Transportation Law Reviewer by Morilla
Transportation Law Reviewer by Morilla
Transportation Law Reviewer by Morilla
REVIEWER
Compiled by:
JUSTIN RYAN D. MORILLA
A.Y. 2015-2016
Page 1
LAST UPDATED: 12/16/15
TRANSPORTATION LAWS
the other batch in June, 1981.
t and thus no ticket was yet issued, the fact remains that the passage had already been paid for by the principal of the appellee, and the appellant had accepted such payment. The existence
Art. 1766. Civil Code
In all
n object is the matters
transport of not regulated by
the passengers this
from theCode, thedeparture
place of rights and obligations
to the of
place of destination as stated in the telex.
age imposing common carriers
reciprocal shallonbeboth
obligations governed
parties. by the Code of Commerce and
by special laws.
re and its willingness for its contract workers to leave for their place of destination.
Hierarchy of Transportation Laws in the Philippines
1. Primary
rt the contract workers Law despite
on their flight - Civil Code
confirmation and bookings made by appellee's travelling agent.
2. The following aresuppletoryin character:
a. Code of Commerce
b. Special Laws
1) Carriage of Goods by Sea Act
d specified the period of compliance therewith, and(COGSA)
with emphasis that it could only be used if the passengers fly on BA. Under the circumstances, the appellant should have refused acceptan
2) Salvage Law
3) Warsaw Convention
4) Tariff and Customs Code
Definition of Transportation
It includes:
1. Waiting time,
2. Loading and unloading,
3. Stopping in transit, and
4. All other accessorial services in connection with the loaded
movement
In the instant case, the contract "to carry" is the one involved which is 1. The carrying across of pax and/or goods is only an ancillary
consensual and is perfected by the mere consent of the parties. activity or sideline
There is no dispute as to the appellee's consent to the said contract "to 2. The transportation service is merely on an occasional,
carry" its contract workers from Manila to Jeddah. The appellant's episodic, or unscheduled basis
consent thereto, on the other hand, was manifested by its acceptance
of the PTA or prepaid ticket advice that ROLACO Engineering has 3. The transportation is offered only to a narrow segment of
prepaid the airfares of the appellee's contract workers advising the the general population
xclude it from the4.definition
He has of not secured
a common a Certificate of Public Convenience
carrier.
[CPC]
"common carrier" as used in Section 133 (j) of the Local Government Code refers only to common carriers transporting goods and passengers through moving vehicles or vessels either by lan
G.R. No. L-47822 December 22, 1988 PEDRO DE GUZMAN, petitioner,
vs.
definition of "common carriers"
COURT in the Civil
OF APPEALS andCode makes CENDANA,
ERNESTO no distinction as to the means of transporting, as long as it is by land, water or air. It does not provide that the transportation of the p
respondents.
FELICIANO, J.:
orting goods by water for compensation. Petitioner is clearly a common carrier. In De Guzman, supra, we considered private respondent Ernesto Cendaña to be a common carrier even if his p
only limited clientele. A common carrier need not have fixed and publicly known routes. Neither does it have to maintain terminals or issue tickets.
ether the given undertaking is a part of the business engaged in by the carrier which he has held out to the general public as his occupation rather than the quantity or extent of the business
There is greater reason for holding petitioner to be a common carrier because the transportation of goods is an integral part of her business. To uphold petitioner's contention w
to the consignee‘s warehouse at Cainta, Rizal. As the appellate court put it, "as long as a person or corporation holds [itself] to the public for the purpose of transporting goods as [a] busines
er that it is not a common carrier but a customs broker whose principal function is to prepare the correct customs declaration and proper shipping documents as required by law is bereft of m
Exclusive hauler
rs are persons, corporations, firms or associations engaged in the business of carrying or transporting passengers or goods or both, by land, water, or air, for hire or compensation, offering th
In disputing the conclusion of the trial and appellate courts that general public as his occupation rather than the quantity or extent of
petitioner was a common carrier, she alleged in this petition that the the business transacted." In this case, petitioner herself has made
contract between her and Rodolfo A. Cipriano, representing the admission that she was in the trucking business, offering her
CIPTRADE, was lease of the truck. She cited as evidence certain trucks to
affidavits which referred to the contract as "lease". These affidavits
were made by Jesus Bascos 8 and by petitioner herself. 9 She further
averred that Jesus Bascos confirmed in his testimony his statement
that the contract was a lease contract. 10 She also stated that: she
was not catering to the general public. Thus, in her answer to the
amended complaint, she said that she does business under the same
style of A.M. Bascos Trucking, offering her trucks for lease to those
who have cargo to move, not to the general public but to a few
customers only in view of the fact that it is only a small business.
Article 1732 of the Civil Code defines a common carrier as "(a) person,
corporation or firm, or association engaged in the business of carrying
or transporting passengers or goods or both, by land, water or air, for
compensation, offering their services to the public." The test to
determine a common carrier is "whether the given undertaking is a part
of the business engaged in by the carrier which he has held out to the
Travel Agency
The object of petitioner‘s contractual relation with respondent is the Are arrastre operators common carriers?
