San Beda College of Law: Emory Id in Ommercial AW
San Beda College of Law: Emory Id in Ommercial AW
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.
Classifications:
1. Common or Private
2. Goods or Passengers
3. For a fee (for hire) or Gratuitous
4. Land, Water/maritime, or Air
5. Domestic/inter-island/coastwise or
International/foreign
It is a relationship which is imbued with the
public interest.
COMMON CARRIER
Persons, corporations, firms or associations
engaged in the business of carrying or transporting
passengers or goods or both, by land, water, or air,
for compensation, offering their services to the
public (Art. 1732, Civil Code).
Art. 1732 of the New 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).
It also avoids a distinction
between a person or enterprise offering
transportation service on a regular or scheduled
basis and one offering such service on an
occasional, episodic or unscheduled basis.
Neither does the law distinguish between a
carrier offering its services to the general public that
is the general community or population and one
who offers 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 Certificate of Public Convenience
(De Guzman vs. CA, 168 SCRA 612).
It makes no distinction as to the means of
transporting, as long as it is by land, water or air. It
does not provide that the transportation should be
by motor vehicle.
(First Philippine Industrial
Corporation vs. CA)
One is a common carrier even if he has no fixed
and publicly known route, maintains no terminals,
and issues no tickets (Asia Lighterage Shipping, Inc.
vs. CA).
Characteristics:
1. Undertakes to carry for all people indifferently
and thus is liable for refusal without
sufficient reason (Lastimoso vs. Doliente,
October 20, 1961);
2. Cannot lawfully decline to accept a particular
class of goods for carriage to the prejudice
of the traffic in these goods;
3. No monopoly is favored (Batangas Trans.
vs. Orlanes, 52 PHIL 455);
4. Provides public convenience.
PRIVATE CARRIER
One which, without being engaged in the
business of carrying as a public employment,
undertakes to deliver goods or passengers for
compensation. (Home Insurance Co. vs. American
COMMON CARRIER
PRIVATE
CARRIER
1. As to availability
Holds himself out for all Contracts with particular
people indiscriminately
individuals or groups
only
2. As to required diligence
Extraordinary diligence is Ordinary diligence is
required
required
3. As to regulation
Subject
to
State Not subject to State
regulation
regulation
4. Stipulation limiting liability
Parties may not agree on Parties may limit the
limiting
the
carriers
carriers
liability,
liability except when
provided it is
not
provided by law
contrary to law, morals
or good customs
5. Exempting circumstance
Prove
extraordinary caso fortuito, Art. 1174
diligence and Art. 1733,
NCC
NCC
6.Presumption of negligence
There is a presumption
of fault or negligence
No presumption of fault
or negligence
7.Governing law
Law on common carriers
Law on obligations and
contracts
GOVERNING LAWS
A. Domestic/inter-island/coastwise
Applicable to Land, Water, and Air transportation
1. Civil Code - primary
2. Code of Commerce (Arts. 349, 379, 573734, 580, 806-845) - suppletory
B.
International/foreign/overseas (Foreign
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MEMORY AID IN COMMERCIAL LAW
country to Philippines)
Applicable to Water/maritime and Air
transportation
The law of the country of destination generally
applies.
1. Civil Code - primary
2. Code of Commerce - suppletory
3. Others - suppletory
a. Water/maritime: Carriage of Goods by
Sea Act (COGSA)
b. Air: Warsaw Convention
I. NEW CIVIL CODE
(Arts. 1732-1766)
REQUIREMENT
OF
EXTRAORDINARY
DILIGENCE
Rendition of service with the greatest skill and
utmost foresight. (Davao Stevedore Co. v.
Fernandez)
Rationale:
1. From the nature of the business and for
reasons of public policy (Art. 1733)
2. Relationship of trust
3. Business is impressed with a special
public duty
4. Possession of the goods
5. Preciousness of human life
A common carrier is not an absolute insurer of all
risks of travel.
COVERAGE
1. Vigilance over goods (Arts. 1734-1754); and
2. Safety of passengers (Arts. 1755-1763).
PASSENGER
A person who has entered into a contract of
carriage, express or implied, with the carrier. They
are entitled to extraordinary diligence from the
common carrier.
