Transcribed and Prepared by: Hanniyah Sevilla 4 Manresa ’08-‘09 1

Transportation 1.) De Guzman vs. CA - even if the carriage of

goods or pax is only an ancillary or sideline,
Law Review that person can still be considered a cc. Even
Based on the lectures of: if the transportation is merely occasional,
Atty. Melissa Romana sporadic or not on a regular basis. Even
Suarez though the transporation is offered only to a
Starring: Shyler, the cab beetle.  narrow segment of the general population.
And lastly, even if he has not secured a
APPLICABLE LAW certificate of public convenience.

Art. 1766. In all matters not regulated by this Code, the rights and A Fx: Facts: Ernesto Cendaña, a junk dealer, was engaged
t
obligations of common carriers shall be governed by the Code of e
in buying up used bottles and scrap metal in Pangasinan.
Commerce and by special laws. n Upon gathering sufficient quantities of such scrap
e material, Cendaña would bring such material to Manila
o for resale. He utilized 2 six-wheeler trucks which he
The primary law in transportation law is the civil code, d owned for hauling the material to Manila. On the return
particularly the provisions on common carriers. The e trip to Pangasinan, Cendaña would load his vehicles with
suppletory laws are the Code of Commerce, and special cargo which various merchants wanted delivered to
D differing establishments in Pangasinan. For that service,
laws like the COGSA (Carriage of Goods by Sea Act), a
Cendaña charged
Salvage Law, Warsaw Convention, Tariff and Customs v
a freight rates which were commonly lower than regular
Code. o commercial rates. Sometime in November 1970, Pedro
de Guzman, a merchant and authorized dealer of General
C
What is transportation? o Milk Company (Philippines), Inc. in Urdaneta,
It is a movement of things or persons from one place to l Pangasinan, contracted with Cendaña for the hauling of
l 750 cartons of Liberty filled milk from a warehouse of
another; a carrying across. e
g
General Milk in Makati, Rizal, to de Guzman’s
e establishment in Urdaneta on or before 4 December
What does transportation include?
1970. Accordingly, on 1 December 1970, Cendaña loaded
1. Waiting time - just because a person is in the airport o in Makati the merchandise on to his trucks: 150 cartons
waiting for the flight to board, does not mean that f
were loaded on a truck driven by Cendaña himself; while
transportation has not started. L 600 cartons were placed on board the other truck which
a was driven by Manuel Estrada, Cendaña ’s driver and
w
2. Loading and unloading with respect to transportation employee. Only 150 boxes of Liberty filled milk were
of goods delivered to de Guzman. The other 600 boxes never
reached de Guzman, since the truck which carried these
boxes was hijacked somewhere along the MacArthur
3. Stopping in transit - when one takes a long flight, Highway in Paniqui, Tarlac, by armed men who took with
transit stops are also included even if passenger is them the truck, its driver, his helper and the cargo.
required to disembark and take all his belongings with
him. Held: Article 1732 of the Civil Code makes no distinction
between one whose principal business activity is the
4. All other accessorial services in connection with the carrying of persons or goods or both, and one who does
such carrying only as an ancillary activity (in local idiom,
loaded movement -- so it could be anything, like when as “a sideline”). Article 1732 also carefully avoids making
you are in HK, you are allowed to check-in the City, the any distinction between a person or enterprise offering
movement of your luggage from the city check in to the transportation service on a regular or scheduled basis
airport is already included in the term transportation. and one offering such service on an occasional, episodic
or unscheduled basis. Neither does Article 1732
DEFINITION OF COMMON CARRIER (CC) distinguish between a carrier offering its services to the
“general public,” i.e., the general community or
population, and one who offers services or solicits
Art. 1732. Common carriers are persons, corporations, firms or business only from a narrow segment of the general
associations engaged in the business of carrying or transporting population. Article 1733 deliberately refrained from
passengers or goods or both, by land, water, or air, for making such distinctions.
compensation, offering their services to the public.
Cendaña is properly characterized as a common carrier
even though he merely “back-hauled” goods for other
Elements: merchants from Manila to Pangasinan, although such
1. must be a person, association, corporation, or firms backhauling was done on a periodic or occasional rather
2. Engaged in a business than regular or scheduled manner, and even though
3. Transports persons or goods or both by land, water Cendaña’s principal occupation was not the carriage of
or air goods for others. There is no dispute that Cendaña
4. Offers service to the public charged his customers a fee for hauling their goods; that
fee frequently fell below commercial freight rates is not
5. Accepts compensation for services relevant.

If one element is missing, then it is not a common A certificate of public convenience is not a requisite for
carrier. the incurring of liability under the Civil Code provisions
governing common carriers. That liability arises the
National Steel vs. CA 283 SCRA 45 (True test of moment a person or firm acts as a common carrier,
without regard to whether or not such carrier has also
Common carrier)
complied with the requirements of the applicable
regulatory statute and implementing regulations and has
The carriage of goods and passengers provided it has been granted a certificate of public convenience or other
space for all who opt to avail themselves of its franchise.
transportation for a fee.
2. FPIC vs. CA - still a common carrier even if
This means that if you are a carrier, you cannot the mode of transportation is not a motor
discriminate. You have to provide space for everyone vehicle (in this case, pipeline) for as long as
who wants to avail of the services of transporting all the requisites/elements of a cc are
persons or things. present. Here, it is not the pipeline that
moves, it is the oil.
Q: To be a common carrier, must one be engaged in
the transport of goods/passengers primarily? 3. Asia Lighterage vs. CA (2003) -- even if it has
no fixed and publicly known route, maintains
A: No. Still considered common carrier --- no terminals and issues no tickets
 Transcribed and Prepared by: Hanniyah Sevilla 4 Manresa ’08-‘09 2

4. Calvo vc. UCPB - even if it is not in the business

of public transportation; here, Calvo was a The object of petitioner’s contractual relation with
customs broker. respondent is the latter’s service of arranging and
facilitating petitioner’s booking, ticketing and
accommodation in the package tour. In contrast, the
5. Schmitz vs. TVI - even if the mode of transport is object of a contract of carriage is the transportation of
not owned by him passengers or goods. It is in this sense that the contract
between the parties in this case was an ordinary one for
6. Bascos vs. CA - even if the contract is not a services and not one of carriage. Petitioner’s submission
contract of carriage. Here, what was entered into is premised on a wrong assumption.
was a contract of lease of the truck. The goods were
lost and the defense was that what was entered into DILIGENCE REQUIRED:
was a lease contract. According to the SC, the name of
the contract does not matter, for as long as the Art. 1733. Common carriers, from the nature of their business
requisites are present, then that person is considered a and for reasons of public policy, are bound to observe
common carrier. extraordinary diligence in the vigilance over the goods and
for the safety of the passengers transported by them,
WHO ARE NOT CONSIDERED COMMON according to all the circumstances of each case.
CARRIER?
Such extraordinary diligence in the vigilance over the goods
FGU vs. Sarmiento (2002) - Truck owned by Sarmiento is further expressed in Articles 1734, 1735, and 1745, Nos. 5, 6,
carrying refrigerators belonging to shipper, Concepcion and 7, while the extraordinary diligence for the safety of the
Industries. Here, SC said that Sarmiento was not a passengers is further set forth in Articles 1755 and 1756.
common carrier because it was the exclusive hauler of
Concepcion Industries. Notes:
1. What is Extra Ordinary Diligence (XOD)?
GPS, being an exclusive contractor and hauler of Concepcion That extreme measure of care and caution which
Industries, Inc., rendering or offering its services to no other
persons of which unusual prudence and
individual or entity, cannot be considered a common carrier.
Common carriers are persons, corporations, firms or circumspection use for securing and preserving
associations engaged in the business of carrying or their own properties or rights. (National
transporting passengers or goods or both, by land, water, or Trucking and Forwarding Corp. vs. Lorenzo
air, for hire or compensation, offering their services to the Shipping (2005))
public,[8] whether to the public in general or to a limited
clientele in particular, but never on an exclusive basis. The true Facts: DOH and CARE signed an agreement where CARE
test of a common carrier is the carriage of passengers or would acquire from the US donations to be transported to
goods, providing space for those who opt to avail themselves of the Philippines. To deliver the goods within the Phil,
its transportation service for a fee.Given accepted standards, DOH entered into a contract with NTFC. NTFC shipped
GPS scarcely falls within the term “common carrier.” BUT GPS the goods through Lorenzo Shipping. The consignee was
is still liable based on the contract. However, there is no A, NTFC’s branch manager. LS delivered the goods but
presumption of negligence in case of loss. when it requested A to return the bills of ladings, A
merely returned certified true copies thereof. Every after
2. Crisostomo vs. CA (2003) Is a travel agency a delivery, A and his subordinates signed a delivery
common carrier? receipt. Despite delivery however, it was alleged that the
goods were never received.
Held: No. Petitioner contends that respondent did not observe A
t LS invoked that it exercised XOD, and thus was not liable
the standard of care required of a common carrier when it
efor the loss.
informed her wrongly of the flight schedule. She could not be n
deemed more negligent than respondent since the latter is e
o
Held: Is LS presumed to be at fault for the loss of the
required by law to exercise extraordinary diligence in the
goods?
fulfillment of its obligation. If she were negligent at all, the dNo - Article 173 of the Civil Code demands that a
same is merely contributory and not the proximate cause of ecommon carrier observe extraordinary diligence over the
the damage she suffered. Her loss could only be attributed to
respondent as it was the direct consequence of its employee’s Dgoods transported by it.  Extraordinary diligence is that
aextreme measure of care and caution which persons of
gross negligence. vunusual prudence and circumspection use for securing
a
and preserving their own property or rights.  This
Petitioner’s contention has no merit. o
exacting standard imposed on common carriers in a
Ccontract of carriage of goods is intended to tilt the scales
By definition, a contract of carriage or transportation is one oin favor of the shipper who is at the mercy of the
whereby a certain person or association of persons obligate l
common carrier once the goods have been lodged for
themselves to transport persons, things, or news from one l
eshipment.  Hence, in case of loss of goods in transit, the
place to another for a fixed price. Such person or association
gcommon carrier is presumed under the law to have been
of persons are regarded as carriers and are classified as private eat fault or negligent. However, the presumption of fault
or special carriers and common or public carriers. A common
carrier is defined under Article 1732 of the Civil Code as oor negligence, may be overturned by competent evidence
f showing that the common carrier has observed
persons, corporations, firms or associations engaged in the
extraordinary diligence over the goods.
business of carrying or transporting passengers or goods or LIn the instant case, we agree with the court a quo that
both, by land, water or air, for compensation, offering their a
services to the public. wthe respondent adequately proved that it exercised
extraordinary diligence.  Although the original bills of
lading remained with petitioner, respondent’s agents
It is obvious from the above definition that respondent is not
demanded from Abdurahman the certified true copies of
an entity engaged in the business of transporting either
the bills of lading.  They also asked the latter and in his
passengers or goods and is therefore, neither a private nor a
absence, his designated subordinates, to sign the cargo
common carrier. Respondent did not undertake to transport
delivery receipts.
petitioner from one place to another since its covenant with its
This practice, which respondent’s agents testified to be
customers is simply to make travel arrangements in their
their standard operating procedure, finds support in
behalf. Respondent’s services as a travel agency include
Article 353 of the Code of Commerce. Conformably with
procuring tickets and facilitating travel permits or visas as well
the aforecited provision, the surrender of the original bill
as booking customers for tours.
of lading is not a condition precedent for a common
carrier to be discharged of its contractual obligation.  If
While petitioner concededly bought her plane ticket through the
surrender of the original bill of lading is not possible,
efforts of respondent company, this does not mean that the
acknowledgment of the delivery by signing the delivery
latter ipso facto is a common carrier. At most, respondent
receipt suffices. 
acted merely as an agent of the airline, with whom petitioner
ultimately contracted for her carriage to Europe. Respondent’s
obligation to petitioner in this regard was simply to see to it 2. In PAL vs. CA 106 S 391 - SC said that the
that petitioner was properly booked with the airline for the duty of to exercise the duty of utmost diligence on
appointed date and time. Her transport to the place of
destination, meanwhile, pertained directly to the airline.
 Transcribed and Prepared by: Hanniyah Sevilla 4 Manresa ’08-‘09 3

the part of the CC is for the safety of passengers, as

well as members of the crew. 2. Note: The cancellation of certificate of public
convenience cannot be done without hearing;
If you are part of the crew, and you are injured, you although these bodies have the power to initiate
can sue the the CC and the CC cannot invoke that it is hearing motu propio. Take note of the ground for
not required to exercise XOD. So there is no cancellation as provided under Art. 1765.
discrimination between crew and passengers.
3. Pantranco vs. Public Service Commission
The duty to exercise the utmost diligence on the part of 70 P 221 - A certificate of public convenience
common carriers is for the safety of passengers as well as for constitutes neither a franchise nor a contract. It
the members of the crew or the complement operating the confers no property rights and is a mere license or
carrier, the airplane in the present case. And this must be so privilege and therefore can be subject to
for any omission, lapse or neglect thereof will certainly result to
regulation founded on the police power of the
the damage, prejudice, nay injuries and even death to all
aboard the plane, passengers and crew members alike. State.

4. Medina vs. Cresencia- The sale of CPC

3. Benedicto vs. IAC - The prevailing doctrine on
without approval of the governing bodies is not
common carriers makes the registered owner liable for
binding against the public. So there has to be
consequences flowing from the operations of the
approval first. It is binding between the parties
carrier, even though the specific vehicle involved may
only. In contemplation of the law, the grantee of
already have been transferred to another person. This
record continues to be responsible under the CPC
doctrine rests upon the principle that in dealing with
in relation to the governing body or the public.
vehicles registered under the Public Service Law, the
public has the right to assume that the registered
5. PAL vs. CAB 270 S 538 - PAL alleged that
owner is the actual or lawful owner thereof It would be
CAB abused its discretion when it granted to
very difficult and often impossible as a practical matter,
Grand Air a Temporary Operating Permit. Accdg.
for members of the general public to enforce the rights
to PAL, Grand Air has not been granted a
of action that they may have for injuries inflicted by the
legislative franchise to operate.
vehicles being negligently operated if they should be
required to prove who the actual owner is. The
The issue in this petition is whether or not Congress, in A
registered owner is not allowed to deny liability by
enacting Republic Act 776, has delegated the authority to t
proving the identity of the alleged transferee. Thus, authorize the operation of domestic air transport services e
contrary to petitioner's claim, private respondent is not to the respondent Board, such that Congressional
n
e
required to go beyond the vehicle's certificate of mandate for the approval of such authority is no longer o
registration to ascertain the owner of the carrier. necessary.
d
e
4. BA Finance vs. CA - the registered owner, the Civil Aeronautics Board has the authority to issue a
Certificate of Public Convenience and Necessity, or D
defendant-appellant herein, is primarily responsible for a
Temporary Operating Permit to a domestic air transport
the damage caused to the vehicle of the plaintiff- operator, who, though not possessing a legislative
v
a
appellee, but he (defendant-appellant) has a right to be franchise, meets all the other requirements prescribed by o
indemnified by the real or actual owner of the amount the law. Such requirements were enumerated in Section
C
that he may be required to pay as damage for the 21 of R.A. 776.
o
injury caused to the plaintiff-appellant. (File a 3rd party l
complaint) There is nothing in the law nor in the Constitution, which l
indicates that a legislative franchise is an indispensable e
g
requirement for an entity to operate as a domestic air
Reason: Were a registered owner allowed to evade e
transport operator. Although Section 11 of Article XII
responsibility by proving who the supposed transferee or owner recognizes Congress' control over any franchise, o
is, it would be easy for him, by collusion with others or certificate or authority to operate a public utility, it does f
otherwise, to escape said responsibility and transfer the same not mean Congress has exclusive authority to issue the L
to an indefinite person, or to one who possesses no property same. Franchises issued by Congress are not required a
with which to respond financially for the damage or injury before each and every public utility may operate. In w
done. A victim of recklessness on the public highways is usually many instances, Congress has seen it fit to delegate this
without means to discover or Identify the person actually function to government agencies, specialized particularly
causing the injury or damage. He has no means other then by in their respective areas of public service.
a recourse to the registration in the Motor Vehicles Office to
determine who is the owner. The protection that the law aims A reading of Section 10 of the same reveals the clear
to extend to him would become illusory were the registered intent of Congress to delegate the authority to regulate
owner given the opportunity to escape liability by disproving the issuance of a license to operate domestic air
his ownership. If the policy of the law is to be enforced and transport services
carried out, the registered owner should not be allowed to
prove the contrary to the prejudice of the person injured, that
is, to prove that a third person or another has become the Distinctions between CC and Private
owner, so that he may thereby be relieved of the responsibility Carrier
to the injured person.
1. Definition Cf: Art. 1766 Involves a single
STATE REGULATION OF COMMON undertaking
CARRIER 2. As to Bound to carry all May choose person
whom it may pax who choose with whom it may
Art. 1765. The Public Service Commission may, on its own motion or contract to employ it contract
on petition of any interested party, after due hearing, cancel the 3. Degree of Observe XOD GFOF
certificate of public convenience granted to any common carrier diligence
that repeatedly fails to comply with his or its duty to observe required
extraordinary diligence as prescribed in this Section. 4. As to Negligence is Person who alleges
presumption presumed if pax negligence must
Notes: of negligence or goods do not prove the same
1. So the public service commission has been replaced reach final
by the following bodies: destination
5. As to how
LTO - private vehicles to escape
LTFRB- common carrier liability
Civil Aeronautics Board - public airplanes 6. As to state A CC performs Does not perform
ATO- private planes (according to Lyndon) regulation public service and public service; also
MARINA - common carriers for sea is subject to State subject to State
 Transcribed and Prepared by: Hanniyah Sevilla 4 Manresa ’08-‘09 4

regulation regulation but not Art. 1735. In all cases other than those mentioned in Nos. 1, 2,
too strict. 3, 4, and 5 of the preceding article, if the goods are lost,
destroyed or deteriorated, common carriers are presumed
CC OF GOODS (CCOG) to have been at fault or to have acted negligently, unless
they prove that they observed extraordinary diligence as
Art. 1753. The law of the country to which the goods required in Article 1733.
are to be transported shall govern the liability of the
common carrier for their loss, destruction or 4. If any of the 5 instances arises, the
deterioration. presumption of negligence WILL NOT ARISE. The
effect is that there is no automatic presumption of
NOTES: negligence. What is the effect? The effect is that
1. If foreign voyage or flight from foreign country the CCOG no longer needs to prove that it
inbound to Phil - governed by Phil laws. If outbound, exercised XOD.
carrier lands in US and there is complaint, can pax sue
CCOG here? Yes, apply conflicts of laws. (Saudia 5. Q: Is the CCOG automatically exempt from
Airlines case) liability in cases of the 5 instances mentioned in
Art. 1734?
TEST TO DETERMINE IF ONE IS CCOG
A: NO. The CCOG must still have to prove that it
a. He must be engaged in the business of carrying complied with the requirements of Art. 1739,
goods for others as a public employment, and must 1740, 1741, 1742.
hold himself out as ready to engage in the
transportation of goods for person generally as a 6. YNCHAUSTI VS. DEXTER - What does the
business and not as a casual occupation; shipper/consignee have to show in order to
have a prima facie case against the carrier?
b. He must undertake to carry goods of the kind to
which his business is confined; 1. Actual receipt of goods by the carrier;
2. Failure to deliver the goods in the same
c. He must undertake to carry by the method by which conditions as it was received.
his business is conducted and over his established
roads; and If these two are shown, the burden of proof is
shifted and it is incumbent upon the carrier, in
d. The transportation must be for hire. (FPIC VS. CA) order to exonerate itself, to both allege and prove
that the injury was due to some circumstances.
Art. 1733. Common carriers, from the nature of their
business and for reasons of public policy, are bound to The mere proof of delivery of goods in good order to a
observe extraordinary diligence in the vigilance over carrier, and of their arrival at the place of destination in
the goods X X X bad order, makes out a prima facie case against the
carrier, so that if no explanation is given as to how the
Such extraordinary diligence in the vigilance over the injury occurred, the carrier must be held responsible. It
is incumbent upon the carrier to prove that the loss was
goods is further expressed in Articles 1734, 1735, and
due to accident or some other circumstance inconsistent
1745, Nos. 5, 6, and 7, while the extraordinary with its liability.
diligence for the safety of the passengers is further set
forth in Articles 1755 and 1756.
7. What does it mean if the shipment is
'containarized'? (Bankers and Manufacturers
Notes:
vs. CA)
What is XOD in the vigilance of goods?
Extraordinary diligence requires rendering service with
It must be underscored that the shipment involved in the A
the greatest skill and foresight to avoid damage and case at bar was "containerized". The goods under this t
destruction to the goods entrusted for carriage and arrangement are stuffed, packed, and loaded by the e
n
delivery. (Leamer vs. Malayan, 2005) shipper at a place of his choice, usually his own e
warehouse, in the absence of the carrier. The container is o
Art. 1734. Common carriers are responsible for the loss, sealed by the shipper and thereafter picked up by the
d
destruction, or deterioration of the goods, unless the same is due carrier. Consequently, the recital of the bill of lading for
e
goods thus transported ordinarily would declare "Said to
to any of the following causes only: Contain", "Shipper's Load and Count", "Full Container D
Load", and the amount or quantity of goods in the a
(1) Flood, storm, earthquake, lightning, or other natural disaster v
container in a particular package is only prima facie a
or calamity; evidence of the amount or quantity which may be o
overthrown by parol evidence.
C
(2) Act of the public enemy in war, whether international or o
A shipment under this arrangement is not inspected or l
civil;
inventoried by the carrier whose duty is only to transport l
and deliver the containers in the same condition as when e
Notes: the carrier received and accepted the containers for g
e
1. Gen Rule is the first sentence; the exceptions are the transport.
5 cases enumerated. o
f
What is the requirement to hold the CCOG
2. Does it mean that if goods are lost, damaged or liable if goods are damaged under this L
a
destroyed, is the CCOG automatically responsible? arrangement? w