G.R. No. 138334 August 25, 2003
latter‘s service of arranging and facilitating petitioner‘s booking, ESTELA L. CRISOSTOMO, Petitioner, vs.
ticketing and accommodation in the package tour. In contrast, the The Court Anofarrester
Appealsoperator
and CARAVANis anTRAVEL
entity who transports
& TOURS the goodsINC.,
INTERNATIONAL, from the
Respondents.
object of a contract of carriage is the transportation of passengers or vessel to the customs warehouse.YNARES-SANTIAGO, J.:
goods. It is in this sense that the contract between the parties in this It is hired by the government. It has only one customer – government.
case was an ordinary one for services and not one of carriage. Therefore, there is one missing element to make it a common carrier. It
Petitioner‘s
or a common carrier. submission
Respondent did notisundertake
premisedtoontransport
a wrongpetitioner
assumption. does
from one place to another sincenot
its offer its services
covenant to the public.
with its customers is simply to make travel arrangements in their beh
Being the custodian of the goods discharged from a vessel, an arrastre operator's duty is to take good care of the goods and to turn them over to the party entitled to their possession.
serves only one customer, Wyeth.
e:
ommon carrier is similar to that of the consignee and the arrastre operator. Since it is the duty of the ARRASTRE to take good care of the goods that are in its custody and to deliver them in g
always and necessarily solidarily liable as the facts of a case may vary the rule. But the precise question is which entity had custody of the shipment during its unloading from the vessel?
n is which entity had custody of the shipment during its unloading from the vessel? XXX
destination instead of merely arranging for their transportation, it becomes liable as a common carrier for loss or damage to goods. A freight forwarder assumes the responsibility of a carrier
The registered owner shall be liable for consequences flowing from the
operations of the carrier, even though the vehicle has already been
transferred to another[Benedicto v. CA, 187 SCRA 547]
SUGGESTED ANSWER:
ALTERNATIVE ANSWER:
Parties
Star Shipping Lines can refuse to honor 555 Company'sclaim for the
1. CARRIER
missing and damaged goods. The Bill ofLading is the document of title
2. SHIPPER OR CONSIGNOR – one who delivers the goods
that legally establishes theownership of 555 Company over said
to the carrier for transportation
goods. 555 needs topresent the Bill of Lading to legally claim said
3. CONSIGNEE – one to whom the goods are delivered; he is
goods.(National Union Fire Insurance of Pittsburg v. Stolt-Nielaen,
not a party to the contract of carriage, as a general rule.
G.R. No.87958, April 26, 1990)
Law Applicable
Liability of a Common Carrier of Goods
Art. 1753
Art. 1734.
The law of the country to which the goods are to be transported
Common carriers are responsible for the loss, destruction, or
shall govern the liability of the common carrier for their loss,
deterioration of the goods, unless the same is due to any of the
destruction or deterioration
following causes only:
Test to determine if one is a Common Carrier of Goods
1. Flood, storm, earthquake, lightning, or other natural disaster or
calamity;
FPIC v. CA [300 SCRA 661]
2. Act of the public enemy in war, whether international or civil;
1. He must be engaged in the business of carrying goods for
others as a public employment,
3. Act of omission of the shipper or owner of the goods;
2. He must undertake to carry goods of the kind to which his
business is confined and is conducted,
4. The character of the goods or defects in the packing or in the The common carrier must prove that it exercised XO diligence in the
container; vigilance over the goods according to all the circumstances of each
case [Art. 1735, 1733]
5. Order or act of competent public authority.
Instances where Presumption of Negligence does NOT Arise [Art.
1734]
Art. 1735.
Natural disaster
In all cases other than those mentioned in Nos. 1, 2, 3, 4, and 5 of Art.
1734, if the goods are lost, destroyed or deteriorated, common carriers Act of public enemy
are presumed to have been at fault or to have acted negligently, Act of shipper
unless they prove that they observed extraordinary diligence as Character of the goods
required in Art. 1733. Order of competent authority
GENERAL RULE: Common carriers are responsible for the loss, Effects when any of the 5 Exceptions Present:
destruction, or deterioration of goods [Art. 1734]
1. There is no presumption that the common carrier acted
Effects when the Goods are Lost, Destroyed or Deteriorated [Art. negligently
1735] 2. The common carrier need not prove that it exercised
extraordinary diligence in the vigilance over the goods,
The shipper/consignee has a cause of action for breach of 3. BUT, the common carrier is not automatically exempt from
contract against the carrier liability;
4. To escape liability, the common carrier has to prove that it
The common carrier is PRESUMED to have been at fault complied with the requirements under Art. 1739, 1740,
or to have acted negligently 1741, 1742, and 1743
o There is no automatic liability or responsibility. How a Common Carrier of Goods Can Escape Liability
What does the shipper or consignee have to show in order to 1st Exception: NATURAL DISASTER - flood, storm, earthquake,
have a prima facie case against the carrier? lightning, or other natural disaster or calamity [Art. 1734.1]
1. Proof of actual delivery of goods in good order to carrier, and Requisites - The common carrier must show that:
2. Failure of carrier to deliver the goods in the same condition
as when they were received [Ynchausti v. Dexter, 41 P 1. The natural disaster must have been the proximate and
289] only cause of the loss [Art. 1739],
2. It exercised DUE diligence (not extraordinary diligence) to
What does it mean if the shipment is not containerized? prevent or minimize the loss BEFORE, DURING or
AFTER the occurrence [Art. 1739],
G.R. No. 80256 October 2, 1992 3. It did not incur in delay in transporting the goods [Art.