The following are not considered passengers, and
are entitled to ordinary diligence only:
a. One who has not yet boarded any part of
a vehicle regardless of whether or not he
has purchased a ticket;
b. One who remains on a carrier for an
unreasonable length of time after he has
been afforded every safe opportunity to
alight;
c.
One who has boarded by fraud, stealth,
or deceit;
d. One who attempts to board a moving
vehicle, although he has a ticket, unless
the attempt be with the knowledge and
consent of the carrier;
e. One who has boarded a wrong vehicle,
has been properly informed of such fact,
and on alighting, is injured by the carrier;
f.
Invited guests and accommodation
passengers. (Lara vs. Valencia)
g. One who rides any part of the vehicle
which is unsuitable or dangerous or which
he knows is not designed or intended for
passengers.
DEFENSES OF A COMMON CARRIER IN THE
CARRIAGE OF GOODS
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MEMORY AID IN COMMERCIAL LAW
CARRIAGE OF GOODS
CARRIAGE OF PASSENGERS
Parties
1.
2.
3.
Common carrier
Shipper
Consignee
1.
2.
Common carrier
Passenger
Cause of liability
Delay in delivery, loss, destruction, or deterioration of
Death or injury to the passengers
the goods
Duration of liability
From the time the goods are unconditionally placed in
the possession of, and received by the carrier for
transportation until the same are delivered actually or
constructively by the carrier to the consignee or to the
person who has the right to receive them. (Art. 1736)
It remains in full force and effect even when they
are temporarily unloaded or stored in transit unless the
shipper or owner has made use of the right of
stoppage in transitu. (Art. 1737)
It 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. 1738)
Delivery of goods to the custom authorities is not
delivery to the consignee. (Lu Do v. Binamira, 101 Phil
120)
Ordinary
circumstance:
Exercise
of
extraordinary diligence (Art. 1735)
Special circumstances:
a. Flood, storm, earthquake, lighting, or
other natural disaster or calamity (plus
force majeure)
b. Act of the public enemy in war,
whether international or civil
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MEMORY AID IN COMMERCIAL LAW
Void stipulations
1. That the goods are transported at the risk of the
owner or shipper;
2. That carrier will not be liable for any loss,
destruction or deterioration of the goods;
3. That the carrier need not observe any diligence
in the custody of the goods;
4. That the carrier shall exercise a degree of
diligence less than that of a good father of a family
over the movable transported;
5. That the carrier shall not be responsible for the
acts or omissions of his or its employees;
6. That the carriers 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;
7. That the carrier is not responsible for the loss,
destruction or deterioration of the goods on account
of the defective condition of the car, vehicle, ship or
other equipment used in the contract of carriage.
(Art. 1745)
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MEMORY AID IN COMMERCIAL LAW
A.
OVERLAND TRANSPORTATION
(Arts. 349-379)
Applicability
1. Domestic land and water/maritime transportation.
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MEMORY AID IN COMMERCIAL LAW
8.
own bills.
9.
No stipulation
1. Within a reasonable
time.
2. Carrier is bound to
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MEMORY AID IN COMMERCIAL LAW
Effects of delay
a. Merely suspends and generally does not
terminate the contract of carriage
b. Carrier remains duty bound to exercise
extraordinary diligence
c.
Natural disaster shall not free the carrier from
responsibility (Art.1740)
d. If delay is without just cause, the contract
limiting the common carriers liability cannot be
availed of in case of loss or deterioration of the
goods (Art.1747)
RIGHT OF CONSIGNEE TO ABANDON GOODS
Instances:
1. Partial non-delivery, where the goods are
useless without the others (Art. 363);
2. Goods are rendered useless for sale or
consumption for the purposes for which they are
properly destined (Art. 365); and
3. In case of delay through the fault of the carrier
(Art. 371).
NOTICE OF DAMAGE (ART. 366)
Requisites for applicability:
1. Domestic/inter-island/coastwise transportation
2. Land/water/air transportation
3. Carriage of goods
4. Goods shipped are damaged
Rules:
a. Patent damage: shipper must file a claim against
the carrier immediately upon delivery (it may be
oral or written)
b. Latent damage: shipper should file a claim
against the carrier within 24 hours from
delivery.
