with another, such rates or charges furnish adequate working
capital and produce an adequate return on the assets of the
ANG V. AMERICAN STEAMSHIP
One year prescriptive period under Section 3(6) par 4 of the
Carriage of Goods by sea act does not apply to case of
misdelivery. 'loss' contemplates merely 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 much a way that their existence is unknown or they cannot
be recovered This is a case of misdelivery not nondelivery, and
thus 1144’s prescriptive period of 10 years governs.
NEW ZEALAND V. JOY
Article 366 – within 24 hours following the receipt of the
merchandise by the consignee from the carrier. In other words,
there must be delivery of the merchandise by the carrier to the
consignee at the place of destination. he cargo never reached
Manila, its destination, nor was it ever delivered to the
consignee, the office of the shipper in Manila, because the ship
ran aground upon entering Laoang Bay, Samar. Such being the
case, it follows that the aforesaid article 366 does not have
application because the cargo was never received by the
consignee. That said article "is limited to cases of claims for
damages to goods actually received by the consignee;
ARRASTRE SERVICES V. MENDOZA
PD 857 took effect, transferring powers, duties, and jurisdiction
of stevedoring and arrastre operations to Phil. Port Authority
(PPA), which also authorized it to "regulate the rates or charges
for port services or port related services so that, taking one year
NVC 3-D
Authority." he State in the exercise of its police power through
its agency, the PPA, has the power to revoke the temporary
permits of petitioners, assuming the existence of valid
temporary permits, and take over the operations of the port of
Tacloban whenever the need to promote the public interest
and welfare both if the stevedoring industry and the workers
therein justifies such take over We have found the ten percent
(10%) share of the government in the earnings from
stevedoring and arrastre service as reasonable consideration
for the use of government premises, works, facilities, and
services, not to mention the supervision inherent in the
upgrading and improvement of port operations, of which said
services are an integral part.
KLM V. CA
KLM invokes Article 30 of the Warsaw Convention, but such
cannot be sustained as neither accident nor delay occurred.
LUFTHANSA V. CA
Lufthansa prays this court to take heed of jurisprudence in the
United States where the term "delay" was interpreted to
include "bumping-off" or failure to carry a passenger with a
confirmed reservation. These decisions in the United States are
not controlling in this jurisdiction. If there was really no seat
available because of over-booking, why did Lufthansa confirm
the ticket of the plaintiff- appellee? It has to be pointed out that
the confirmed ticket is up to Blantyre, Malawi, not only to
Bombay. Since the ticket was marked O.K., meaning confirmed,
therefore plaintiff-appellee must have a definite seat with
Kenya Airways but it was lost or given to another person
CHINA AIRLINES V. CA
CAL personnel prevented passengers from boarding because
their names were not on the list. CAL confirmed the
reservations, it bound itself to transport passengers. The
confirmed tickets issued by Amexco to passengers upon CAL’s
confirmation of the reservations are undeniable proof of the
contract of carriage. CAL did not allow passengers to board,
despite possessing tickets. The passenger has every right to
expect that he would fly on the flight and on that date. If he
does not, the carrier opens itself for breach of contract of
carriage
SANTIAGO LIGHTERAGE V. CA
Under the agreement, physical transfer of a seaworthy vessel is
necessary to satisfy delivery. Since petitioner did not deliver a
seaworthy vessel, petitioner failed to perform his obligation to
Pelaez under the agreement, based on the testimony of the
engineer and the Captain’s Master Report stating that upon
taking control of the vessel, it already had problem not
attributable to the crew of Palaez.
ABOITIZ V. NEW INDIA
Aboitiz sank on her voyage from HK to Malaysia, and
Respondent indemnified General Textile for the cargo.
common carriers are bound to observe extraordinary diligence
over the goods they transport according to all the
circumstances of each case. The weather was moderate when
NVC 3-D
the vessel sank, thus such occasioned to its unseaworthiness
and not due to typhoon. To limit petitioners liability to the
amount of the insurance proceeds, it has the burden of showing
that the unseaworthiness of the vessel was not due to its fault
or negligence. But it failed to do so. Doctrine of Limited Liability
should not apply.
Western Shipping V. NLRC
The fact is that when the M/V Sea Wealth was in Lhokseumawe,
Indonesia, it was loaded with 17,171.443 metric tons of urea.
When it reached Davao, it unloaded 8,021.713 metric tons of
its cargo, so that on its voyage to Manila, the vessels load was
much lighter. The boarding of the complements family did not
make the vessels load heavier than when it left Indonesia. If the
vessel was seaworthy then, with more reason it was seaworthy
when it sailed from Davao with a lighter load. Furthermore, the
vessel arrived only an hour behind its ETA as given to
petitioners, but petitioners agents were not on hand to meet it
when the vessel arrived. SC held Bao was illegally dismissed.
CALTEX V. SULPICIO
The charterer has no liability for damages under Philippine
Maritime laws. A contract of affreightment is one by which the
owner of a ship or other vessel lets the whole or part of her to
a merchant or other person for the conveyance of goods, on a
particular voyage, in consideration of the payment of freight.
MT Vector is a common carrier, and their agreement with
Caltex did not convert the former to a private carrier. It is only
when the charter includes both the vessel and its crew, as in a
bareboat or demise that a common carrier becomes private, at
least insofar as the particular voyage covering the charter-party
is concerned. a ship-owner in a time or voyage charter retains
possession and control of the ship, although her holds may, for
the moment, be the property of the charterer. charterer of a
vessel has no obligation before transporting its cargo to ensure
that the vessel it chartered complied with all legal
requirements. The duty rests upon the common carrier simply
for being engaged in public service.
MACONDRAY V. PROVIDENT
The shipper, represented by Macondray, shipped in Vancouver
5K metric tons of Muriate of Potash for delivery to Consignee
Atlas in Cebu. The Court ruled that petitioner was the ship
agent. Article 586 of the Code of Commerce states that a ship
agent is the person entrusted with provisioning or representing
the vessel in the port in which it may be found. Whether acting
as agent of the owner of the vessel or charterer, Macondray is
considered as the ship agent. Under the circumstances,
Macondray was the entity that represented the vessel in the
Port of Manila and was the ship agent within the meaning of
Art. 586 of the Code of Commerce, under which he is civilly
liable.