BANKERS & MANUFACTURERS ASSURANCE CORP., petitioner, 1740]
vs.
Is fire a natural calamity?
COURT OS APPEALS, F. E. ZUELLIG & CO., INC. and E. RAZON,
INC., respondents.
MELO, J.:
er and thereafter picked up by the carrier. Consequently, the recital of the bill of lading for goods thus transported ordinarily would declare "Said to Contain", "Shipper's Load and Count", "F
Petitioner Carrier claims that the loss of the vessel by fire exempts it from liability under
G.R. No. 150255. April 22, 2005 SCHMITZ TRANSPORT & BROKERAGE
CORPORATION, Petitioners, vs.
USTRIAL INSURANCE COMPANY, LTD., and BLACK SEA SHIPPING AND DODWELL now INCHCAPE SHIPPING SERVICES, Respondents.
CARPIO-MORALES, J.:
vent or minimize the loss, before, during and after the occurrence of the storm in order that it may be exempted from liability for the loss of the goods.
easonable precautions to avoid the loss. After noting that TVI failed to arrange for the prompt towage of the barge despite the deteriorating sea conditions, it should have summoned the sam
1. The act of the public enemy must have been the proximate
and only cause of the loss [Art. 1739], 4th Exception: The CHARACTER of the GOODS or DEFECTS in
2. It exercised DUE diligence to prevent or minimize the the PACKING or in the CONTAINER [Art. 1734.4]
loss BEFORE, DURING or AFTER the occurrence [Art.
1739] Requisite:
3rd Exception: ACT or OMISSION of the SHIPPER or OWNER of The common carrier must prove that it exercised DUE
the goods [Art. 1734.3] diligence to FORESTALL or LESSEN the loss [Art. 1742]
The case at bar falls under one of the exceptions mentioned in Article
1734 of the Civil Code, particularly number (4) thereof, i.e., the
character of the goods or defects in the packing or in the containers.
The trial court found that the breakage of the crate was not due to the
fault or negligence of ICTSI, but to the inherent defect and weakness
of the materials used in the fabrication of the said crate.
G.R. No. 148496March 19, 2002
GINES CALVO doing business under the name and style TRANSORIENT CONTAINER TERMINAL SERVICES,5th Exception: If through the ORDER Of PUBLIC AUTHORITY the
INC., petitioner, vs. goods are seized or destroyed [Art. 1743]
UCPB GENERAL INSURANCE CO., INC. (formerly Allied Guarantee Ins. Co., Inc.) respondent.
MENDOZA, J.: Requisites:
Was there a contract of carriage between the carrier and the shipper even if the loss occurred when the hemp was loaded on a barge owned by the carrier which was loaded fre
y say that the carrier losses control of the goods because of a custom regulation and it is unfair that it be made responsible for what may happen during the interregnum. And this is precisely
es,delivered
the rights
atand obligations
ship's of the
tackle. These parties attached
stipulations thereby
are clear. They subjecting
have been them to the
adopted principles
precisely and usages
to mitigate of the maritime
the responsibility of law. In other
the carrier words, here
considering thewe have alaw
present complete
on the contract of carriage
matter, and we find th
n
o the effect that a bill of lading is not indispensable for the creation of a contract of carriage.
hat the delivery of the shipment in question to the warehouse of the Bureau of Customs is not the delivery contemplated by Article 1736; and since the burning of the warehouse occurred b
ut, however, that in the bills of lading issued for the cargoes in question, the parties agreed to limit the responsibility of the carrier for the loss or damage that may be caused to the shipment
l not be responsible for loss or damage to shipments billed 'owner's risk' unless such loss or damage is due to negligence of carrier. Nor shall carrier be responsible for loss or damage caused
y of the above stipulation; there is nothing therein that is contrary to law, morals or public policy.
ANK was indicated in the bills of lading as consignee whereas GPC was the notify party. However, in the export invoices GPC was clearly named as buyer/importer. Petitioner also referred to
which eitherValidity of Stipulations
exempt the carrier from liability for loss or damage occasioned by its negligence, or provide for an unqualified limitation of such liability to an agreed valuation.