Note: These rules does not apply to misdelivery of
goods. (Roldan vs. Lim Ponzo)
Purpose of notice: To inform the carrier that the
shipment has been damaged, and it is charged with
liability therefore, and to give it an opportunity to
make an investigation and fix responsibility while
the matter is fresh.
The filing of notice of claim is a condition
precedent for recovery.
Shorter period may be stipulated by the parties
because it merely affects the shippers remedy and
does not affect the liability of the carrier.
(PHILAMGEN vs. Sweetlines, Inc.)
Prescriptive Period
Not provided by Article 366. Thus, in such
absence, Civil Code rules on prescription apply.
If despite the notice of claim, the carrier refuses
to pay, action must be filed in court.
1. No bill of lading was issued:
within 6 years
2. Bill of lading was issued: within
10 years.
ARTICLE 366
COGSA Sec.3 (6)
Applicability
1. Domestic/inter1. International/
island/coastwise
transportation
2. Land,
water,
air
transportation
3. Carriage of goods
overseas/foreign (from
foreign
country
to
Phils.)
Note: subject to the
rule on Paramount
Clause
2. Water/maritime
transportation
3. Carriage of goods
Notice of damage
1. Condition precedent
1. Not a condition
2. 24-hour period for
precedent
claiming latent damage
2. 3-day period for
claiming latent damage
Prescriptive period
None provided; Civil One year from the date
Code applies.
of delivery (delivered
but damaged goods),
or date when the
vessel left port or from
the date of delivery to
the
arrastre
(nondelivery or loss).
COMBINED CARRIER AGREEMENT (ART. 373)
GENERAL RULE: In case of a contract of
transportation of several legs, each carrier is
responsible for its particular leg in the contract.
EXCEPTION: A combined carrier agreement where
a carrier makes itself liable assuming the obligations
and acquiring as well the rights and causes of action
of those which preceded it.
B.
MARITIME COMMERCE
(Arts. 573-869)
IMPORTANT CONCEPTS:
1. Merchant vessel
2. Maritime lien and Preference of Credit
3. Doctrine of limited liability
4. Causes of revocation of voyage
5. Participants in maritime commerce
6. Charter party
7. Loans on bottomry and respondentia
8. Accidents in maritime commerce
MARITIME/ADMIRALTY LAW
It is the system of laws which particularly relates
to the affairs and business of the sea, to ships, their
crews and navigation, and to maritime conveyance
of persons and property. (Notes and Cases on the
OF
MARITIME
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MEMORY AID IN COMMERCIAL LAW
allowed
and
costs
taxed by the court and
taxes due to the
Government;
2. Crews wages;
3. General average;
4. Salvage, including
contract salvage;
5.
Maritime
liens
arising prior in time to
the recording of the
preferred mortgage;
6. Damages arising out
of tort; and
7. Preferred mortgage
registered prior in time.
EXCEPTIONS:
1.
2.
3.
4.
5.
6.
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MEMORY AID IN COMMERCIAL LAW
RIGHT OF ABANDONMENT
SHIPOWNER OR SHIP
CONSIGNEE
AGENT
What may be abandoned
Vessel
Goods shipped
Instances
1. In case of civil liability 1. Partial non-delivery,
from indemnities to third where the goods are
persons (Art. 587);
useless without the
2. Sec. 138, Insurance others (Art. 363);
Code;
2. Goods are rendered
3. In case of leakage of useless for sale or
at least of the consumption for the
contents of a cargo purposes for which
containing liquids (Art. they
are
properly
687)
destined (Art. 365);
and
3. In case of delay
through the fault of the
carrier (Art. 371).
Effects
1. Transfer of ownership 1. Transfer
of
of the vessel from the ownership
on
the
shipowner
to
the goods from the shipper
shippers or insurer.
to the carrier.
2. In case of (2), the 2. Carrier should pay
insurer must pay the the shipper the market
insured as if there was value of the goods at
actual total loss of the the
point
of
vessel.
destination.
