
carriage is insisted upon by the
shipper, provided its objections are
stated in the bill of lading.
?owever, when a common carrier
accepts cargo for shipment for
valuable consideration, it ta5es the ris5
of delivering it in good condition as
when it was loaded. "PA% vs. CA#
B* D/$0 $o del!-e' $&e good
/ot only to transport the goods safely
but to the person indicated in the bill
of lading. >he goods should be
delivered to the consignee or any other
person to whom the bill of lading was
validly transferred or negotiated.
T!+e of del!-e'0
S$!1/la$ed
!n
Con$'a#$/B!l
l of Lad!ng
No
$!1/la$!on
1. Carrier is
bound to
ful,ll the
contract and
is liable for
any delay<
no matter
from what
1. &ithin a
reasonable
time.
2. Carrier is
bound to
forward them
in the 1
st
shipment of
cause it may
have arisen.
the same or
similar goods
which he
may ma5e to
the point of
delivery.
"A4>. (2
Code of
Commerce#
EDe#$ of dela0
a. Derely suspends and generally does
not terminate the contract of carriage
b. Carrier remains duty bound to
e7ercise e7traordinary diligence
c. /atural disaster shall not free the
carrier from responsibility "Art.1.$:#
d. +f delay is without just cause, the
contract limiting the common carrierCs
liability cannot be availed of in case of
loss or deterioration of the goods
"Art.1.$.#
RIG)T OF CONSIGNEE TO
ABANDON GOODS
In$an#e%
1. Partial non*delivery, where the
goods are useless without the others
"Art. 1#<
2. Goods are rendered useless for sale
or consumption for the purposes for
which they are properly destined "Art.
1(#< and
. +n case of delay through the fault of
the carrier "Art. .1#.
NOTICE OF DAMAGE .ART* 6332
Re;/!!$e fo' a11l!#a>!l!$0%
1. )omestic'inter*island'coastwise
transportation
2. %and'water'air transportation
. Carriage of goods
$. Goods shipped are damaged
R/le%
a. Patent damage@ shipper must ,le a
claim against the carrier immediately
upon delivery "it may be oral or
written#
b. %atent damage@ shipper should ,le a
claim against the carrier within 2$
hours from delivery.
No$e% >hese rules does not apply to
misdelivery of goods. "4oldan vs. %im
Pon0o#
Purpose o) notice: >o inform the
carrier that the shipment has been
damaged, and it is charged with
liability therefore, and to give it an
opportunity to ma5e an investigation
and ,7 responsibility while the matter
is fresh.
>he ,ling of notice of claim is a
condition precedent for recovery.
3horter period may be stipulated by
the parties because it merely a-ects
the shipperCs remedy and does not
a-ect the liability of the carrier.
"P?+%ADGA/ vs. 3weetlines, +nc.#
P'e#'!1$!-e Pe'!od
/ot provided by Article 11. >hus, in
such absence, Civil Code rules on
prescription apply.
+f despite the notice of claim, the
carrier refuses to pay, action must be
,led in court.
1. /o bill of lading was issued@
within 3 0ea'
2. =ill of lading was issued@
within 4@ 0ea'*
ARTICLE
633
COGSA
Se#*6 .32
A11l!#a>!l!$0
1. )om
estic'inter*
island'coastw
ise
transportatio
n
2. %and
, water, air
transportatio
n
. Carri
age of goods
1.+nternation
al'
overseas'for
eign "from
foreign
country to
Phils.#
/ote@
subject to
the rule on
Paramount
Clause
2.
&ater'mariti
me
transportatio
n
. Carriage
of goods
No$!#e of da+age
1.
Condition
precedent
2.
2$*hour
period for
claiming
latent
damage
1./ot a
condition
precedent
2.*day
period for
claiming
latent
damage
P'e#'!1$!-e 1e'!od
/one
provided<
Civil Code
applies.
6ne year
from the
date of
delivery
"delivered
but
damaged
goods#, or
date when
the vessel
left port or
from the
date of
delivery to
the arrastre
"non*
delivery or
loss#.
COMBINED CARRIER AGREEMENT
.ART* 6562
56N6RAL RUL6: +n case of a contract
of transportation of several legs, each
carrier is responsible for its particular
leg in the contract.
67C6PT81N: A combined carrier
agreement where a carrier ma5es itself
liable assuming the obligations and
acGuiring as well the rights and causes
of action of those which preceded it.
7* MARITIME
COMMERC
E
.A'$* 556,=3?2
IMPORTANT CONCEPTS%
1. Derchant vessel
2. Daritime lien and Preference of
Credit
. )octrine of limited liability
$. Causes of revocation of voyage
(. Participants in maritime
commerce
1. Charter party
.. %oans on bottomry and
respondentia
2. Accidents in maritime commerce
MARITIME/ADMIRALTY LAW
+t is the system of laws which
particularly relates to the a-airs and
business of the sea, to ships, their
crews and navigation, and to maritime
conveyance of persons and property.
Aquino & ernando, citin, 3rancisco,
p.!:#&
Daritime laws apply only to
maritime trade and sea voyages.
(Pandect o) Co((ercial Law and
*urisprudence, *ustice *ose +itu,, $--.
ed.&
Arrastre service is not maritime in
character. +t refers to a contract for the
unloading of goods from a vessel.
"+C>3+ vs. Prudential Guarantee, 2:
3C4A 2$$#
C)ARACTERISTICS OF MARITIME
TRANSACTION
1. Real * similar to transactions over
real property with respect to e-ectivity
against third persons which is done
through registration. "4ubiso vs.
4ivera, . Phil. .2#. >he evidence of
real nature is shown by@ 1# the
limitation of the liability of the agents
to the actual value of the vessel and
the freight money< and 2# the right to
retain the cargo and embargo and
detention of the vessel "%u0on
3tevedoring Corp v. CA, 1(1 3C4A
11;#<
2. 4pothecar4 * the liability of the
owner of the value of the vessel is
limited to the vessel itself (;octrine o)
Li(ited Liabilit4&.
>he real and hypothecary nature of
maritime law simply means that the
liability of the carrier in connection
with losses related to maritime
contracts is con,ned to the vessel,
which stands as the guaranty for their
settlement. "Aboiti0 3hipping Corp. vs.
General Accident !ire and %ife
Assurance Corp. 21. 3C4A (;#.
MERC)ANT (ESSEL
Eessel engaged in maritime
commerce, whether foreign or
otherwise. (<ar Re/iew =aterials in
Co((ercial Law, *or,e =ira/ite, !""!
ed.&
Constitutes property which may be
acGuired and transferred by any of the
means recogni0ed by law. >hey shall
continue to be considered as personal
property. "Arts. (., (2(#
>hey are susceptible to (ariti(e
liens such as for the repair, eGuipping
and provisioning of the vessel in the
preparation of a voyage, as well as
mortgage liabilities, in satisfaction of
which a vessel may be validly arrested
and sold. "3hip Dortgage )ecree of
1;.2#
MARITIME LIEN
+t constitutes a present right of
property in the ship, a jus in re, to be
afterward enforced in admiralty by
process in rem. "P/= vs. CA, . 3C4A
21#
+f the maritime lien arose prior to the
recording of a preferred mortgage, it
shall have priority over the said
mortgage lien. "P/= vs. CA, . 3C4A
21#
ORDER OF PREFERENCE IN CASE
OF SALE OF (ESSEL
R*A* 34@3 P*D* 4574
EDe#$!-!$0 da$e
1;1; 1;.2
A11l!#a>!l!$0
6verseas
shipping
only
=oth
domestic
and
overseas
shipping
B!nd of ale
Budicial Budicial and
e7trajudicial
O'de' of P'efe'en#e
A preferred
mortgage
shall have
priority over
all claims
against the
vessel,
e7cept the
following
preferences
in the order
stated@
1. Budicial
costs of the
proceedings<
2. >a7es due
the
Philippine
Government
<
. 3alaries
and wages
of the
Captain and
Crew of the
vessel
during its
last voyage<
$. General
average or
salvage
including
contract
>he
preferred
mortgage
lien shall
have priority
over all
claims
against the
vessel,
e7cept the
following
preferences
in the order
stated@
1. A7penses
and fees
allowed and
costs ta7ed
by the court
and ta7es
due to the
Government
<
2. CrewCs
wages<
. General
average<
$. 3alvage,
including
contract
salvage<
(. Daritime
liens arising
salvage,
bottomry
loans, and
indemnity
due shippers
for the value
of goods
transported
but which
were not
delivered to
the
consignee<
(. Costs of
repair and
eGuipment
of the
vessel, and
provisioning
of food,
supplies and
fuel during
its last
voyage< and
1. Preferred
mortgages
registered
prior in time.
prior in time
to the
recording of
the
preferred
mortgage<
1. )amages
arising out
of tort< and
.. Preferred
mortgage
registered
prior in time.
A-ect of sale@ All pre*e7isting claims
in the vessel are terminated. >hey will
then be satis,ed from the proceeds of
the sale subject to the order of
preference.
DOCTRINE OF LIMITED LIABILITY
.)YPOT)ECARY R9LE2
Cases where applicable@
1. Art. (2. P civil liability for
indemnities to third persons
2. Art. (;: P indemnities from
negligent acts of the captain "not
the shipowner or ship agent#
. Art. 2. P collision
$. Art. 1$ P liability for wages of
the captain and the crew and for
advances made by the ship agent
if the vessel is lost by shipwrec5
or capture
56N6RAL RUL6: >he liability of
shipowner and ship agent is limited to
the amount of interest in said vessel
such that where vessel is entirely lost,
the obligation is e7tinguished. "%u0on
3tevedoring v. Ascano, 1(1 3C4A 11;#
>he interest e7tends to@ 1# the vessel
itself< 2# eGuipments< # freightage<
and $# insurance proceeds. "Chua v.