As to DILIGENCE Required
of the bill of lading here in question, however, clearly shows that the present case falls within the third stipulation, to wit: That a clause in a bill of lading limiting the liability of the carrier to a
RULE: The common carrier and the shipper or owner of the goods
may enter into a stipulation whereby the diligence required would be
LESS than XO diligence [Art. 1744]
gnees may recover the full value of the goods by the simple expedient of declaring the true value of the shipment in the Bill of Lading. Other than the payment of a higher freight, there was n
As to Amount of Liability
Three kinds of stipulations have often been made in a bill of lading. The first is one exempting the carrier from any and all liability for loss or damage occasioned by its own neglig
The authorities relied upon by the plaintiff-appellant (the Harter Act [Act of Congress of February 13, 1893]: Louisville Ry. Co. vs. Wynn, 88 Tenn., 320; and Galt vs. Adams Expres
The actual total loss for the 5,000 pieces of calorized lance pipes was
P256,039 (Exhibit "C"), which was exactly the amount of the insurance
coverage by Development Insurance (Exhibit "A"), and the amount
affirmed to be paid by respondent Court. The goods were shipped in
28 packages (Exhibit "C-2") Multiplying 28 packages by $500 would
result in a product of $14,000 which, at the current exchange rate of
P20.44 to US $1, would be P286,160, or "more than the amount of
damage actually sustained." Consequently, the aforestated amount of
P256,039 should be upheld.
With respect to the seven (7) cases of spare parts (Exhibit "I-3"), their
actual value was P92,361.75 (Exhibit "I"), which is likewise the insured
value of the cargo (Exhibit "H") and amount was affirmed to be paid by
respondent Court. however, multiplying seven (7) cases by $500 per
package at the present prevailing rate of P20.44 to US $1 (US $3,500
x P20.44) would yield P71,540 only, which is the amount that should
be paid by Petitioner Carrier for those spare parts, and not
P92,361.75.
SUGGESTED ANSWER:
Yes. Ordinarily, the common carrier is not liable for acts ofother
passengers. But the common carrier cannot relieveitself from liability if
the common carrier‗s employeescould have prevented the act or
omission by exercising duediligence. In this case, the passenger asked
the driver tokeep an eye on the bag which was placed beside
thedriver‗s seat. If the driver exercised due diligence, he couldhave
prevented the loss of the bag.
When Stipulation Limiting Liability CANNOT be availed of by CC Marino was a passenger on a train. Another passenger,Juancho, had
in case of Loss, Destruction or Deterioration of the Goods[Art. taken a gallon of gasoline placed in a plasticbag into the same coach
1747]: where Marino was riding. Thegasoline ignited and exploded causing
injury to Marino whofiled a civil suit for damages against the railway
1. If the CC, without just cause, DELAYS the transportation companyclaiming that Juancho should have been subjected
of the goods, or toinspection by its conductor. The railway companydisclaimed liability
2. If the CC, without just cause, CHANGES the stipulated or resulting from the explosion contendingthat it was unaware of the
usual route contents of the plastic bag andinvoking the right of Juancho to privacy.
a) Should therailway company be held liable for damages? b) If it were
Agreement Limiting Liability v.v. Presumption of Negligence an airline company involved, would your answer be thesame? Explain
briefly.
Art. 1752
SUGGESTED ANSWER:
Even when there is an agreement limiting the liability of a common
carrier in the vigilance over the goods, the common carrier is a) No. The railway company is not liable for damages. Inoverland
disputably presumed to have been negligent in case of their loss, transportation, the common carrier is not boundnor empowered to
destruction or deterioration. make an examination on the contents ofpackages or bags, particularly
those handcarried bypassengers.
Article 1732. Common carriers are persons, corporations, firms or In the case at bar, it is undisputed that the respondent carried a
associations engaged in the business of carrying or transporting confirmed ticket for the two-legged trip from Frankfurt to Manila: 1)
passengers or goods or both, by land, water, or air, for compensation, Frankfurt-Singapore; and 2) Singapore-Manila. In her contract of
offering their services to the public. carriage with the petitioner, the respondent certainly expected that she
would fly to Manila on Flight No. SQ 72 on January 28, 1991. Since the
Article 1733. Common carriers, from the nature of their business and petitioner did not transport the respondent as covenanted by it on said
for reasons of public policy, are bound to observe extraordinary terms, the petitioner clearly breached its contract of carriage with the
diligence in the vigilance over the goods and for the safety of the respondent. The respondent had every right to sue the petitioner for
passengers transported by them, according to all the circumstances of this breach.
each case.
G.R. No. 155550 January 31, 2008
Diligence Required from Common Carrier of Pax NORTHWEST AIRLINES, INC., petitioner,
vs.
Art. 1755 STEVEN P. CHIONG, respondent.