NO. There is no automatic liability or responsibility for In order to hold the carrier liable for whatever
loss/deterioration/damage of goods. What arises is loss, damage or deterioration that happened on
AUTOMATIC PRESUMPTION of negligence. the goods inside the container, it has to be
opened in front of the carrier and inspected. If the
3. How to rebut presumption/escape liability? consignee receives the container, does not check
it, brings it to ihs warehouse and complains days
The CCOG must prove that it exercised XOD. (Note: later, then that is no longer allowed. The
Do not say "by exercising XOD" because that is inspection should be done in front of the carrier.
different from proving CCOG exercised XOD.)
If the inspection is done upon arrival, there is a
presumption that the goods were received in good
 Transcribed and Prepared by: Hanniyah Sevilla 4 Manresa ’08-‘09 5

order. The carrier then will have to prove that the 3. What about heavy rains, are they considered
goods were received otherwise. natural disasters? NO. Vessels are built to
withstand heavy rains and seas.
8. What is an arrastre operator?
Eastern Shipping vs. CA: The heavy seas and
Is an arrastre operator legally liable for the loss of a rains referred to in the master's report were not
shipment in its custody? If so, what is the extent of its caso fortuito, but normal occurrences that an
liability? (Summa Insurance vs. CA) ocean-going vessel, particularly in the month of
September which, in our area, is a month of rains
H: In the performance of its obligations, an arrastre operator and heavy seas would encounter as a matter of
should observe the same degree of diligence as that required of routine. They are not unforeseen nor
a common carrier and a warehouseman as enunciated under unforeseeable. These are conditions that ocean-
Article 1733 of the Civil Code and Section 3(8) of the going vessels would encounter and provide for, in
Warehouse Receipts Law, respectively. Being the custodian of
the ordinary course of a voyage.
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. 4. DSR Senator vs. Phoenix (2003) - same ruling
as Eastern Shipping that fire is not a natural
Flood, storm, earthquake, lightning, or calamity.
other natural disaster or calamity -- in
relation to 1739 and 1740: 5. Illustration of Art. 1740: Philamgen vs. CA
222 SCRA 414 - Here, the goods arrived in port
Art. 1739. In order that the common carrier may be exempted from but because of the heavy rains, they were not
responsibility, the natural disaster must have been the proximate discharged and so the goods were destroyed. The
and only cause of the loss. However, the common carrier must issue is did the CCOG negligently incur in delay?
exercise due diligence to prevent or minimize loss before, during
and after the occurrence of flood, storm or other natural disaster No, the cause of the delay was not the fault of the
in order that the common carrier may be exempted from liability carrier. The delay was caused by the decision of
for the loss, destruction, or deterioration of the goods. The same the board (construction of catwalks, etc), customs
duty is incumbent upon the common carrier in case of an act of the of the place and heavy, intermittent rains.
public enemy referred to in Article 1734, No. 2.
Other cases:
Art. 1740. If the common carrier negligently incurs in delay in
transporting the goods, a natural disaster shall not free such carrier 7. Schmitz Transport vs. Transventure: the
from responsibility. natural calamity was not the only and proximate
cause of the loss.
Notes: Act of the public enemy in war,
whether international or civil;
1. CCOG need not prove it exercised XOD; however,
CCOG must prove that: (Philamgen vs. MCG Marine) Requirements:
a. the natural calamity or disaster must have been the a. the natural act of public enemy must have been
proximate and only cause of the loss; and the proximate and only cause of the loss; and
b. the CCOG exercised due diligence to prevent or b. the CCOG exercised due diligence to prevent or
minimize the loss and minimize the loss
c. CCOG did not incur delay in transporting the goods.
Act of omission of the shipper or
2. Is fire a natural calamity? (This was not clearly owner of the goods in relation to:
answered by Atty. Suarez; In response to the suggested
answer that fire is considered natural calamity if caused by
lightning, the answer given by Ma'am S was: When you say Art. 1741. If the shipper or owner merely contributed to the
natural, it has to be natural. Obviously if it was caused by loss, destruction or deterioration of the goods, the
something that has some kind of human intervention, it cannot proximate cause thereof being the negligence of the
fall under natural disaster.) common carrier, the latter shall be liable in damages, which
however, shall be equitably reduced.
EASTERN SHIPPING VS. IAC
Notes:
As a general rule, fire is not a natural disaster.
1. In order to totally escape liability, the CCOG
must prove that the act/negligence of the shipper
Petitioner Carrier claims that the loss of the vessel by fire
is the only and proximate cause of the loss.
exempts it from liability under the phrase "natural disaster or
calamity. " However, we are of the opinion that fire may not be Otherwise, Art. 1741 applies. If the CCOG is not
considered a natural disaster or calamity. This must be so as it able to prove that the only and proximate cause of
arises almost invariably from some act of man or by human the loss is the act of the shipper then, there will
means. It does not fall within the category of an act of God be an equitable reduction of the liability.
unless caused by lightning or by other natural disaster or
calamity. It may even be caused by the actual fault or privity 2. COMPANIA MARITIMA VS. CA: Here, the
of the carrier.
shipper stated the weight of the payloader was
2.5 tons when it was 7.5 tons in reality. CCOG
Of course the exception is unless it was naturally used a lifting apparatus with a 5 ton capacity, so A
caused, such as lightning, or if there was an the payloader fell and was damaged. t
earthquake and suddenly the cement rubbed against e
n
each other. H: We are not persuaded by the proferred explanation of e
o
petitioner alleged to be the proximate cause of the fall of
This was reiterated in Cokaliong vs. UCPB (2003) the payloader while it was being unloaded at the d
Cagayan de Oro City pier. Petitioner seems to have e
Having originated from an unchecked crack in the fuel oil overlooked the extraordinary diligence required of
D
service tank, the fire could not have been caused by force common carriers in the vigilance over the goods a
majeure. Broadly speaking, force majeure generally applies to transported by them by virtue of the nature of their v
a natural accident, such as that caused by a lightning, an business, which is impressed with a special public duty. a
o
earthquake, a tempest or a public enemy. Hence, fire is not
considered a natural disaster or calamity. And circumstances clearly show that the fall of the C
payloader could have been avoided by petitioner's crew. o
Evidence on record sufficiently show that the crew of l
l
e
g
e

o
f

L
a
w
 Transcribed and Prepared by: Hanniyah Sevilla 4 Manresa ’08-‘09 6

petitioner had been negligent in the performance of its deliver the goods to the warehouse of the shipper.
obligation by reason of their having failed to take the necessary When the goods arrived, they were spoiled. Calvo
precaution under the circumstances which usage has denied liability for the goods and alleged that the
established among careful persons, more particularly its Chief spoilage took place while the goods were in the
Officer, Mr. Felix Pisang, who is tasked with the over-all
vessel or while with the arrastre operator.
supervision of loading and unloading heavy cargoes and upon
whom rests the burden of deciding as to what particular winch
the unloading of the payloader should be undertaken. While it According to the SC, when did the consignee
was his duty to determine the weight of heavy cargoes before discover the spoilage of the goods? When they
accepting them. Mr. Felix Pisang took the bill of lading on its were in the possession of Calvo.
face value and presumed the same to be correct by merely
"seeing" it.
For this provision to apply, the rule is that if the improper
packing or, in this case, the defect/s in the container,
In that sense, therefore, private respondent's act of furnishing
is/are known to the carrier or his employees or apparent
petitioner with an inaccurate weight of the payloader upon
upon ordinary observation, but he nevertheless accepts
being asked by petitioner's collector, cannot be used by said
the same without protest or exception notwithstanding
petitioner as an excuse to avoid liability for the damage
such condition, he is not relieved of liability for damage
caused, as the same could have been avoided had petitioner
resulting therefrom. In this case, petitioner accepted the
utilized the "jumbo" lifting apparatus which has a capacity of
cargo without exception despite the apparent defects in
lifting 20 to 25 tons of heavy cargoes.
some of the container vans. Hence, for failure of
petitioner to prove that she exercised extraordinary
Act of omission of the shipper or owner of diligence in the carriage of goods in this case or that she
the goods; is exempt from liability, the presumption of negligence as
provided under Art. 1735 holds.
The character of the goods or defects in
the packing or in the containers; c. Iron bulk Shipping vs. Remington

ARTICLE 1742. Even if the loss, destruction, or deterioration Order or act of competent public
of the goods should be caused by the character of the goods, or authority.
the faulty nature of the packing or of the containers, the common
carrier must exercise due diligence to forestall or lessen the loss. ARTICLE 1743. If through the order of public authority
the goods are seized or destroyed, the common carrier is
Notes: not responsible, provided said public authority had power to
1. If there is a defect in the packaging or character of issue the order
the goods, for example in a case, grain was loaded and
they were already halfway to rotting, i.e. there were Note:
already molds, then the requisite for CCOG to escape 1. First requisite: Person issuing order must
liability is that it must prove that it exercised due have power to issue such.
diligence to forsetall or lessen the loss. That is under
Art. 1742. 2. Second requisite: The order must be lawful or
must have been issued under legal process or
2. But a perusal of the cases will show that the SC is authority
saying that CCOG should do something more than just
Art. 1742: (Ganzon vs. CA - A,owner of the the CCOG was
unloading the iron. Mayor B demanded P5,000
a. Southern Lines vs. CA: Petitioner claims exemption and when A refused, B shot A. After several days,
from liability by contending that the shortage in the the unloading resumed and Acting Mayor C
shipment of rice was due to such factors as the ordered X and the crew of the vessel to dump the
shrinkage, leakage or spillage of the rice on account of iron. The issue is, can the CCOG be held liable for
the bad condition of the sacks at the time it received the loss of the cargo?
the same and the negligence of the agents of
respondent City of Iloilo in receiving the shipment. Held: YES. We cannot sustain the theory of caso
fortuito. In the courts below, the petitioner's defense was
that the loss of the scraps was due to an "order or act of
Held: The contention is untenable, for, if the fact of improper
competent public authority," and this contention was
packing is known to the carrier or his servants, or apparent
correctly passed upon by the Court of Appeals which
upon ordinary observation, but it accepts the goods
ruled that:
notwithstanding such condition, it is not relieved of liability for
loss or injury resulting thereform.
... In the second place, before the appellee Ganzon could
be absolved from responsibility on the ground that he
Furthermore, according to the Court of Appeals, "appellant
was ordered by competent public authority to unload the
(petitioner) itself frankly admitted that the strings that tied the
scrap iron, it must be shown that Acting Mayor Basilio
bags of rice were broken; some bags were with holes and
Rub had the power to issue the disputed order, or that it
plenty of rice were spilled inside the hull of the boat, and that
was lawful, or that it was issued under legal process of
the personnel of the boat collected no less than 26 sacks of rice
authority. The appellee failed to establish this. Indeed,
which they had distributed among themselves." This finding,
no authority or power of the acting mayor to issue such
which is binding upon this Court, shows that the shortage
an order was given in evidence.
resulted from the negligence of petitioner.
The petitioner was not duty bound to obey the illegal
Therefore, if goods are delivered to the CCOG and the order to dump into the sea the scrap iron. Moreover,
defect in the goods/packaging is apparent, then the CC there is absence of sufficient proof that the issuance of
may accept the goods with reservation or exception. It the same order was attended with such force or
must be indicated in the bill of lading that the goods intimidation as to completely overpower the will of the
petitioner's employees. The mere difficulty in the
are already defective, etc. And if the goods arrived in
fullfilment of the obligation is not considered force
the same condition as it was received, then that can be majeure.
used as an exception. If that happens, all the carrier
has to prove is Art. 1742 -- due diligence to forestall or
DURATION OF LIABILITY (from
lessen the loss.
what point to what point is a carrier
liable?)
Otherwise, the acceptance of CCOG without exception,
the CC cannot hide under this exception.
ARTICLE 1736. The extraordinary responsibility of the
common carrier lasts from the time the goods are
b. CALVO VS. UCPB: Calvo is a customs broker. The
unconditionally placed in the possession of, and received by
vessel arrived in Manila. The cargo was loaded on the
the carrier for transportation until the same are delivered,
truck of Calvo. Calvo as broker also volunteered to
 Transcribed and Prepared by: Hanniyah Sevilla 4 Manresa ’08-‘09 7

actually or constructively, by the carrier to the consignee, or to the for causes other that those mentioned, the common
person who has a right to receive them, without prejudice to the carrier is presumed to have been at fault or to have
provisions of article 1738. acted negligently, unless it proves that it has observed
extraordinary diligence in their care , and that this
extraordinary liability lasts from the time the goods are
ARTICLE 1737. The common carrier's duty to observe placed in the possession of the carrier until they are
extraordinary diligence in the vigilance over the goods remains in delivered to the consignee, or "to the person who has the
full force and effect even when they are temporarily unloaded or right to receive them" , but these provisions only apply
stored in transit, unless the shipper or owner has made use of the when the loss, destruction or deterioration takes place
right of stoppage in transitu. while the goods are in the possession of the carrier, and
not after it has lost control of them.
ARTICLE 1738. The extraordinary liability of the common The reason is obvious. While the goods are in its
carrier continues to be operative even during the time the goods possession, it is but fair that it exercise extraordinary
are stored in a warehouse of the carrier at the place of destination, diligence in protecting them from damage, and if loss
until the consignee has been advised of the arrival of the goods occurs, the law presumes that it was due to its fault or
and has had reasonable opportunity thereafter to remove them or negligence. This is necessary to protect the interest the
otherwise dispose of them. interest of the owner who is at its mercy. The situation
changes after the goods are delivered to the consignee.

Notes: While we agree with the Court of Appeals that while

delivery of the cargo to the consignee, or to the person
From when: from the time the goods are who has a right to receive them", contemplated in Article
unconditionally placed in the possession of, and 1736, because in such case the goods are still in the
received by the carrier for transportation. hands of the Government and the owner cannot exercise
dominion over them, we believe however that the parties
may agree to limit the liability of the carrier considering
Not actually place on the ship, it is enough even if that the goods have still to through the inspection of the
custody is transferred to the office/receiving office of customs authorities before they are actually turned over
the carrier. to the consignee. This is a situation where we may say
that the carrier losses control of the goods because of a
It ends: When the goods are delivered, actually or custom regulation and it is unfair that it be made
responsible for what may happen during the
constructively, by the carrier to the consignee, or to the
interregnum. And this is precisely what was done by the
person who has a right to receive them, without parties herein.
prejudice to the provisions of article 1738.
So what can be done in cases such as this wherein
1. Compania Maritima vs. Icna - Since the vessel of
we have no exact provision under the law to
CM was too large for the Sasa Warf, CM sent a lighter
govern the same? In such case, the agreement of
to pick up the hemp. Before the hemp could be loaded
the parties prevail.
to the vessel, the lighter sank. CM alleged that it could
not be liable for the loss as the goods were not yet
3. SERVANDO VS. PHIL STEAM NAVIGATION
loaded on the vessel. Besides, there was no bill of
CO
lading yet issued to the shipper.
Here, the goods were delivered in good order in
H: The claim that there can be no contract of affreightment
Athe warehouse of the customs authority. At about
because the hemp was not actually loaded on the ship that was t
to take it from Davao City to Manila is of no moment, for the e
2:00 in the afternoon of the same day, said
delivery of the hemp to the carrier’s lighter is in line with the nwarehouse was razed by a fire of unknown origin,
contract. edestroying appellees' cargoes. Before the fire,
o
however, appellee Uy Bico was able to take
The authorities are to the effect that a bill of lading is not ddelivery
of 907 cavans of rice. Is the carrier liable?
indispensable for the creation of a contract of carriage. As e
regards the form of the contract of carriage it can be said that
DH: No. Article 1736 of the Civil Code imposes upon
provided that there is a meeting of the minds and from such a
meeting arise rights and obligations, there should be no v
common carriers the duty to observe extraordinary
limitations as to form.’ The bill of lading is juridically a adiligence from the moment the goods are unconditionally
oplaced in their possession "until the same are delivered,
documentary proof of the stipulations and conditions agreed
upon by both parties. actually or constructively, by the carrier to the consignee
C
o
or to the person who has a right to receive them, without
The liability of the carrier as common carrier begins with the l prejudice to the provisions of Article 1738. "
l
actual delivery of the goods for transportation, and not merely eThe court a quo held that the delivery of the shipment in
with the formal execution of a receipt or bill of lading; the g
issuance of a bill of lading is not necessary to complete delivery equestion to the warehouse of the Bureau of Customs is
and acceptance. Even where it is provided by statute that not the delivery contemplated by Article 1736; and since
othe burning of the warehouse occurred before actual or
liability commences with the issuance of the bill of lading, f
actual delivery and acceptance are sufficient to bind the carrier. constructive delivery of the goods to the appellees, the
Lloss is chargeable against the appellant.
a
The test as to whether the relation of shipper and carrier had wIt
been established is, had the control and possession of the should be pointed out, however, that in the bills of
cotton been completely surrendered by the shipper to the lading issued for the cargoes in question, the parties
shipper? Whenever the control and possession of goods passes agreed to limit the responsibility of the carrier for the
to the carrier and nothing remains to be done by the shipper, loss or damage that may be caused to the shipment by
then it can be said with certainty that the relation of shipper inserting therein the following stipulation:
and carrier has been established.
Clause 14. Carrier shall not be responsible for loss or
damage to shipments billed 'owner's risk' unless such
2. In relation to Art. 1738, what if the goods are in the loss or damage is due to negligence of carrier. Nor shall
customs warehouse and they get destroyed, carrier be responsible for loss or damage caused by force
deteriorated or damaged because the processing of majeure, dangers or accidents of the sea or other
papers take too long to process? Can the carrier be waters; war; public enemies; . . . fire . ...
held liable?
In the case at bar, the burning of the customs warehouse
was an extraordinary event which happened
LU DO & LU YM CORP VS. BINAMIRA -- NO. independently of the will of the appellant. The latter
could not have foreseen the event.
H: It is true that, as a rule, a common carrier is responsible for
the loss, destruction or deterioration of the goods it assumes to So in this case, the burning of the customs
carry from one place to another unless the same is due to any
warehouse was considered as a fortuitous event
to any of the causes mentioned in Article 1734 on the new Civil
Code, and that, if the goods are lost, destroyed or deteriorated, in so far as the carrier is concerned.
 Transcribed and Prepared by: Hanniyah Sevilla 4 Manresa ’08-‘09 8