+AC, 111 3C4A 12#
67C6PT81N':
1. Claims under &or5menCs
Compensation "Abueg vs. 3an )iego
.. Phil .:#<
2. +njury or damage due to shipowner
or to the concurring negligence of
the shipowner and the captain<
. >he vessel is insured "EasGue0 vs.
CA 12 3C4A ((#.
$. A7penses for repair on vessel
completed before loss<
(. +n case there is no total loss and the
vessel is not abandoned<
1. Collision between two negligent
vessels<
Abandonment of the vessel is
necessary to limit the liability of the
shipowner. >he only instance were
abandonment is dispensed with is
when the vessel is entirely lost "%u0on
3tevedoring vs. CA 1(1 3C4A 11;#.
RIG)T OF S)IPOWNER OR S)IP
AGENT TO ABANDON (ESSEL
+nstances@
1. +n case of civil liability from
indemnities to third persons "Art. (2.#<
2. +n case of lea5age of at least Q
of the contents of a cargo containing
liGuids "Art. 12.#< and
. +n case of constructive loss of
the vessel "3ec. 12, +nsurance Code#.
RIG)T OF ABANDONMENT
S)IPOWNE
R OR S)IP
CONSIGNEE
AGENT
W&a$ +a0 >e a>andoned
Eessel Goods
shipped
In$an#e
1. +n case of
civil liability
from
indemnities
to third
persons "Art.
(2.#<
2. 3ec. 12,
+nsurance
Code<
. +n case of
lea5age of at
least Q of
the contents
of a cargo
containing
liGuids "Art.
12.#
1. Partial
non*
delivery,
where the
goods are
useless
without the
others "Art.
1#<
2. Goods are
rendered
useless for
sale or
consumption
for the
purposes for
which they
are properly
destined
"Art. 1(#<
and
. +n case of
delay
through the
fault of the
carrier "Art.
.1#.
EDe#$
1. >ransfe
r of
ownership of
the vessel
from the
shipowner to
the shippers
or insurer.
2. +n case
of "2#, the
insurer must
pay the
insured as if
there was
actual total
loss of the
1.>ransfer of
ownership
on the goods
from the
shipper to
the carrier.
2.Carrier
should pay
the shipper
the mar5et
value of the
goods at the
point of
destination.
vessel.
CA9SES OF RE(OCATION OF
(OYAGE
1. &ar or interdiction of commerce<
2. =loc5ade<
. Prohibition to receive cargo at
destination<
$. Ambargo<
(. +nability of the vessel to navigate.
"Art. 1$:#
Te'+%
1. +nterdiction of commerce P A
governmental prohibition of
commercial intercourse intended to
bring about an entire cessation for
the time being of all trade whatever.
2. =loc5ade P A sort of circumvallation
of a place by which all foreign
connection and correspondence is,
as far as human power can e-ect it,
to be cut o-.
. Ambargo P A proclamation or order
of a state, usually issued in time of
war or threatened hostilities,
prohibiting the departure of ships or
goods from some or all the ports of
such state until further order.
PARTICIPANTS IN MARITIME
COMMERCE
A. 3hipowners and ship agents
=. Captains and masters of the vessel
C. 69cers and crew of the vessel
). 3upercargoes
A. Pilot
A* S)IPOWNERS AND S)IP AGENTS
S&!1owne' .1'o1'!e$a'!o2
Person who has possession, control
and management of the vessel and the
conseGuent right to direct her
navigation and receive freight earned
and paid, while his possession
continues.
S&!1 agen$ .na-!e'o2
Person entrusted with provisioning
and representing the vessel in the port
in which it may be found< also includes
the shipowner.
/ot a mere agent under civil law< he
is solidarily liable with the ship owner.
Powers and functions@
1. Capacity to trade<
2. )ischarge duties of the captain,
subject to Art.1:;<
. Contract in the name of the owners
with respect to repairs, details of
eGuipment, armament, provisions of
food and fuel, and freight of the
vessel, and all that relate to the
reGuirements of navigation<
$. 6rder a new voyage, ma5e a new
charter or insure the vessel after
obtaining authori0ation from the
shipowner or if granted in certi,cate
of appointment.
C!-!l L!a>!l!$!e of $&e S&!1owne'
And S&!1 Agen$
1. All contracts of the captain, whether
authori0ed or not, to repair, eGuip
and provision the vessel< "Art. (21#
2. %oss and damage to the goods
loaded on the vessel without
prejudice to their right to free
themselves from liability by
abandoning the vessel to the
creditors. "Art. (2.#
D/$0 of S&!1 Agen$ $o D!#&a'ge
$&e Ca1$a!n and Me+>e' of $&e
C'ew
+f the seamen contract is not for a
de,nite period or voyage, he may
discharge them at his discretion. "Art.
1:#
+f for a de,nite period, he may not
discharge them until after the
ful,llment of their contracts, e7cept on
the following grounds@
a. +nsubordination in serious
matters<
b. 4obbery<
c. >heft<
d. ?abitual drun5enness<
e. )amage caused to the vessel or
to its cargo through malice or
manifest or proven negligence. "Art.
1:(#
B* CAPTAINS AND MASTERS
>hey are the chiefs or commanders of
ships.
>he terms have the same meaning,
but are particularly used in accordance
with the si0e of the vessel governed
and the scope of transportation, i.e.,
large and overseas, and small and
coastwise, respectively.
/ature of position "*fold character#@
1. General agent of the shipowner<
2. >echnical director of the vessel<
. 4epresentative of the
government of the country under
whose Nag he navigates.
Ruali,cations@
1. !ilipino citi0en<
2. %egal capacity to contract<
. Dust have passed the reGuired
physical and mental
e7aminations reGuired for
licensing him as such. "Art. 1:;#
+nherent powers@
1. Appoint crew in the absence of
ship agent<
2. Command the crew and direct
the vessel to its port of
destination<
. +mpose correctional punishment
on those who, while on board
vessel, fail to comply with his
orders or are wanting in
discipline<
$. Da5e contracts for the charter of
vessel in the absence of ship
agent.
(. 3upply, eGuip, and provision the
vessel< and
1. 6rder repair of vessel to enable it
to continue its voyage. "Art. 11:#
3ources of funds to comply with the
inherent powers of the captain "in
successive order#@
1. !rom the consignee of the vessel<
2. !rom the consignee of the cargo<
. =y drawing on the ship agent<
$. =y a loan on bottomry<
(. =y sale of part of the cargo. "Art.
111#
)uties@
1. =ring on board the proper
certi,cate and documents and a
copy of the Code of Commerce<
2. Feep a %og =oo5, Accounting
=oo5 and !reight =oo5<
. A7amine the ship before the
voyage<
$. 3tay on board during the loading
and unloading of the cargo<
(. =e on dec5 while leaving or
entering the port<
1. Protest arrivals under stress and
in case of shipwrec5<
.. !ollow instructions of and render
an accounting to the ship agent<
2. %eave the vessel last in case of
wrec5<
;. ?old in custody properties left by
deceased passengers and crew
members<
1:. Comply with the
reGuirements of customs, health,
etc. at the port of arrival<
11. 6bserve rules to avoid
collision<
12. )emand a pilot while
entering or leaving a port. "Art.
112#
A shipCs captain must be accorded a
reasonable measure of discretionary
authority to decide what the safety of
the ship and of its crew and cargo
speci,cally reGuires on a stipulated
ocean voyage "+nter*6rient Daritime
Anterprises +nc. vs. CA#.
/o liability for the following@
1. )amages caused to the vessel or
to the cargo by force majeure<
2. 6bligations contracted for the
repair, eGuipment, and
provisioning of the vessel unless
he has e7pressly bound himself
personally or has signed a bill of
e7change or promissory note in
his name. "Art. 12:#
Sol!da'0 L!a>!l!$!e of $&e S&!1
Agen$/S&!1owne' fo' A#$ Done >0
$&e Ca1$a!n $owa'd Paenge'
and Ca'goe
1. )amages to vessel and to cargo
due to lac5 of s5ill and
negligence<
2. >hefts and robberies of the crew<
. %osses and ,nes for violation of
laws<
$. )amages due to mutinies<
(. )amages due to misuse of
power<
1. !or deviations<
.. !or arrivals under stress<
2. )amages due to non*observance
of marine regulations. "Art. 112#
C* OFFICERS AND CREW
1. 3ailing Date'!irst Date
2. 3econd Date
. Angineers
$. Crew
/o liability under the following
circumstances@
1. +f, before beginning voyage, captain
attempts to change it, or a naval
war with the power to which the
vessel was destined occurs<
2. +f a disease brea5s out and be
o9cially declared an epidemic in the
port of destination<
. +f the vessel should change owner or
captain. "Art. 1$.#
Sa!l!ng Ma$e/F!'$ Ma$e
3econd chief of the vessel who ta5es
the place of the captain in case of
absence, sic5ness, or death and shall
assume all of his duties, powers and
responsibilities. "Art. 12.#
)uties@
1. Provide himself with maps and
charts with astronomical tables
necessary for the discharge of his
duties<
2. Feep the =innacle =oo5<
. Change the course of the voyage
on consultation with the captain
and the o9cers of the boat,
following the decision of the
captain in case of disagreement<
$. 4esponsible for all the damages
caused to the vessel and the
cargo by reason of his
negligence. "Arts. 122 * 11#
Se#ond Ma$e
>a5es command of the vessel in case
of the inability or disGuali,cation of the
captain and the sailing mate, assuming
in such case their powers and
responsibilities.