NACHURA, J.:
A common
n April 1, 1989, carrier isinbound
already defaulted to carry
his obligation to pax
abidesafely
by theas far as
terms andhuman care
conditions of the contract of carriage; and thus, Northwest could not have been in breach of its reciprocal obligati
and foresight can provide, using the utmost diligence of very
cautious persons, with due regard for all the circumstances.
ogether, amply establish the fact that Chiong was present at MIA on April 1, 1989, passed through the PCG counter without delay, proceeded to the Northwest check-in counter, but when h
Diligence Required/ Presumption
Art. 1756
In an action based on a contract of carriage, the court need not make an express finding of fault or negligence on the part of the carrier in order to hold it responsible to pay the
First, That there was a contract to furnish plaintiff a first class passage covering, amongst others, the Bangkok-Teheran leg; Second, That said contract was breached when petitio
G.R. No. 150843 March 14, 2003 If the common carriers proves that it observed the diligence
CATHAY PACIFIC AIRWAYS, LTD., petitioner, prescribed in Art. 1733 and 1756 [Art. 1756]
vs.
SPOUSES DANIEL VAZQUEZ and MARIA LUISA MADRIGAL Grounds to Escape Liability
VAZQUEZ, respondents.
How a common carrier of pax can escape liability – if it proves that:
DAVIDE, JR., C.J.:
1. It observed XO diligence by carrying the pax safely as far
as human foresight can provide, using the diligence of a
mmodation they had booked for and which was designated in their boarding passes. They clearly waived their priority
very orcautious
preferenceperson,
when theywith
askeddue
that other passengers
regard for allbe the
given the upgra
circumstances [Art. 1756]
Petitioner has charged respondent carrier of negligence on the ground that the injury complained of could have been prevented by the common carrier if something like mesh-wo
We do not agree.
Although the suggested precaution could have prevented the injury complained of, the rule of ordinary care and prudence is not so exacting as to require one charged with its exe
h the truck carrying the 600 cartons of Liberty filled milk. We do not believe, however, that in the instant case, the standard of extraordinary diligence required private respondent to retain a
trial court shows that the accused acted with grave, if not irresistible, threat, violence or force. 3 Three (3) of the five (5) hold-uppers were armed with firearms. The robbers not only too
G.R. No. 113003 October 17, 1997
made absolute insurers against all risks of travel and of transport of goods, and are not held liable for acts or events which cannot be foreseen or are inevitable, provided that they shall have c
ALBERTA YOBIDO and CRESENCIO YOBIDO, petitioners, vs.
COURT OF APPEALS, LENY TUMBOY, ARDEE TUMBOY and
JASMIN TUMBOY, respondents.
ROMERO, J.:
vent which constitutes the casofortuito, or if it can be foreseen, it must be impossible to avoid;
an agency from the cause of injury or loss.
t could not explode within five days' use. Be that as it may, it is settled that an accident caused either by defects in the automobile or through the negligence of its driver is not a casofortuito
of the carrier in the law. Coupled with this is the established condition of the road — rough, winding and wet due to the rain. It was incumbent upon the defense to establish that it took prec
ghting from a train, walks along the station platform is considered still a passenger.2 So also, where a passenger has alighted at his destination and is proceeding by the usual way to leave th
r the bus, was run over and killed. In the circumstances, it cannot be claimed that the carrier's agent had exercised the "utmost diligence" of a "very cautions person" required by Article 1755
Validity of Stipulations
As to Diligence Required
Art. 1757
by stipulation,
by the posting of notices,
by statements on tickets, or otherwise.
As to Amount of Liability
Art. 1758
Common Carrier; Defenses; Limitation of Liability (2001) Common carriers are liable for the death of or injuries to passengers
When a pax is carried gratuitously, a stipulation limiting the CC’s through the negligence or willful acts of their employees, EVEN
Supposefor
liability A was riding on an
negligence airplane
is valid, butof a common
not carrier
for willful when
acts or the
gross THOUGH such employees may have acted:
accident happened and A suffered serious injuries. In an action by A
negligence.
against the common carrier, the latter claimed that 1) there was a 1. beyond the scope of their authority, or
2) The stipulation limiting the carrier‗s liability tothe value of the goods
stipulation in the ticket issued to A absolutely exempting the carrier 2. in violation of the orders of the CC
appearing in the bill of ladingunless the shipper or owner declares a
from liability from the passenger‗s death or injuries ad notices were
higher value, isexpressly recognized in Article 1749 of the Civil Code.
posted by the common carrier dispensing with the extraordinary This liability of the common carriers does NOT cease upon proof that
diligence of the carrier,
Responsibility for andActs
2) A wasof given a discount on his plane fare they exercised all the diligence of a GFOF in the selection and
thereby reducing the liability of the common carrier with respect to A in supervision of their employees
particular. Art. 1759
Employees
XXX
As the case now before us presents itself, the only fact from which a
conclusion can be drawn to the effect that plaintiff was guilty of
contributory negligence is that he stepped off the car without being
able to discern clearly the condition of the platform and while the train
was yet slowly moving. In considering the situation thus presented, it
should not be overlooked that the plaintiff was, as we find, ignorant of
the fact that the obstruction which was caused by the sacks of melons
piled on the platform existed; and as the defendant was bound by
reason of its duty as a public carrier to afford to its passengers facilities
for safe egress from its trains, the plaintiff had a right to assume, in the
absence of some circumstance to warn him to the contrary, that the
platform was clear. The place, as we have already stated, was dark, or
dimly lighted, and this also is proof of a failure upon the part of the
defendant in the performance of a duty owing by it to the plaintiff; for if
it were by any possibility concede that it had right to pile these sacks in
the path of alighting passengers, the placing of them adequately so
that their presence would be revealed.