NEGROS NAVIGATION V. CA
The ship collided with an oil tanker owned by Philippine
National Oil Company (PNOC) and PNOC Shipping. The ship
sank, people were injured and died, but Miranda’s family was
never found. The Court denied the contention of NN that the
purchase of tickets does not necessarily mean the alleged
victims actually took the trip. Miranda was able to prove
NVC 3-D
through numerous testimonies of people who saw the family
before the incident. The rule is well-entrenched in our
jurisprudence that a shipowner may be held liable for injuries
to passengers notwithstanding the exclusively real and
hypothecary nature of maritime law if fault can be attributed
to the shipowner.
MONARCH INSURANCE V. CA
MV Aboitiz owned by Aboitiz, sank in its voyage, resulting in loss
of cargo. Aboitiz raised the real and hypothecary nature of
liability in maritime law and asked for a motion to quash the
case. Court stated that the limited liability rule continues to be
applied, with some exceptions. Article 837 of the Code of
Commerce applies in cases of collision, and Article 587 and 690
embody the universal principle of limited liability. “No vessel,
no liability” is the expression of the limited liability rule. The
ship-owners or agents liability is merely co-extensive with his
interest in the vessel such that a total loss thereof results in
its extinction. The total destruction of the vessel extinguishes
maritime liens because there is no longer any res to which it
can attach. That Aboitiz failed to discharge the burden of
proving that the unseaworthiness of its vessel was not due to
its fault and/or negligence should not however mean that the
limited liability rule will not be applied to the present cases. The
rule on limited liability provides that claimants be treated as
“creditors in an insolvent corporation whose assets are not
enough to satisfy the totality of claims against it.”
HEIRS OF SANTOS V. CA
a certified true copy of the Special Permit to the Compania
Maritama issued by the Bureau of Customs to establish that it
carried both passengers and cargo, and their negligence in
operating the vessel. he Court ruled that Compania Maritama
was negligent. The limited liability doctrine applies not only to
the goods but also in all cases like death or injury to passengers
wherein the shipowner or agent may properly be held liable for
the negligent or illicit acts of the captain. It must be stressed at
this point that Article 587 speaks only of situations where the
fault or negligence is committed solely by the captain.
Maritima could have directed the ship's captain to immediately
depart in view of the fact that as of 11:07 in the morning of
November 2, 1967, the typhoon was already strong. Maritama
could not present evidence that it installed a radar, and
ultimately failed to show extraordinary diligence coupled with
the negligence of the captain -- proving that they were the
proximate cause of the sinking.
Manila Steamship vs Abdulhaman
Both ships collided, resulting in the death of 9 passengers and
some went missing, including the 5 children of respondent
Abdulhaman. The Court held Manila Steamship liable for
damages for a maritime tort, not a civil tort. It is a general
principle, well established maritime law and custom, that
shipowners and ship agents are civilly liable for the acts of the
captain and for the indemnities due the third persons; so that
injured parties may immediately look for reimbursement to the
owner of the ship, it being universally recognized that the ship
master or captain is primarily the representative of the owner.
The international rule is to the effect that the right of
abandonment of vessels, as a legal limitation of a shipowner’s
liability, does not apply to cases where the injury or the average
NVC 3-D
is due to shipowner’s own fault.
Sweet Lines vs CA
The vessel set sail again the next day. Instead of docking at
Catbalogan, the vessel docked at Tacloban. The owner of a
vessel and the ship agent shall be civilly liable for the acts of the
captain. Under Article 2220 of the Civil Code, respondents are
entitled to moral damages for the bad faith of Sweet Lines
Singa Shipping vs NLRC
There was an existing animosity on board between the Filipino
and Greek crew, of which Sangil did not know. After an
argument and a scuffle between Sangil and a Greek deck
steward, Sangil fell and hit his head and suffering a cut in his
head. The Court ruled that based on the ship’s Logbook. Sangil
was actually pushed by the Greek deck steward. The accident
could have easily been avoided if the ship captain were more
vigilant in the supervision of his crew. The captain, as the
general agent of the ship-owner, could be held responsible for
failing to make the workplace safe. Singa, together with Royal,
was held jointly and severally liable to pay Sangil $500 plus
10% as attorney’s fees.
Remigio vs NLRC
Remigio felt severe chest pains and shortness of breath.
Remigio was repatriated. He sent a demand for payment of
unpaid wages, sickness allowance and permanent total
disability benefits. The demand was refused. The Court ruled in
favor of Remigio, and entitled to compensation for the heart
ailment and permanent total disability benefits. Permanent
total disability means the disablement of an employee to earn
wages in the same kind of work, or work of similar nature that
he was trained for or accustomed to perform; it does not mean
absolute helplesness. What is necessary is that the injury must
be such that the employee cannot pursue her usual work and
earn therefrom. Petitioner’s unfitness to work attached to the
nature of his job rather than to its place of performance.
Disability should not be understood more on its medically
significance but on the loss of earning capacity.
Maritime Factors vs Hindang
Hindang seemingly committed suicide by hanging himself in his
cabin, and was found by the Chief Mate and Oiler. Maritime
Factors argues that Hindang committed suicide, which was not
compensable. The Court ruled in favor of Maritime The Court
stated that the autopsy report positively showed that Hindang
committed suicide when read in its entirety, and that the
written report of the crew showed the same.