CAUSES OF REVOCATION OF VOYAGE
1. War or interdiction of commerce;
2. Blockade;
3. Prohibition to receive cargo at destination;
4. Embargo;
5. Inability of the vessel to navigate. (Art. 640)
Terms:
1. Interdiction of commerce A governmental
prohibition of commercial intercourse intended
to bring about an entire cessation for the time
being of all trade whatever.
2. Blockade A sort of circumvallation of a place
by which all foreign connection and
correspondence is, as far as human power can
effect it, to be cut off.
3. Embargo 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.
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MEMORY AID IN COMMERCIAL LAW
2.
Solidary
Liabilities
of
the
Ship
Agent/Shipowner for Acts Done by the
Captain towards Passengers and Cargoes
1. Damages to vessel and to cargo due to
lack of skill and negligence;
2. Thefts and robberies of the crew;
3. Losses and fines for violation of laws;
4. Damages due to mutinies;
5. Damages due to misuse of power;
6. For deviations;
7. For arrivals under stress;
8. Damages due to non-observance of
marine regulations. (Art. 618)
C. OFFICERS AND CREW
1. Sailing Mate/First Mate
2. Second Mate
3. Engineers
4. Crew
No liability under the following circumstances:
1. If, before beginning voyage, captain attempts
to change it, or a naval war with the power to
which the vessel was destined occurs;
2. If a disease breaks out and be officially
declared an epidemic in the port of destination;
3. If the vessel should change owner or captain.
(Art. 647)
Sailing Mate/First Mate
Second chief of the vessel who takes the place of
the captain in case of absence, sickness, or death
and shall assume all of his duties, powers and
responsibilities. (Art. 627)
Duties:
1. Provide himself with maps and charts with
astronomical tables necessary for the
discharge of his duties;
2. Keep the Binnacle Book;
3. Change the course of the voyage on
consultation with the captain and the
officers of the boat, following the decision
of the captain in case of disagreement;
4. Responsible for all the damages caused to
the vessel and the cargo by reason of his
negligence. (Arts. 628 - 631)
Second Mate
Takes command of the vessel in case of the
inability or disqualification of the captain and the
sailing mate, assuming in such case their powers
and responsibilities.
Third in command
Duties:
1. Preserve the hull and rigging of the
vessel;
2. Arrange well the cargo;
3. Discipline the crew;
4. Assign work to crew members;
5. Inventory the rigging and equipment of
the vessel, if laid up. (Art. 632)
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MEMORY AID IN COMMERCIAL LAW
Engineers
Officers of the vessel but have no authority
except in matters referring to the motor apparatus.
When two or more are hired, one of them shall be
the chief engineer.
Duties:
1. In charge of the motor apparatus, spare
parts, and other instruments pertaining to
the engines;
2. Keep the engines and boilers in good
condition;
3. Not to change or repair the engine
without authority of the captain;
4. Inform the captain of any damage to the
motor apparatus;
5. Keep an Engine Book;
6. Supervise all personnel maintaining the
engine. (Art. 632)
Crew
The aggregate of seamen who man a ship, or the
ships company.
Hired by the ship agent, where he is present and
in his absence, the captain hires them, preferring
Filipinos, and in their absence, he may take in
foreigners, but not exceeding 1/5 of the crew. (Art.
634)
Classes of Seamans Contracts
1. By the voyage;
2. By the month; and
3. By share of profits or freightage.
Just Causes for the Discharge of Seaman
While Contract Subsists
1. Perpetration of a crime;
2. Repeated insubordination, want of discipline;
3. Repeated incapacity and negligence;
4. Habitual drunkenness;
5. Physical incapacity;
6. Desertion. (Art. 637)
Rules in case of Death of a Seaman
The seamans heirs are entitled to payment as
follows:
1. If 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;
3. if captured in defense of vessel - full payment;
4. if captured due to carelessness - wages up to
the date of the capture. (Art. 645)
Complement of the Vessel
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, stokers and other
employees on board not
having specific
designations.
EXCEPT:
1. Accident caused by force majeure or natural
calamity provided the pilot exercised prudence and
extra diligence to prevent or minimize damages.