Presumption of negligence
Responsibility for Acts of Strangers arises:
When a CC can be held liable for death or injury to pax for willful acts In case of loss, destruction or In case of death or injuries to
or negligence of strangers: deterioration of the goods passengers
If the common carrier's employees through the exercise of Non-arrival of goods at Non fulfillment of contract
the diligence of a GFOF could have prevented or destination; delay
stopped the act or omission
Presumption of negligence does Presumption of negligence will
G.R. No. L-19161 April 29, 1966 not arise automatically in the always arise in case of carriage
MANILA RAILROAD COMPANY, petitioner, vs. five (5) instances mentioned of pax
MACARIA BALLESTEROS, TIMOTEO CAMAYO, JOSE REYES and
JULIAN MAIMBAN, JR., respondents.
Stipulation that provides that the Responsibility of a common
MAKALINTAL, J.:
common carrier need not carrier to transport passenger
observe
as correctly overruled by the trial court, considering the provisions of Article 1763 of the Civil Code and any(b) diligence
section 48 in Vehicle
of the Motor the Law,
with which
extraordinary
respectivelyand utmost
provide as follows:
custody of the goods shall be diligence cannot be dispensed
considered unreasonable, with by stipulation, by the
ers or of strangers, if the common carrier's employees through the exercise of the diligence of a goodunjust
father of a family
and could have
contrary prevented
to public or stoppedofthe actnotices,
posting or omission.by
policy statements on tickets or
otherwise
tting beside him or in any other part of the car, to interfere with him in the operation of the motor vehicle, by allowing said person to take hold of the steering wheel, or in any other manner
Degree of diligence can be The responsibility of a common
driver could have taken over, constitute reckless imprudence and wanton injurious conduct on the part of the MRR
lessened employees."
provided it be in carrier to exercise extraordinary
writing, signed by the shipper or and utmost diligence in the
owner, supported by a valuable transportation of passengers
consideration other than the cannot be lessened by
service rendered by the stipulation, the posting of
common carrier and notices, by statements on
reasonable, just and not tickets, or otherwise
contrary to public policy
Suppletory Laws:
How ownership of MERCHANT VESSELS may be acquired [Art. Captain or Master of a Vessel
573]:
Distinctions:
1. By any means recognized by law [Art. 712 Civil Code]:
a. By law [sale or dacion en pago] 1. Captain - one who governs vessels:
b. By donation a. that navigate the high seas, or
c. By testate or intestate succession b. of large dimensions and importance [although
d. In consequence of certain contracts engaged in coastwise trade]
e. By tradition 2. Master - one who commands smaller ships engaged
exclusively in the coastwise trade
2. By prescription:
a. 3 years – if possession thereof was in good faith Note: For purposes of Maritime Commerce, ―captain‖ and
with just title duly recorded, or ―master‖ have the same meaning, both being the chiefs and
b. 10 years – in the absence of above requisites commanders of vessels
What kind of property is a vessel? Qualifications under Art 609 of the Code of Commerce
of the Orinoco
As aRiver,
commonCaptain Colon
carrier, relied onisthe
petitioner knowledge
liable and
for breach ofexperience ofof
the contract pilot Vasquez
carriage, to guide
having failedthe
to vessel safely.
overcome the presumption of negligence with the loss and destruction of goods it
al, bank, deep and shallow ends of the river. In his deposition, pilot EzzarSolarzano Vasquez testified that he is an official pilot in the Harbour at Port Ordaz, Venezuela, and that he had been a
ine Roxas deemed it best not to order him (the pilot) to stop the vessel,mayhap, because the latter had assured him that they were navigating normally before the grounding of the vessel.M
of the Orinoco River, Captain Colon relied on the knowledge and experience of pilot Vasquez to guide the vessel safely.
General Functions of a Captain
se) has to do with the operation and preservation of the vessel during its voyage and the protection of the passengers (if any) and crew and cargo. In his role as general agent of the shipown
hallow ends of the river. In his deposition, pilot EzzarSolarzano Vasquez testified that he is an official pilot in the Harbour at Port Ordaz, Venezuela,and that he had been a pilot for twelve (12
e has adopted. 7 Even according to the law of the vessel's registry, that book is also "required by law"Aasbus of GL by
disclosed Transit on its
the entry way8to
itself. Davao
There is nostopped toenable
controversy a passenger
as to the genuineness of the sa
to alight. At that moment, Santiago,who had been waiting for a ride,
boarded the bus.However, the bus driver failed to notice Santiago who
wasstill standing on the bus platform, and stepped on theaccelerator.