Yu Con vs Ipil
Yu Con, a merchant selling cloth, contacted Glicerio Ipil
(shipmaster), Narciso Lauron (owner of the craft), and Justo
Solamo (supercargo) to transport merchandise and money
from the Cebu port to Catmon. Thus, Yu Con sued Ipil, Lauron,
and Solamo arguing that the disappearance was through the 3’s
negligence/abandonment. The SC, affirming the trial court,
held all 3 liable. Ipil (as shipmaster) and Solamo (as supercargo)
are liable. The said two defendants being the depositaries of
the sum in question, and they having failed to exercise for its
safe-keeping the diligence required by the nature of the
NVC 3-D
obligation assumed by them and by the circumstances of the
time and the place, it is evident that, pursuant to the Civil Code,
“vessel” in accordance with the Code of Commerce. Blanco (a
commentator on mercantile law), defining the meaning of
"ship" and "vessels" says that such terms refer to "floating
apparatus used in the service of an industry or in that of
maritime commerce." Following such definition, the banca
called Maria (chartered by Yu Con from Lauron), was a "vessel"
and Ipil (master of the banca Maria) must also be considered
captain. The Code of Commerce in force omits the declaration
of non-liability contained in the old code, and clearly makes the
shipowner liable civilly for the loss suffered by those who
contracted with the captain, in consequence of the
misdemeanors and crimes committed by the latter or by the
members of the crew.
Magsaysay vs Agan
still in port, it ran aground at the mouth of the Cagayan river,
and, attempts to refloat it under its own power having failed,
Magsaysay has it refloated by the Luzon Stevedoring Co. at an
agreed compensation. The standing may, therefore, be
regarded as accidental, and the issue is whether the expenses
incurred in floating a vessel so stranded should be considered
general average and shared by the cargo owners. The SC held
that there was NO general average in this case. general or gross
averages include "all the damages and expenses which are
deliberately caused in order to save the vessel, its cargo, or
both at the same time, from a real and known risk" (Art. 811).
Being for the common benefit, gross averages are to be borne
by the owners of the articles saved (Art. 812). gives the
following requisites for general average: (1) there must be a
common danger. (2) that for the common safety part of the
vessel or of the cargo or both is sacrificed deliberately. (3) that
from the expenses or damages caused follows the successful
saving of the vessel and cargo. (4) that the expenses or
damages should have been incurred or inflicted after taking
proper legal steps and authority. But as the sacrifice was for the
benefit of the vessel — to enable it to proceed to destination
— and not for the purpose of saving the cargo, the cargo
owners are not in law bound to contribute to the expenses.
Thus, Magsaysay (plaintiff) did not establish a case for general
average, thus its claim of contribution against the Agan
(defendant) cannot be granted.
Intl Harvester vs Hamburg
While the ship carrying said cargo was on its way to
Vladivostock, war broke out in Europe; and as the Suevia was a
German vessel, the master considered it necessary to take
refuge in the nearest neutral port, which happened to be
Manila. It follows that when the master of the Suevia decided
to take refuge in the port of Manila, he acted exclusively with a
view to the protection of his vessel. There was no common
danger to the ship and cargo; and therefore it was not a case
for a general average.
 (2) HAL was nevertheless LIABLE for the
expenses of forwarding the cargo by another line, the full
freight having been received by the ship at the commencement
of the voyage. By the terms of the contract of affreightment the
defendant company was bound to forward the cargo to
Vladivostock at the steamer's expense, not necessarily by a
steamer belonging to the defendant company; and it does not
by any means follow that it is not liable for the expense incurred
NVC 3-D
by the owner in completing the unfinished portion of the
voyage in another ship.
American Home Ass. vs. CA
The shipment arrived in Manila but, upon delivery of the
shipment to Mayleen Paper, Inc., it was found that 122 bales
had either been damaged or lost. Mayleen Paper, Inc. then duly
demanded indemnification from respondent NMC but the
latter refused. The Court ruled that common carriers cannot
limit their liability for injury or loss of goods where such injury
or loss was caused by its own negligence. Otherwise stated, the
law on averages under the Code of Commerce cannot be
applied in determining liability where there is negligence.
Instead of presenting proof of the exercise of extraordinary
diligence as required by law, NMC filed its Motion to Dismiss
hypothetically admitting the truth of the facts alleged in the
complaint. Article 1734 of the Civil Code provides that common
carriers are responsible for loss, destruction or deterioration of
the goods, unless due to any of the causes enumerated therein.
Clearly, the case at bar does not fall under any of the
exceptions.
Phil Home Ass. vs. CA
While the vessel was off Okinawa, Japan, a small flame was
detected on the acetylene cylinder located in the
accommodation area near the engine room on the main deck
level. The incident forced the master and the crew to abandon
the ship. Thereafter, SS Eastern Explorer was found to be a
constructive total loss and its voyage was declared abandoned.
However, a tugboat arrived and towed the vessel. The cargoes
were saved and loaded to another vessel for delivery to their
original ports of destination. The goods subject of the present
controversy were neither lost nor damaged in transit by the fire
that razed the carrier. In fact, the said goods were all delivered
to the consignees, even if the transshipment took longer than
necessary. As a rule, general or gross averages include all
damages and expenses which are deliberately caused in order
to save the vessel, its cargo, or both at the same time, from a
real and known risk. While the instant case may technically fall
within the purview of the said provision, the formalities
prescribed under Article 813 and 814 of the Code of Commerce
in order to incur the expenses and cause the damage
corresponding to gross average were not complied with. The
Court held that carrier ESLI was liable because of its negligence
and held that the consignees and insurance company were
absolved from liability.
Smith Bell vs CA

Yotai Maru’s headlights headlights indicated that both vessels
were sailing on exactly opposite paths. Despite this, the course
of DON CARLOS was changed by 5 degrees to the left instead of
to the right to overtake another vessel, the DON FRANCISCO.
This was the cause of the collision. . A "proper look-out" is one
who has been trained as such and who is given no other duty
save to act as a look-out and who is stationed where he can see
and hear best and maintain good communication with the
officer in charge of the vessel, and who must, of course, be
vigilant In the case at bar, the failure of the "Don Carlos" to
recognize in a timely manner the risk of collision with the "Yotai
Maru" coming in from the opposite direction, was at least in
NVC 3-D
part due to the failure of the "Don Carlos" to maintain a proper
look-out. Thus, it follows that DON CARLOS was the sole and
proximate cause of the collision and it should be held liable to
the insurers.