2. Countermand or overrule by the master of the
vessel in which case the registered owner of the
vessel is liable. (Sec.11, Art.III PPA Admin Order 0385)
SPECIAL
CONTRACTS
OF
MARITIME
COMMERCE
1. Charter party
2. Bill of lading
3. Contract of transportation of passengers
on sea voyages
4. Loan on bottomry
5. Loan on respondentia
6. Marine insurance
CHARTER PARTY
A contract by virtue of which the owner or agent
binds himself to transport merchandise or persons
for a fixed price.
A contract by which an entire ship, or some
principal part thereof is let/leased by the owner to
another person for a specified time or use. (Planters
Products, Inc. vs. CA, 226 SCRA 476)
Parties:
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MEMORY AID IN COMMERCIAL LAW
CHARTER PARTY
An entire or complete
contract.
Consensual contract
BAREBOAT OR
DEMISE CHARTER
Charterer
becomes
CHARTER PARTY
Charterer may rescind
charter party by paying
half of the freightage
agreed upon.
The new owner is not
compelled to respect the
charter party so long as
he can load the vessel
with his own cargo. (Art.
689)
Commercial law concept
Common
converted
carrier.
carrier
is
to private
The
vessel
owner
retains
possession,
command
and
navigation of the ship
Clause paramount or
paramount clause
BILL OF LADING
More like a private
receipt
which
the
captain gives to accredit
goods received from
persons
Real contract
CONTRACT OF
AFFREIGHTMENT
(TIME OR VOYAGE
CHARTER)
Owner remains liable as
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MEMORY AID IN COMMERCIAL LAW
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 Law and
Jurisprudence,
Justice
Jose Vitug, 1997 ed.)
A clause in a charter
party providing that the
COGSA shall apply, even
though
the
transportation
is
domestic, subject to the
extent that any term of
the bill of lading is
repugnant to the COGSA
or applicable law, then
to the extent thereof the
provision of the bill of
lading is void. (Pandect
of Commercial Law and
Jurisprudence,
Justice
Jose Vitug, 1997 ed.)
CHARTERER
1. To pay the agreed
charter price;
2. To pay freightage
on unboarded cargo;
3. To pay losses to
others
for
loading
uncontracted cargo and
illicit cargo;
4. To wait if the
vessel needs repair;
5. To pay expenses
for deviation. (Arts.
679-687)
Fortuitous
causes
(Art. 690)
1. War or
interdiction of
commerce;
2. Blockade;
3. Prohibition
to receive
cargo;
4. Embargo;
and
5. Inability of
vessel at the
charterers
disposal;
4. Return of
the vessel due
to
pirates,
enemies or bad
weather;
5. Arrival at a
port
for
repairs.
vessel before
loading by the
charterer;
the vessel to
navigate.
Terms:
1. Primage - bonus to be paid to the captain after
the successful voyage.
2. Demurrage the sum fixed 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.
3. Deadfreight the amount paid by or
recoverable from a charterer of a ship for the
portion of the ships capacity the latter
contracted for but failed to occupy.
4. Lay Days - days allowed to charter parties for
loading and unloading the cargo.
5. Extra Lay Days days which follow after the
lay days have elapsed.
USUAL
FORMS
OF
CONSUMMATING
CONTRACTS
1. C.I.F. cost, insurance and freight;
2. F.O.B. - free on board;
3. F.A.S. - free alongside ship; and
4. C. & F. - cost and freight.
TRANSSHIPMENT OF GOODS
The act of taking cargo out of one ship and
loading it in another, or the transfer of goods from
the vessel stipulated in the contract of affreightment
to another vessel before the place of destination
named in the contract has been reached, or the
transfer for further transportation from one ship or
conveyance to another.
It 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.
If done without legal excuse, 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 excepted. (Magellan
Manufacturing vs. CA, 201 SCRA 102)
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 exposed to maritime
risks, 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
RESPONDENTIA
Definition
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MEMORY AID IN COMMERCIAL LAW
Loan
made
by
shipowner
or
ship
agent guaranteed by
vessel
itself
and
repayable upon arrival
of
vessel
at
destination. (Art. 719)
1.
2.
3.
1.
2.