>hird in command
)uties@
1. Preserve the hull and rigging of
the vessel<
2. Arrange well the cargo<
. )iscipline the crew<
$. Assign wor5 to crew members<
(. +nventory the rigging and
eGuipment of the vessel, if laid
up. "Art. 12#
Eng!nee'
69cers of the vessel but have no
authority e7cept in matters referring to
the motor apparatus. &hen two or
more are hired, one of them shall be
the chief engineer.
)uties@
1. +n charge of the motor apparatus,
spare parts, and other
instruments pertaining to the
engines<
2. Feep the engines and boilers in
good condition<
. /ot to change or repair the
engine without authority of the
captain<
$. +nform the captain of any
damage to the motor apparatus<
(. Feep an Angine =oo5<
1. 3upervise all personnel
maintaining the engine. "Art.
12#
C'ew
>he aggregate of seamen who man a
ship, or the shipCs company.
?ired by the ship agent, where he is
present and in his absence, the captain
hires them, preferring !ilipinos, and in
their absence, he may ta5e in
foreigners, but not e7ceeding 1'( of
the crew. "Art. 1$#
Clae of Sea+anA Con$'a#$
1. =y the voyage<
2. =y the month< and
. =y share of pro,ts or freightage.
</$ Ca/e fo' $&e D!#&a'ge of
Sea+an W&!le Con$'a#$ S/>!$
1. Perpetration of a crime<
2. 4epeated insubordination, want of
discipline<
. 4epeated incapacity and
negligence<
$. ?abitual drun5enness<
(. Physical incapacity<
1. )esertion. "Art. 1.#
R/le !n #ae of Dea$& of a
Sea+an
>he seamanCs heirs are entitled to
payment as follows@
1. +f death is natural@
a. compensation up to time of death
if engaged on wage
b. if by voyage * half of amount if
death occurs on voyage out< and
full, if on voyage in
c. if by shares * none, if before
departure< full, if after departure
2. if death is due to defense of vessel *
full payment<
. if captured in defense of vessel * full
payment<
$. if captured due to carelessness *
wages up to the date of the capture.
"Art. 1$(#
Co+1le+en$ of $&e (eel
All persons on board, from the
captain to the cabin boy, necessary for
the management, maneuvers, and
service, thus including the crew, the
sailing mates, engineers, sto5ers and
other employees on board not having
speci,c designations.
)oes not include the passengers or
the persons whom the vessel is
transporting.
D* S9PERCARGOES
Persons who discharges
administrative duties assigned to him
by ship agent or shippers, 5eeping an
account and record of transaction as
reGuired in the accounting boo5 of the
captain. "Art. 1$;#
E* PILOT
A person duly Guali,ed, and licensed,
to conduct a vessel into or out of ports,
or in certain waters.
>he term generally connotes a person
ta5en on board at a particular place for
the purpose of conducting a ship
through a river, road or channel, or
from a port.
Daster pro hac /ice for the time
being in the command and navigation
of the ship.
&hile in e7ercising his functions a
pilot is in sole command of the ship
and supersedes the master for the
time being in the command and
navigation of the ship, the master does
not surrender his vessel to the pilot
and the pilot is not the master. >here
are occasions when the master may
and should interfere and even displace
the pilot, as when the pilot is obviously
incompetent or into7icated "!ar
Aastern 3hipping Company vs. CA#.
Compulsory Pilotage P 3tates
possessing harbors have enacted laws
or promulgated rules reGuiring vessels
approaching their ports to ta5e on
board pilots licensed under the local
laws. (Notes and Cases on the Law on
Aquino, T. & ernando, R.P. !""# ed. p.
:$9&
L!a>l!$0 of P!lo$
56N6RAL RUL6@ 6n compulsory
pilotage grounds, the ?arbor Pilot is
responsible for damage to a vessel or
to life or property due to his
negligence.
67C6PT:
1. Accident caused by force majeure or
natural calamity provided the pilot
e7ercised prudence and e7tra diligence
to prevent or minimi0e damages.
2. Countermand or overrule by the
master of the vessel in which case the
registered owner of the vessel is liable.
"3ec.11, Art.+++ PPA Admin 6rder :*2(#
SPECIAL CONTRACTS OF MARITIME
COMMERCE
1. Charter party
2. =ill of lading
. Contract of transportation of
passengers on sea voyages
$. %oan on bottomry
(. %oan on respondentia
1. Darine insurance
C)ARTER PARTY
A contract by virtue of which the
owner or agent binds himself to
transport merchandise or persons for a
,7ed price.
A contract by which an entire ship, or
some principal part thereof is
let'leased by the owner to another
person for a speci,ed time or use.
"Planters Products, +nc. vs. CA, 221
3C4A $.1#
Pa'$!e%
1. 3hip owner or ship agent
2. Charterer
Clae%
1. =areboat or demise P >he charterer
provides crew, food and fuel. >he
charterer is liable as if he were the
owner, e7cept when the cause arises
from the unworthiness of the vessel.
>he shipowner leases to the charterer
the whole vessel, transferring to the
latter the entire command, possession
and conseGuent control over the
vesselCs navigation, including the
master and the crew, who thereby
become the charterCs servants. +t
transforms a common carrier into a
private carrier.
>he charterer becomes the owner
of the vessel pro hac vice, just for
that one particular purpose only.
=ecause the charterer is treated as
owner pro hac /ice, the charterer
assumes the customary rights and
liabilities of the shipowner to third
persons and is held liable for the
e7pense of the voyage and the
wages of the seamen.
2. Contract of A-reightment E A
contract whereby the owner of the
vessel leases part or all of its space to
haul goods for others.
>he shipowner retains the
possession, command and
navigation of the ship, the charterer
merely having use of the space in
the vessel in return for his payment
of the charter hired.
Finds@
a. >ime charter P vessel is chartered
for a ,7ed period of time or
duration of voyage.
b. Eoyage or trip charter P the
vessel is leased for one or series
of voyages usually for purposes
of transporting goods for
charterer.
LEASE C)ARTER
PARTY
+f for a
de,nite
period,
lessee
cannot give
up the lease
by paying a
Charterer
may rescind
charter party
by paying
half of the
freightage
agreed upon.
portion of
the amount
agreed upon.
+f the leased
property is
sold to one
who 5nows
of the
e7istence of
the lease,
the new
owner must
respect the
lease.
>he new
owner is not
compelled to
respect the
charter party
so long as he
can load the
vessel with
his own
cargo. "Art.
12;#
Civil law
concept
Commercial
law concept
C)ARTER
PARTY
BILL OF
LADING
An entire or
complete
contract.
Dore li5e a
private
receipt which
the captain
gives to
accredit
goods
received
from persons
Consensual
contract
4eal contract
BAREBOAT
OR DEMISE
C)ARTER
CONTRACT
OF
AFFREIG)T
MENT .TIME
OR (OYAGE
C)ARTER2
Charterer
becomes
liable to
others
caused by its
negligence
6wner
remains
liable as
carrier and
must answer
for any
breach of
duty
Charterer
regarded as
Charterer is
not regarded
owner pro
hac vice for
the voyage
as owner.
6wner of
vessel
relinGuishes
possession,
command
and
navigation to
charterer
>he vessel
owner
retains
possession,
command
and
navigation of
the ship
Common
carrier is
converted to
private
carrier.
Common
carrier is not
converted to
a private
carrier.
PERSONS W)O MAY MABE A
C)ARTER
1. 6wner or owners of the vessel,
either in whole or in majority
part, who have legal control and
possession of the vessel
2. Charterer may subcharter entire
vessel to
rd
person only if not
prohibited in original charter.
"Art.1.;#
. 3hip agent if authori0ed by the
owner's or given such power in
the certi,cate of appointment.
"Art.(;2#
$. Captain in the absence of the
ship agent or consignee and only
if he acts in accordance with the
instructions of the agent or owner
and protects the latterCs
interests. "Art.1:;#
RE89ISITES OF A (ALID C)ARTER
PARTY
1. Consent of the contracting
parties
2. A7isting vessel which should be
placed at the disposition of the
shipper
. !reight
$. Compliance with Art. 1(2 of the
Code of Commerce
Cla/e W&!#& Ma0 Be In#l/ded In
a C&a'$e' Pa'$0
<aon
#la/e
Cla/e
1a'a+o/n$
o'
1a'a+o/n$
#la/e
A stipulation
in a charter
party that in
case of a
maritime
accident for
which the
shipowner is
not
responsible
by law,
contract or
otherwise,
the cargo
shippers,
consignees
or owners
shall
contribute
with the
shipowner in
general
average.
"Pandect of
Commercial
%aw and
Burisprudenc
e, Bustice
Bose Eitug,
1;;. ed.#
A clause in a
charter party
providing
that the
C6G3A shall
apply, even
though the
transportatio
n is
domestic,
subject to
the e7tent
that any
term of the
bill of lading
is repugnant
to the
C6G3A or
applicable
law, then to
the e7tent
thereof the
provision of
the bill of
lading is
void.