Sulpicio vs CA
Petitioners asserted that private respondent, through its
patron, admitted that the vessel had no lookout during the
collision despite the absolute rule provided in Rule 9 of the
Rules of Road. it contended that it was a privileged vessel
pursuant to Rules 19, 21, 22, 23 of the Regulations for the
Prevention of Collisions at Sea. The lower courts found that
M/V “Don Sulpicio” was crossing at 15.5 knots per hour while
F/B Aquarius “G” was obeying a speed limit of 7.5 knots per
hour. When it overtook F/B Aquarius” G”, it was duty bound
during the collision to slacken its speed and keep away from
other vessel, which it failed to do. The stance of petitioners that
F/B Aquarius “G” is a burdened vessel which should have kept
out of the way of M/V “Don Sulpicio” is not supported by facts.
Sarasola vs Sontua
The Y. Sontua changed its course which was the primary cause
of the collision. Even so, if the Mercedes had remained true to
its course, there would have been a full clearance. if the
collision had taken place after dark, there would be much force
in plaintiff’s contention that the Mercedes acted on an
emergency, and that it ought not to be responsible for an error
of judgment. But it appears from the physical facts that by the
aid of natural light, at the time of and prior to the collision,
either vessel could be clearly and distinctly seen for a
considerable distance. That the officers of the Mercedes saw
the Y. Sontua and its course and the maneuver which it made.
under such a state of facts, the Mercedes either knew or should
have known that, if it had remained true to its course, there
would not have been any collision. It follows from what has
been said that the negligence of the Y. Sontua was the primary
cause of the accident, and that the Mercedes was guilty of
contributory negligence in failing to maintain its course, and
that the case comes under the provisions of article 827.
Erlanger vs Swedish East
The captain and the crew left the ship and went to the coast.
The Manchuria (a steamship sailing from Manila for Hong Kong)
was requested to pass by the reef and saved the captain and
the crew. The Mindoro arrived shortly after and removed the
baggage of the officers/crew, which were on the deck of the
ship. Elements necessary to a valid salvage claim: (1) a marine
peril. (2) Service voluntarily rendered when not required as an
existing duty or from a special contract. (3) Success, in whole or
in part, or that the service rendered contributed to such
success. A derelict is defined as "A ship or her cargo which is
abandoned and deserted at sea by those who were in charge of
it, without any hope of recovering it (sine spe recuperandi), or
without any intention of returning to it (sine animo revertendi).
the evidence proves that the Nippon was in peril; that the
captain left in order to protect his life and the lives of the crew;
that the intent of returning was slight. The expenses incurred
by the salvor must be borne by them. It is true that the award
should be liberal enough to cover the expenses and give an
extra amount as a reward for the services rendered but the
expenses are used in no other way as a basis for the final award.
NVC 3-D
A part of the risk that the salvor incurred was that the goods
salved would not pay them for the amount expended in salving
them. They knew this risk and they should not have spent more
money than their reasonable share of the proceeds would
amount to under any circumstances.
Magellan Mgf v. CA
MMMC subcontracted with Zuellig, a shipping agent, to ship
through Orient Container lines (OOCL), specifying it needed an
on-board bill of lading and that transhipment is not allowed
under said letter of credit. However, upon arrival of the goods
in the destination, there was neither an on board bill of lading
nor absence of transhipment. The Court held that there was
transhipment, as ownership of the vessels is immaterial; what
is controlling is the fact of transfer of goods from the vessel
stipulated in the contract to another vessel before the place of
destination named in the contract has been reached. That
MMMC’s consent is manifested in the bill of lading, in clear and
unequivocal terms. On the issue of demurrage, MMMC cannot
be made liable, as respondents gave them the option to
abandon the goods, which they did, and therefore the
respondents are estopped from asking the same.
Everette Steamship V. CA
Upon arrival in Manila, one of the crates was missing. It was
confirmed and admitted by Everett Steamship to Hernandez
Trading, who later made a formal claim upon Everett
Steamship for Y1.5M. Everett Steamship offered to pay only
Y100K, the maximum amount under the bill of lading which
limits the liability of petitioner. In addition, even if Maruman
Trading accepted the terms of the bill, it does not follow that
Hernandez Trading as consignee is bound considering that it
was not privy to the contract. The Court stated that the parties
were bound under the reasonable and just conditions under
the bill of lading. Under the bill of lading, the liability would be
limited to Y100K, and Maruman Trading had the option to
declare a higher valuation if the value of the cargo was higher
than the limitation -- which Maruman failed to do.
SMC v. Inquito Heirs
SMC chartered the M/V Doa Roberta owned by Julius Ouano
for a period of two years, the M/V Doa Roberta sank. Out of
the 25 officers and crew on board the vessel, only five
survived, It has also been defined as a contract by virtue of
which the owner or the agent of the vessel leases for a certain
price the whole or a portion of the vessel for the transportation
of goods or persons from one port to another. A charter party
may either be a (1) bareboat or demise charter or (2) contract
of affreightment. Under a demise or bareboat charter, the
charterer mans the vessel with his own people and becomes, in
effect, the owner of the ship for the voyage or service
stipulated, subject to liability for damages caused by
negligence. If the charter is a contract of affreightment, which
leaves the general owner in possession of the ship as owner for
the voyage, the rights and the responsibilities of ownership
rest on the owner. charter party in these cases was a contract
of affreightment,
National Steel v. CA
The vessel arrived in Manila the next day with the shipment
NVC 3-D
found to be wet and rusty. Cargo was unloaded by stevedores
but due to heavy rains, it took 11 days. charter party (a
maritime contract by which the charterer, a party other than
the shipowner, obtains the use and service of all or some part
of a ship for a period of time or a voyage/s). Not being a
common carrier under Article 1732 of the Civil Code, VSI thus
does not have the duty to exercise extraordinary diligence. The
agreement between the parties -- the Contract of Voyage
Charter Hire -- placed the burden of proof for such loss or
damage upon the shipper, not upon the shipowner. Such
stipulation, while disadvantageous to NSC, is valid because the
parties entered into a contract of private charter. NSC must
prove that the damage to its shipment was caused by VSI’s
willful negligence or failure to exercise due diligence in making
MV Vlasons I seaworthy and fit for holding, carrying and
safekeeping the cargo. Ineluctably, the burden of proof was
placed on NSC by the parties agreement. NSC failed to prove
the same — as found by the lower courts, MV Vlasons was
seaworthy and that the stevedores were negligent. The Court
also held that NSC may not be held liable for demurrage as the
four-day laytime allowed it did not lapse, having been tolled by
unfavorable weather condition in view of the WWDSHINC.