Because of the sudden motion, Santiagoslipped and fell down
suffering serious injuries. MaySantiago hold GL Transit liable for
breach of contract ofcarriage? Explain.
SUGGESTED ANSWER:
When Ship owner or Ship Agent shall be Civilly Liable [Art. 586]
1. Art. 586:
a. For the acts of the CAPTAIN, and
What is the probative value of the entries in the logbook? It is an b. For the obligations contracted by the CAPTAIN
official record of entries made by a person in the performance of a duty to repair, equip, and provision the vessel [provided
required by law and are prima facie evidence of the facts stated therein the creditor proves that the amount claimed was
invested for the benefit of the vessel]
Duration of Responsibility of Captain for Cargo on Board his
Vessel [Art. 619] 2. Art. 587 - For the indemnities in favor of 3rd persons
which arise from the conduct of the CAPTAIN in the care of
1. FROM – the time it is turned over to him at the dock or afloat the goods which the vessel carried
alongside the vessel at the port of loading
2. UNTIL – he delivers it on the shore or on the discharging
wharf at the port of unloading
3. UNLESS –otherwise expressly agreed upon
The trial court found that petitioner "was appointed as local agent of the vessel, which duty includes arrangement for the entrance and clearance of the vessel." Further, the CA f
These acts all point to the conclusion that it was the entity that represented the vessel in the Port of Manila and was the ship agent within the meaning and context of Article
As ship agent, it may be held civilly liable in certain instances. The Code of Commerce provides:
"Article 586. The shipowner and the ship agent shall be civilly liable for the acts of the captain and for the obligations contracted by the latter to repair, equip, and provision the v
"Article 587. The ship agent shall also be civilly liable for the indemnities in favor of third persons which may arise from the conduct of the captain in the care of the goods which
Petitioner does not dispute the liabilities of the ship agent for the loss/shortage of 476.140 metric tons of standard-grade Muriate of Potash valued at P1,657,700.95. Hence, we
boardthe vessel MV Tonichi (a common carrier engaged incoastwise trade owned by Ichi) for shipment from PuertoGalera to Manila. The cargo did not reach Manila becausethe vessel capsiz
of ashipowner for damages in case of loss is limited to thevalue of the vessel involved. His other properties cannotbe reached by the parties entitled to damages.
uilty of negligence, the ―limited liability rule‖ does notapply. In such case, the ship owner is liable to the fullextent of the damages sustained by the aggrieved parties(Mecenas v CA 180 s 83)
eursaway,
properlyMV
held liable in
Pioneer leftdamages for for
port to sail theLeyte.
consequent death
That was of its passengers?
amiscalculation of the We are of the opinion and so hold that this question is controlled by the provisions of article 587 of the Code o
ain in the care of the goods which the vessel carried; but he may exempt himself therefrom by abandoning the vessel with all her equipments and the freight he may have earned during the
ned to that which he is entitled as of right to abandon — "the vessel with all
typhoon signals by both the ship owner and the captain as the typhoon MV Mariposa is guilty of negligence inignoring the typhoon bulletins
came earlier andovertook the vessel. The vessel sank and a number issued by PAGASA and inoverloading the vessel. But only the captain of
ofpassengers disappeared with it.Relatives of the missing passengers the vesselMV Mariposa is guilty of negligence. The ship owner is not.
claimed damagesagainst the shipowner. The shipowner set up the Therefore, the ship owner can invoke the doctrine oflimited liability.
defensethat under the doctrine of limited liability, his liability wasco-
extensive with his interest in the vessel. As the vesselwas totally lost, Limited Liability Rule; Doctrine of Inscrutable Fault (1991)
his liability had also been extinguished.. How will you advice the
claimants? Discuss thedoctrine of limited liability in maritime law. (3%). In a collision between M/T Manila, a tanker, and M/VDon Claro, an inter-
Assuming that the vessel was insured, may theclaimants go after the island vessel, Don Claro sank andmany of its passengers drowned and
insurance proceeds? (3%) died. All its cargoeswere lost. The collision occurred at nighttime but the
seawas calm, the weather fair and visibility was good. Prior tothe collision
SUGGESTED ANSWER: and while still 4 nautical miles apart, Don Claro already sighted Manila on
its radarscreen. Manila had no radar equipment. As for speed,Don Claro
Under the doctrine of limited liability in maritime law,the liability of the was twice as fast as Manila.
shipowner arising from the operation of a shipis confined to the vessel, At the time of the collision, Manila failed to follow Rule19 of the
equipment, and freight, or insurance, ifany, so that if the shipowner International Rules of the Road which requires 2vessels meeting head on
abandoned the ship, equipment, andfreight, his liability is extinguished. to change their course by eachvessel steering to starboard (right) so that
However, the doctrine oflimited liability does not apply when the each vessel maypass on the port side (left) of the other. Manila
shipowner or captain isguilty of negligence. signaledthat it would turn to the port side and steered accordingly,thus
resulting in the collision. Don Claro‗s captain wasoff-duty and was having
Yes. In case of a lost vessel, the claimants may go afterthe proceeds a drink at the ship‗s bar at thetime of the collision.
of the insurance covering the vessel.