"Pandect of
Commercial
%aw and
Burisprudenc
e, Bustice
Bose Eitug,
1;;. ed.#
R!g&$ and O>l!ga$!on of Pa'$!e
S)IPOWNE
R OR S)IP
AGENT
C)ARTERER
1. +f the
vessel is
chartered
wholly, not
to accept
cargo from
others<
2. >o
observe
represented
capacity<
. >o unload
cargo
clandestinely
placed
$. >o
substitute
another
vessel if load
is less than
'( of
capacity<
(. >o leave
the port if
the charterer
does not
bring the
cargo within
the lay days
and e7tra lay
days
allowed<
1. >o place in
a vessel in a
condition to
navigate<
.. to bring
cargo to
nearest
neutral port
in case of
war or
bloc5ade.
"Arts. 11;*
1.2#
1. >o pay
the agreed
charter
price<
2. >o pay
freightage
on
unboarded
cargo<
. >o pay
losses to
others for
loading
uncontracte
d cargo and
illicit cargo<
$. >o wait if
the vessel
needs
repair<
(. >o pay
e7penses for
deviation.
"Arts. 1.;*
12.#
Re#!!on of a C&a'$e' Pa'$0
A$
#&a'$e'
A$
&!1ow
Fo'$/!$
o/
e'A
'e;/e
$
.A'$
3==2
ne'A
'e;/e
$
.A'$*
3=?2
#a/e
.A'$*
3?@2
1. =y
abando
ning the
charter
and
paying
half of
the
freighta
ge<
2. Arror
in
tonnage
or Nag<
.
!ailure
to place
the
vessel
at the
chartere
rCs
disposal
<
$.
4eturn
of the
vessel
due to
pirates,
enemie
s or bad
weather
<
(.
Arrival
at a
port for
repairs.
1. +f the
e7tra
lay days
termina
te
without
the
cargo
being
placed
alongsid
e the
vessel<
2. 3ale
by the
owner
of the
vessel
before
loading
by the
chartere
r<
1. &ar
or
interdict
ion of
commer
ce<
2.
=loc5ad
e<
.
Prohibiti
on to
receive
cargo<
$.
Ambarg
o< and
(.
+nability
of the
vessel
to
navigat
e.
Te'+%
1. Primage * bonus to be paid to the
captain after the successful voyage.
2. )emurrage P the sum ,7ed in the
charter party as a remuneration to
the owner of the ship for the
detention of his vessel beyond the
number of days allowed by the
charter party for loading or
unloading or for sailing.
. )eadfreight P the amount paid by or
recoverable from a charterer of a
ship for the portion of the shipCs
capacity the latter contracted for
but failed to occupy.
$. %ay )ays * days allowed to charter
parties for loading and unloading
the cargo.
(. A7tra %ay )ays E days which follow
after the lay days have elapsed.
9S9AL FORMS OF CONS9MMATING
CONTRACTS
1. C.+.!. P cost, insurance and freight<
2. !.6.=. * free on board<
. !.A.3. * free alongside ship< and
$. C. M !. * cost and freight.
TRANSS)IPMENT OF GOODS
>he act of ta5ing cargo out of one
ship and loading it in another, or the
transfer of goods from the vessel
stipulated in the contract of
a-reightment to another vessel before
the place of destination named in the
contract has been reached, or the
transfer for further transportation from
one ship or conveyance to another.
+t is not dependent on the ownership
of the transporting ships or in the
change of carriers, but rather on the
fact of actual physical transfer of cargo
from one vessel to another.
+f done without legal e7cuse,
however competent and safe the
vessel into which the transfer is made,
is a violation of contract and
infringement of right of shipper and
subjects carrier to liability if freight is
lost event by cause otherwise
e7cepted. "Dagellan Danufacturing vs.
CA, 2:1 3C4A 1:2#
LOAN ON BOTTOMRY AND
RESPONDENTIA
A real, unilateral, aleatory contract,
by virtue of which one person lends to
another a certain amount of money or
goods on things e7posed to maritime
ris5s, which amount, with its earnings,
is to be returned if the things are
safely transported, and which is lost if
the latter are lost.
LOAN ON
BOTTOMRY
LOAN ON
RESPONDE
NTIA
)e,nition
%oan made
by
shipowner
or ship
agent
guaranteed
by vessel
itself and
repayable
upon arrival
of vessel at
destination.
"Art. .1;#
%oan ta5en
on security
of the cargo
laden on a
vessel, and
repayable
upon safe
arrival of
cargo at
destination.
"Art. .1;#
&ho may contract
3hipowner
or ship
agent.
6utside of
the
residence of
the owners *
the captain.
6nly the
owner of the
cargo.
Common elements@
1. A7posure of security to
marine peril<
2. 6bligation of the debtor
conditioned only upon
safe arrival of the
security at the point of
destination.
!orms@
1. Public instrument
2. Policy signed by the
contracting parties and
the bro5er ta5ing part
therein
. Private instrument
"Art. .2:#
Contents@
1. Find, name and registry
of the vessel<
2. /ame, surname and
domicile of the captain<
. /ames, surnames and
domiciles of the
borrower and the
lender<
$. Amount of the loan and
the premium stipulated<
(. >ime for repayment<
1. Goods pledged to
secure repayment<
.. Eoyage during which the
ris5 is run "Art..21#
BOTTOMRY
/
RESPONDE
NTIA
ORDINARY
LOAN
.M9T99M2
/ot subject
to 8sury
%aw
3ubject to
8sury %aw
%iability of
the
borrower is
contingent
on the safe
arrival of the
vessel or
cargo at
destination
/ot subject
to any
contingency
"absolute
liability#
>he last
lender is a
preferred
creditor
>he ,rst
lender is a
preferred
creditor
W)EN LOAN ON BOTTOMRY OR
RESPONDENTIA REGARDED AS
SIMPLE LOAN
1. %ender loaned an amount larger
than the value of the object due
to fraudulent means employed by
the borrower. "A4>..21#
2. !ull amount of the loan is not
used for the cargo or given on
the goods if all of them could not
have been loaded, the balance
will be considered a simple loan.
"A4>..2.#
. +f the e-ects on which the money
is ta5en is not subjected to any
ris5. "A4>..2;#
No$e@ 8nder e7isting laws, the parties
to a loan, whether ordinary or
maritime, may agree on any rate of
interest. "C= Circular ;:(#
MARINE
INS9RANCE
LOAN ON
BOTTOM
RY OR
RESPOND
ENTIA
+ndemnity is
paid after the
loss has
occurred
+ndemnity
is paid in
advance
by way of
a loan
+n case of loss
of the vessel
due to a ris5
insured
against, the
obligation of
the insurer
becomes
absolute
+n case of
loss of the
vessel due
to a
marine
peril, the
obligation
of the
borrower
to pay is
e7tinguish
ed
Consensual
contract
4eal
contract
)01o$&e#a'0 Na$/'e of Bo$$o+'0/
Re1onden$!a
56N6RAL RUL6: >he obligation of the
borrower to pay the loan is
e7tinguished if the goods given as
security are absolutely lost by reason
of an accident of the sea, during the
voyage designated, and if it is proven
that the goods were on board.
67C6PT81N':
1. %oss due to inherent defect<
2. %oss due to the barratry on the part
of the captain<
. %oss due to the fault or malice of
the borrower<
$. >he vessel was engaged in
contraband< and
(. >he cargo loaded on the vessel be
di-erent in from that agreed upon.
Con#/''en#e of Ma'!ne In/'an#e
and Loan on
Bo$$o+'0/Re1onden$!a
1. >he insurable interest of the
owner of a ship hypothecated by
bottomry is only the e7cess of the
value over the amount secured
by bottomry. "3ec. 1:1, +nsurance
Code#
2. >he value of what may be saved
in case of shipwrec5 shall be
divided between the lender and
the insurer in proportion to the
interest of each one. "Art. .(#
/ote@ +f a vessel is hypothecated by
bottomry only the e7cess is insurable,
since a loan on bottomry parta5es of
the nature li5ewise of an insurance
coverage to the e7tent of the loan
accommodation. >he same rule would
apply to the hypothecation of the
cargo by respondentia. (Pandect o)
Co((ercial Law and *urisprudence,
*ustice *ose +itu,, $--. ed.&
ACCIDENTS IN MARITIME
COMMERCE
1. Averages
2. Arrival 8nder 3tress
. Collision
$. 3hipwrec5
A(ERAGE
An e7traordinary or accidental
e7pense incurred during the voyage in
order to preserve the cargo, vessel or
both, and all damages or deterioration
su-ered by the vessel from departure
to the port of destination, and to the
cargo from the port of loading to the
port of consignment. "Art. 2:1#
>he person whose property has
been saved must contribute to
reimburse the damage caused or
e7pense incurred if the situation
constitutes general average.
Classes@
1. Particular or 3imple Average
2. Gross or General Average
&here both vessel and cargo are
saved, it is general average< where
only the vessel or only the cargo is
saved, it is particular average.
A7penses incurred to reNoat a
vessel, which accidentally ran aground,
in order to continue its voyage, do not
constitute general average. /ot only is
there absence of a marine peril,
common safety factor, and
deliberateness. +t is the safety of the
property, and not the voyage, which
constitutes the true foundation of
general average. "A. Dagsaysay, +nc.
vs. Agan, G.4./o. %*1;, Ban. 1,
1;((#
PARTIC9LA
R OR
SIMPLE
GROSS OR
GENERAL
De"n!$!on
)amages or
e7penses
caused to the
vessel or
cargo that
did not inure
to the
common
bene,t, and
borne by
respective
)amages or
e7penses
deliberately
caused in
order to
save the
vessel, its
cargo or
both from
real and
5nown ris5.
owners. "Art.