Unsworth Transport vs CA
The materials were noted to be complete and in good
order.Shipment arrived in Unilab’s warehouse. A quality
control representative of Unilab rejected 1 paper bag with
dried yeast and 1 steel drum with Vitamin B Complex as unfit
for the intended purpose. The term freight forwarder" refers to
a firm holding itself out to the general public (other than as a
pipeline, rail, motor, or water carrier) to provide transportation
of property for compensation and, in the ordinary course of its
busin ess, (1) to assemble and consolidate, or to provide for
assembling and consolidating, shipments, and to perform or
provide for break-bulk and distribution operations of the
shipments; (2) to assume responsibility for the transportation
of goods from the place of receipt to the place of destination;
and (3) to use for any part of the transportation a carrier
subject to the federal law pertaining to common carrie rs. A
freight forwarder’s liability is limited to damages arising from
its own negligence, including negligence in choosing the carrier;
however, where the forwarder contracts to deliver goods to
their destination instead of merely arranging for their
transportation, it becomes liable as a common carrier for loss
or damage to goods. Package Limitation Rule under COGSA
applies: Section 4(5) of the COGSA provides: 
 ( 5) Neither the
carrier nor the ship shall in any event be or become liable for
any loss or damage to or in connection with the transportation
of goods in an amount exceeding $500 per package unless the
nature and value of such goods have been declared by the
shipper before shipment and inserted in the bill of lading. In the
present case, the shipper did not declare a higher valuation of
the goods to be shipped. Petitioners liability should be limited
to $500 per steel drum. In this case, as there was only one drum
lost, private respondent is entitled to receive only $500 as
damages for the loss.
Brillo vs CA
Brillo alleged that the balance sought to be collected was
exorbitant and overstated, that it never refused to 
 pay but it
merely suspended its payments when plaintiff Daily failed to
NVC 3-D
render proper accounting in 
 a ccordance with the prescribed
rate of freightage at the rate of P2.20 per ton for every
kilometer. he commissioner's report was composed of two
sets. 
 1 st – (plaintiff’s rate) P109,741.66 
 2 nd –
(defendant’s rate of P2.20 /ton /km) P3,658.76 only. It
appeared that it was in Philippine Federation of Petroleum
Haulers Association (Case) that the Board of Transportation
issued the fixed rate, which shall be valid only for one year from
date (March 12, 1985). More than one year had already
elapsed. Thus, the rate imposed in the Case no longer applied
for there was no proof that the same was extended. The
applicable rate should be the one agreed upon and the same
should have the force of law between the parties.
Asian Terminal v First Lepanto
Delivered goods incurred shortages of 8,600 kilograms and
spillage of 3,315 kg for a total of 11,915 kg of loss/damage
valued at P166,772.41. SMITH BELL requested for its inspection
and it was discovered that one jumbo bag thereof sustained
loss/damage while in the custody of COSCO as evidenced by
Turn Over Survey of Bad Order Cargo. PROVEN claimed that the
damages in the shipment were sustained before they were
withdrawn from ATI’s custody under which the shipment was
left in an open area exposed to the elements, thieves and
vandals. The relationship between the consignee and the
arrastre operator is akin to that existing between the consignee
and/or the owner of the shipped goods and the common
carrier, or that between a depositor and a warehouseman.
Being the custodian of the goods discharged from a vessel, an
arrastre operator’s duty is to take good care of the goods and
to turn them over to the party entitled to their possession. In
fact, what the document established is that when the
loss/damage was discovered, the shipment has been in ATI’s
custody for at least two weeks.
Marine Port vs Amercan Assurance
Upon receipt of the container vans at its warehouse, MSC
discovered substantial shortages in the number of bags of flour
delivered. Upon receipt, MSC once more discovered substantial
shortages The relationship between an arrastre operator and a
consignee is similar to that between a warehouseman and a
depositor, or to that between a common carrier and the
consignee and/or the owner of the shipped goods. As custodian
of the shipment discharged from the vessel, the arrastre
operator must take good care of the same and turn it over to
the party entitled to its possession. In case of claim for loss filed
by a consignee or the insurer as subrogee, it is the arrastre
operator that carries the burden of proving compliance with the
obligation to deliver the goods to the appropriate party. · the
signature of the consignee’s representative on the gate pass is
evidence of receipt of the shipment in good order and condition.
Article 1981 of the Civil Code also mandates a presumption of
fault on the part of the arrastre operator. no such presumption
arises in this case considering that it was not sufficiently shown
that the container vans were re-opened or that their locks and
seals were broken for the second time. MPSI cannot just the
same be held liable for the missing bags of flour since the
consigned goods were shipped under "Shipper's Load and
Count" arrangement. "This means that the shipper was solely
responsible for the loading of the container, while the carrier
was oblivious to the contents of the shipment Protection
NVC 3-D
against pilferage of the shipment was the consignee's lookout.
The arrastre operator was not required to verify the contents
of the container. The arrastre operator was expected to deliver
to the consignee only the container received from the carrier.