3.
4.
5.
6.
7.
Common elements:
Exposure of security to marine peril;
Obligation of the debtor conditioned only
upon safe arrival of the security at the point
of destination.
Forms:
Public instrument
Policy signed by the contracting parties and
the broker taking part therein
Private instrument (Art. 720)
Contents:
Kind, name and registry of the vessel;
Name, surname and domicile of the captain;
Names, surnames and domiciles of the
borrower and the lender;
Amount of the loan and the premium
stipulated;
Time for repayment;
Goods pledged to secure repayment;
Voyage during which the risk is run (Art.721)
BOTTOMRY/
RESPONDENTIA
ORDINARY LOAN
(MUTUUM)
Liability
of
the
borrower is contingent
on the safe arrival of
the vessel or cargo at
destination
WHEN
LOAN
ON
BOTTOMRY
OR
RESPONDENTIA REGARDED AS SIMPLE LOAN
1. Lender loaned an amount larger than the
value of the object due to fraudulent
means employed by the borrower.
(ART.726)
2. Full 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.
(ART.727)
3. If the effects on which the money is taken
is not subjected to any risk. (ART.729)
MARINE INSURANCE
Nature
LOAN ON
BOTTOMRY OR
RESPONDENTIA
Indemnity is paid in
advance by way of
a loan
In case of loss of
the vessel due to a
marine peril, the
obligation of the
borrower to pay is
extinguished
Real contract
of
Bottomry/
EXCEPTIONS:
1.
2.
3.
4.
5.
AVERAGE
An extraordinary or accidental expense incurred
during the voyage in order to preserve the cargo,
vessel or both, and all damages or deterioration
suffered by the vessel from departure to the port of
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MEMORY AID IN COMMERCIAL LAW
PARTICULAR OR
GROSS OR GENERAL
SIMPLE
Definition
Damages or expenses Damages or expenses
caused to the vessel or deliberately caused in
cargo that did not inure order to save the
to the common benefit, vessel, its cargo or
and borne by respective both from real and
owners. (Art. 809)
known risk. (Art. 811)
Requisites
1. common danger;
2. deliberate
sacrifice;
3. success;
4. proper formalities
and legal steps.
Liability
The owner of the goods All the persons having
which gave rise to the an interest in the
expense or suffered the vessel and the cargo
damage shall bear this therein at the time of
average. (Art. 810)
the occurrence of the
average
shall
contribute to satisfy
this average. (Art. 812)
The
insurers
(Art.859) and lenders
on
bottomry
and
respondentia
shall
likewise
contribute.
(Art.732).
Number of interests involved
Only
one
interest Several
interests
involved
involved
Share in the damage or expense
100% share
In proportion to the
value of the owners
property saved
Right to recover
No reimbursement
There
may
be
reimbursement
Kinds (not exclusive)
Art. 809
Art. 811
70
MEMORY AID IN COMMERCIAL LAW
INTERNATIONAL
Deck cargo is not
allowed
With shippers consent
General average
Particular average
Without shippers consent
Captain is liable
Captain is liable
When
unlawful
Who
bears
expenses:
The inability to
continue
voyage is due
to
lack
of
provisions,
well-founded
fear of seizure,
privateers,
pirates,
or
accidents
of
the
sea
disabling it to
navigate. (Art.
819)
1. Lack
of
provisions due
to negligence to
carry according
to usage and
customs;
2. Risk
of
enemy not well
known
or
manifest
3. Defect of
vessel due to
improper
repair; and
4. Malice,
negligence, lack
of foresight or
skill of captain.
(Art. 820)
The shipowner
or ship agent
is liable in case
of
unlawful
arrival under
stress.
But
they shall not
be liable for
the damages
caused
by
reason of a
lawful arrival.
(Art. 821)
COLLISION
Impact of two vessels both of which are moving.
Allision
Impact between a moving vessel and a stationary
one.
Nautical Rules to Determine Negligence
1. When two vessels are about to enter a port,
the farther one must allow the nearer to enter
first; 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. When two vessels meet, the smaller should
give the right of way to the larger one.
3. A vessel leaving port should leave the way
clear for another which may be entering the
same port.