4. SAMAR MINING VS. NORDEUTCHER LLOYD Held: YES. Delivery to GPC is delivery to the consignee.
The extraordinary responsibility of common carriers last
The bill of lading provided that it was effective only for until actual or constructive delivery of the cargo to the
the transport of the goods for Germany to Manila. consignee or his agent.
From Manila, the goods were to be further transported Pakistan was indicted as consignee and GPC was the
to Davao. The carrier had unloaded and delivered the notify party. However, in the export invoice, GPC was
good in the bonded warehouse in Manila. They never clearly named as buyer or importer. Petitioner referred
reached Davao. Is Nordeutcher Lloyd liable? to GPC as such in his demand letter to respondent and
his complaint before the court. This premise brings into
Held: No. When the carrier under the terms of the bill conclusion that the deliveries of the cargo to GPC as
buyer or importer is in conformity with Art. 1736 of the
of lading had delivered the goods at the port of
Civil Code. Therefore, there was a valid delivery.
destination, at that point he merely becomes the agent
of consignee and ceases to be liable as carrier for loss
or damages of the goods transported. Thereafter, loss So here, even if there was no delivery to the
of goods in its hand for causes beyond its control consignee but there were instructions from the
without negligence being proved, cannot sustain a shipper then the goods are deemed delivered and
claim for damage against the carrier. the CCOG can no longer be held liable for the loss
of the goods.
There is no doubt that Art. 1738 finds no applicability to the
instant case. The said article contemplates a situation where 6. SCHMITZ TRANSPORT VS. TVI: The cargo
the goods had already reached their place of destination and was on board MV Alexander that was parked
A are stored in the warehouse of the carrier. The subject goods outside the breakwater. The goods were loaded on
t were still awaiting transshipment to their port of destination, a barge that was supposed to be pulled by the
e
n
and were stored in the warehouse of a third party when last tugboat. According to Schmitz, Black Sea, the
seen and/or heard of. However, Article 1736 is applicable to
e owner of MV Alexander, should be liable because
o the instant suit. Under said article, the carrier may be relieved
of the responsibility for loss or damage to the goods upon
the goods have not yet been delivered to the
d
actual or constructive delivery of the same by the carrier to the consignee.
e
consignee, or to the person who has a right to receive them. In
D sales, actual delivery has been defined as the ceding of H: No, because Shcmitz is an agent of the
a corporeal possession by the seller, and the actual apprehension
v
consignee. And Black Sea already delivered the
a of corporeal possession by the buyer or by some person goods once the same were transferred from the
o authorized by him to receive the goods as his representative
vessel MV Alexander to the barge that was
for the purpose of custody or disposal. By the same token,
C
there is actual delivery in contracts for the transport of goods supposed to bring the goods to the warehouse of
o Little Giant, the consignee. Thus Black sea no
l when possession has been turned over to the consignee or to
l his duly authorized agent and a reasonable time is given him to longer had custody over the goods. There was
e remove the goods. The court a quo found that there was already actual delivery to the person who had the
g
e
actual delivery to the consignee through its duly authorized right to receive them, Schmitz -- as an agent of
agent, the carrier. the consignee.
o
f It becomes necessary at this point to dissect the complex
relationship that had developed between appellant and VALIDITY OF STIPULATIONS
L
a appellee in the course of the transactions that gave birth to the
w present suit. Two undertakings appeared embodied and/or Can the CCOG and the shipper agree that the
provided for in the Bill of Lading 19 in question. The first is FOR CCOG will not be required to exercise XOD?
THE TRANSPORT OF GOODS from Bremen, Germany to Manila.
The second, THE TRANSSHIPMENT OF THE SAME GOODS from YES. As to the diligence required,
Manila to Davao, with appellant acting as agent of the
consignee. At the hiatus between these two undertakings of
appellant which is the moment when the subject goods are General rule: the CCOG and the shipper may
discharged in Manila, its personality changes from that of enter into an agreement/stipulation which lessens
carrier to that of agent of the consignee. Thus, the character of the diligence required, but there are requisites:
appellant's possession also changes, from possession in its own
name as carrier, into possession in the name of consignee as ARTICLE 1744. A stipulation between the common
the latter's agent. Such being the case, there was, in effect,
carrier and the shipper or owner limiting the liability of the
actual delivery of the goods from appellant as carrier to the
same appellant as agent of the consignee. Upon such delivery, former for the loss, destruction, or deterioration of the
the appellant, as erstwhile carrier, ceases to be responsible for goods to a degree less than extraordinary diligence shall be
any loss or damage that may befall the goods from that point valid, provided it be:
onwards. This is the full import of Article 1736, as applied to
the case before Us. (1) In writing,
(2) signed by the shipper or owner;
But even as agent of the consignee, the appellant cannot be
(3) Supported by a valuable consideration other than the
made answerable for the value of the missing goods, It is true
that the transshipment of the goods, which was the object of service rendered by the common carrier; and
the agency, was not fully performed. However, appellant had (4) Reasonable, just and not contrary to public policy.
commenced said performance, the completion of which was
aborted by circumstances beyond its control. An agent who Can the parties stipulate that there shall be no
carries out the orders and instructions of the principal without
diligence to be excercised by the CCOG?
being guilty of negligence, deceit or fraud, cannot be held
responsible for the failure of the principal to accomplish the
object of the agency. NO. Under Art. 1745, these are void stipulations
because they are against public policy.
5. Macam vs. CA
ARTICLE 1745. Any of the following or similar
Facts: Petitioner Macam exported watermelons and stipulations shall be considered unreasonable, unjust and
mangoes to Hong Kong, Great Prospect Company is the contrary to public policy:
consignee. The bill of lading stated that one of the bill (1) That the goods are transported at the risk of
must be presented by the Pakistan Bank as consignee the owner or shipper;
and GPC as the notify party. Upon arrival in Hong (2) That the common carrier will not be liable
Kong, the shipment was delivered by the carrier for any loss, destruction, or deterioration of the goods;
directly to GPC and not to Pakistan Bank and without (3) That the common carrier need not observe
surrendering the bill of lading. Was there a proper any diligence in the custody of the goods;
delivery? (4) That the common carrier shall exercise a
degree of diligence less than that of a good father of a
 Transcribed and Prepared by: Hanniyah Sevilla 4 Manresa ’08-‘09 9

family, or of a man of ordinary prudence in the vigilance over the ARTICLE 1749. A stipulation that the common carrier's
movables transported; liability is limited to the value of the goods appearing in the
(5) That the common carrier shall not be responsible bill of lading, unless the shipper or owner declares a greater
for the acts or omission of his or its employees; value, is binding.
(6) That the common carrier's liability for acts
committed by thieves, or of robbers who do not act with grave or ARTICLE 1750. A contract fixing the sum that may be
irresistible threat, violence or force, is dispensed with or recovered by the owner or shipper for the loss, destruction,
diminished; or deterioration of the goods is valid, if it is reasonable and
(7) That the common carrier is not responsible for the just under the circumstances, and has been fairly and freely
loss, destruction, or deterioration of goods on account of the agreed upon.
defective condition of the car, vehicle, ship, airplane or other
equipment used in the contract of carriage. Normally, when are these stipulations present?
1. In contracts of carriage by sea -- in the bill of
Notes: lading; (500 pesos per kilo)
2. In contracts of carriage by air -- in the ticket.
1. De Guzman vs. CA: Cendana is not liable for the (normally $20 per kilo)
loss of the goods because of the hijacking incident
because it fell under Art. 1745(6) . According to the For the stipulation to be valid, it must not be just
court, a stipulation. It must contain a statement which
says that if the shipper agrees or has declared a
H: Applying the above-quoted Articles 1734 and 1735, we note higher valuation and has paid for a higher price
firstly that the specific cause alleged in the instant case the thereof, then the 500 peso limitation is not
hijacking of the carrier's truck does not fall within any of the applicable.
five (5) categories of exempting causes listed in Article 1734. It
would follow, therefore, that the hijacking of the carrier's
The 500-peso limitation is only applicable when
vehicle must be dealt with under the provisions of Article 1735,
in other words, that the private respondent as common carrier the shipper has not declared a higher value and
is presumed to have been at fault or to have acted negligently. paid a higher freight.
This presumption, however, may be overthrown by proof of
extraordinary diligence on the part of private respondent. A stipulation which exempts the carrier from any
or all liability from loss or damage occasioned by
Petitioner insists that private respondent had not observed its own negligence is not valid.
extraordinary diligence in the care of petitioner's goods.
Petitioner argues that in the circumstances of this case, private
respondent should have hired a security guard presumably to A stipulation which provides for an unqualified
ride with the truck carrying the 600 cartons of Liberty filled limitations, like 10 pesos per kilo (only) and thus
milk. We do not believe, however, that in the instant case, the limits liability to an agreed valuation is not valid.
standard of extraordinary diligence required private respondent (Meaning, wala yung stipulation that if the shipper
to retain a security guard to ride with the truck and to engage pays a higher freight, etc.)
A brigands in a firelight at the risk of his own life and the lives of
t the driver and his helper.
e (Heacock vs. Macondray) where the SC
n
e Under Article 1745 (6) above, a common carrier is held enumerated the three kinds of stipulation:
o responsible and will not be allowed to divest or to diminish
such responsibility even for acts of strangers like thieves or 1. No liability -- the carrier will not be liable at all
d
e
robbers, except where such thieves or robbers in fact acted for the negligent acts of its crew and employees --
"with grave or irresistible threat, violence or force." We believe void
D and so hold that the limits of the duty of extraordinary
a diligence in the vigilance over the goods carried are reached
v
where the goods are lost as a result of a robbery which is 2. Limited Liability -- regardless of the value of
a
o attended by "grave or irresistible threat, violence or force." the cargo, the maximum liability of the carrier will
by only to a certain amount, i.e. 500 per kilo --
C
o
Three (3) of the five (5) hold-uppers were armed with firearms. void.
l The robbers not only took away the truck and its cargo but also
l kidnapped the driver and his helper, detaining them for several 3. Qualified liability- this is the only stipulation in
e days and later releasing them in another province (in
g a bill of lading/ticket which can validly limit
Zambales). In these circumstances, we hold that the
e
occurrence of the loss must reasonably be regarded as quite liability; here, the carrier fixes a maximul liability
o beyond the control of the common carrier and properly in the event the shipper doe snot delcare any
f regarded as a fortuitous event. It is necessary to recall that value, or a value upto a certain amount. Should
L even common carriers are not made absolute insurers against shipper declare a higher value and willing to pay
a all risks of travel and of transport of goods, and are not held higher freightage, the carrier shall accordingly be
w liable for acts or events which cannot be foreseen or are liable for greater damage.
inevitable, provided that they shall have complied with the
rigorous standard of extraordinary diligence.
Other cases cited in ppt: Eastern vs. IAC (150
SCRA 463), Sea-Land Services vs. IAC (153
ARTICLE 1746. An agreement limiting the common carrier's SCRA), Cokaliong Shipping vs. UCPB (2003)
liability may be annulled by the shipper or owner if the common
carrier refused to carry the goods unless the former agreed to such
Art. 1747. If the common carrier, without just cause, delays
stipulation.
the transportation of the goods or changes the stipulated or
usual route, the contract limiting the common carrier's
ARTICLE 1747. If the common carrier, without just cause,
liability cannot be availed of in case of the loss, destruction,
delays the transportation of the goods or changes the stipulated or
or deterioration of the goods.
usual route, the contract limiting the common carrier's liability
cannot be availed of in case of the loss, destruction, or
deterioration of the goods. Even if there is any limitation limiting the liability
of the carrier, this cannot be availed of by the
ARTICLE 1748. An agreement limiting the common carrier's carrier if it without just cause, delays the
liability for delay on account of strikes or riots is valid. transportation of the goods, or etc.

What if there is a stipulation limiting the liability

Stipulation lessening the amount of
and the flight is from Davao to Manila. But
liability
because there was a typhoon in Manila, it was
unable to land there so it landed in Cebu. Can the
Valid: Provided follow the requisites under 1749 and
carrier avail of the stipulation?
1750
 Transcribed and Prepared by: Hanniyah Sevilla 4 Manresa ’08-‘09 10

Yes, because there was a just cause for the change of servants or visitors, or if the loss arises from the
flight. 1747 only applies if there is no reason. character of the things brought. (n)

Art. 1748. An agreement limiting the common carrier's liability for Art. 2003. The common carrier cannot free
delay on account of strikes or riots is valid. himself from responsibility by posting notices to
the effect that he is not liable for the articles
Art. 1749. A stipulation that the common carrier's liability is limited brought by the passengers.
to the value of the goods appearing in the bill of lading, unless the
shipper or owner declares a greater value, is binding. CARRIAGE OF PASSENGERS

Art. 1750. A contract fixing the sum that may be recovered. by the Art. 1755. A common carrier is bound to carry the passengers
owner or shipper for the loss, destruction, or deterioration of the safely as far as human care and foresight can provide, using
goods is valid, if it is reasonable and just under the circumstances, the utmost diligence of very cautious persons, with a due
and has been fairly and freely agreed upon. regard for all the circumstances.

Art. 1751. The fact that the common carrier has no competitor Art. 1756. In case of death of or injuries to passengers,
along the line or route, or a part thereof, to which the contract common carriers are presumed to have been at fault or to
refers shall be taken into consideration on the question of whether have acted negligently, unless they prove that they observed
or not a stipulation limiting the common carrier's liability is extraordinary diligence as prescribed in Articles 1733 and
reasonable, just and in consonance with public policy. 1755.

Art. 1752. Even when there is an agreement limiting the liability of Automatic presumption of negligence, rebutted by
the common carrier in the vigilance over the goods, the common proving that carrier excercised extraordinary
carrier is disputably presumed to have been negligent in case of diligence for the safety of passengers according to
their loss, destruction or deterioration. the circumstances of each case.

That presumption of negligence will still arise despite Under the provisions of carriage of goods, in
the fact that there is an agreement. The carrier still has carriage of passengers, there are no exceptions as
to prove that it exercised EXOD to escape liability. If to the presumption of negligence. They will be
the carrier does not want to prove it, it will just accept automatically presumed to be negligent under
the liability, then the carrier will be liable for the 1756, there are no exceptions. So that is the first
amount stipulated in the agreement. Of course, unless distinction between COG and COP, but the
any of the circumstances like natural disaster, etc. are presumption can be rebutted.
present.
Take note that proving extraordinary diligence is
Baggage of passengers not the only way of escaping liability. We all know
that under the general provisions of the Civil
With respect to baggage of passengers, we recognize Code, a fortuitous event will always exempt the
checked-in baggage and hand-carried baggages. obligor from liability, if the fortuitous event is the
Passenger is responsible for his hand-carry baggages. cause of the death, injury of the passenger. Just
memorize the requisites of fortuitous events.
Art. 1754. The provisions of Articles 1733 to 1753 shall apply to the
passenger's baggage which is not in his personal custody or in that Issue: If A is a passenger of a taxi and taxi
of his employee. As to other baggage, the rules in Articles 1998 and figured in an accident. A sues the taxi for breach
2000 to 2003 concerning the responsibility of hotel-keepers shall of contract of carriage, does A have to prove that
be applicable. the taxi driver is at fault for A to collect damages
from the operator of the taxi?
With respect to check in baggages, the applicable
provisions are the provisions we took up. However, if Answer: In an action based on a contract of
the luggage is hand-carried, different provisions of the carriage, the court need not make an express
CC will apply. (1998, 2000- 2003) finding of fault or negligence on the part of the
carrier in order to hold it responsible to pay
What is the summary for hand-carried items? damages to the passenger. Because of the
automatic presumption of negligence, the burden
1. Art. 1998: The carrier shall be responsible for hand- of proof is on the carrier. If the carrier rebuts the
carried baggages as depositaries, provided that notice presumption, then it is absolved. If it does not
was given to them, or to their employees, of the effects rebut that presumption, there is no need for the
brought by the passengers and that, on the part of the passenger or his heirs to prove negligence.
latter, they take the precautions which said carriers or
their substitutes advised relative to the care and What kind of fortuitous event will exempt a carrier
vigilance of their effects. from liability? Is a tire blow out a fortuitous event?

2. Art. 2000. The responsibility referred to in the It depends. Remember that even the SC did not
preceding article shall include the loss of, or injury to categorically state that a tire blow out is not a
the personal property of the passenger caused by the fortuitous event. You always have to look at the
servants or employees of the carrier as well as requisites.
strangers; but not that which may proceed from any
force majeure. In the cases (Yobido vs. CA, Necesito vs.
Paras), they were all cases of tire blow outs and
The fact that passengers are constrained to rely on the the SC always found a way to remove the tire
vigilance of the carrier shall be considered in blow out situtation from coverage of fortuitous
determining the degree of care required of him. events.

3. Art. 2001. The act of a thief or robber, who has In Necesito vs. Paras (1958), the SC said that
entered the carrier is not deemed force majeure, unless "defective parts of vehicles cannot be considered a
it is done with the use of arms or through an irresistible fortuitous event because the manufacturer of the
force. (n) defective parts is considered in law the agent of
the carrier, and the good repute of the
Art. 2002. The carrier is not liable for compensation if manufacturer will not relieve the carrier from
the loss is due to the acts of the passenger, his family, liability."
 Transcribed and Prepared by: Hanniyah Sevilla 4 Manresa ’08-‘09 11

relation of carrier and passenger does not necessarily

In Yobido, the court discovered that the driver was cease where the latter, after alighting from the car, aids
driving too fast, so there was negligence and the carrier's servant or employee in removing his
participation on the part of the carrier in bringing the baggage from the car. The issue to be determined here is
whether as to the child, who was already led by the
accident. father to a place about 5 meters away from the bus, the
liability of the carrier for her safety under the contract of
What about hi-jacking? Is it a fortuitous event? carriage also persisted.