2:;#
"Art. 211#
Re;/!!$e
1. common
danger<
2. deliberate
sacri,ce<
. success<
$. proper
formalitie
s and
legal
steps.
L!a>!l!$0
>he owner of
the goods
which gave
rise to the
e7pense or
su-ered the
damage shall
bear this
average.
"Art. 21:#
All the
persons
having an
interest in
the vessel
and the
cargo
therein at
the time of
the
occurrence
of the
average
shall
contribute to
satisfy this
average.
"Art. 212#
>he
insurers
"Art.2(;#
and lenders
on bottomry
and
respondenti
a shall
li5ewise
contribute.
"Art..2#.
N/+>e' of !n$e'e$
!n-ol-ed
6nly one
interest
involved
3everal
interests
involved
S&a'e !n $&e da+age o'
eF1ene
1::S share +n proportion
to the value
of the
ownerCs
property
saved
R!g&$ $o 'e#o-e'
/o
reimburseme
nt
>here may
be
reimbursem
ent
B!nd .no$ eF#l/!-e2
Art. 2:; Art. 211
P'o#ed/'e fo' 'e#o-e'0
1.Assembly
and
deliberation
2.4esolution
of the
captain
.Antry of
the
resolution in
the logboo5
$.)etailed
minutes
(.)elivery of
the minutes
to the
maritime
judicial
authority of
the ,rst
port, within
2$ hours
from arrival,
1.4ati,catio
n by captain
under oath.
"Arts. 21*
21$#
GOODS NOT CO(ERED BY GENERAL
A(ERAGE E(EN IF SACRIFICED
1. Goods carried on dec5. "A4>.2((#
2. Goods not recorded in the boo5s
or records of the vessel.
"A4>.2(( "2##
. !uel for the vessel if there is
more than su9cient fuel for the
voyage. "4ule +T, Hor5*Antwerp
4ule#
<e$$!on
Act of throwing cargo overboard in
order to lighten the vessel.
6rder of goods to be cast overboard@
1. >hose which are on the dec5,
preferring the heaviest one with
the least utility and value<
2. >hose which are below the upper
dec5, beginning with the one with
greatest weight and smallest
value. "Art. 21(#
Bettisoned goods are not res nullius
nor deemed KabandonedL within the
meaning of civil law so as to be the
object of occupation by salvage.
(Pandect o) Co((ercial Law and
*urisprudence, *ustice *ose +itu,, $--.
ed.&
+n order that the jettisoned goods
may be included in the gross or
general average, the e7istence of the
cargo on board should be proven by
means of the bill of lading. "Art. 211#
Yo'G,An$we'1 .Y,A2 R/le on
De$e'+!n!ng L!a>!l!$0 fo' A-e'age
W!$& Rega'd To De#G Ca'go
1. )ec5 cargo is allowed only in
domestic'coastwise'inter*island
shipping, and is prohibited in
international'overseas'foreign
shipping.
2. +f dec5 cargo is loaded with the
consent of the shipper on overseas
trade, it must always contribute to
general average, but should the same
be jettisoned, it would not be entitled
to reimbursement because there is
violation of the H*A 4ules.
. +f dec5 cargo is loaded with the
consent of the shipper on coastwise
shipping, it must always contribute to
general average and if jettisoned
would be entitled to reimbursement.
4eason@ +n domestic shipping,
voyages are usually short and the seas
are generally not rough. +n overseas
shipping, the vessel is e7posed for
many days to perils of the sea.
DOMESTIC INTERNATI
ONAL
)ec5 cargo is
allowed
)ec5 cargo
is not
allowed
&ith shipperCs consent
General
average
Particular
average
&ithout shipperCs consent
Captain is
liable
Captain is
liable
ARRI(AL 9NDER STRESS
.ARRIBADA2
>he arrival of a vessel at the nearest
and most convenient port instead of
the port of destination, if during the
voyage the vessel cannot continue the
trip to the port of destination.
W&en
lawf/l
W&en
/nlawf
/l
W&o
>ea'
eF1en
e%
>he
inability
to
continu
e
voyage
is due
to lac5
of
provisio
ns,
well*
founded
fear of
sei0ure,
private
1. %ac5
of
provisio
ns due
to
negligen
ce to
carry
accordin
g to
usage
and
customs
<
2. 4is5
of
>he
shipown
er or
ship
agent is
liable in
case of
unlawful
arrival
under
stress.
=ut
they
shall
not be
liable
ers,
pirates,
or
acciden
ts of
the sea
disablin
g it to
navigat
e. "Art.
21;#
enemy
not well
5nown
or
manifest
. )efec
t of
vessel
due to
imprope
r repair<
and
$. Dalic
e,
negligen
ce, lac5
of
foresigh
t or s5ill
of
captain.
"Art.
22:#
for the
damage
s
caused
by
reason
of a
lawful
arrival.
"Art.
221#
+t is the duty of the captain to
continue the voyage without delay
after the cause of the arrival under
stress has ceased failing in such duty
renders him liable. ?owever, in case
the cause has been ris5 of enemies,
there must ,rst be an assembly before
departure. "Art. 22(#
3teps@
1. Captain should determine during
the voyage if there is well
founded fear of sei0ure,
privateers and other valid
grounds<
2. Captain shall assemble the
o9cers and summon the persons
interested in the cargo who may
attend the meeting but without a
right to vote<
. >he o9cers shall determine and
agree if there is well*founded
reason after e7amining the
circumstances. >he captain shall
have the deciding vote<
$. >he agreement shall be drafted
and the proper minutes shall be
signed and entered in the log
boo5<
(. 6bjections and protests shall
li5ewise be entered in the
minutes.
COLLISION
+mpact of two vessels both of which
are moving.
All!!on
+mpact between a moving vessel and
a stationary one.
Na/$!#al R/le $o De$e'+!ne
Negl!gen#e
1. &hen two vessels are about to enter
a port, the farther one must allow
the nearer to enter ,rst< if they
collide, the fault is presumed to be
imputable to the one who arrived
later, unless it can be proved that
there was no fault on its part.
2. &hen two vessels meet, the smaller
should give the right of way to the
larger one.
. A vessel leaving port should leave
the way clear for another which may
be entering the same port.
$. >he vessel which leaves later is
presumed to have collided against
one which has left earlier.
(. >here is a presumption against the
vessel which sets sail in the night.
1. >here is a presumption against the
vessel with spread sails which
collides with another which is at
anchor and cannot move, even
when the crew of the latter has
received word to lift anchor, when
there was not su9cient time to do
so or there was fear of a greater
damage or other legitimate reason.
.. >here is a presumption against an
improperly moored vessel.
2. >here is a presumption against a
vessel which has no buoys to
indicate the location of its anchors
to prevent damage to vessels which
may approach it.
;. Eessels must have Kproper loo5*
outsL or persons trained as such
and who have no other duty aside
therefrom. "3mith =ell v. CA#
Na/$!#al R/le a $o Sa!l!ng (eel
and S$ea+&!1
1. &here a steamship and a sailing
vessel are approaching each other
from opposite directions, or on
intersecting lines, the steamship
from the moment the sailing vessel
is seen, shall watch with the highest
diligence her course and
movements so as to be able to
adopt such timely means of
precaution as will necessarily
prevent the two boats from coming
in contact.
2. >he sailing vessel is reGuired to
5eep her course unless the
circumstances reGuire otherwise.
Hone of T!+e !n $&e Coll!!on of
(eel
1. 3irst >one P all time up to the
moment when ris5 of collision begins.
/o rule is as yet applicable for none
is necessary.
2. 'econd >one P time between
moment when ris5 of collision begins
and moment it becomes a practical
certainty.
+t is in this period where conduct of
the vessels is primordial. +t is in this
0one that vessels must strictly observe
nautical rules, unless a departure
therefrom becomes necessary to avoid
imminent danger.
. Third >one P time when collision is
certain and time of impact.
An error in this 0one would no longer
be legally conseGuential.
6rror in 6?tre(is * sudden
movement made by a faultless vessel
during the third 0one of collision with
another vessel which is at fault during
the 2nd 0one. Aven if such sudden
movement is wrong, no responsibility
will fall on said faultless vessel.
"8rrutia and Co. v. =aco 4iver
Plantation Co., 21 P?+% 12#
Cae Co-e'ed B0 Coll!!on and
All!!on
$. 1ne /essel at )ault
Eessel at fault is liable for damage
caused to innocent vessel as well as
damages su-ered by the owners of
cargo of both vessels. "Art. 221#
2. <oth /essels at )ault
Aach vessel must bear its own loss,
but the shippers of both vessels may
go against the shipowners who will be
solidarily liable. "Art. 22.#
. +essel at )ault not @nown
Aach vessel must bear its own loss,
but the shippers of both vessels may
go against the shipowners who will be
solidarily liable. "Art. 222#
;octrine o) 8nscrutable 3ault P +n
case of collision where it cannot be
determined which between the two
vessels was at fault, both vessels
bear their respective damage, but
both should be solidarily liable for
damage to the cargo of both
vessels.
#. Third /essel at )ault
>he third vessel will be liable for
losses and damages. "Art. 21#
:. 3ortuitous e/entA)orce (aBeure
/o liability. Aach bears its own loss.