4. The vessel which leaves later is presumed to
have collided against one which has left earlier.
5. There is a presumption against the vessel
which sets sail in the night.
6. There 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 sufficient time to
do so or there was fear of a greater damage or
other legitimate reason.
7. There is a presumption against an improperly
moored vessel.
8. There 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.
9. Vessels must have proper look-outs or
persons trained as such and who have no
other duty aside therefrom. (Smith Bell v. CA)
Nautical Rules as to Sailing Vessel and
Steamship
1. Where 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. The sailing vessel is required to keep her
course unless the circumstances require
otherwise.
Zones of Time in the Collision of Vessels
1. First zone all time up to the moment when risk
of collision begins.
No rule is as yet applicable for none is necessary.
2. Second zone time between moment when risk
of collision begins and moment it becomes a
practical certainty.
It is in this period where conduct of the vessels is
primordial. It is in this zone that vessels must
strictly observe nautical rules, unless a departure
therefrom becomes necessary to avoid imminent
danger.
71
MEMORY AID IN COMMERCIAL LAW
MARITIME PROTEST
Condition precedent or prerequisite to recovery
of damages arising from collisions and other
maritime accidents.
It 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
72
MEMORY AID IN COMMERCIAL LAW
73
MEMORY AID IN COMMERCIAL LAW
BAGGAGE
CHECK
Checked-in
baggage
AIR
WAYBILL
Goods to be
shipped
2. Checked-in baggage
GENERAL RULE: $20 per kilogram
EXCEPTION: In 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.
3. Hand-carried baggage
$1000/passenger
4. Goods to be shipped
GENERAL RULE: $20 per kilogram
EXCEPTION: In 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 fixing a lower limit is null and void. (Art. 23)
Carrier is not entitled to the foregoing limit if the
damage is caused by willful misconduct or default
on its part. (Art. 25)
Thus, the WC does not operate as an exclusive
enumeration of the instances of an absolute limit of
the extent of liability. It does not preclude the
application of the Civil Code and other pertinent
local laws. It does not regulate or exclude liability
for other breaches of contract by the carrier, or
misconduct of its employees, or for some particular
or exceptional type of damage. (Alitalia vs. CA)
In PanAm v. IAC, the WC was applied as regards
the limitation on the carriers liability, there being a
simple loss of baggage without any improper
conduct on the part of the officials or employees of
the airline or other special injury sustained by the
passenger.
In KLM Royal v. Tuller, the WC has invariably
been held inapplicable, or as not restrictive of the
carriers liability, where there was satisfactory
evidence of malice or bad faith attributable to its
officers and employees. (Alitalia vs. IAC)
74
MEMORY AID IN COMMERCIAL LAW
2. Prescriptive period
Action must be filed within 2 years from:
a. date of arrival at the destination
b. date of expected arrival
c.
date on which the transportation stopped.
(Art. 29)
In United Airlines vs. Uy the two-year prescriptive
period was not applied where the airline employed
delaying tactics.
RULE IN CASE OF VARIOUS SUCCESSIVE
CARRIERS
1. Carriage of passengers
GENERAL RULE: Action is filed only against the
carrier in which the accident or delay occurred.
EXCEPTION: Agreement or contract whereby the
first carrier assumed liability for the whole journey.
2. Carriage of baggage or goods
a. Passenger or consignor can file an action
against the first carrier and the carrier in
which the damage occurred
b. Passenger or consignee can file an action
against the last carrier and the carrier in
which the damage occurred.
These carriers are jointly and severally
liable. (Art. 30)
A contract of international carriage by air,
although performed by different carriers under a
series of airline tickets constitutes a single
operation. Members of the International Air
Transportation Association (IATA) are under a
general pool partnership agreement wherein they
act as agent of each other in the issuance of tickets
to contracted passengers to boost ticket 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)
Under a general pool partnership agreement, the
ticket-issuing airline is the principal in a contract of
carriage while the endorsee-airline is the agent.
The obligation of the former remained and did not
cease even when the breach occurred not on its
own flight but on that of another airline which had
undertaken to carry the passengers to one of their
destinations. (China Airlines vs. Chiok)
JURISDICTION
At the option of the plaintiff, the action for
damages may be filed 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.