As a general rule, hi-jacking of an airline cannot be a It has been recognized as a rule that the (contractual)
fortuitous event because this is not unforseen, this is relation of carrier and passenger does not cease at the
moment the passenger alights from the carrier's vehicle
expected. That is why security checks are conducted.
at a place selected by the carrier at the point of
But in GACAL vs. PAL - this was considered a destination, but continues until the passenger has had a
fortuitous event because the inspection was done by reasonable time or a reasonable opportunity to leave the
the military, and not PAL. This case is a special case. carrier's premises. And, what is a reasonable time or a
reasonable delay within this rule is to be determined
But what if the hi-jack happened on a bus or a truck? from all the circumstances. So no specific time or specific
In De Guzman, the SC said that it was a fortuitous distance.
event. Can you really expect that your bus will be
hijacked while you're traveling along the highway? No, 3. PAL vs. Zapatos: Even if the pax are in
otherwise nobody will travel. transit, this will not terminate the contractual
relations.
PILAPIL VS. CA: It was held that a CC is not liable for
failure to install window grills on its buses to protect its Held: Undisputably, PAL's diversion of its flight due to
passengers from injuries hurled at the bus by lawless inclement weather was a fortuitous event. Nonetheless,
elements. such occurrence did not terminate PAL's contract with its
passengers. Being in the business of air carriage and the
sole one to operate in the country, PAL is deemed
FORTUNE EXPRESS VS. CA: The SC said that FE was equipped to deal with situations as in the case at bar.
liable because there was an early warning already. So What we said in one case once again must be stressed,
the element of unforseeability was missing. i.e., the relation of carrier and passenger continues until
the latter has been landed at the port of destination and
DURATION OF LIABILITY has left the carrier's premises. Hence, PAL necessarily
would still have to exercise extraordinary diligence in
safeguarding the comfort, convenience and safety of its
No provision for CC of pax for the duration of liability; stranded passengers until they have reached their final
only cases destination.

1. Bataclan vs. Medina (overturned bus which leaked DOCTRINE OF LAST CLEAR CHANCE:
gasoline and was set on fire when villagers who wanted
to help brought torches) This doctrine calls for application in suits between
owners of two colliding vehicles. It does not apply
Held: CC is still liable even if the bus was no longer in transit. where a pax demands responsibility from a carrier
In the present case and under the circumstances obtaining in A
t to enforce its contractual obligations.
the same, we do not hesitate to hold that the proximate cause e
of the death of Bataclan was the overturning of the bus, this n
for the reason that when the vehicle turned not only on its side e The principle of last clear chance is inapplicable in the
but completely on its back, the leaking of the gasoline from the o instant case, as it only applies in a suit between the
tank was not unnatural or unexpected; that the coming of the owners and drivers of two colliding vehicles. It does not
d
men with a lighted torch was in response to the call for help, e arise where a passenger demands responsibility from the
made not only by the passengers, but most probably, by the carrier to enforce its contractual obligations, for it would
driver and the conductor themselves, and that because it was D be inequitable to exempt the negligent driver and its
a owner on the ground that the other driver was likewise
very dark (about 2:30 in the morning), the rescuers had to v
carry a light with them; and coming as they did from a rural a guilty of negligence. The common law notion of last clear
area where lanterns and flashlights were not available, they o chance permitted courts to grant recovery to a plaintiff
had to use a torch, the most handy and available; and what who has also been negligent provided that the defendant
C
was more natural than that said rescuers should innocently had the last clear chance to avoid the casualty and failed
o
approach the overturned vehicle to extend the aid and effect l to do so. Accordingly, it is difficult to see what role, if
the rescue requested from them. In other words, the coming of l any, the common law of last clear chance doctrine has to
e play in a jurisdiction where the common law concept of
the men with the torch was to be expected and was a natural g
sequence of the overturning of the bus, the trapping of some of e
contributory negligence as an absolute bar to recovery by
its passengers and the call for outside help. What is more, the the plaintiff, has itself been rejected, as it has been in
burning of the bus can also in part be attributed to the o Article 2179 of the Civil Code. (Tiu vs. Arriesgado)
f
negligence of the carrier, through its driver and its conductor.
According to the witnesses, the driver and the conductor were L VALIDITY OF STIPULATIONS
on the road walking back and forth. They, or at least, the a
w
driver should and must have known that in the position in
Two kinds:
which the overturned bus was, gasoline could and must have
leaked from the gasoline tank and soaked the area in and
around the bus, this aside from the fact that gasoline when 1. As to the diligence required
spilled, specially over a large area, can be smelt and detected 2. As to the amount of liability
even from a distance, and yet neither the driver nor the
conductor would appear to have cautioned or taken steps to AS TO THE DILIGENCE REQUIRED
warn the rescuers not to bring the lighted torch too near the
bus. Said negligence on the part of the agents of the carrier
come under the codal provisions above- reproduced, Art. 1757. The responsibility of a common carrier for the
particularly, Articles 1733, 1759 and 1763. safety of passengers as required in Articles 1733 and 1755
cannot be dispensed with or lessened by stipulation, by the
2. La Mallorca vs. CA (the child of a Pax was run over posting of notices, by statements on tickets, or otherwise.
by the bus when she followed her father who was
getting their baggages. The bus was already moving Remember:
steadily after it had dropped off the Pax even though Diligence required: XOD
the baggages were still on board the truck.) What kind of XOD: Utmost diligence of a very
cautious person
Held: here can be no controversy that as far as the father is
concerned, when he returned to the bus for his bayong which (1) CC of Goods are allowed to lessened
was not unloaded, the relation of passenger and carrier the degree of diligence, but NOT do
between him and the petitioner remained subsisting. For, the away with the same completely.
 Transcribed and Prepared by: Hanniyah Sevilla 4 Manresa ’08-‘09 12

(2) CC of Pax CANNOT dispense with nor Held: There was contributory negligence on the part of A,
lessen the degree of diligence. and both truck and jeepney were found to be negligent.
Sharing of liability: 20-40-40. 20 to be borne by A.
AS TO AMOUNT OF LIABILITY
Contributory negligence is conduct on the part
Art. 1758. When a passenger is carried gratuitously, a stipulation of the injured party, contributing as a legal cause
limiting the common carrier's liability for negligence is valid, but to the harm he has suffered, which falls below the
not for wilful acts or gross negligence. standard to which he is required to conform for
his own protection.
The reduction of fare does not justify any limitation of the common
carrier's liability. When is one considered to have contributed to his
injuries: It has been held that “to hold a person
General Rule: Cannot be limited as having contributed to his injuries, it must be
But under 1758, there are circumstances where this shown that he performed an act that brought
liability is limited: about his injuries in disregard of warning or signs
1. Pax carried gratuitously of an impending danger to health and body.
2. Existence of stipulation limiting liability Respondent Noe’s act of hanging on the Fiera is
3. Accident/Breach not caused by willful acts or gross definitely dangerous to his life and limb.
negligence.
3. CANGCO VS. MRR ( Jose Cangco, herein
Remember: Minimum amount that heirs of pax can plaintiff, was an employee of the defendant in this
collect from CC is P 50,000 because this is indemnity case, manila Railroad Company. Upon the
for death. CC is automatically liable for this minimum occasion in question, plaintiff was returning home
amount; if it wants to lessen this amount, CC must by rail from his daily labors. As the train drew up
follow Art. 1758. to the station, plaintiff arose from his seat. As the
train slowed down, plaintiff stepped off, but one or
LIABILITY FOR ACTS OF EES both of his feet came in contact with a sack of
watermelons. As a result, his feet slipped from
under him and he fell violently on the platform.)
Art. 1759. Common carriers are liable for the death of or injuries to
passengers through the negligence or wilful acts of the former's
Held: The act of the plaintiff in stepping off the train
employees, although such employees may have acted beyond the
while it as yet slowly moving was not characterized by
scope of their authority or in violation of the orders of the common imprudence so as to hold him guilty of contributory
carriers. negligence.

This liability of the common carriers does not cease upon proof In arriving to such conclusion, the court used the best of
that they exercised all the diligence of a good father of a family in negligence enunciated in the case of Picart vs. Smith (37
the selection and supervision of their employees. PHIL 809) which was stated as follow: Was there
anything in the circumstances surrounding the plaintiff at
the time he alighted from the train which would have
Notes: admitted a person of average prudence that to get off
1. There is no express provision in CC of Goods exactly the train under the conditions then existing was
like Art. 1759. BUT, the absence of express stipulation dangerous? If so, the plaintiff should have deserted from
does not mean that CC of Goods not liable for acts of alighting; and his failure so to desist was contributory
negligence.
ees. Under Art. 1775, par. 5, the CC cannot stipulate
that it shall not be responsible for the acts of its ees. So In the case at bar, the plaintiff was ignorant of the fact
this means that CC of goods still liable; that the obstruction which was caused by the sacks of
melds piled on the platform existed. Moreover, the place
2. If driver is drunk and figures in an accident, CC was dark or dimly lighted. Thus, he was a failure on the
cannot say that it is not liable because driver violated part of the defendant to afford to its passengers facilities
company rules of no drinking while driving. for safe egress from its trains.
It is not negligence per se for a traveler to alight from a
slowly moving train.
3. Defense of Diligence of Good father of family is
available if the cause of action is culpa acquiliana (Art.
4. Del Prado vs. MRR
2176, 2180 of NCC), But if the cause of action is for
breach of contract of carriage, this defense of GFOF
Held: Defendant should still be held liable for the
cannot be invoked.
damages sustained by the plaintiff. The contributory
negligence upon the latter was not the proximate cause
CONTRIBUTORY NEGLIGENCE of the injury. The proximate cause was the act of the
motorman in putting off on the power prematurely. A
Art. 1761. The passenger must observe the diligence of a good person moving boarding a moving car must be taken to
father of a family to avoid injury to himself. assure the risk of injury from boarding the car, but he
cannot fairly be held to assume the risk that the
motorman will increase his peril by accelerating the
Art. 1762. The contributory negligence of the passenger does not speed of the car before he is planted on the platform.
bar recovery of damages for his death or injuries, if the proximate The motorman’s negligence succeeded the negligence of
cause thereof is the negligence of the common carrier, but the herein plaintiff. Under the doctrine of “last clear chance”,
amount of damages shall be equitably reduced. the contributory negligence of the party injured will not
defeat the action if it be shown that the carrier might be
the exercise of reasonable care and prudence have
Notes: avoided the consequences of the negligence of the
1. Definition of Contributory Negligence: It is the injured party.
principle that negligence, no matter how slight, on the
part of the person injured which is one of the causes 5. Brinas vs. People (old woman and her
proximately contributing to his negligence equitably granddaughter bound for Losacan. Conductor
reduces the liability of the CC. announced their stop so the lola stood up and
carried her "apo" and went to exit. When train
2. Estacion vs. Bernardo (2006): (Pax of Jeepney door opened, before they could go down, the train
was seated in extension seat initially but gave his seat picked up speed and they both fell and died)
up to an old lady. A then hung/stood outside the
jeepney. When jeepney stopped at the curve, an isuzu Held: It is a matter of common knowledge and
truck with a faulty break hit the jeepney causing injury experience about common carriers like trains and buses
to A's leg which had to be amputated.) that before reaching a station or flagstop they slow down
and the conductor announces the name of the place. It is
 Transcribed and Prepared by: Hanniyah Sevilla 4 Manresa ’08-‘09 13

also a matter of common experience that as the train or bus the very extreme right of the road. Said driver would not
slackens its speed, some passengers usually stand and proceed move the bus further without endangering the safety of
to the nearest exit, ready to disembark as the train or bus his passengers. Notwithstanding all these efforts, the
comes to a full stop. This is especially true of a train because rear left side was hit. This finding of the lower court was
passengers feel that if the train resumes its run before they are sustained. Also, of the carrier’s employee is confronted
able to disembark, there is no way to stop it as a bus may be with a sudden emergency, he is not held to the same
stopped. degree of care he would otherwise, he required in the
absence of such emergency.
It was negligence on the conductor's part to announce the next
flag stop when said stop was still a full three minutes ahead. As By placing his left arm on the window, he is guilty of
the respondent Court of Appeals correctly observed, "the contributory negligence cannot relieve the carrier but can
appellant's announcement was premature and erroneous and only reduce its liability, this is a circumference which
was the proximate cause of the death of the victims. Any further mistakes against plaintiff’s position. It is a
negligence of the victims was at most contributory and does prevailing rule that it is negligence per se for passengers
not exculpate the accused from criminal liability. on a railroad to protrude any part of his body and that no
recovery can be had for an inquiry.”
6. Dangwa vs. CA - (There was no contributory
negligence on the part of the victim in this case) Responsibility for acts of strangers

Held: The foregoing testimonies show that the place of the Art. 1763. A common carrier is responsible for injuries
accident and the place where one of the passengers alighted suffered by a passenger on account of the wilful acts or
were both between Bunkhouses 53 and 54, hence the finding negligence of other passengers or of strangers, if the
of the Court of Appeals that the bus was at full stop when the common carrier's employees through the exercise of the
victim boarded the same is correct. They further confirm the
diligence of a good father of a family could have prevented
conclusion that the victim fell from the platform of the bus
when it suddenly accelerated forward and was run over by the or stopped the act or omission.
rear right tires of the vehicle, as shown by the physical
evidence on where he was thereafter found in relation to the Notes:
bus when it stopped. Under such circumstances, it cannot be 1. This is one instance wherein the carrier need
said that the deceased was guilty of negligence. LLphil
not prove that it exercised XOD to escape liability.
The contention of petitioners that the driver and the conductor
had no knowledge that the victim would ride on the bus, since If the injury/death of pax was caused by the act of
the latter had supposedly not manifested his intention to board a stranger (somebody who is not an ee of the
the same, does not merit consideration. When the bus is not in carrier) the carrier need only prove that its ees
motion there is no necessity for a person who wants to ride the exercised diligence of GFOF to prevent or stop the
same to signal his intention to board. A public utility bus, once act or omission.
it stops, is in effect making a continuous offer to bus riders.
Hence, it becomes the duty of the driver and the conductor,
Why? It is not the responsibility of the CC of Pax
every time the bus stops, to do no act that would have the
effect of increasing the peril to a passenger while he was to ensure that no injury from outside forces will be
attempting to board the same. The premature acceleration of caused to the pax, i.e. when a bomb is thrown
the bus in this case was a breach of such duty. from the roadside.

It is the duty of common carriers of passengers, including 2. MRR vs. Ballesteros - Here, the driver of the
common carriers by railroad train, streetcar, or motorbus, to bus allowed a stranger to take the wheel of the
stop their conveyances a reasonable length of time in order to
bus. After awhile, the driver struggled with him as
afford passengers an opportunity to board and enter, and they
are liable for injuries suffered by boarding passengers resulting the stranger did not want to give the wheel back.
from the sudden starting up or jerking of their conveyances The bus met an accident. Can this provision be
while they are doing so. invoked?

Further, even assuming that the bus was moving, the act of What kind of diligence does the CC of Pax have to
the victim in boarding the same cannot be considered negligent prove here? XOD because by actually allowing a
under the circumstances. As clearly explained in the testimony
of the aforestated witness for petitioners, Virginia Abalos, the
stranger to drive the bus even if that person
bus had "just started" and "was still in slow motion" at the caused the accident, but still the driver did not
point where the victim had boarded and was on its platform. exercise the diligence of GFOF to prevent or stop
the act or omission. (yan talaga sa lecture)
It is not negligence per se, or as a matter of law, for one to
attempt to board a train or streetcar which is moving slowly. 3. Fortune Express vs. CA- Fortune express
An ordinarily prudent person would have made the attempt to
cannot invoke this provision.
board the moving conveyance under the same or similar
circumstances. The fact that passengers board and alight from
a slowly moving vehicle is a matter of common experience and As already stated, despite the report of PC agent
both the driver and conductor in this case could not have been Generalao that the Maranaos were planning to burn some
unaware of such an ordinary practice. The victim herein, by of petitioner’s buses and the assurance of petitioner’s
stepping and standing on the platform of the bus, is already operations manager (Diosdado Bravo) that the necessary
considered a passenger and is entitled to all the rights and precautions would be taken, nothing was really done by
protection pertaining to such a contractual relation. Hence, it petitioner to protect the safety of passengers.
has been held that the duty which the carrier of passengers
owes to its patrons extends to persons boarding the cars as Issue: Are there other causes for breach of
well as to those alighting therefrom. contract of carriage aside from Art. 1755 and
1756?
7. Isaac vs. Al Ammen
Answer: Yes.
Facts: Plaintiff boarded defendant’s bus as paying
passenger from Albay. The bus collided with a pick-up 1. If a passenger is bumped off his flight and
truck which was coming from opposite direction trying he has a confirmed booking, that is a breach
to swerve from a pile of gravel. As a result, his left arm because the carrier in the ticket ensured that it
was completely severed. Plaintiff chose to hold will deliver the pax to its destination on the time
defendant liable on its contractual obligation. Plaintiff and date stipulated.
brought an action for damages which the lower court
dismissed holding the driver of the pick-up car 2. Air France vs. Carrascoso – Rebooked to a
negligent and not that of the bus. lower class without pax consent. Pax seated in
first class from Mla to Bangkok. Upon arrival in
Issue: Whether or not the common carrier is liable. Bangkok, he was downgraded to economy to give
way to a "white man". There is a breach because
Held: The bus was running at a moderate speed. The driver of his ticket says first class, and by booking the pax
the bus upon the speeding pick-up truck swerved the bus to to economy class without his consent, what
 Transcribed and Prepared by: Hanniyah Sevilla 4 Manresa ’08-‘09 14