Barrios vs Go Thong
Captain Barrios altered the course of said vessel, and steered
and headed towards the beckoning MV Don Alfredo, which
Captain Barrios found to be in trouble, due to engine failure and
the loss of her propeller. in fact as near as about seven meters
from the latter ship — and with the consent and knowledge of
the captain and/or master of the MV Don Alfredo, the Captain
Barrios caused the latter vessel to be tied to, or well-secured
and connected with two lines from the MV Henry I. Defendant,
on the other hand, insists that the facts made out no such case,
but that what merely happened was only mere towage from
which petitioner cannot claim any compensation or
remuneration independently of the shipping company that
owned the vessel commanded by him. Salvage - the
compensation allowed to persons by whose assistance a ship or
her cargo has been saved, in whole or in part, from impending
peril on the sea, or in recovering such property from actual loss,
as in case of shipwreck, derelict, or recapture." Three elements
are necessary to a valid salvage claim, namely, (1) a marine
peril, (2) service voluntarily rendered when not required as an
existing duty or from a special contract, and (3) success in
whole or in part, or that the service rendered contributed to
such success. There was no marine peril in this case, according
to the RTC “in a helpless condition due to engine failure, it did
not drift too far from the place where it was. As found by the
court a quo the weather was fair, clear, and good. a sister
vessel was known to be on its way to succor it”. Vessel-owner,
William Lines, Incorporated, had expressly waived its claim for
compensation for the towage service rendered to defendant, it
is clear that petitioner , whose right if at all depends upon and
not separate from the interest of his employer, is not entitled
to payment for such towage service. Art. 2142, Civil Code -
quasi-contract of towage where the crew is not entitled to
compensation separate from that of the vessel, there is no
occasion to resort to equitable considerations. 
 Port of Manila, on the one hand, and the Government of the
Phil Charter v Neptune Orient
During the voyage however, the container with cargoes fell
overboard and was lost. Their liability should not exceed $500
or the limit of liability in the bill of lading. Facts found by RTC
do not support the new allegation of facts by petitioner
regarding the intentional throwing overboard of the subject
cargoes and quasi deviation. Sec. 4, Paragraph 5 of COGSA:
neither the carrier nor the ship shall in any event be or become
liable for any loss or damage to or in connection with the
transportation of goods in an amount exceeding $500 per
package. Bill of Lading states: “Neither the Carrier shall be liable
for any loss exceeding $500 unless the nature and value of such
goods have been declared by the Shipper before shipment and
inserted in this Bill of Lading and the shipper has paid additional
charges on such declared value”. Bill of lading did not show that
shipper in HK declared the actual value of the goods as insured
by Fukuyama. Hence, the stipulation that the carrier’s liability
shall not exceed $500 per package applies. Such stipulation is
allowed under Article 1749 of the CC and Section 4 paragraph 5
of COGSA
NVC 3-D
PECO v Manila Port 

Manila Port Service (herein after referred to as MPS) and/or the
Manila Railroad Company — or vice versa — are defendants in
these cases, as operators of the arrastre service in the Port of
Manila. These cases hinge on the proper interpretation of
paragraph 15 of the management contract between the
defendants herein, as operators of the arrastre service in the
Philippines, thru the Bureau of Customs, on the other.
“in any event the CONTRACTOR shall be relieved and
released of any and all responsibility or liability for loss,
damage, misdelivery and/or non-delivery of goods, unless suit
in the court of proper jurisdiction is brought within a period of
1 year from the date of the discharge of the goods or from the
date when the claim for the value of such goods have been
rejected or denied by the CONTRACTOR provided that such
claim shall have been filed with the CONTRACTOR within [15]
days from the date of discharge of the last package from the
carrying vessel.”
The Court held that the claims were filed within the prescriptive
period. Accordingly, the liability of the arrastre operator in
these cases is limited to the invoice value of each package, plus
"all damages that may be suffered on account of loss,
destruction or damage of any merchandise while in the custody
or under the control of the contractor" — which liability may in
no case exceed P500.00 for each package.
Lhullier vs British Air

Lhuillier was a British Air (BA) passenger for its flight from
London to Rome. Lhuillier asked Halliday (a flight attendant on
board the flight) to help her place her hand-carried luggage in
the overhead bin. The Supreme Court affirmed the RTC’s order
dismissing the case, ruling that the Warsaw Convention applies
because the air travel/where the alleged tortious conduct
occurred, was between the UK (London) and Italy, which are
both signatories to the Warsaw Convention — thus Lhuillier
only had 4 options, as follows — Under Article 28(1) of the
Warsaw Convention, the plaintiff may bring the action for
damages before the court where it is the: (1) domicile of
carrier, (2) principal business of carrier, (3) branch of carrier
where the contract has been made, and (4) place of
destination. LHUILLER‘s place of departure was London, United
Kingdom while her place of destination was Rome, Italy. As
such, the transport of the petitioner is deemed to be an
"international carriage" within the contemplation of the
Warsaw Convention. In this case, Lhuiller can only file in:
(1)United Kingdom — the domicile of BA (#1 above) and also
BA‘s principal place of business (#2 above); or, (2) Rome, Italy
— because the ticket was issued there (#3 above) and also the
place of destination (#4 above). Thus, the complaint should be
dismissed.
UA vs Uy

In SF, he checked in together with his luggage, including 1 piece
found to be overweight. Thus, he paid for the overweight
charges. On Oct. 16, 1989, he discovered that 1 of his bags had
been slashed and its contents were stolen. Uy sued UA for
damages based on 2 causes of action: (1st) the shabby and
NVC 3-D
humiliating treatment he received from United‘s employees at
the San Francisco Airport which caused him extreme
embarrassment and social humiliation; and, (2nd) the slashing
of his luggage and the loss of his personal effects amounting to
$5,310 Uy‘s cause of action has prescribed as per Art. 29 the
Warsaw Convention (WC) (which provides that an action must
be brought within 2 years reckoned from the date of arrival at
the destination). As to 1st cause of action — an action for
damages arising from the misconduct of the airline employees
and the violation of respondent's rights as passenger — clearly
is not within the bounds of the WC. Common carriers may be
held liable for breaches of other provisions of the Civil Code
which provide for a different reglementary period (e.g., 4 years
for actions based on quasi-delict/torts. 2nd cause of action —
an action for damages arising from theft or damage to property
or goods — is well within the bounds of the Warsaw
Convention. However, if the common carrier employs delaying
tactics the 2nd cause of action cannot be considered time-
barred under Art. 29 of the WC as the 2-year time bar under the
said WC provision to file a complaint CANNOT be used by
common carriers.