"Art. 2:#
>he doctrine of res ipsa loGuitur
applies in case a moving vessel stri5es
a stationary object, such as a bridge
post, doc5, or navigational aid. "!ar
Aastern 3hipping v. CA, %u0on
3tevedoring vs. CA#
Aven if the cause of action against
the common carrier is based on Guasi*
delict, the defense of due diligence in
the selection and supervision of
employees is unavailing in case of a
maritime tort resulting in collision. +t is
not a civil tort governed by the Civil
Code but a maritime one governed by
Arts. 221*2; of the Code of
Commerce. "Danila 3teamship vs. +nsa
Abdulhaman#
)octrine of %ast Clear Chance and
4ule on Contributory /egligence
cannot be applied in collision cases
because of Art.22. of the Code of
Commerce. (Notes and Cases on the
Law on Transportation and Public
Utilities, Aquino, T. & ernando, R.P.
!""# ed.&
MARITIME PROTEST
Condition precedent or prereGuisite to
recovery of damages arising from
collisions and other maritime
accidents.
+t is a written statement made under
oath by the captain of a vessel after
the occurrence of an accident or
disaster in which the vessel or cargo is
lost or damaged, with respect to the
circumstances attending such
occurrence, for the purpose of
recovering losses and damages.
A7cuses for not ,ling protest@ 1#
where the interested person is not on
board the vessel< and 2# on collision
time, need not be protested. "Art. 21#
Cases applicable@
1. Collision "Art. 2(#<
2. Arrival under stress "Art. 112"2##<
. 3hipwrec5s "Arts. 112"1(#, 2$#<
$. &here the vessel has gone
through a hurricane or when the
captain believes that the cargo
has su-ered damages or
averages "Art. 12$#.
&ho ma5es@ Captain
&hen made@ within 2$ hours from the
time the collision too5 place.
=efore whom made@ competent
authority at the point of collision or at
the ,rst port of arrival, if in the
Philippines and to the Philippine
consul, if the collision too5 place
abroad. "Art. 2(#
S)IPWRECB
+t is the loss of the vessel at sea as a
conseGuence of its grounding, or
running against an object in sea or on
the coast. +t occurs when the vessel
sustains injuries due to a marine peril
rendering her incapable of navigation.
+f the wrec5 was due to malice,
negligence or lac5 of s5ill of the
captain, the owner of the vessel may
demand indemnity from said captain.
"Art. 2$1#
>he rules on collision or allision, as
may be pertinent, can eGually apply to
shipwrec5s.
SPECIAL CONCEPTS
ARRASTRE SER(ICE
A contract for the unloading of goods
from a vessel.
A11l!#a>!l!$0% 1/erseas trade only.
(Co((ercial Law Re/iew, C.
S!gn!"#an#e% &hen a person brings
in cargo from abroad, he cannot unload
and deliver the cargo by himself. >he
unloading must be done by the
arrastre operator, which will then
deliver the cargo to the importer.
(Co((ercial Law Re/iew, C.
Na$/'e of >/!ne% +t is a public
utility, discharging functions which are
heavily invested with public interest.
L!a>!l!$0%
1. 3imilar to a warehouseman "%ua
Fian v. Danila 4ailroad#
2. 3imilar to a common carrier
"/orthern Dotors v. Prince %ine#
. 3olidary liability with the common
carrier
No$e% +n order that the arrastre
operator may be held liable, the
consignee must prove that the damage
was due to the negligence and while
the goods are in the custody of the
arrastre operator. "?artford !ire
+nsurance v. A. 4a0on, +nc.#
STE(EDORING SER(ICE
>he carriage of goods from the
warehouse or pier to the holds of the
vessel. "Chief of 3ta- vs. C+4#
As understood in the port business,
the term consists of the handling of
cargo from the hold of the ship to the
doc5, in case of pier*side unloading< or
to a barge, in case of unloading at sea.
"Anglo*!il >rading Corp. vs. %a0aro#
>he loading on the ship of outgoing
cargo is also part of stevedoring wor5.
"+bid.#
CONTAINERIHATION/ ISAID,TO,
CONTAINJ/ IS)IPPERAS LOAD AND
CO9NTJ SYSTEM
3ystem whereby the shipper loads his
cargoes in a specially designed
container, seals the container and
delivers it to the carrier for
transportation. >he carrier does not
participate in the counting of the
merchandise for loading into the
container, the actual loading, and the
sealing of the container. "83 %ines v.
Comm. 6f Customs, +C>3+ v. Prudential
Guarantee#
>he matter of Guantity, description
and conditions of the cargo inside the
container is the sole responsibility of
the shipper, unless there is stipulation
to the contrary. "83 %ines vs. Comm. 6f
Customs, 4eyma =ro5erage v. Phil.
?ome Assurance#
No$e% +n order to attribute to the
carrier any damage to the shipment
that may be found, inspection o) the
,oods should be done at pier%side.
"=an5ers vs. CA#

III* CARRIAGE OF GOODS BY SEA
ACT/COGSA .C*A* No* 352
APPLICABILITY
>he transportation must be@
1. &ater'maritime transportation<
2. for the carriage of goods< and
. overseas'international'foreign
"from foreign port to Philippine
port#.
+t can be applied in domestic sea
transportation if agreed upon by the
parties. "Clause para(ount or
para(ount clause#
IMPORTANT FEAT9RES%
1. Amount of carrierCs liability
2. /otice of damage
. Prescriptive period
AMO9NT OF CARRIERAS LIABILITY
8nder the 3ec. $"(#, the liability limit
is set at U(:: per pac5age or
customary freight unit unless the
nature and value of such goods is
declared by the shipper. >his is
deemed incorporated in the bill of
lading even if not mentioned in it.
"Aastern 3hipping vs. +AC, 1(: 3C4A
$1#
/ote that Art. 1.$;, /CC applies to
domestic'inter*island'coastwise trade.
NOTICE OF DAMAGE .SEC* 6.322
R/le%
a. Patent damage@ shipper should ,le a
claim with the carrier immediately
upon delivery
b. %atent damage@ shipper should ,le a
claim with the carrier within three
days from delivery.
No$e@ >he ,ling of a notice of claim is
not a condition precedent.
PRESCRIPTI(E PERIOD
Action for loss or damage to the
cargo should be brought within one
year after@
a. )elivery of the goods "delivered
but damaged goods#< or
b. >he date when the goods should
have been delivered "non*
delivery#. "3ec. I1J#
K%oss or )amageL as applied to the
C6G3A contemplates a situation where
no delivery at all was made by the
shipper of the goods because the same
had perished, gone out of commerce,
or disappeared in such a way that their
e7istence is un5nown or they cannot
be recovered. >hus, it is inapplicable in
case of misdelivery or conversion. "Ang
vs. American 3teamship Agencies +nc.#
and damage arising from delay or late
delivery "Ditsui 6.3.F. %ines %td. vs.
CA#. +n such instance the, Civil Code
rules on prescription shall apply.
>he one*year prescriptive period is
suspended by@
1. >he e7press agreement of the
parties "8niversal 3hipping %ines,
+nc. vs. +AC, 122 3C4A 1.:#
2. >he ,ling of an action in court
until it is dismissed. "3tevens M
Co. vs. /ordeutscher %loyd, 1
3C4A 12:#
>he one*year period shall run from
delivery of the last pac5age and is not
suspended by e7trajudicial demand.
")ole Phils.,+nc. vs. Daritime Co.,1$2
3C4A 112#
>he one*year period shall run from
delivery to the arrastre operator and
not to the consignee. "8nion Carbide
Phils, +nc. vs. Danila 4ailroad Co.,3C4A
(;#
>he insurer e7ercising its right of
subrogation is bound by the one*year
prescriptive period. ?owever, it does
not apply to the claim against the
insurer for the insurance proceeds.
"!il. Derchants +ns. Co. vs. Alejandro<
Dayer 3teel Pipe Corp. vs. CA#
I(* WARSAW CON(ENTION OF 4?7?
.WC2
P9RPOSE% >o protect the emerging air
transportation industry and to secure
the uniformity of recovery by the
passengers.
APPLICABILITY
>he transportation must be@
1. +nternational transportation<
2. Air transportation< and
. Carriage of passengers, baggage
or goods.
>he &C shall also apply to fortuitous
transportation by aircraft performed by
an air transportation enterprise.
8nternational transportation * any
transportation in which the place of
departure and the place of destination
are situated either@
1. &ithin the territories of two ?igh
Contracting Parties regardless of
whether or not there be a brea5 in
the transportation or transshipment,
or
2. &ithin the territory of a single
?igh 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.
"Kround tripL, Am. Bur.#
>ransportation 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, su0erainty, mandate, or
authority of the same ?igh Contracting
Party. "Art. 1 3ec.#
W)EN INAPPLICABLE
1. &hen public policy is
contradicted<
2. +f the reGuirements under the
Convention are not complied
with.
IMPORTANT CONCEPTS%
1. >ransportation documents
a. Passenger tic5et
b. =aggage chec5
c. Air way bill
2. %iability of the carrier for damages
a. )eath or injury to passengers
b. %oss or damage to baggage or
goods
c. )elay
. 3uccessive carrier agreement
$. Burisdiction
(. Combined transportation agreement
PASSE
NGER
TICBET
BAGGA
GE
C)ECB
AIR
WAYBIL
L
Passeng
er
Chec5e
d*in
baggag
e
Goods
to be
shipped
LIABILITY OF CARRIER FOR
DAMAGES
1. )eath or injury of a passenger if the
accident causing it too5 place on board
the aircraft or in the course of its
operations of embar5ing or
disembar5ing< "Art. 1.#
2. )estruction, loss or damage to any
baggage or goods, if it too5 place
during the Ktransportation by airL< "Art.