happens is that there is no more consent in the

contract. Here, there was definitely a breach of contract
even if the flight that the minors were supposed to
3. Singson vs. Cathay Pacific - On 24 May 1988 take is in another airline. It was because of PAL's
CARLOS SINGSON and his cousin Crescentino Tiongson negligence that they were not able board the
bought from Cathay Pacific Airways, Ltd. (CATHAY), at other airline.
its Metro Manila ticket outlet two (2) open-dated,
identically routed, round trip plane tickets for the H: When an airline issues a ticket to a passenger,
purpose of spending their vacation in the United States. confirmed for a particular flight on a certain date, a
Each ticket consisted of six (6) flight coupons contract of carriage arises. The passenger has every right
corresponding to this itinerary: flight coupon no. 1 - to expect that he be transported on that flight and on
that date, and it becomes the airline's obligation to carry
Manila to Hongkong; flight coupon no. 2 - Hongkong to him and his luggage safely to the agreed destination
San Francisco; flight coupon no. 3 - San Francisco to without delay. If the passenger is not so transported or if
Los Angeles; flight coupon no. 4 - Los Angeles back to in the process of transporting, he dies or is injured, the
San Francisco; flight coupon no. 5 - San Francisco to carrier may be held liable for a breach of contract of
Hongkong; and, finally, flight coupon no. 6 - Hongkong carriage.
to Manila. The procedure was that at the start of each
Private respondents and petitioner entered into a
leg of the trip a flight coupon corresponding to the
contract of air carriage when the former purchased two
particular sector of the travel would be removed from plane tickets from the latter. Under this contract,
the ticket booklet so that at the end of the trip no more petitioner obliged itself (1) to transport Deanna and
coupon would be left in the ticket booklet. Nikolai, as unaccompanied minors, on 2 May 1980 from
Manila to San Francisco through one of its planes, Flight
On 6 June 1988 CARLOS SINGSON and Crescentino 106; and (2) upon the arrival of Deanna and Nikolai in
Tiongson left Manila on board CATHAY’s Flight No. 902. San Francisco Airport on 3 May 1980, to transport them
on that same day from San Francisco to Los Angeles via
They arrived safely in Los Angeles and after staying
a connecting flight on United Airways 996. As it was,
there for about three (3) weeks they decided to return petitioner failed to transport Deanna and Nikolai from
to the Philippines. On 30 June 1988 they arranged for San Francisco to Los Angeles on the day of their arrival
their return flight at CATHAY’s Los Angeles Office and at San Francisco. The staff of United Airways 996 refused
chose 1 July 1988, a Friday, for their departure. While to take aboard Deanna and Nikolai for their connecting
Tiongson easily got a booking for the flight, SINGSON flight to Los Angeles because petitioner's personnel in
was not as lucky. It was discovered that his ticket San Francisco could not produce the indemnity bond
accomplished and submitted by private respondents.It
booklet did not have flight coupon no. 5 corresponding
was established in the instant case that since Deanna
to the San Francisco-Hongkong leg of the trip. Instead, and Nikolai would travel as unaccompanied minors,
what was in his ticket was flight coupon no. 3 - San petitioner required private respondents to accomplish,
Francisco to Los Angeles - which was supposed to have sign and submit to it an indemnity bond. Private
been used and removed from the ticket booklet. It was respondents complied with this requirement. Petitioner
not until 6 July 1988 that CATHAY was finally able to gave a copy of the indemnity bond to one of its
arrange for his return flight to Manila. personnel on Flight 106, since it was required for the San
Francisco-Los Angeles connecting flight of Deanna and
Nikolai. Petitioner's personnel lost the indemnity bond
H: CATHAY undoubtedly committed a breach of contract during the stop-over of Flight 106 in Honolulu, Hawaii.
when it refused to confirm petitioner's flight reservation Thus, Deanna and Nikolai were not allowed to take their
back to the Philippines on account of his missing flight connecting flight.
coupon. Its contention that there was no contract of carriage
that was breached because petitioner’s ticket was open-dated Evidently, petitioner was fully aware that Deanna and
is untenable. To begin with, the round trip ticket issued by the Nikolai would travel as unaccompanied minors and,
carrier to the passenger was in itself a complete written therefore, should be specially taken care of considering
contract by and between the carrier and the passenger. It had their tender age and delicate situation. Petitioner also
all the elements of a complete written contract, to wit: (a) the knew well that the indemnity bond was required for
consent of the contracting parties manifested by the fact that Deanna and Nikolai to make a connecting flight from San
the passenger agreed to be transported by the carrier to and Francisco to Los Angeles, and that it was its duty to
from Los Angeles via San Francisco and Hongkong back to the produce the indemnity bond to the staff of United
Philippines, and the carrier’s acceptance to bring him to his Airways 996 so that Deanna and Nikolai could board the
destination and then back home; (b) cause or consideration, connecting flight. Yet, despite knowledge of the
which was the fare paid by the passenger as stated in his foregoing, it did not exercise utmost care in handling the
ticket; and, (c) object, which was the transportation of the indemnity bond resulting in its loss in Honolulu, Hawaii.
passenger from the place of departure to the place of This was the proximate cause why Deanna and Nikolai
destination and back, which are also stated in his ticket. were not allowed to take the connecting flight and were
thus stranded overnight in San Francisco. Further,
Interestingly, it appears that CATHAY was responsible for the petitioner discovered that the indemnity bond was lost
loss of the ticket. One of two (2) things may be surmised from only when Flight 106 had already landed in San Francisco
the circumstances of this case: first, US Air (CATHAY’s agent) Airport and when the staff of United Airways 996
had mistakenly detached the San Francisco-Hongkong flight demanded the indemnity bond. This only manifests that
coupon thinking that it was the San Francisco-Los Angeles petitioner did not check or verify if the indemnity bond
portion; or, second, petitioner’s booklet of tickets did not from was in its custody before leaving Honolulu, Hawaii for
issuance include a San Francisco-Hongkong flight coupon. In San Francisco.
either case, the loss of the coupon was attributable to the
negligence of CATHAY’s agents and was the proximate cause of The foregoing circumstances reflect petitioner's utter lack
the non-confirmation of petitioner's return flight on 1 July of care for and inattention to the welfare of Deanna and
1988. Nikolai as unaccompanied minor passengers. They also
indicate petitioner's failure to exercise even slight care
With regard to the second issue, we are of the firm view that and diligence in handling the indemnity bond. Clearly,
the appellate court seriously erred in disallowing moral and the negligence of petitioner was so gross and reckless
exemplary damages. Although the rule is that moral damages that it amounted to bad faith.
predicated upon a breach of contract of carriage may only be
recoverable in instances where the mishap results in the death It is worth emphasizing that petitioner, as a common
of a passenger, or where the carrier is guilty of fraud or bad carrier, is bound by law to exercise extraordinary
faith, there are situations where the negligence of the carrier is diligence and utmost care in ensuring for the safety and
so gross and reckless as to virtually amount to bad faith, in welfare of its passengers with due regard for all the
which case, the passenger likewise becomes entitled to recover circumstances.[19] The negligent acts of petitioner
moral damages, such as in the instant case. signified more than inadvertence or inattention and thus
constituted a radical departure from the extraordinary
4. PAL vs. CA (Sept. 22, 2008) - Here, two standard of care required of common carriers.
unaccompanied minors were not able to board the
Petitioner's claim that it cannot be entirely blamed for
plane because PAL was not able to produce the
the loss of the indemnity bond because it gave the
indemnity bond executed by the minors' parents since indemnity bond to the immigration office of Honolulu,
they were travelling unaccompanied.
 Transcribed and Prepared by: Hanniyah Sevilla 4 Manresa ’08-‘09 15

Hawaii, as a matter of procedure during the stop-over, and the When in the five (5) NONE, the
said immigration office failed to return the indemnity bond to presumption of instances presumption of
petitioner's personnel before Flight 106 left Honolulu, Hawaii, negligence does mentioned; negligence will
deserves scant consideration. It was petitioner's obligation to not arise
automatically
natural calamity, ALWAYS arise in
ensure that it had the indemnity bond in its custody before
leaving Honolulu, Hawaii for San Francisco. Petitioner should etc. case the carriage
have asked for the indemnity bond from the immigration office of PAX
during the stop-over instead of partly blaming the said office W/N degree of For both, it cannot be dispensed.
later on for the loss of the indemnity bond. Petitioner's diligence can be
insensitivity on this matter indicates that it fell short of the dispensed with
extraordinary care that the law requires of common carriers. W/N degree of yes, under the NO
diligence can be requisites
As we have earlier found, petitioner breached its contract of lessened previously
carriage with private respondents, and it acted recklessly and
discussed
malevolently in transporting Deanna and Nikolai as
W/N liability in yes, under Art. As a general rule,
unaccompanied minors and in handling their indemnity bond.
case of breach can 1748, 1749 and NO, unless
We have also ascertained that private respondents are entitled
be lessened?
to moral damages because they have sufficiently established 1750; carried
petitioner's gross negligence which amounted to bad faith. This gratuitously;
being the case, the award of exemplary damages is warranted. stipulation but
only for simple
5. Cathay Pacific vs. Vasquez- Is an involuntary negligence.
upgrading of an airline passenger’s accommodation
from one class to a more superior class at no extra cost VIP: When we talk about transportation
a breach of contract of carriage that would entitle the laws we should not only focus on breach
passenger to an award of damages? of contract of carriage. We should also
include that there are other causes of
H: We resolve the first issue in the affirmative. action which may arise.

A contract is a meeting of minds between two persons whereby Example: A car owned by E and driven by F was
one agrees to give something or render some service to
speeding along JP Laurel hit a Taxi driven by D
another for a consideration. There is no contract unless the
following requisites concur: (1) consent of the contracting which in turn hit C. B the passenger of the taxi
parties; (2) an object certain which is the subject of the was also injured. The taxi is owned by A.
contract; and (3) the cause of the obligation which is
established.[4] Undoubtedly, a contract of carriage existed Question: How many causes of action are
between Cathay and the Vazquezes. They voluntarily and freely available to B and to C? What are the defenses
gave their consent to an agreement whose object was the available to E, D and F?1
transportation of the Vazquezes from Manila to Hong Kong and
back to Manila, with seats in the Business Class Section of the
aircraft, and whose cause or consideration was the fare paid by MARITIME COMMERCE
the Vazquezes to Cathay.
Applicable laws: Code of
The only problem is the legal effect of the upgrading of the seat
Commerce; COGSA; Salvage Law
accommodation of the Vazquezes. Did it constitute a breach of
contract?
Governing body: Marina (Maritime
Breach of contract is defined as the “failure without legal Industry Authority)
reason to comply with the terms of a contract.” It is also
defined as the “[f]ailure, without legal excuse, to perform any Functions of Marina: CF PD 474
promise which forms the whole or part of the contract.”
1. Issue certificate of public conveniece for the
The Vazquezes never denied that they were members of
Cathay’s Marco Polo Club. They knew that as members of the operation of domestic and overseas water
Club, they had priority for upgrading of their seat carriers;
accommodation at no extra cost when an opportunity arises.
But, just like other privileges, such priority could be waived. 2. Register and issue certificate, licenses, or
The Vazquezes should have been consulted first whether they documents necessary or incident thereto.
wanted to avail themselves of the privilege or would consent to
a change of seat accommodation before their seat assignments
Q: What is the requirement for a carrier to
were given to other passengers. Normally, one would
appreciate and accept an upgrading, for it would mean a better operate domestic sea voyages?
accommodation. But, whatever their reason was and however
odd it might be, the Vazquezes had every right to decline the A: Certificate of Public Convenience (CPC)
upgrade and insist on the Business Class accommodation they
had booked for and which was designated in their boarding Kinds of VESSELS (under PD 474)
passes. They clearly waived their priority or preference when
they asked that other passengers be given the upgrade. It
"Vessels" or "Watercraft" Any barge, lighter,
should not have been imposed on them over their vehement
objection. By insisting on the upgrade, Cathay breached its bulk carrier, passenger ship freighter, tanker,
contract of carriage with the Vazquezes. container ship, fishing boats or other artificial
contrivance utilizing any source of motive power,
So it is not only death or injury which causes breach of designed, used or capable of being used as a
contract of carriage of pax. Anything that is in violation means of water transportation operating either as
of a contract will constitute a breach. common contract carrier, including fishing vessels
covered under Presidential Decree No. 43, except
(1) those owned and/or operated by the
DISTINCTIONS BETWEEN CCOG Armed Forces of the Philippines and
AND CCOP by foreign governments for military
Diligence required extraordinary Utmost diligence purposes, and
diligence of very cautious (2) bancas, sailboats and other
person. waterborne contrivance of less than
When Loss, destruction death or injury three gross tons capacity and not
presumption of or deterioration and non- motorized.
negligence arises and non-arrival of fulfillment of the
the goods at contract
destination and
negligent delay 1 I did not include the Q and A already. Please see
your UP Bar.
 Transcribed and Prepared by: Hanniyah Sevilla 4 Manresa ’08-‘09 16

HOW OWNERSHIP OF A VESSEL ARTICLE 583. If the ship being on a voyage the captain
MAY BE ACQUIRED should find it necessary to contract one or more of the
obligations mentioned in Nos. 8 and 9 of Article 580, he shall
ARTICLE 573. Merchant vessels constitute property which may be apply to the judge or court if he is in Philippine territory, and
2 otherwise to the Filipino Consul should there be one, and, in
acquired and transferred by any of the means recognized by law .
his absence to the judge or court or to the proper local
authority, presenting the certificate of the registry of the
The acquisition of a vessel must be included in a written
vessel treated of in Article 612, and the instruments proving
instrument, which shall not produce any effect with regard to third
the obligation contracted.
persons if not recorded in the mercantile registry.
The judge or court, the consul or the local authority as the
The ownership of a vessel shall also be acquired by the possession
case may be, in view of the result of the proceedings
thereof in good faith for three years, with a good title duly
instituted, shall make a temporary memorandum in the
recorded.
certificate of their result, in order that it may be recorded in
the registry when the vessel returns to the port of her
In the absence of any of these requisites, uninterrupted possession
registry, or so that it can be admitted as a legal and
for ten years shall be necessary in order to acquire ownership.
preferred obligation in case of sale before the return, by
reason of the sale of the vessel by virtue of a declaration of
A captain can not acquire by prescription the ship of which he is in
unseaworthiness.
command.
Notes: The lack of this formality shall make the captain personally
liable to the creditors who may be prejudiced through his
1. Q: Kind of property is a vessel? fault.
A: Movable, but ownership must be evidenced by
certificate of ownership and transfers must be
Notes:
registered in the proper registry to bind 3rd persons.
1. Article 580 Nos. 8 and 9 3 = contract obligations
for the repair and equipment of the vessel and
2. Requisites for Legal Acquisition of a Merchant
obtain loans and bottomry.
Vessel:
2. Why are these formalities required for the
1. Must appear in a written instrument;
captain? Because omission to follow these
2. Recorded in the proper registry --
requirements will make the captain personally
under EO 125, transaction must be registered
liable. He cannot ask for a refund from the carrier.
with the Marina but now this is being conducted
by the PPA.
Persons who take part in marine
commerce
3. Robiso vs. Rivera: It is undeniable that the defendant
Rivera acquired by purchase the pilot boat Valentina on a date
I. SHIP OWNER
prior to that of the purchase and adjudication made at public
auction, by and on behalf of the plaintiff Rubiso; but it is no II. SHIP AGENT - By agent is understood the
less true that the sale of the vessel by Sy Qui to Florentino E. person intrusted with the provisioning of a vessel,
Rivera, on January 4, 1915, was entered in the customs or who represents her in the port in which she
registry only on March 17, 1915, while its sale at public auction happens to be.
to Fausto Rubiso on the 23d of January of the same year,
1915, was recorded in the office of the Collector of Customs on
ARTICLE 586. The owner of a vessel and the agent shall be
the 27th of the same month, and in the commercial registry on
the 4th of March, following; that is, the sale on behalf of the civilly liable for the acts of the captain and for the obligations
defendant Rivera was prior to that made at public auction to contracted by the latter to repair, equip, and provision the
Rubiso, but the registration of this latter sale was prior by vessel, provided the creditor proves that the amount
many days to the sale made to the defendant. claimed was invested therein.

The requisite of registration in the registry, of the purchase of a

vessel, is necessary and indispensable in order that the Notes:
purchaser's rights may be maintained against a claim filed by a 1. Macondray vs. Provident (2004) - Canpotex,
third person. shipper, shipped and loaded on board the vessel M/V
‘Trade Carrier’, 5000 metric tons of Standard Grade
In view of said legal provisions, it is undeniable that the Muriate of Potash in bulk for transportation to and
defendant Florentino E. Rivera's rights cannot prevail over delivery at the port of Sangi, Toledo City, Cebu, in favor
those acquired by Fausto Rubiso in the ownership of the pilot of ATLAS FERTILIZER CORPORATION, Consignee. Upon
boat Valentina, inasmuch as, though the latter's acquisition of arrival, it was discovered that the shipment sustained
the vessel at public auction, on January 23, 1915, was losses.
subsequent to its purchase by the defendant Rivera,
nevertheless said sale at public auction was antecedently MACONDRAY filed ANSWER, denying liability over the
recorded in the office of the Collector of Customs, on January losses, having NO absolute relation with defendant
27, and entered in the commercial registry-an unnecessary TRADE AND TRANSPORT, the alleged operator of the
proceeding--on March 4th; while the private and voluntary vessel who transported the subject shipment; that
purchase made by Rivera on a prior date was not recorded in accordingly, MACONDRAY is the local representative of
the office of the Collector of Customs until many days the SHIPPER; the charterer of M/V TRADE CARRIER and
afterwards, that is, not until March 17, 1915.
3 Art. 580 (8) The part of the price which has
Repair and Maintenance of Vessel during not been paid the last vendor, the credits pending
the Voyage (Art. 583) for the payment of material and work in the
construction of the vessel, when it has not
navigated, and those arising from the repair and
equipment of the vessel and its provisioning with
2 In relation to Art. 712 of the Civil Code: victuals and fuel during its last voyage. x x x
a. Donation; (9) The amounts borrowed on bottomry bonds
b. law before the departure of the vessel, proven by
c. Testate or intestate succession; means of the contracts executed according to law
d. As a consequence of certain contracts and recorded in the commercial registry; the
e. By tradition amounts borrowed during the voyage with the
f. By prescription (3 years if possession in good authority mentioned in the foregoing subdivision,
faith, with just title duly recorded, otherwise, filling the same requisites, and the insurance
10 years) premium, proven by the policy of the contract or
certificate taken from the books of the broker.
 Transcribed and Prepared by: Hanniyah Sevilla 4 Manresa ’08-‘09 17

not party to this case; that it has no control over the acts of the the utmost familiarity with the usual and safe routes
captain and crew of the Carrier and cannot be held responsible taken by seasoned and legally authorized ones. Had the
for any damage arising from the fault or negligence of said patron been licensed, he could be presumed to have both
captain and crew. the skill and the knowledge that would have prevented
the vessel's hitting the sunken derelict ship that lay on
The CA affirmed the trial court’s finding that petitioner was not their way to Pier 18.
the agent of Trade and Transport. The appellate court ruled,
however, that petitioner could still be held liable for the As a common carrier, petitioner is liable for breach of the
shortages of the shipment, because the latter was the ship contract of carriage, having failed to overcome the
agent of Canpotex Shipping Services Ltd. -- the shipper and presumption of negligence with the loss and destruction
charterer of the vessel M/V Trade Carrier. of goods it transported, by proof of its exercise of
extraordinary diligence.
H: In the present case, we find no compelling reason to
overturn the Court of Appeals in its categorical finding that General Functions of a Captain:
petitioner was the ship agent. Such factual finding was not in
conflict with the trial court’s ruling, which had merely stated
that petitioner was not the agent of Trade and Transport. ARTICLE 610. The following powers are inherent in
Indeed, although it is not an agent of Trade and Transport, the position of captain or master of a vessel:
petitioner can still be the ship agent of the vessel M/V Trade 1. To appoint or make contracts with the crew
Carrier. in the absence of the agent and propose said crew, should
said agent be present; but the agent shall not be permitted
Article 586 of the Code of Commerce states that a ship agent is
to employ any member against the captain's express
“the person entrusted with provisioning or representing the
vessel in the port in which it may be found.” refusal.
2. To command the crew and direct the vessel
Hence, whether acting as agent of the owner of the to the port of its destination, in accordance with the
vessel or as agent of the charterer, petitioner will be instructions he may have received from the agent.
considered as the ship agent and may be held liable as 3. To impose, in accordance with the
such, as long as the latter is the one that provisions or agreements and the laws and regulations of the merchants
represents the vessel.
marine, on board the vessel, correctional punishment upon
The trial court found that petitioner “was appointed as local those who do not comply with his orders or who conduct
agent of the vessel, which duty includes arrangement for the themselves against discipline, holding a preliminary
entrance and clearance of the vessel.” Further, the CA found investigation on the crimes committed on board the vessel
and the evidence shows that petitioner represented the vessel. on the high seas, which shall be turned over to the
The latter prepared the Notice of Readiness, the Statement of authorities, who are to take cognizance thereof, at the first
Facts, the Completion Notice, the Sailing Notice and Custom’s port touched.
Clearance. Petitioner’s employees were present at Sangi,
4. To make contracts for the charter of the
Toledo City, one day before the arrival of the vessel, where
they stayed until it departed. They were also present during vessel in the absence of the agent or of her consignee,
the actual discharging of the cargo. Moreover, Mr. de la Cruz, acting in accordance with the instructions received and
the representative of petitioner, also prepared for the needs of protecting the interests of the owner most carefully.
the vessel, like money, provision, water and fuel. 5. To adopt all the measures which may be
necessary to keep the vessel well supplied and equipped,
These acts all point to the conclusion that it was the entity that purchasing for the purpose all that may be necessary,
represented the vessel in the Port of Manila and was the ship
provided there is no time to request instructions of the
agent within the meaning and context of Article 586 of the
Code of Commerce. agent.
6. To make, in similar urgent cases and on a
voyage, the repairs to the hull and engines of the vessel and
III. CAPTAIN- one who governs vessels and
to her rigging and equipment which are absolutely
navigates the high seas or of large dimension and
necessary in order for her to be able to continue and
importance.
conclude her voyage; but if she should arrive at a point
where there is a consignee of the vessel, he shall act in
vs. Master- commands small ships and engages
concurrence with the latter.
exclusively in coastwide trade.