Crescent Petro vs MV
The test to determine whether a case involving a contract
comes within the jurisdiction of the admiralty court are either
the: (1) locational test or (2) subject matter test. The Philippines
as adopted the subject matter test. It is worthy to note that
petitioner Crescent never alleged and proved Canadian law as
basis for the existence of a maritime lien. Under P.D. No. 1521
or the Ship Mortgage Decree of 1978, the following are the
requisites for maritime liens on necessaries to exist: (1) the
"necessaries" must have been furnished to and for the benefit
of the vessel; (2) the "necessaries" must have been necessary
for the continuation of the voyage of the vessel; (3) the credit
must have been extended to the vessel; (4) there must be
necessity for the extension of the credit; and (5) the necessaries
must be ordered by persons authorized to contract on behalf
of the vessel. These do not avail in the instant case.
PNB V CA
The SC held that CBC's claim is a maritime lien and preferred
over the mortgage lien. The applicable law on the matter is
Sections 17 and 21 of PD 1521 (Ship Mortgage Decree of 1978).
Under these provisions, any person furnishing repairs, supplies,
or other necessaries to a vessel on credit will have a maritime
lien on the said vessel. In the instant case, it was Hongkong
United Dockyards, Ltd. which originally possessed a maritime
lien over the vessel M/V "Asean Liberty" by virtue of its repair
of the said vessel on credit. (Section 21 of the Ship Mortgage
Decree of 1978 applies). Such maritime lien, if it arose prior to
the recording of a preferred mortgage lien, shall have priority
over the said mortgage lien. In the instant case, the maritime
lien over the vessel M/V "Asean Liberty" arose or was
constituted at the time Hongkong United Drydocks, Ltd. made
repairs on the said vessel on credit as early as March 12, 1979,
the date of the contract for the repair and conversion of M/V
"Asean Liberty."
Metro Traffic v Gonong
He questioned the petitioner's act on the ground not only that
the car was not illegally parked, especially, that there was no
NVC 3-D
ordinance or law authorizing such removal. The SC held that the
removal is unlawful. The relevant laws are L.O.I 43 (entitled
Measures to Effect a Continuing Flow of Transportation on
Streets and Highways) and P.D. No. 1605 (Granting the
Metropolitan Manila Commission Central Powers Related to
Traffic Management, Providing Penalties, and for Other
Purposes). A careful reading of PD 1605 will show that removal
and confiscation of the license plate of any illegally parked
vehicle is NOT among the specified penalties. The petitioner has
not pointed to any such additional sanctions, relying instead on
its argument that the applicable authority for the questioned
act is LOI 43.
Baliwag vs CA
A kerosene lamp served as a warning device for cars that pass-
by. The Baliwag bus rammed the cargo truck, because Santiago
failed to notice the truck and lamp, even after the passengers
warned him. he Court held that only Baliwag should be held
liable because it breached its contract of carriage due to the
recklessness of its driver. Baliwag’s driver was (1) running at a
very high speed despite the drizzle and darkness of the
highway; (2) Driver smelled of liquour; (3) immediately before
the collision, the driver was conversing with a co-employee.
kerosene lamp or torch at the edge of the road, near the
portion of the truck may substantially serve as an early warning
device – in compliance with Section 34 (g) of the Land
Transportation and Traffic Code,
Mallari v CA
The RTC ruled in favor of Mallari, stated that the proximate
cause was the negligence of Bulletin’s driver because the left
front of the delivery truck hit and bumped the left rear of the
jeep and order Bulletin and its driver to pay jointly and
severally. e time of or before the accident, Mallari Jr himself
testified that such fact indeed did occur . Based on the sketch
and spot report of the police authorities, the collision occurred
immediately after Mallari Jr overtook a vehicle in front of it
while traversing a curve on the highway . The overtaking was
in violation of Sec. 41, pars. (a) and (b), of RA 4136 as amended,
Land Transportation and Traffic Code Mallari Jr admitted that
he already saw that the delivery van was coming from the
opposite direction and failing to consider the speed thereof
since it was still dark at 5AM mindlessly occupied the left lane
and overtook 2 vehicles in front of it at a curve in the highway.
2
Clearly, the proximate cause of the collision resulting in the
death of Israel Reyes, a passenger of the jeep, was the sole
negligence of the driver of the passenger jeep, Jr, who
recklessly operated and drove his jeep in a lane where
overtaking was not allowed by traffic rules. Due to the
presumption of negligence arising from injury or death, absent
proof of extraordinary diligence, Mallari should be held liable.
Lucena Grand Central vs JAC Liner
Provision: prohibited the city government from granting any
third party any privilege and/or concession to operate a bus,
mini-bus, and/or jeepney terminal.They struck down as void
the second ordinance for being ultra vires. stating that while
the ordinances comply with the first requirement of the valid
exercise of delegated police power, i.e. lawful subject, it failed
under the lawful method test. It is gathered that the
NVC 3-D
Sangguniang Panlungsod had identified the cause of traffic
congestion to be the indiscriminate loading and unloading of
passengers by buses on the streets of the city proper, hence,
the conclusion that the terminals contributed to the
proliferation of buses obstructing traffic on the city streets. Bus
terminals per se do not, however, impede or help impede the
flow of traffic. cope of the proscription against the maintenance
of terminals is so broad that even entities which might be able
to provide facilities better than the franchised terminal are
barred from operating at all. that the terminals are encroaching
upon public roads, they are not obstacles. The buses which
indiscriminately load and unload passengers on the city streets
are. The power then of the Sangguniang Panlungsod to prohibit
encroachments and obstacles does not extend to terminals.