12# and
Transportation b4 air P >he period
during which the baggage or goods are
in the charge of the carrier, whether in
an airport or on board an aircraft, or, in
case of a landing outside an airport, in
any place whatsoever.
+t includes any transportation by
land or water outside an airport if such
ta5es place in the performance of a
contract for transportation by air, for
the purpose of loading, delivery, or
transshipment.
. )elay in the transportation of
passengers, baggage or goods. "Art.
1;#
No$e@ >he ?ague Protocol amended
the &C by removing the provision that
if the airline too5 all necessary steps to
avoid the damage, it could e7culpate
itself completely "Art. 2:"1##. "Alitalia
vs. +AC, 1;2 3C4A ;#
LIMIT OF LIABILITY .A'$* 77K a
a+ended >0 G/a$e+ala P'o$o#olK
4?54L Al!$al!a -* IAC2
4* Paenge'
56N6RAL RUL6: U1::,::: per
passenger
67C6PT81N: Agreement to a higher
limit
7* C&e#Ged,!n >aggage
56N6RAL RUL6: U2: per 5ilogram
67C6PT81N: +n case of special
declaration of value and payment of a
supplementary sum by consignor,
carrier is liable to not more than the
declared sum unless it proves the sum
is greater than actual value.
6* )and,#a''!ed >aggage
U1:::'passenger
4* Good $o >e &!11ed
56N6RAL RUL6: U2: per 5ilogram
67C6PT81N: +n case of special
declaration of value and payment of a
supplementary sum by consignor,
carrier is liable to not more than the
declared sum unless it proves the sum
is greater than actual value.
An agreement relieving the carrier
from liability or ,7ing a lower limit is
null and void. "Art. 2#
Carrier is not entitled to the
foregoing limit if the damage is caused
by willful misconduct or default on its
part. "Art. 2(#
>hus, the &C does not operate as an
e7clusive enumeration of the instances
of an absolute limit of the e7tent of
liability. +t does not preclude the
application of the Civil Code and other
pertinent local laws. +t does not
regulate or e7clude liability for other
breaches of contract by the carrier, or
misconduct of its employees, or for
some particular or e7ceptional type of
damage. "Alitalia vs. CA#
+n PanAm v. +AC, the &C was applied
as regards the limitation on the
carrierCs liability, there being a simple
loss of baggage without any improper
conduct on the part of the o9cials or
employees of the airline or other
special injury sustained by the
passenger.
+n F%D 4oyal v. >uller, the &C has
invariably been held inapplicable, or as
not restrictive of the carrierCs liability,
where there was satisfactory evidence
of malice or bad faith attributable to its
o9cers and employees. "Alitalia vs.
+AC#
ACTION FOR DAMAGES
1. /otice of claim
A written complaint must me made
within@
a. days from receipt of baggage
b. . days from receipt of goods
c. +n case of delay, 1$ days from
receipt of baggage'goods
>he complaint is a condition
precedent. &ithout the complaint, the
action is barred e7cept in case of fraud
on the part of the carrier. "Art. 21#
2. Prescriptive period
Action must be ,led within 2 years
from@
a. date of arrival at the destination
b. date of e7pected arrival
c. date on which the transportation
stopped. "Art. 2;#
+n 8nited Airlines vs. 8y the two*
year prescriptive period was not
applied where the airline employed
delaying tactics.
R9LE IN CASE OF (ARIO9S
S9CCESSI(E CARRIERS
1. Carriage of passengers
56N6RAL RUL6: Action is ,led only
against the carrier in which the
accident or delay occurred.
67C6PT81N: Agreement or contract
whereby the ,rst carrier assumed
liability for the whole journey.
2. Carriage of baggage or goods
a. Passenger or consignor can ,le
an action against the Crst carrier
and the carrier in which the
damage occurred
b. Passenger or consignee can ,le
an action against the last carrier
and the carrier in which the
damage occurred.
>hese carriers are jointly and
severally liable. "Art. :#
A contract of international carriage
by air, although performed by di-erent
carriers under a series of airline tic5ets
constitutes a single operation.
Dembers of the +nternational Air
>ransportation Association "+A>A# are
under a general pool partnership
agreement wherein they act as agent
of each other in the issuance of tic5ets
to contracted passengers to boost
tic5et sales worldwide and at the same
time provide passengers easy access
to airlines which are otherwise
inaccessible in some parts of the
world. "American Airlines vs. CA#
8nder a general pool partnership
agreement, the tic5et*issuing airline is
the principal in a contract of carriage
while the endorsee*airline is the agent.
>he obligation of the former remained
and did not cease even when the
breach occurred not on its own Night
but on that of another airline which
had underta5en to carry the
passengers to one of their
destinations. "China Airlines vs. Chio5#
<9RISDICTION
At the option of the plainti-, the
action for damages may be ,led in the@
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< or
d. Court of the place of destination.
"Art. 22"1##
NOTE% +t is the passengerCs Kultimate
destinationL not Kan agreed stopping
placeL that determines the country
where suit is to be ,led.
>he forum of action provided in Art.
22"1# is a matter of jurisdiction rather
than of venue. "3antos +++ vs.
/orthwest< 2A C.B.3.#
(* SAL(AGE LAW .A#$ No* 73432
SAL(AGE
Two #on#e1$%
1. 3ervices one person renders to the
owner of a ship or goods, by his own
labor, preserving the goods or the ship
which the owner or those entrusted
with the care of them have either
abandoned in distress at sea, or are
unable to protect or secure.
2. Compensation allowed to persons
by whose voluntary assistance a ship
at sea or her cargo or both have been
saved in whole or in part from
impending sea peril, or such property
recovered from actual peril or loss, as
in cases of shipwrec5, derelict or
recapture.
Re;/!!$e%
1. Ealid object of salvage<
2. 6bject must have been e7posed
to marine peril "not perils of the
ship#<
. 3ervices rendered voluntarily
"neither an e7isting duty nor out
of a pre*e7isting contract#<
$. 3ervices are successful, total or
partial.
S/>Me#$ of Sal-age%
1. 3hip itself<
2. Betsam P goods which are cast into
the sea, and there sin5 and remain
under water<
. !loatsam or !lotsam P goods which
Noat upon the sea when cast
overboard<
$. %igan or %agan P goods cast into the
sea tied to a buoy, so that they may be
found again by the owners (p.$.D,
*ud,e ;ia>&.
Pe'on w&o &a-e no '!g&$ $o a
'ewa'd fo' al-age@
1. Crew of the vessel saved<
2. Person who commenced 3alvage in
spite of opposition of the Captain or his
representative<
. +n accordance with 3ec. of the
3alvage %aw, a person who fails to
deliver a salvaged vessel or cargo to
the Collector of Customs.
Derelict P a ship or her cargo which
is abandoned and deserted at sea by
those who are in charge of it, without
any hope of recovering it, or without
any intention of returning to it.
>he intention of those in charge
must be ascertained. +f those in charge
left with the intention of returning, or
of procuring assistance, the property is
not derelict, but if they Guitted the
property with the intention of ,nally
leaving it, it is derelict and a change of
their intention and an attempt to
return will not change its nature
"Arlanger M Galinger vs. 3wedish Aast
Asiatic Co. %td.#.
+f it is clear that the intention to
return is slight, the salvage which was
done thereafter is considered valid.
Aquino, T. & ernando, R.P. !""# ed. p.
0$0&
CONTRACT OF TOWAGE
A contract whereby one vessel,
usually motori0ed, pulls another,
whether loaded or not with
merchandise, from one place to
another, for a compensation. +t is a
contract for services rather than a
contract of carriage.
SAL(AGE TOWAGE
Governed
by special
law "Act /o.
2111#
Governed
by Civil
Code on
contract of
lease
4eGuires
success,
otherwise
no payment
3uccess is
not reGuired
Dust be
done with
the consent
of the
captain'cre
wmen
6nly the
consent of
the tugboat
owner is
needed
Eessel must
be involved
in an
accident
Eessel need
not be
involved in
an accident
!ees
distributed
among
crewmen
!ees belong
to the
tugboat
owner
R9LES ON SAL(AGE REWARD
1. >he reward is ,7ed by the 4>C judge
in the absence of agreement or
where the latter is e7cessive. "3ec.
;#
2. >he reward should constitute a
su9cient compensation for the
outlay and e-ort of the salvors and
should be liberal enough to o-er an
inducement to others to render
services in similar emergencies in
the future.
. +f sold "no claim being made within
months from publication#, the
proceeds, after deducting e7penses
and the salvage claim, shall go to
the owner< if the latter does not
claim it within years, (:S of the
said proceeds shall go to the
salvors, who shall divide it
eGuitably, and the other half to the
government. "3ecs. 11*12#
$. +f a vessel is the salvor, the reward
shall be distributed as follows@
a. (:S to the shipowner<
b. 2(S to the captain< and
c. 2(S to the o9cers and crew in
proportion to their salaries. "3ec.
1#
>a5ing passengers from a sin5ing
ship, without rendering any service in
rescuing the vessel, is not a salvage
service, being a duty of humanity and
not for reward.
(I* P9BLIC SER(ICE ACT
.C*A* No* 4432
P9RPOSES%
1. >o secure adeGuate, sustained
service for the public at the least
possible cost<
2. >o protect the public against
unreasonable charges and poor,
ine9cient service<
. >o protect and secure
investments in public services<
$. >o prevent ruinous competition.
A9T)ORITY TO OPERATE P9BLIC
SER(ICES
56N6RAL RUL6: /o public service
shall operate without having been
issued a certi,cate of public
convenience or a certi,cate of public
convenience and necessity.