But For purposes of maritime commerce, captain, Notes:

master, patron, they all mean the same. 1. Inter-orient Maritime vs. NLRC- Here, the
captain refused to leave the port, contrary to the
Qualifications of Captain ship agent's instructions, until the supplies he
requested necessary for the welding-repair of the
ARTICLE 609. Captains and masters of vessels must be Filipino turbo-charger and the economizer were delivered.
having legal capacity to bind themselves in accordance with this Subsequently, the captain was dismissed. Issue:
Code, and must prove that they have the skill, capacity, and Was the captain remiss of his duties?
qualifications required to command and direct the vessel, as
established by marine laws, ordinances, or regulations, or by those H: NO. The captain has the authority to decide. The
captain of a vessel is a confidential and managerial
of navigation, and that they are not disqualified according to the
employee within the meaning of the above doctrine. A
same for the discharge of the duties of that position. master or captain, for purposes of maritime commerce, is
one who has command of a vessel. A captain commonly
If the owner of a vessel desires to be the captain thereof and does performs three (3) distinct roles: (1) he is a general
not have the legal qualifications therefor, he shall limit himself to agent of the shipowner; (2) he is also commander and
the financial administration of the vessel, and shall intrust her technical director of the vessel; and (3) he is a
navigation to a person possessing the qualifications required by representative of the country under whose flag he
navigates. Of these roles, by far the most important is
said ordinances and regulations.
the role performed by the captain as commander of the
vessel; for such role (which, to our mind, is analogous to
Notes: that of "Chief Executive Officer" [CEO] of a present-day
corporate enterprise) has to do with the operation and
1. Coastwise Lighterage vs. CA - Here, the patron of preservation of the vessel during its voyage and the
protection of the passengers (if any) and crew and cargo.
the lighter admitted that he was not licensed.
In his role as general agent of the shipowner, the captain
has authority to sign bills of lading, carry goods aboard
H: Clearly, petitioner Coastwise Lighterage's embarking on a and deal with the freight earned, agree upon rates and
voyage with an unlicensed patron violates Art. 609. It cannot decide whether to take cargo. The ship captain, as agent
safely claim to have exercised extraordinary diligence, by of the shipowner, has legal authority to enter into
placing a person whose navigational skills are questionable, at contracts with respect to the vessel and the trading of
the helm of the vessel which eventually met the fateful the vessel, subject to applicable limitations established
accident. It may also logically, follow that a person without by statute, contract or instructions and regulations of the
license to navigate, lacks not just the skill to do so, but also shipowner. 17 To the captain is committed the
 Transcribed and Prepared by: Hanniyah Sevilla 4 Manresa ’08-‘09 18

governance, care and management of the vessel. Clearly, the The master is not wholly absolved from his duties while a
captain is vested with both management and fiduciary pilot is on board his vessel, and may advise with or offer
functions. suggestions to him. He is still in command of the vessel,
except so far as her navigation is concerned, and must
More importantly, a ship's captain must be accorded a cause the ordinary work of the vessel to be properly
reasonable measure of discretionary authority to decide what carried on and the usual precaution taken. Thus, in
the safety of the ship and of its crew and cargo specifically particular, he is bound to see that there is sufficient
requires on a stipulated ocean voyage. The captain is held watch on deck, and that the men are attentive to their
responsible, and properly so, for such safety. He is right there duties, also that engines are stopped, towlines cast off,
on the vessel, in command of it and (it must be presumed) and the anchors clear and ready to go at the pilot's
knowledgeable as to the specific requirements of seaworthiness order.
and the particular risks and perils of the voyage he is to
embark upon. The applicable principle is that the captain has A perusal of Capt. Kabankov's testimony makes it
control of all departments of service in the vessel, and apparent that he was remiss in the discharge of his
reasonable discretion as to its navigation. It is the right and duties as master of the ship, leaving the entire docking
duty of the captain, in the exercise of sound discretion and in procedure up to the pilot, instead of maintaining watchful
good faith, to do all things with respect to the vessel and its vigilance over this risky maneuver.
equipment and conduct of the voyage which are reasonably
necessary for the protection and preservation of the interests In sum, where a compulsory pilot is in charge of a ship,
under his charge, whether those be of the shipowners, the master being required to permit him to navigate it, if
charterers, cargo owners or of underwriters. It is a basic the master observes that the pilot is incompetent or
principle of admiralty law that in navigating a merchantman, physically incapable, then it is the duty of the master to
the master must be left free to exercise his own best refuse to permit the pilot to act. But if no such reasons
judgment. The requirements of safe navigation compel us to are present, then the master is justified in relying upon
reject any suggestion that the judgment and discretion of the the pilot, but not blindly. Under the circumstances of this
captain of a vessel may be confined within a straitjacket, even case, if a situation arose where the master, exercising
in this age of electronic communications. that reasonable vigilance which the master of a ship
should exercise, observed, or should have observed, that
the pilot was so navigating the vessel that she was
2. Far Eastern Shipping vs. CA- There was a Russian
going, or was likely to go, into danger, and there was in
vessel that arrived in Manila, owned by Far Eastern the exercise of reasonable care and vigilance an
Shipping. It was assigned berth no. 4. There is such a opportunity for the master to intervene so as to save the
thing as compulsory pilotage -- there is a pilot assigned ship from danger, the master should have acted
to pilot the vessel outside the break water until it accordingly. The master of a vessel must exercise a
reaches its birth. In this case, A was assigned to the degree of vigilance commensurate with the
vessel. The captain of the vessel was beside A. Under circumstances.
the rules of compulsory pilotage, once a pilot takes
In general, a pilot is personally liable for damages caused
over the helm, the captain will have to stand aside and by his own negligence or default to the owners of the
surrender all his authority to the pilot who is more vessel, and to third parties for damages sustained in a
familiar with the docking maneuvers. Now, A hit the collision. Such negligence of the pilot in the performance
pier. PPA filed a complaint against Far Eastern of duty constitutes a maritime tort. At common law, a
Shipping. Issue: Can the captain of the vessel be shipowner is not liable for injuries inflicted exclusively by
considered negligent in this case? Because the only way the negligence of a pilot accepted by a vessel
compulsorily.The exemption from liability for such
that Far Eastern shipping can be held liable is for the
negligence shall apply if the pilot is actually in charge
courts to declare the captain negligent. and solely in fault. Since, a pilot is responsible only for
his own personal negligence, he cannot be held
HELD: YES. accountable for damages proximately caused by the
default of others, or, if there be anything which
A pilot, in maritime law, is a person duly qualified, and concurred with the fault of the pilot in producing the
licensed, to conduct a vessel into or out of ports, or in certain accident, the vessel master and owners are liable.
waters. In a broad sense, the term "pilot" includes both (1)
those whose duty it is to guide vessels into or out of ports, or
3. WILDVALLEY SHIPPING VS. CA - Almost
in particular waters and (2) those entrusted with the navigation
of vessels on the high seas. However, the term "pilot" is more same facts, except in this case the vessel was
generally understood as a person taken on board at a particular Filipino owned and it arrived in Velenzuela. There
place for the purpose of conducting a ship through a river, road was a compulsory pilotage. When the pilot
or channel, or from a port. boarded the vessel, the captain left the bridge.
When it entered the Venezuelan channel, the
Under English and American authorities, generally speaking, vessel experienced some vibration and the pilot
the pilot supersedes the master for the time being in the
assured the captain that the vibrations were
command and navigation of the ship, and his orders must be
obeyed in all matters connected with her navigation. He normal - the result of the shallowness of the
becomes the master pro hac vice and should give all directions channel. But the vessel ran aground thereafter.
as to speed, course, stopping and reversing, anchoring, towing
and the like. And when a licensed pilot is employed in a place Held: The captain in this case was not negligent.
where pilotage is compulsory, it is his duty to insist on having
effective control of the vessel, or to decline to act as pilot. We find that the grounding of the vessel is attributable to
Under certain systems of foreign law, the pilot does not take the pilot. When the vibrations were first felt the watch
entire charge of the vessel, but is deemed merely the adviser officer asked him what was going on, and pilot Vasquez
of the master, who retains command and control of the replied that "(they) were in the middle of the channel
navigation even on localities where pilotage is compulsory. and that the vibration was as (sic) a result of the
shallowness of the channel.
While it is indubitable that in exercising his functions a pilot-is
in sole command of the ship[69] and supersedes the master for The law does provide that the master can countermand
the time being in the command and navigation of a ship and or overrule the order or command of the harbor pilot on
that he becomes master pro hac vice of a vessel piloted by board. The master of the Philippine Roxas deemed it best
him,[70] there is overwhelming authority to the effect that the not to order him (the pilot) to stop the vessel. The
master does not surrender his vessel to the pilot and the pilot master of the Philippine Roxas deemed it best not to
is not the master. The master is still in command of the vessel order him (the pilot) to stop the vessel, mayhap, because
notwithstanding the presence of a pilot. There are occasions the latter had assured him that they were navigating
when the master may and should interfere and even displace normally before the grounding of the vessel. Based on
the pilot, as when the pilot is obviously incompetent or these declarations, it comes as no surprise to us that the
intoxicated and the circumstances may require the master to master chose not to regain control of the ship. Admitting
displace a compulsory pilot because of incompetency or his limited knowledge of the Orinoco River, Captain Colon
physical incapacity. If, however, the master does not observe relied on the knowledge and experience of pilot Vasquez
that a compulsory pilot is incompetent or physically to guide the vessel safely.
incapacitated, the master is justified in relying on the pilot, but
not blindly.
So the SC gave conflicting decisions, but if you
look at it, the SC ruled in these ways only for one
 Transcribed and Prepared by: Hanniyah Sevilla 4 Manresa ’08-‘09 19

reason -- ruling in favor of Filipinos. (Very good, Officer Josip Milin also cannot be given weight for lack of
Lyndon!:D) authentication.

Books to be carried by the captain Although technical rules of evidence do not strictly apply
to labor proceedings, however, in the instant case,
authentication of the above-mentioned documents is
ARTICLE 612. The following obligations are inherent in the necessary because their genuineness is being assailed,
office of captain: x x x and since petitioners offered no corroborating evidence.
These documents and their contents have to be duly
3. To have three folioed and stamped books, placing at the identified and authenticated lest an injustice would result
beginning of each one a note of the number of folios it contains, from a blind adoption of such contents. Thus, the
unauthenticated documents relied upon by petitioners
signed by the maritime official, and in his absence by the are mere self-serving statements of their own officers
competent authority. and were correctly disregarded by the Court of Appeals.

In the first book, which shall be called "log book," he shall enter DURATION OF LIABILITY of Captain
every day the condition of the atmosphere, the prevailing winds,
the course sailed, the rigging carried, the horsepower of the Do not forget the duration of liability under the
engines, the distance covered, the maneuvers executed, and other Civil Code, Art. 1736.
incidents of navigation. He shall also enter the damage suffered by With respect to the captain:
the vessel in her hull, engines, rigging, and tackle, no matter what
is its cause, as well as the imperfections and averages of the cargo,
ARTICLE 619. The captain shall be liable for the
and the effects and consequence of the jettison, should there be
cargo from the time it is turned over to him at the dock, or
any; and in cases of grave resolutions which require the advice or a
afloat alongside the ship, at the port of loading until he
meeting of the officers of the vessel, or even of the passengers and
delivers it on the shores or on the discharging wharf, of the
crew, he shall record the decision adopted. For the informations
port of unloading unless the contrary has been expressly
indicated he shall make use of the binnacle book, and of the steam
agreed upon.
or engine book kept by the engineer.

In the second book, called the "accounting book," he shall enter all Notes:
the amounts collected and paid for the account of the vessel,
entering specifically article by article, the sources of the collection, 1. If the goods are delivered to Aboitiz in the
and the amounts invested in provisions, repairs, acquisition of warehouse, does the liability of Aboitiz start? Yes,
rigging or goods, fuel, outfits, wages, and all other expenses. He because the goods are transferred already to
shall furthermore enter therein a list of all the members of the Aboitize. Does the liability of the captain start?
crew, stating their domiciles, their wages and salaries, and the NO. Only once the goods are at the dock and until
amounts they may have received on account, either directly or by the goods are delivered to the shore. So the
delivery to their families. captain has a shorter period of responsibility as
compared to the carrier. Of course, unless is a
In the third book, called "freight book," he shall record the entry stipulation to the contrary.
and exit of all the goods, stating their marks and packages, names
of the shippers and of the consignees, ports of loading and MARITIME PROTEST
unloading, and the freight earned. In the same book he shall record
the names and places of sailing of the passengers and the number Definition: This has to be done by the captain if
of packages of which their baggage consists, and the price of the the vessel/cargo is lost or injured. It is a written
passage. statement under oath, made by the captain or
master of the vessel after the occurrence of an
accident or disaster in which the vessel or cargo is
Notes:
lost or injured with respect to circumstances
1. Of the three books, the log book is the most
attending such ocurrence.
important;
Purpose: It is usually intended to show that the
2. Haverton Shipping vs. NLRC - What is the
loss or damage resulted from a peril of the sea or
probative value of the entries in the logbook? Can you
some other cause for shich neither the master or
use the log book as evidence? YES. It is an official
owner was responsible. It concludes with the
record of entries made by a person in the performance
protestation against any liablity of the owner for
of his duty required by law and are prima facie
such loss or damage.
evidence of the facts entered therein.

But in: ARTICLE 624. A captain whose vessel has gone

through a hurricane or who believes that the cargo has
3. Centennial vs. Dela Cruz: In Wallem Maritime suffered damages or averages, shall make a protest thereon
Services, Inc. v. National Labor Relations Commission, before the competent authority at the first port he touches
citing Haverton Shipping Ltd. v. National Labor within the twenty-four hours following his arrival, and shall
Relations Commission, the Court ruled that a copy of an ratify it within the same period when he arrives at the place
official entry in the logbook is legally binding and serves of his destination, immediately proceeding with the proof
as an exception to the hearsay rule. In the said case, of the facts, it not being permitted to open the hatches
however, there was no controversy as to the until this has been done.
genuineness of the said entry and the authenticity of
the copy presented in evidence. The captain shall proceed in the same manner if, the vessel
having been wrecked, he is saved alone or with part of his
crew, in which case he shall appear before the nearest
In the instant case, respondent has consistently assailed the
genuineness of the purported entry and the authenticity of authority, and make a sworn statement of the facts.
such copy. He alleged that before his repatriation, there was no
entry in the ship's official logbook regarding any incident that The authority or the consul abroad shall verify the said
might have caused his relief; that Captain Kowalewski's facts, receiving a sworn statement of the members of the
signature in such purported entry was forged. In support of his crew and passengers who may have been saved, and taking
allegations, respondent submitted three official documents the other steps which may assist in arriving at the facts,
bearing the signature of Capt. Sczepan Kowalewski which is
drafting a certificate of the result of the proceedings in the
different from the one appearing in Annex E. Thus, it was
incumbent upon petitioners to prove the authenticity of Annex log book and in that of the sailing mate, and shall deliver
E, which they failed to do. Likewise, the purported report of the original records of the proceedings to the captain,
Capt. Kowalewski dated September 1, 2000 and the stamped and folioed, with a memorandum of the folios,
statements of Safety Officer Khaldun Nacem Faridi and Chief which he must rubricate, for their presentation to the judge
or court of the port of destination.
 Transcribed and Prepared by: Hanniyah Sevilla 4 Manresa ’08-‘09 20

The statement of the captain shall be believed if it is in accordance as they are hired by the carrier. Relevant
with those of the crew and passengers; if they disagree, the latter provisions: Art. 634-637
shall be accepted, unless there is proof to the contrary
DISCHARGE:
Procedure:
1. Protest must be made with a competent
authority at first port he touches; Who can discharge? The shipowner or the
2. within 24 hours following his arrival captain can discharge the crew (Art. 637)
3. Captain must ratify it within 24 hours when he
arrives at the place of destination where he What is the effect if the captain or the crew
must proceed immediately with the proof of is discharged during the voyage? Example,
the facts voyage from Manila to San Francisco and en
4. He must not open the hatches until all of the route to SF they are discharged:
above are done.
ARTICLE 604. If the captain or any other member of
IV. OFFICERS AND CREW OF THE VESSEL the crew should be discharged during the voyage, they shall
receive their salary until the return to the place where the
SAILING MATE - He is the 2nd chief of the contract was made, unless there are good reasons for the
vessel; takes place of the captain and assumes all discharge, all in accordance with Articles 636 et seq. of this
his duties and powers in case of absence, sickness Code.
or death.
Gen Rule: They shall continue to receive their
ARTICLE 627. The sailing mate, as the second chief of the salaries until their return to the port where the
vessel and unless the agent orders otherwise, shall take the place contract was made. They have to be paid the full
of the captain in cases of absence, sickness, or death, and shall round trip.
then assume all his powers, obligations, and responsibilities.
Except: If there is a just cause or just motive.
Notes:
1. Centennial vs. Dela Cruz, supra. (2008) - Rule in case of discharge if the contract is for
Petitioners allege loss of trust and confidence due to a definite period or voyage:
incompetence as the ground for respondent's dismissal.
Loss of trust and confidence is premised on the fact ARTICLE 605. If the contracts of the captain and
that the employee holds a position whose functions members of the crew with the agent should be for a
may only be performed by someone who has the definite period or voyage, they can not be discharged until
confidence of management. Such employee may be the fulfillment of their contracts, except for reasons of
managerial or rank-and-file, but the nature of his insubordination in serious matters, robbery, theft, habitual
position determines the requirements for a valid drunkenness, and damage caused to the vessel or to its
dismissal. cargo by malice or manifest or proven negligence.