28(1))
NOTE: It is the passengers ultimate destination
not an agreed stopping place that determines the
country where suit is to be filed.
The forum of action provided in Art. 28(1) is a
matter of jurisdiction rather than of venue. (Santos
III vs. Northwest; 2A C.J.S.)
CONTRACT OF TOWAGE
A contract whereby one vessel, usually
motorized, pulls another, whether loaded or not
with merchandise, from one place to another, for a
75
MEMORY AID IN COMMERCIAL LAW
EXCEPTIONS:
SALVAGE
TOWAGE
Governed by special
law (Act No. 2616)
Requires success,
otherwise no payment
Vessel must be
involved in an accident
Fees distributed
among crewmen
Fees belong to
tugboat owner
1.
2.
3.
4.
5.
the
in
6.
7.
Warehouses;
Animal drawn vehicles and bancas moved
by oar or sail;
Airships, except for the fixing of maximum
rates for fare and freight;
Radio companies, except for rates fixing;
Public services owned or operated by the
government, except as to rates fixing;
Ice plants; and
Public markets.
PUBLIC SERVICE
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. (Sec.
13b, CA 146)
A casual or incidental service devoid of public
character and interest is not brought within the
category. The question depends on such factors as
the extent 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.
(Luzon Stevedoring vs. PSC)
NOTE: The Public Service Commission created
under the Public Service Law has already been
abolished under P.D. No. 1 and other issuances. It
has been replaced by the following government
agencies: LTO; LTFRB; ATO; BOE; NTC; NEA; ERB;
NWRC; CAB; and MIA.
CERTIFICATE OF
PUBLIC
CONVENIENCE
(CPC)
CERTIFICATE
OF
PUBLIC
CONVENIENCE AND
NECESSITY (CPCN)
An
authorization
issued
by
the
appropriate
government agency for
the operation of public
services for which no
franchise,
either
municipal
or
legislative, is required
by law, e.g., common
carriers.
An
authorization
issued
by
the
appropriate
government agency for
the operation of public
service for which a
prior
franchise
is
required by law; e.g.
telephone and other
services.
76
MEMORY AID IN COMMERCIAL LAW
POWERS
REQUIRING PRIOR
NOTICE AND
HEARING
POWERS
EXERCISABLE
WITHOUT PRIOR
NOTICE AND
HEARING
1. Issuance of CPC
or CPCN;
2. Fixing of rates,
tolls, and charges;
3. Setting up of
standards
and
classifications;
4. Establishment of
rules
to
secure
accuracy of all meters
and all measuring
appliances;
5. Issuance
of
orders
requiring
establishment
or
maintenance
of
extension of facilities;
6. Revocation,
or
modification of CPC or
CPCN;
7. Suspension of CPC
or CPCN, except when
it is necessary to
avoid serious and
irreparable damage or
inconvenience to the
public
or
private
interest, in which
case, a suspension
not more than 30
days may be ordered,
prior to the hearing.
(Soriano v. Medina,
164 SCRA 36)
1. Investigation any
matter
concerning
public service;
2. Requiring
operators to furnish
safe, adequate, and
proper service;
3. Requiring public
services
to
pay
expenses
of
investigation;
4. Valuation
of
properties of public
utilities;
5. Examination and
test
of
measuring
appliances;
6. Grant of special
permits to make extra
or special trips in
territories specified in
the certificate;
7. Uniform
accounting system and
furnishing of annual
reports;
8. Compelling
compliance with the
laws and regulations.
77
MEMORY AID IN COMMERCIAL LAW
RATE-FIXING POWER
The rate to be fixed 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 requirements:
1. One which yields to the carrier a fair
return upon the value of the property
employed in performing the service; and
2. One which is fair to the public for the
service rendered.
2.
4.
5.
KABIT SYSTEM
A system whereby a person who has been
granted a certificate of public convenience allows
other persons who own motor vehicles to operate
under such license, for a fee or percentage of such
earnings. It is void and inexistent under Art. 1409,
Civil Code.
Effects:
1. The 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, 154 SCRA
388)