67C6PT81N':
1. &arehouses<
2. Animal drawn vehicles and
bancas moved by oar or sail<
. Airships, e7cept for the ,7ing of
ma7imum rates for fare and
freight<
$. 4adio companies, e7cept for
rates ,7ing<
(. Public services owned or
operated by the government,
e7cept as to rates ,7ing<
1. +ce plants< and
.. Public mar5ets.

P9BLIC SER(ICE
A person who owns, operates,
manages or controls in the Philippines
for hire or compensation, with general
or limited clientele, whether
permanent, occasional or accidental,
and done for general business
purposes, any common carrier or
public utility, ice plants, power and
water supplies, communication and
similar public services. "3ec. 1b, CA
1$1#
A casual or incidental service devoid
of public character and interest is not
brought within the category. >he
Guestion depends on such factors as
the e7tent of services, whether such
person or company has held himself or
itself out as ready to serve the public
or a portion of the public generally.
"%u0on 3tevedoring vs. P3C#
NOTE@ >he Public 3ervice Commission
created under the Public 3ervice %aw
has already been abolished under P.).
/o. 1 and other issuances. +t has been
replaced by the following government
agencies@ %>6< %>!4=< A>6< =6A< />C<
/AA< A4=< /&4C< CA=< and D+A.
CERTIFICA
TE OF
P9BLIC
CON(ENIE
NCE .CPC2
CERTIFICAT
E OF
P9BLIC
CON(ENIE
NCE AND
NECESSITY
.CPCN2
An
authori0atio
n issued by
the
appropriate
government
agency for
the
operation of
public
services for
which no
franchise,
either
municipal or
legislative,
is reGuired
by law, e.g.,
common
carriers.
An
authori0atio
n issued by
the
appropriate
government
agency for
the
operation of
public
service for
which a
prior
franchise is
reGuired by
law< e.g.
telephone
and other
services.
A CPC or a CPC/ constitutes neither
a franchise nor a contract, confers no
property right, and is a mere license or
a privilege. >he holder of said
certi,cate does not acGuire a property
right in the route covered thereby. /or
does it confer upon the holder any
proprietary right or interest or
franchise in the public highways.
4evocation of this certi,cate deprives
him of no vested right. /ew and
additional burdens, alteration of the
certi,cate, or even revocation or
annulment thereof is reserved to the
3tate. "%uGue vs. Eillegas, : 3C4A
$:2#
+t is a KpropertyL and has a
considerable value and can be the
subject of sale or attachment. "Cogeo*
Cubao 6perators and )rivers Assn. vs.
CA, 2:. 3C4A $, 4aymundo vs.
%uneta Dotor Co.#
RE89REMENTS FOR GRANTING
CPC OR CPCN
1. Applicant must be a citi0en of the
Philippines or a corporation or entity
1:S of the capital of which is owned
by such citi0ens<
2. Applicant must prove public
necessity<
. Applicant must prove that the
operation of the public service
proposed and the authori0ation to
do business will promote the public
interest on a proper and suitable
manner<
$. Applicant must have su9cient
,nancial capability to underta5e the
proposed services and meeting the
responsibilities incident to its
operation.
POWERS
RE89IRIN
G PRIOR
NOTICE
AND
)EARING
POWERS
E:ERCISAB
LE
WIT)O9T
PRIOR
NOTICE
AND
)EARING
1. +ssuance
of CPC or
CPC/<
2. !i7ing of
rates, tolls,
and
charges<
. 3etting
up of
standards
and
classi,catio
ns<
$. Astablish
1. +nvestigat
ion any
matter
concerning
public
service<
2. 4eGuiring
operators to
furnish safe,
adeGuate,
and proper
service<
. 4eGuiring
public
ment of
rules to
secure
accuracy of
all meters
and all
measuring
appliances<
(. +ssuance
of orders
reGuiring
establishme
nt or
maintenanc
e of
e7tension
of facilities<
1. 4evocati
on, or
modi,catio
n of CPC or
CPC/<
..
3uspension
of CPC or
CPC/,
e7cept
when it is
necessary
to avoid
serious and
irreparable
damage or
inconvenien
ce to the
public or
private
interest, in
which case,
a
suspension
not more
than :
days may
be ordered,
prior to the
hearing.
"3oriano v.
Dedina,
11$ 3C4A
services to
pay
e7penses of
investigation
<
$. Ealuation
of properties
of public
utilities<
(. A7aminati
on and test
of
measuring
appliances<
1. Grant of
special
permits to
ma5e e7tra
or special
trips in
territories
speci,ed in
the
certi,cate<
.. 8niform
accounting
system and
furnishing of
annual
reports<
2. Compellin
g
compliance
with the
laws and
regulations.
1#
9NLAWF9L ACTS OF P9BLIC
9TILITY COMPANIES
1. Angagement in public service
business without ,rst securing the
proper certi,cate<
2. Providing or maintaining unsafe,
improper or inadeGuate service as
determined by the proper authority<
. Committing any act of unreasonable
and unjust preferential treatment to
any particular person, corporation or
entity as determined by the proper
authority<
$. 4efusing or neglecting to carry
public mail upon reGuest. "3ecs. 12
and 1;#
ACTS RE89IRING PRIOR APPRO(AL
1. Astablish and maintain individual or
joint rates<
2. Astablish and operate new units<
. +ssue free tic5ets<
$. +ssue any stoc5 or stoc5 certi,cates
representing an increase of capital<
(. Capitali0e any franchise in e7cess of
the amount actually paid to the
Government<
1. 3ell, alienate, mortgage or lease
property, certi,cates or franchise.
8nder 3ec. 2:"g# of C.A. /o. 1$1, the
sale, etc. may be negotiated and
completed before the approval by the
proper authority. +ts approval is not a
condition precedent to the validity of
the contract. >he approval is necessary
only to protect public interest.
PRIOR OPERATOR/OLD OPERATOR
R9LE
>he rule allowing an e7isting
franchised operator to invo5e a
preferential right within the authori0ed
territory as long as he renders
satisfactory and economical service.
>he policy is not to issue a certi,cate
to a second operator to cover the
same ,eld and in competition with a
,rst operator who is rendering
su9cient, adeGuate and satisfactory
service. >he prior operator must ,rst
be given an opportunity to improve its
service, if inadeGuate or de,cient.
Purpose@ >o prevent ruinous and
wasteful competition in order that the
interests of the public would be
conserved and preserved.
+t subordinates the prior applicant
rule which gives the ,rst applicant
priority only if things and
circumstances are eGual.
&here the operator either fails or
neglects to ma5e the improvement or
e-ect the increase in services,
especially when given the opportunity,
new operators should be given the
chance to give the services needed by
the public.
PRIOR APPLICANT R9LE
Presupposes a situation when two
interested persons apply for a
certi,cate to operate a public utility in
the same community over which no
person has as yet granted any
certi,cate. +f it turns out, after the
hearing, that the circumstances
between the two applicants are more
or less eGual, then the applicant who
applied ahead of the other, will be
granted the certi,cate.
RATE,FI:ING POWER
>he rate to be ,7ed must be just,
founded upon conditions which are fair
and reasonable to both the owner and
the public.
A rate is just and reasonable if it
conforms to the following
reGuirements@
1. 6ne which yields to the carrier a
fair return upon the value of the
property employed in performing
the service< and
2. 6ne which is fair to the public for
the service rendered.
REGISTERED OWNER R9LE
>he registered owner of a certi,cate
of public convenience is liable to the
public for the injuries or damages
su-ered by third persons caused by
the operation of said vehicle, even
though the same had been transferred
to a third person.
>he registered owner is not allowed
to escape responsibility by proving that
a third person is the actual and real
owner Reason@ +t would be easy for
him, by collusion with others or
otherwise, to transfer the responsibility
to an inde,nite person, or to one who
possesses no property with which to
respond ,nancially for the damage or
injury done. "Are0o, et al. vs. Bepte 1:2
Phil 1:#.
BABIT SYSTEM
A system whereby a person who has
been granted a certi,cate of public
convenience allows other persons who
own motor vehicles to operate under
such license, for a fee or percentage of
such earnings. +t is void and ine7istent
under Art. 1$:;, Civil Code.
EDe#$%
1. >he transfer, sale, lease or
assignment of the privilege granted
is valid between the contracting
parties but not upon the public or
third persons. "Gelisan vs. Alday,
1($ 3C4A 22#
2. >he registered owner is primarily
liable for all the conseGuences
Nowing from the operations of the
carrier.
>he public has the right to
assume that the registered owner is
the actual or lawful owner thereof. +t
would be very di9cult and often
impossible, as a practical matter, for
the public to enforce their rights of
action that they may have for
injuries inNicted by the vehicle i)
the4 should be required to pro/e
who the actual owner is. "=enedicto
vs. +AC, 12. 3C4A ($.#
. >he thrust of the law in enjoining
the 5abit system is to identify the
person upon whom responsibility
may be ,7ed with the end in view of
protecting the riding public "%im vs.
CA . 3C4A ;$#.
$. >he registered owner cannot
recover from the actual owner and
the latter cannot obtain transfer of
the vehicle to himself, both being in
pari delicto. ">eja Dar5eting vs. +AC#
(. !or the better protection of the
public, both the registered owner
and the actual owner are jointly and
severally liable with the driver.
"Oamboanga >ransportation Co. vs.
CA#

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San Beda College of Law 54

MEMORY AID IN COMMERCIAL LAW

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