Article 627 of the Code of Commerce defines the Chief Mate, Notes:
also called Chief Officer or Sailing Mate, as "the second chief of 1. Madrigal vs. Ogilvie - The services of Jesus
the vessel, and unless the agent orders otherwise, shall take G. Ogilvie, Salvador Ortile, Antonio C. Militar and
the place of the captain in cases of absence, sickness, or death, Miguel M. Fermin were engaged by Manuel
and shall then assume all his powers, duties, and
Mascuñana, master or captain employed by the
responsibilities." A Chief Officer, therefore, is second in
command, next only to the captain of the vessel. petitioner Madrigal Shipping Company, Inc., to
man and fetch the vessel "S.S. Bridge" from
Chief Mate is a managerial employee because the said officer Sasebu, Japan. Pursuant thereto the respondents
performed the functions of an executive officer next in were flown to Sasebu, Japan, and they manned
command to the captain; that in the performance of such the vessel out of the port of Sasebu. On 16 March
functions, he is vested with powers or prerogatives to lay down 1948, when the vessel reached Hongkong, the
and execute management policies.
respondents were dismissed and replaced by a
The exercise of discretion and judgment in directing a ship's crew of Chinese nationality. The respondents were
course is as much managerial in nature as decisions arrived at flown back to Manila and paid their respective
in the confines of the more conventional board room or salaries up to the date of their dismissal.(So they
executive office. Important functions pertaining to the were only paid from Japan to Hongkong)
navigation of the vessel like assessing risks and evaluating the
vessel's situation are managerial in nature. Thus, respondent,
H:The services of the respondents were engaged by the
as Chief Officer, is a managerial employee; hence, petitioners
petitioner to man its vessel for a determinate time or
need to show by substantial evidence the basis for their claim
voyage, with an express stipulation that "this contract
that respondent has breached their trust and confidence.
expires on the arrival of this boat at the port of Manila."
Not having been discharged for any of the causes
Petitioners' basis for dismissing respondent was the alleged
enumerated in the Art. 605, the respondents are entitled
entry by Captain Kowalewski in the ship's logbook regarding
to the amounts they respectively seek to collect from the
respondent's inexperience and inefficiency. A ship's
petitioner.
log/logbook is the official record of a ship's voyage which its
captain is obligated by law to keep wherein he records the
decisions he has adopted, a summary of the performance of 2. Wallem vs. Minister of Labor: Wallem hired
the vessel, and other daily events. A logbook is a respectable X and Y as seamen for 10 months. For instigating
record that can be relied upon when the entries therein are the International Transport Federation (ITF)
presented in evidence. (Connect with page 16) Chapter to demand higher wages they were
dismissed. Was the dismissal proper?
SECOND MATE (which is actually the 3rd mate
since the sailing mate is the 2nd mate) No, the seamen cannot be dismissed without legal
cause because the contract was for a definite
In case of disability, disqualification of the captain and period of 10 months. What X and Y did was not a
the sailing mate, he takes over. Relevant provisions: legal cause under Art. 605 but an exercise of the
Art 632-633, Code of Commerce rights of all workmen to seek better rights and
higher benefits x x x
CREW OR SAILORS - Under the Code of
Commerce, they are enlisted by the captain in such Grounds if captain discharges crew:(of course,
number he may deem proper. But I think at the captain cannot discharge himself!)
present the captain has no business with the crew
 Transcribed and Prepared by: Hanniyah Sevilla 4 Manresa ’08-‘09 21

ARTICLE 636. Should a fixed period for which a sailor has all her equipments and the freight he may have earned
signed not be stated, he can not be discharged until the end of the during the voyage.
return voyage to the port where he enrolled.
Other provisions providing for abandonment:
ARTICLE 637. Neither can the captain discharge a sailor
during the time of his contract except for sufficient cause, the ARTICLE 590. The owners of a vessel shall be civilly liable in
following being considered as such: the proportion of their contribution to the common fund,
1. The perpetration of a crime which disturbs order on the for the results of the acts of the captain, referred to in
vessel. Article 587. Each part owner may exempt himself from this
2. Repeated offenses of insubordination, against discipline, or liability by the abandonment before a notary of the part of
against the fulfillment of the service. the vessel belonging to him.
3. Repeated incapacity or negligence in the fulfillment of the
service to be rendered.
And in cases of collision if the same is caused by
4. Habitual drunkenness.
the captain alone, under
5. Any occurrence which incapacitates the sailor to carry out the
work under his charge, with the exception of the provisions
contained in Article 644. Art. 837: The civil liability contracted by the shipowners in
6. Desertion. the cases prescribed in this section, shall be understood as
limited to the value of the vessel with all her appurtenances
ARTICLE 644. A sailor who falls sick shall not lose his right and all the freight earned during the voyage.
to wages during the voyage, unless the sickness is the result of his
own fault. At any rate, the costs of the attendance and cure shall Notes:
be defrayed from the common funds, in the form of a loan.
If the sickness should be caused by an injury received in the 1. What is abandonment? It is equivalent to an
service or defense of the vessel the sailor shall be attended and offer of the value of the vessel, her equipment
cured from the common funds, there being deducted before and freight earned in return for an exemption
anything else from the proceeds of the freight, the cost of the from liability.
attendance and cure.
So if the vessel sank and the sinking of the vessel
WHAT IS A SUPERCARGO? A person was caused entirely by the negligence of the
specially employed by the owner of a cargo to take captain, the SO or SA can be held liable. But if SO
charge of and sell to the best advantage merchandise or SA abandons the vessel, then the liability will
which has been shipped, and to purchase returning only be limited to the value of the vessel, the
cargoes and to receive freight, as he may be freightage and the equipment.
authorized.
2. The real and hypothecary nature of maritime
law, therefore, distinguishes it from Civil law and
ARTICLE 649. Supercargoes shall discharge on board the
commercial law because of this doctrine. A
vessel the administrative duties which the agent or shippers may
shipping transportation contract is "real and
have assigned them; they shall keep an account and record of
hypothecary" in nature under Art. 587 which
their transactions in a book which shall have the same conditions
accord/issue a shipowner/agent the right of
and requisites as required for the accounting book of the captain,
abandonment and by necessary implication, his
and shall respect the latter in his duties as chief of the vessel.
liability is confined to that to which he is entitled
as of right to abandon, meaning the vessel and all
The powers and liabilities of the captain shall cease, when there is
her equipment and the freight she may have
a supercargo, with regard to that part of the administration
earned during the voyage.
legitimately conferred upon the latter, but shall continue in force
for all acts which are inseparable from his authority and office.
Read: Yangco vs. Laserna for history of right of
abandonment.
ARTICLE 650. All the provisions contained in the second
section of Title III, Book II, with regard to qualifications, manner
3. Reasons why SO/SA are given the right to
of making contracts, and liabilities of factors shall be applicable to
abandonment (Heirs of Amparo vs. delos
supercargoes.
Santos)
ARTICLE 651. Supercargoes can not, without special
a. To offset against the innumerable hazards and
authorization or agreement, make any transaction for their own
perils of the sea;
account during the voyage, with the exception of the ventures
b. To encourage ship building and marine
which, in accordance with the custom of the port of destination,
commerce
they are permitted to do.
Neither shall they be permitted to invest in the return trip more
4. Note that when abandonment is made in the
than the profits from the ventures, unless there is a special
instances provided by law, it cannot be refused.
authorization thereto from the principals.
5. Can a charterer make an abandonment?
ABANDONMENT/DOCTRINE OF LIMITED NO, because he cannot be considered in place of
LIABILITY IN MARINE TRANSPORTATION the owner or the shipagent in matters regarding
to the responsibility pertaining to ownership and
As already discussed, the CCOG can limit its liability by possession of the vessel. Even if the charter is a
stipulation. (Art. 1749-1750) For CCOP, liability can bareboat or demise charter.
only be limited when Pax is carried for free and there is
a stipulation. Under Maritime Commerce, there is a way EXCEPTIONS TO RIGHT OF
for a CC to limits its liability even without a stipulation ABANDONMENT (meaning even if the
because it is the law itself which proves for this liability. right to abandonment exists, the SO/SA
will still pay for more than the value of
Recall: ARTICLE 586 and 583 (SO/SA civilly liable for the vessel)
acts of captain and obligations contracted)
1. When the vessel is properly insured - the
ARTICLE 587. The agent shall also be civilly liable for the insurance will take care of the liability, the value
indemnities in favor of third persons which arise from the conduct of which may be more than the value of the
of the captain in the care of the goods which the vessel carried; but vessel, freight, etc.
he may exempt himself therefrom by abandoning the vessel with
 Transcribed and Prepared by: Hanniyah Sevilla 4 Manresa ’08-‘09 22

2. When the liability for repairs of the vessel was SC said that the claimants cannot get their 43
incurred before the loss of such vessel (favorite BQ) million claims. They have to share pro-rata the
proceeds of the insurance. There is no preference
3. When the liability is one which arises from the of credit.
provisions of the labor code.
In the instant case, there is, therefore, a need to collate
When abandonment CANNOT BE MADE all claims preparatory to their satisfaction from the
insurance proceeds on the vessel M/V P. Aboitiz and its
1. When the voyage is not maritime, but only in a river, pending freightage at the time of its loss. No claimant
can be given precedence over the others by the simple
bay, or gulf expedience of having completed its action earlier than
the rest. Thus, execution of judgment in earlier
2. When the vessel is not acting as a common carrier completed cases, even these already final and executory
but a private carrier. must be stayed pending completion of all cases
occasioned by the subject sinking. Then and only then
3. When the SO/SA is at fault, i.e. when there is lack of can all such claims be simultaneously settled, either
completely or pro-rata should the insurance proceeds
proper equipment, lack of technical training of the
and freightage be not enough to satisfy all claims.
crew, unlicensed crew members, captain. So any kind
of negligence, no matter how minute will remove the
right of abandonment. 3. Aboitiz Shipping vs. New India (2006) -
The SC changed its mind again.
cases:
a. Heirs of Amparo delos Santos vs. CA: The vessel Our ruling in Monarch may appear inconsistent with the
exception of the limited liability doctrine, as explicitly
left late because the carrier decided to load more
stated in the earlier part of the Monarch decision. An
unmanifested passengers and cargo. Because the exception to the limited liability doctrine is when the
vessel left late, it encountered a typhoon and the vessel damage is due to the fault of the shipowner or to the
sank. According to the Board of Marine Inquiry (BMI) concurrent negligence of the shipowner and the captain.
the sinking was caused by the fault of the captain and In which case, the shipowner shall be liable to the full-
its officers in operating the vessel. The SO/SA claimed extent of the damage. We thus find it necessary to clarify
the right to abandon, but the SC said that the doctrine now the applicability here of the decision in Monarch.
Where the shipowner fails to overcome the presumption
of limited liability cannot be invoked in this case of negligence, the doctrine of limited liability cannot be
because there was fault or negligence on the part of the applied. Therefore, we agree with the appellate court in
carrier because it overloaded the vessel even if it was sustaining the trial court's ruling that petitioner is liable
cleared to leave. And everytime it is discovered that a for the total value of the lost cargo.
vessel is overloaded with cargo/pax, goodbye
abandonment. 4. Aboitiz Shipping vs. Equitable (2008)
which affirmed the New India ruling. Here,
It must be stressed at this point that Article 587 speaks only of the SC traced the history starting from GAFLAC to
situations where the fault or negligence is committed solely by New India. So no pro-rata sharing of the
the captain. In cases where the shipowner is likewise to be insurance proceeds.
blamed, Article 587 does not apply. Such a situation will be
covered by the provisions of the New Civil Code on Common
Carriers. Owing to the nature of their business and for reasons The Court declared in the 1993 GAFLAC case that claims
of public policy, common carriers are tasked to observe against Aboitiz arising from the sinking of M/V P. Aboitiz
extraordinary diligence in the vigilance over the goods and for should be limited only to the extent of the value of the
the safety of its passengers (Article 1733, New Civil Code). vessel. Thus, the Court held that the execution of
Further, they are bound to carry the passengers safely as far judgments in cases already resolved with finality must be
as human care and foresight can provide, using the utmost stayed pending the resolution of all the other similar
diligence of very cautious persons, with a due regard for all the claims arising from the sinking of M/V P. Aboitiz.
circumstances (Article 1755, New Civil Code). Whenever death Considering that the claims against Aboitiz had reached
or injury to a passenger occurs, common carriers are presumed more than 100, the Court found it necessary to collate all
to have been at fault or to have acted negligently unless they these claims before their payment from the insurance
prove that they observed extraordinary diligence as prescribed proceeds of the vessel and its pending freightage. As a
by Articles 1733 and 1755 result, the Court exhorted the trial courts before whom
similar cases remained pending to proceed with trial and
adjudicate these claims so that the pro-rated share of
b. PHILAMGEN VS. CA- According to the SC, despite each claim could be determined after all the cases shall
the fact that the vessel was sea worthy, it was not have been decided.
cargo worthy. The cases and cases of coca-cola bottles
were loaded on deck and the vessel was top heavy In Monarch Insurance, the Court deemed it fit to settle
making it easy to tilt in case of strong winds. once and for all this factual issue by declaring that the
sinking of M/V P. Aboitiz was caused by the concurrence
of the unseaworthiness of the vessel and the negligence
Q: What if the sinking of the vessel is caused by of both Aboitiz and the vessel's crew and master and not
fortuitous event, is the right of abandonment present? because of force majeure. Notwithstanding this finding,
A: No, the SO or SA will be exempt from liability. the Court did not reverse but reiterated instead the
pronouncement in GAFLAC to the effect that the
Other important cases: claimants be treated as "creditors in an insolvent
1. Aboitiz Shipping v. General Accident (1993)- corporation whose assets are not enough to satisfy the
totality of claims against it."
The sinking of this vessel caused a lot of cases to be
filed against aboitiz. In this case, the SC applied the However, on 02 May 2006, the Court rendered a decision
findings of the BMI where it was found that the sinking in Aboitiz Shipping Corporation v. New India Assurance
of the vessel was caused by a fortuitous event. The SC Company, Ltd. (New India), reiterating the well-settled
even exonerated the captain and crew so nothing could principle that the exception to the limited liability
be collected from Aboitiz doctrine applies when the damage is due to the fault of
the shipowner or to the concurrent negligence of the
shipowner and the captain. Where the shipowner fails to
2. Monarch Insurance vs. CA (2000)- It was
overcome the presumption of negligence, the doctrine of
discovered that Aboitiz was negligent. So the sinking of limited liability cannot be applied. In New India, the
the ship was not caused by fortuitous event and it was Court clarified that the earlier pronouncement in Monarch
not also caused by the captain of the ship. So therefore Insurance was not an abandonment of the doctrine of
the right of abandonment does not exist as there was limited liability and that the circumstances therein still
fault or negligence on the part of the CC. made the doctrine applicable.

In New India, the Court declared that Aboitiz failed to

BUT in this case, there were so many claimants, about
discharge its burden of showing that it exercised
110 claimants, the claim amounting to about 43 Million extraordinary diligence in the transport of the goods it
and the insurance proceeds were only 14 million. The
 Transcribed and Prepared by: Hanniyah Sevilla 4 Manresa ’08-‘09 23

had on board in order to invoke the limited liability doctrine.

Thus, the Court rejected Aboitiz's argument that the award of WHO CAN RESCIND A CHARTER
damages to respondent therein should be limited to its pro rata PARTY: Either party
share in the insurance proceeds from the sinking of M/V P.
Aboitiz.
ARTICLE 688. A charter party may be
The instant petitions provide another occasion for the Court to annulled at the request of the charterer:
reiterate the well-settled doctrine of the real and hypothecary
nature of maritime law. As a general rule, a ship owner's 1.If before loading the vessel he should abandon
liability is merely co-extensive with his interest in the vessel,
the charter, paying half of the freightage agreed
except where actual fault is attributable to the shipowner.
Thus, as an exception to the limited liability doctrine, a upon. (abandonment of charter before
shipowner or ship agent may be held liable for damages when loading; pay 1/2 of the freight)
the sinking of the vessel is attributable to the actual fault or
negligence of the shipowner or its failure to ensure the 2.If the capacity of the vessel should not
seaworthiness of the vessel. The instant petitions cannot be agree with that stated in the certificate of
spared from the application of the exception to the doctrine of the tonnage, or if there is an error in the
limited liability in view of the unanimous findings of the courts
statement of the flag under which she sails.
below that both Aboitiz and the crew failed to ensure the
seaworthiness of the M/V P. Aboitiz. (Charterer will be indemnified by the owner)

3.If the vessel should not be placed at the

SPECIAL CONTRACTS IN MARITIME
disposal of the charterer within the period and in
COMMERCE: (Charter party, bill of lading,
the manner agreed upon. (non placement at
loans on bottomry and respondentia)
disposal of the charterer)
1. CHARTER PARTY - a contract wherein the entire
4.If, after the vessel has put to sea, she should
ship or some principal part thereof is left by the owner
return to the port of departure, on account of
to another person for a specified time or use, in
risk of pirates, enemies, or bad weather, and
consideration of the payment of a fee.
the freighters should agree to unload her.
(charterer must pay owner for the voyage out,
Two kinds of C/P: a. Contract of Affreightment -
meaning one way)
here the owner retains control of the vessel, he
provides the crew, what is being leased is only the
In the second and third cases the person from
space of the vessel. A contract of affreightment can be
whom the vessel was chartered shall indemnify
a time charter or a voyage charter. b.
the charterer for the losses he may suffer. In the
Bareboat/Demise Charter wherein the owner of the
fourth case the person from whom the vessel was
vessel gives up the control and full possession of the
chartered shall have a right to the freightage in
vessel to the charterer who becomes the owner pro
full for the voyage out. If the charter should have
hac vice.
been made by the months, the charterers shall
pay the full freightage for one month, if the
If Voyage or time charter = common carrier retains its
voyage were to a port in the same waters, and
nature as a common carrier; but if it is bareboat
two months, if the voyage were to a port in
charter, the common carrier becomes a private carrier
different waters. From one port to another of the
for that particular charter only.
Peninsula and adjacent islands, the freightage for
one month only shall be paid.
Formal/Substantial requirements:
5.If a vessel should make a port during the
ARTICLE 652. A charter party must be drawn in duplicate and
voyage in order to make urgent repairs and the
signed by the contracting parties, and when either does not know
freighters should prefer to dispose of the
how or can not do so, by two witnesses at their request.
merchandise.(pay for voyage out)
The charter party shall include, besides the conditions
unrestrictedly stipulated, the following statements:
When the delay does not exceed thirty days, the
1.The kind, name, and tonnage of the vessel.
freighters shall pay the full freight for the voyage
2.Her flag and port of registry.
out. Should the delay exceed thirty days, they
3.The name, surname, and domicile of the captain.
shall only pay the freight in proportion to the
4.The name, surname, and domicile of the agent, if the latter
distance covered by the vessel.
should make the charter party.
5.The name, surname, and domicile of the charterer, and if he
states that he is acting by commission, that of the person for ARTICLE 689. At the request of the person
whose account he makes the contract. from whom the vessel is chartered the charter
6.The port of loading and unloading. party may be rescinded:
7.The capacity, number of tons or weight, or measure which
they respectively bind themselves to load and transport, or 1.If the charterer at the termination of the extra
whether it is the total cargo. lay days does not place the cargo alongside the
8.The freightage to be paid, stating whether it is to be a fixed vessel.
amount for the voyage or so much per month, or for the space to In such case the charterer must pay half the
be occupied, or for the weight or measure of the goods of which freight stipulated besides the demurrage for the
the cargo consists, or in any other manner whatsoever agreed lay days and extra lay days elapsed.
upon.
2.If the person from whom the vessel was
(PRIMAGE- a small allowance or compensation payable to the chartered should sell her before the charterer has
master or owner of the vessel for the use of its cables to load and begun to load her and the purchaser should load
unload the goods and to the mariners for lading and unlading in her for his own account. In such case the vendor
port. So what you pay those who load; shall indemnify the charterer for the losses he
DEMURRAGE - an amount stipulated in the charter party to be paid may suffer.
by the charter/shipper to the ship owner for any delay. )
If the new owner of the vessel should not load her
9.The amount of primage to be paid to the captain. for his own account the charter party shall be
respected (in such case, the charter party is not
10.The days agreed upon for loading and unloading. (laydays- rescinded) and the vendor shall indemnify the
no. of days between unloading and departure) purchaser if the former did not inform him of
11.The lay days and extra lay days to be allowed and the rate of the charter pending at the time of making the
demurrage.
 Transcribed and Prepared by: Hanniyah Sevilla 4 Manresa ’08-‘09 24