KMU v Garcia
he Public Service Act delegated to the Public Service
Commission the power of fixing the rates of public services. The
LTFRB was likewise vested with the same under E.O. 202 on
1987. The authority given by the LTFRB to the provincial bus
operators to set a fare range over and above the authorized
existing fare is illegal and invalid as it is tantamount to an undue
delegation of legislative authority. The policy of allowing the
provincial bus operators to change and increase their fares at
will would result not only to a chaotic situation but to an
anarchic state of affairs. Rate making or rate fixing a delicate
and sensitive government function that requires dexterity of
judgment and sound discretion with the settled goal of arriving
at a just and reasonable rate acceptable to both the public
utility and the public. LTFRB Memorandum Circular No. 92-009,
Part IV, is entirely incompatible and inconsistent with Section
16(c)(iii) of the Public Service Act which requires that before a
CPC will be issued, the applicant must prove by proper notice
and hearing that the operation of the public service proposed
will promote public interest in a proper and suitable manner
LTO v Butuan
Ordinance providing for the payment of franchise fees for the
grant of the franchise of tricycles-for-hire, fees for the
registration of the vehicle, and fees for the issuance of a
permit for the driving thereof. LTO challenges the ordinance,
stating that LGUs have been delegated the authority to
franchise tricycles-for-hire of the LTFRB, but NOT the authority
of the LTO to register all motor vehicles and to issue qualified
persons of licenses to drive such vehicles. LGUs indubitably now
have the power to regulate the operation of tricycles-for-hire
and to grant franchises for the operation thereof. The power of
LGUs to regulate the operation of tricycles and to grant
franchises for the operation thereof is still subject to the
guidelines prescribed by the DOTC. The newly delegated
powers pertain to the franchising and regulatory powers
theretofore exercised by the LTFRB and not to the functions of
the LTO relative to the registration of motor vehicles and
issuance of licenses for the driving thereof. The LTO is
additionally charged with being the central repository and
custodian of all records of all motor vehicles.
PAL v CAB
PAL filed a case assailing the jurisdiction of CAB to issue the
CPCN and TOP in favor of GIA to engage in schedule domestic
air transportation services. CAB has the authority to issue a
NVC 3-D
Certificate or TOP to a domestic air transport operator, who,
though not possessing a legislative franchise, meets all the
other requirements prescribed by the law. The use of the word
"necessity", in conjunction with "public convenience" in a
certificate of authorization to a public service entity to operate,
does not in any way modify the nature of such certification, or
the requirements for the issuance of the same. It is the law
which determines the requisites for the issuance of such
certification, and not the title indicating the certificate.
Republic v Express Telecom
In 1993, BayanTel filed an amended application, but NTC issued
an order which closed out all available frequencies for service
applied for by BayanTel In 2000, BayanTel’s motion to revive
was granted. NTC ruled in favor of BayanTel, granting
provisional authority to operate. Constitution is quite emphatic
that the operation of a public utility shall not be exclusive. CA
erred in annulling the Order of the NTC granting Bayantel a
provisional authority to install, operate and maintain CMTS.
Philcomsat vs Alcuaz
EO196 issued on June 17, 1987, petitioner was placed under the
jurisdiction, control and regulation of respondent NTC,
including all its facilities and services and the fixing of rates.
public administrative body acts in a judicial or quasi- judicial
matter, and its acts are particular and immediate rather than
general and prospective, the person whose rights or property
may be affected by the action is entitled to notice and hearing.
No rationalization was offered nor were the attending
contingencies, if any, discussed, which prompted respondents
to impose as much as a fifteen percent (15%) rate reduction. It
is thus clear that with regard to rate-fixing, respondent has no
authority to make such order without first giving petitioner a
hearing. A commission has no power to fix rates which are
unreasonable or to regulate them arbitrarily. This basic
requirement of reasonableness comprehends such rates which
must not be so low as to be confiscatory, or too high as to be
oppressive.
Batangas CATV v CA
Sangguniang Panlungsod enacted a resolution granting
petitioner a permit to construct, install, and operate a CATV
(Cable Television) system in Batangas City, with Section 8
providing that petitioner is authorized to charge its subscribers
the maximum rates specified therein, and that any increase of
rates shall be subject to the approval of the Sangguniang
Panlungsod. NTC has the sole authority to regulate the CATV
ops in the PH. The Court held that the LGU cannot regulate
subscriber rates charged by CATV operators. That the
regulatory power stays with the NTC is also clear from President
Ramos E.O. No. 436 mandating that the regulation and
supervision of the CATV industry shall remain vested solely in
the NTC. LGUs must recognize that technical matters
concerning CATV operation are within the exclusive regulatory
power of the NTC.
ERB v CA
ERB allowed it, noting therein that the updated survey
conducted by Shell cited new developments such as the
accessibility of Imelda Marcos Avenue (now Benigno Aquino, Jr.
NVC 3-D
Avenue) to Parañaque residents along Sucat Road and the
population growth in the trading area. PDSC still appealed. he
record discloses that the ERB Decision approving Shells
application in ERB Case No. 89-57 was based on hard economic
data on developmental projects, residential subdivision listings,
population count, public conveyances, commercial
establishments, traffic count, fuel demand, growth of private
cars, public utility vehicles and commercial vehicles, etc., rather
than empirical evidence to support its conclusions. In approving
Shells application, the ERB made the following factual findings
and, on the basis thereof, justified its ruling.
MIAA v Airspan
MIAA owns, operates, and manages NAIA. Airspan are lessees
and occupants of MIAA’s properties. Fees imposed include (1)
aeronautical fees; (2) rentals; (3) business concessions; (4)
other airport fees and charges; and (5) utilities. MIAA wanted
to increase rentals. Notice and Hearing are required here.
Although Sec. 17 of MIAA’s charter allows the increase or
decrease of rates subject to the provisions of BP325, the latter
providing: "The revision of rates shall be determined by the
respective ministry heads or equivalent functionaries
conformably with the rules and regulations of the Ministry of
Finance issued pursuant to Section 4 hereof, upon
recommendation of the imposing and collecting authorities
concerned, subject to the approval of the Cabinet.” Thus, under
the original Charter of the MIAA, petitioner was given blanket
authority to adjust its fees, charges, and rates. However, E.O.
No. 903 limited such authority to a mere recommendatory
power. attached agency of the DOTC, the MIAA is governed by
the Administrative Code of 1987. The Administrative Code
specifically requires notice and public hearing in the fixing of
rates. In the fixing of rates, no rule or final order shall be valid
unless the proposed rates shall have been published in a
newspaper of general circulation at least two (2) weeks before
the first hearing thereon. It follows that the rate increases
imposed by petitioner are invalid for lack of the required prior
notice and public hearing. They are also ultra vires because, to
begin with, petitioner is not the official authorized to increase
the subject fees, charges, or rates, but rather the DOTC
Secretary.

NVC 3-D