sale. Otherwise, if he informed him, then no need to And a vessel is cargoworthy if it is sufficiently strong and
indemnify. equipped to carry the particular kind of cargo which she
has contracted to carry, and her cargo must be so loaded
that it is safe for her to proceed on her voyage. A mere
Charter Party Ordinary Lease
right given to the charterer to inspect the vessel before
Contract loading and to satisfy himself that she was fit for the
Period If for definite period, If the lease is for a contracted cargo does not free the shipowner from his
the charterer may definite period, the obligation to provide a cargoworthy ship.
rescind the charter lessee cannot terminate
party by paying half the contract BILLS OF LADING (CF: ART. 356,
of the freightage 357, 709, 718)
Effect New owner cannot be If the leased property is
of sale compelled to respect sold to one who knows An intstrument in writing signed by the carrier or
to 3rd the charter party. of the existence of the his agent, describing the freight so as to identify
person lease contract, the new it, staing the name of the consigor, the terms of
owner must respect the the contract of carriage and agreeing or directing
lease that the freight be delivered to the order or
assigns of a specified person at a specified place.
Case:
Two fold nature: Serves as a receipt as well as
Santiago Lighterage vs. CA: Seaworthiness cannot evidence of a contract. BUT it is not important for
be agreed to between the parties (parang jurisdiction of a contract of carriage to exist between the
the court) because it is a fact which has to be proven. shipper/pax and the common carrier. It is merely
an evidence.
Fx: In this case two charter parties were entered into. The
owner of the vessel was Santiago. He chartered the vessel to B What is the effect of the issuance by
(bareboat charter). B chartered the vessel to C (voyage a carrier of an unsigned bill of lading
charter). The vessel was supposed to carry an ore to South
when accepted by the shipper or the
Korea. On the way to pick up the ore from Manila to Zambales,
the vessel had to undergo repairs. In short it never reached consignee?
Korea.
A: Keng Hua Paper Products Co, Inc. vs. CA:
The pertinent provisions of the contract between Santiago and A "bill of lading delivered and accepted constitutes
B reads: "3. Delivery – The VESSEL shall be delivered and the contract of carriage even though not signed,"
taken over by the CHARTERERS at the port of the City of because the "(a)cceptance of a paper containing
Manila, in such ready berth as the CHARTERERS may direct.
the terms of a proposed contract generally
The OWNER shall before and at the time of delivery exercise constitutes an acceptance of the contract and of
due diligence to make the VESSEL seaworthy and in every all of its terms and conditions of which the
respect ready in hull, machinery and equipment for service acceptor has actual or constructive notice." In a
hereunder. The VESSEL shall be properly documented at time nutshell, the acceptance of a bill of lading by the
of delivery. shipper and the consignee, with full knowledge of
its contents, gives rise to the presumption that
The delivery to the CHARTERERS of the VESSEL and the taking
the same was a perfected and binding contract.
over of the VESSEL by the CHARTERERS shall constitute a full
performance by the OWNER of all the OWNER’S obligations
hereunder, and thereafter the CHARTERERS shall not be What must be done to the bill of
entitled to make or assert any claim against the OWNER on lading upon fulfillment of the
account of the representations or warranties expressed or contract?
implied with respect to the VESSEL but the OWNER shall be
responsible for repairs or renewals occasioned by latent defects
ARTICLE 353. The legal basis of the contract between
in the VESSEL, her machinery or appurtenances existing at the
time of delivery under this Agreement, provided such defects the shipper and the carrier shall be the bills of lading, by the
have manifested before turn-over." contents of which all disputes which may arise with regard
to their execution and fulfillment shall be decided without
What is the liability of Santiago as the owner? admission of other exceptions than forgery or material
errors in the drafting thereof.
Held: The mere physical transfer of MV Christine Gay from
petitioner to Pelaez does not constitute full performance of its
obligation under their bareboat charter agreement. Neither is
After the contract has been complied with the bill of lading
it considered a delivery. Under the agreement, physical issued by the carrier shall be returned to him, and by virtue
transfer of a seaworthy vessel is necessary to satisfy delivery. of the exchange of this certificate for the article transported,
Seaworthiness is a relative term. The degree of seaworthiness the respective obligations and actions shall be considered as
varies in relation to the contemplated voyage. canceled, unless in the same act the claims which the
contracting parties desired to reserve are reduced to
To be seaworthy, a vessel “must have that degree of fitness
writing, exception being made of the provisions of Article
which an ordinary, careful and prudent owner would require his
vessel to have at the commencement of her voyage, having 366.
regard to all the probable circumstances of it.” Thus the
degree of seaworthiness varies in relation to the contemplated If in case of loss or for any other reason whatsoever, the
voyage. Crossing the Atlantic calls for stronger equipment consignee can not return upon receiving the merchandise
than sailing across the Visayan Sea. It is essential to consider the bill of lading subscribed by the carrier, he shall give said
that once the necessary degree of seaworthiness has been carrier a receipt for the goods delivered, this receipt
ascertained, this obligation is an absolute one, i.e. the
producing the same effects as the return of the bill of lading.
undertaking is that the vessel actually is seaworthy. It is no
excuse that the shipowner took every possible precaution to
make her so, if in fact he failed. AFter the contract has been complied with, the bill
of lading shall be returend to the carrier who may
In examining what is meant by seaworthiness we must bear in have issued it and it (the surrender) is proof that
mind the dual nature of the carrier’s obligations under a
the goods have been delivered.
contract of affreightment. To satisfy these duties the vessel
must (a) be efficient as an instrument of transport and (b) as a
storehouse for her cargo. The latter part of the obligation is And after the deliverey or return of the bill of
sometimes referred to as cargoworthiness. lading, the respective obligations and actions
between the parties shall be considered as
A ship is efficient as an instrument of transport if its hull, tackle cancelled.
and machinery are in a state of good repair, if she is
sufficiently provided with fuel and ballast, and is manned by an
In case the consignee cannot return upon
efficient crew.
receive the merchandise the bill of lading, he
 Transcribed and Prepared by: Hanniyah Sevilla 4 Manresa ’08-‘09 25

must give the said carrier a receipt for the goods Did the Civil Code repeal the
delivered, this receipt producing the same effects as prescriptive period to file a claim
the return of the bill of lading. (Art. 353) under the Code of Commerce?

What is the presumption if the carrier does not No, the limitations of actions mentioned in the
hold the bill of lading after the fulfillment of the Civil Code are without prejudice to those specified
contract of transportation? in teh Code of Commerce.

The presumption is that the carrier did not deliver the Period to file for recovery of undelivered/lost
goods. cargo in the courts:(note that under the Code
of commerce, it does not cover loss/non
Who may change the consignee? delivery of cargo)

ARTICLE 360. The shipper may, without changing If there is a bill of lading, 10 years, otherwise, 6
the place where the delivery is to be made, change the years. If it involves overseas trading, 1 year from
consignment of the goods delivered to the carrier, and date when it was supposed to be received.
the latter shall comply with his orders, provided that at
the time of making the change of the consignee the bill LOANS ON BOTTOMRY AND
of lading subscribed by the carrier be returned to him, RESPONDENTIA
if one were issued, exchanging it for another containing
the novation of the contract. ARTICLE 719. A loan on bottomry or respondentia
shall be considered that which the repayment of the sum
The expenses arising from the change of consignment loaned and the premium stipulated, under any condition
shall be defrayed by the shipper. whatsoever, depends on the safe arrival in port of the goods
on which it is made, or of their value in case of accident.
TRANSSHIPMENT - It is the act of taking
cargo from one ship and loading it into Notes:
another. Transshipment cannot be made if the 1. If the collateral is the vessel = bottomry;
shipper does not consent because it is if collateral is goods = respondentia.
dangerous.. it will expose the goods to
breakage, etc. So the effect if there was Ex. Loan for 5 Million, en route to San Francisco,
transshipment without consent is that there is the vessel sinks. The loan is extinguished because
a breach in the contract of carriage. And the the collateral is lost.
carrier is liable to the shipper in case of loss,
even for an otherwise excepted cause. 2. Characteristics of a loan on Bottomry: It is
a loan the security of which is the vessel itself and
BRINGING AN ACTION/CLAIM AGAINST conditioned on the safe arrival at the port of
THE CARRIER destination. Also the vessel must be exposed to
maritime peril. (So it must be destroyed during its
Under Art. 366, this does not cover loss because it says voyage)
upon receipt of the goods or merchandise.
3. Who may contract such loan? On
ARTICLE 366. Within the twenty-four hours following the receipt of bottomry: The owner of the vessel or the captain
the merchandise a claim may be brought against the carrier on (see previous discussion, Art. 580); on
account of damage or average found therein on opening the respondentia: owner of the cargo.
packages, provided that the indications of the damage or average
giving rise to the claim can not be ascertained from the exterior of Ordinary Loan Loan on
said packages, in which case said claim would only be admitted on Bottomry/respondentia
the receipt of the packages. (So if the damage is apparent, file a May or may not have Must always have collateral
claim, which may be verbal, immediately upon receipt) collateral
Collateral may be real Collateral must be a vessel or a
After the periods mentioned have elapsed, or after the or personal property cargo subject to maritime risk
transportation charges have been paid, no claim whatsoever shall Absolutely repayable Payment depends on the safe
be admitted against the carrier with regard to the condition in arrival by the collateral at the
which the goods transported were delivered. port of the loan
Need not be in writing Must be in writing
When does the 24 hour period begin to run? When To be binding on 3rd Must be registered in the registry
the goods are actually received. persons, need not be of vessels
registered
Case: New Zealand vs. Chua Joy - Held: In order that Loss of collateral, if Loss of collateral extinguishes
the condition provided in Article 366 of the Code of any does not the loan.
Commerce may be demanded there should be a extinguish the loan
consignment of goods, through a common carrier, by a
consignor in one place to a consignee in another place. Effect of loss of collateral:
And said article provides that the claim for damages Gen Rule: Extinguishes the loan provided
must be made “within twenty-four hours following the requirements of Art. 731 are complied with.
receipt of the merchandise” by the consignee from the
carrier. In other words, there must be delivery of the
ARTICLE 731. The actions which may be brought by
merchandise by the carrier to the consignee at the
the lender shall be extinguished by the absolute loss of the
place of destination.
goods on which the loan was made, if said loss arose from
an accident of the sea at the time and during the voyage
The cargo never reached Manila, its destination, nor
designated in the contract, and should it be proven that the
was it ever delivered to the consignee, the office of the
cargo was on board;
shipper in Manila, because the ship ran aground upon
entering Laoang bay, Samar on the same day of the
EXCEPTIONS:
shipment. Such being the case, it follows that the cargo
but this shall not take place if the loss were caused by the
was never received by the consignee.
inherent defect of the thing;
or through the fault or malice of the borrower,
or through barratry on the part of the captain, or
 Transcribed and Prepared by: Hanniyah Sevilla 4 Manresa ’08-‘09 26

if it were caused by damages suffered by the vessel as a 7.The victuals and wages of the crew during the time the
consequence of being engaged in contraband, or vessel is in quarantine.
if it arose through loading the merchandise on a vessel other than
that designated in the contract, unless this change should have 8.The damage suffered by the vessel or cargo by reason of
been made by reason of force majeure. an impact or collision with another, if it were accidental and
unavoidable. If the accident should occur through the fault
The proof of the loss is incumbent upon the person who received or negligence of the captain, the latter shall be liable for all
the loan, as well as the proof of the existence in the vessel of the the damage caused.
goods declared to the lender as the object thereof.
9.Any damage suffered by the cargo through the faults,
RISKS, DAMAGES AND ACCIDENTS OF negligence, or barratry of the captain or of the crew,
MARITIME COMMERCE without prejudice to the right of the owner to recover the
corresponding indemnity from the captain, the vessel, and
ARTICLE 806. For the purposes of this Code the following the freight.
shall be considered averages:
GENERAL AVERAGE: all the damages and
1. All extraordinary or accidental expenses which may be incurred expenses which are deliberately caused in order to
during the navigation for the preservation of the vessel or cargo, save the vessel, her cargo, or both at the same
or both. time, from a real and known risk (Art. 811)

2. All damages or deterioration the vessel may suffer from the time Who bears the loss? ARTICLE 812. In order to
she puts to sea from the port of departure until she casts anchor in satisfy the amount of the gross or general
the port of destination, and those suffered by the merchandise averages, all the persons having an interest in the
from the time it is loaded in the port of shipment until it is vessel and cargo therein at the time of the
unloaded in the port of consignment. occurrence of the average shall contribute.

What are NOT averages? Petty expenses under Example of General Ave:
Art. 807
1. The goods or cash invested in the redemption of the vessel
ARTICLE 807. The petty and ordinary expenses of or cargo captured by enemies, privateers, or pirates, and the
navigation, such as pilotage of coasts and ports, lighterage and provisions, wages, and expenses of the vessel detained
towage, anchorage dues, inspection, health, quarantine, lazaretto, during the time the arrangement or redemption is taking
and other so-called port expenses, costs of barges, and unloading, place.
until the merchandise is placed on the wharf, and any other
expenses common to navigation shall be considered ordinary 2. The goods jettisoned to lighten the vessel, whether they
expenses to be defrayed by the shipowner, unless there is a special belong to the vessel, to the cargo, or to the crew, and the
agreement to the contrary. damage suffered through said act by the goods kept.

3.The cables and masts which are cut or rendered useless,

ARTICLE 808. Averages shall be:
the anchors and the chains which are abandoned in order to
1.Simple or particular.
save the cargo, the vessel, or both.
2.General or gross.
4.The expenses of removing or transferring a portion of the
PARTICULAR AVERAGE: Simple or particular
cargo in order to lighten the vessel and place her in
averages shall be, as a general rule, all the expenses
condition to enter a port or roadstead, and the damage
and damages caused to the vessel or to her cargo
resulting therefrom to the goods removed or transferred.
which have not redounded to the benefit and common
profit of all the persons interested in the vessel and her
5.The damage suffered by the goods of the cargo through
cargo x x x (Art. 809)
the opening made in the vessel in order to drain her and
prevent her sinking.
Who bears the loss in P/A? The owner of the goods
which gave rise to the expense or suffered the damage
6.The expenses caused through floating a vessel
shall bear the simple or particular average (Art. 810)
intentionally stranded for the purpose of saving her.
Examples of P/A: 7.The damage caused to the vessel which it is necessary to
break open, scuttle, or smash in order to save the cargo.
1. The damages suffered by the cargo from the time of its
embarkation until it is unloaded, either on account of the nature of 8.The expenses of curing and maintaining the members of
the goods or by reason of an accident at sea or force majeure, and the crew who may have been wounded or crippled in
the expenses incurred to avoid and repair the same. defending or saving the vessel.
2.The damages suffered by the vessel in her hull, rigging, arms, and 9.The wages of any member of the crew detained as
equipment, for the same causes and reasons, from the time she hostage by enemies, privateers, or pirates, and the
puts to sea from the port of departure until she anchored in the necessary expenses which he may incur in his imprisonment,
port of destination. until he is returned to the vessel or to his domicile, should he
prefer it.
3.The damages suffered by the merchandise loaded on deck,
except in coastwise navigation, if the marine ordinances allow it. 10.The wages and victuals of the crew of a vessel chartered
by the month during the time it should be embargoed or
4.The wages and victuals of the crew when the vessel should be detained by force majeure or by order of the Government, or
detained or embargoed by a legitimate order or force majeure, if in order to repair the damage caused for the common good.
the charter should have been for a fixed sum for the voyage.
11.The loss suffered in the value of the goods sold at arrivals
5.The necessary expenses on arrival at a port, in order to make under stress in order to repair the vessel because of gross
repairs or secure provisions. average.
6.The lowest value of the goods sold by the captain in arrivals 12.The expenses of the liquidation of the average.
under stress for the payment of provisions and in order to save the
crew, or to cover any other requirement of the vessel against
REQUISITES FOR GENERAL
which the proper amount shall be charged.
AVERAGE:
 Transcribed and Prepared by: Hanniyah Sevilla 4 Manresa ’08-‘09 27

1. There must be a COMMON DANGER, a danger in

which the ship, cargo and crew all participate;

2. For the common safety or for the purposes of

avoiding imminent peril, part of the cargo or
vessel on board is sacrificed deliberately (part of
the crew, pwede? hehe)

3. There must be attempt to avoid the imminent

peril must be successful in a sense that the vessel
and some of the cargo are saved;

4. Damages or expenses were incurred after

taking the proper legal steps.

Cases:
1. Magsaysay vs. Agan

Facts: The S S “San Antonio”, a vessel owned and operated by

A. Magsaysay Inc., left Manila on 6 October 1949, bound for
Basco, Batanes, via Aparri, Cagayan, with general cargo
belonging to different shippers, among them Anastacio Agan.
The vessel reached Aparri on the 10th of that month, and after
a day’s stopover in that port, weighed anchor to proceed to
Basco. But while 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 had it refloated by the Luzon
Stevedoring Co. at an agreed compensation. The stranding of
Magsaysay’s vessel was due to the sudden shifting of the
sandbars at the mouth of the river which the port pilot did not
anticipate. Once afloat, the vessel returned to Manila to refuel
and then proceeded to Basco, the port of destination. There the
cargoes were delivered to their respective owners or
consignees, who, with the exception of Agan, made a deposit
or signed a bond to answer for their contribution to the
average.

On the theory that the expenses incurred in floating the vessel

constitute general average to which both ship and cargo should
contribute, Magsaysay brought the action in the CFI of Manila
to make Agan pay his contribution, which, as determined by
the average adjuster, amounts to P841.40. Agan, in his
answer, denies liability for this amount, alleging, among other
things, that the stranding of the vessel was due to the fault,
negligence and lack of skill of its master, that the expenses
incurred in putting it afloat did not constitute general average,
and that the liquidation of the average was not made in
accordance with law. After trial, the lower court found for
Magsaysay and rendered judgment against Agan for the
amount of the claim, with legal interests. From this judgment,
Agan has appealed directly to the Supreme Court.

The Supreme Court reversed the decision appealed from, and

dismissed Magsaysay’s complaint.

Held: Herein, while the expenses incurred in putting

Magsaysay’s vessel afloat may well come under number 2 of
article 809 — which refers to expenses suffered by the vessel
“by reason of an accident of the sea or force majeure” — and
should therefore be classified as particular average, the said
expenses do not fit into any of the specific cases of general
average enumerated in article 811. Number 6 of Article 811
does mention “expenses caused in order to float a vessel,” but
it specifically refers to “a vessel intentionally stranded for the
purpose of saving it” and would have no application where, as
in the present case, the stranding was not intentional.

With respect to Requisites of General average:

1. With respect to the first requisite, the evidence does not
disclose that the expenses sought to be recovered from
defendant were incurred to save vessel and cargo from a
common danger. The vessel ran aground in fine weather inside
the port at the mouth of a river, a place described as “very
shallow”. It would thus appear that vessel and cargo were at
the time in no imminent danger or a danger which might
“rationally be sought to be certain and imminent.”

2. As to the second requisite, the expenses in question were

not incurred for the common safety of vessel and cargo, since
they, or at least the cargo, were not in imminent peril. The
cargo could, without need of expensive salvage operation, have
been unloaded by the owners if they had been required to do
so.

3. With respect to the third requisite, the salvage operation

was a success; however, 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.