SUGGESTED ANSWER:
a) Who would you hold liable for thecollision? SF Shipping is not entitled to contribution/ reimbursementfor the costs
b) If Don Claro was at fault, may the heirs of thepassengers who died of repairs on the vessel from the shippers.
and the owners of the cargoesrecover damages from the owner of said
vessel? Powers and Duties of a Ship Agent:
SUGGESTED ANSWER: 1. Represent the ownership of the vessel and may, in his own
name and in such capacity, take judicial and extrajudicial
I can hold the 2 vessels liable. In the problem given,whether on the steps in matters relating to commerce (595.2)
basis of the factual settings or under thedoctrine of inscrutable fault, 2. Occupy the duties of the captain, if he has the qualification of
both vessels can be said tohave been guilty of negligence. The liability a captain (596.1)
3. Select and come into agreement with the captain and
contract in the name of owners who shall be bound in all that
refers to repairs, details of equipment, armament, provisions,
fuel, freight, and in general that pertains to the requirement
of navigation (597)
4. Indemnify the captain for all the expenses he may have
incurred from his own funds or from those of other persons
for the benefit of the vessel (602)
NOTE: Ship owner, agent and captain can be one and the same
persons (595, 596, 606)
1. For civil liability to third persons arising from the conduct
of the captain in the vigilance over the goods which the
vessel carried [Art. 587]
2. For the proportionate contribution of co-owners or the
vessel to a common fund for the results of the acts of the
captain [Art. 590]
3. For civil liability incurred by the ship owner in case of
collision [Art.837]
When the ship owner or ship agent may be held liable for MORE
than the value of the vessel:
How Ship Agent may Exempt Himself from Liability:
1. When the vessel is PROPERLY INSURED – the insurance
will take care of the liability the value of w/c could be more
By ABANDONING:
than the value of the vessel
2. When the liability for REPAIRS of the vessel was incurred
1. the vessel, and
BEFORE the loss of such vessel
2. ALL:
3. When the liability is one that arises from the provisions of
a. her equipment, and
the LABOR CODE
b. the freightage it may have earned during the
voyage
When Abandonment CANNOT be Made
Why is the Ship owner given the right of abandonment?
1. When the ship owner or ship agent is at FAULT – he is
deemed at fault when the incident arose because of lack of
As correctly stated by the appellate court, "(t)his rule is found
proper equipment of the vessel and technical training of
necessary to offset against the innumerable hazards and perils of
officers and crew
a sea voyage and to encourage shipbuilding and marine
2. When the voyage is NOT maritime, but only in a river bay,
commerce. (Delos Santos v CA)
of gulf
3. When the vessel is NOT acting as a common carrier but a
What distinguishes Maritime Law from Civil Law or Mercantile
private carrier
Law? The REAL and HYPOTHECARY nature of Maritime Law
G.R. No. L-51165 June 21, 1990
A shipping transportation contract is ―REAL & HYPOTHECARY‖
in nature under Art. 587 which accords a ship owner or agent the right HEIRS OF AMPARO DE LOS SANTOS, HEIRS OF ERNANIE
of abandonment; and by necessary implication, his liability is confined DELOS SANTOS, HEIRS OF AMABELLA DELOS SANTOS, HEIRS
to that which he is entitled as of right to abandon - "the vessel with all OF LENNY DELOS SANTOS, HEIRS OF MELANY DELOS SANTOS,
her equipments and the freight it may have earned during the voyage." HEIRS OF TERESA PAMATIAN, HEIRS OF DIEGO SALEM, AND
[Yangco v. Laserna, Oct 29, 1941] RUBEN REYES, petitioners,
vs.
HONORABLE COURT OF APPEALS AND COMPANIA
ABANDONMENT
MARITIMA, respondents.
MEDIALDEA. J.:
It is equivalent to an offer of the value of the vessel, her equipment and Under Article 587, a shipowner or agent has the right of abandonment;
freight earned in return for an exemption from liability. and by necessary implication, his liability is confined to that which he is
entitled as of right to abandon-"the vessel with all her equipments and
When ABANDONMENT is made in the instances provided by the freight it may have earned during the voyage" (Yangco v. Laserna,
law, it cannot be refused. et al., 73 Phil. 330, 332). Notwithstanding the passage of the New Civil
Code, Article 587 of the Code of Commerce is still good law. The
Note:When the right to abandonment exists, the reason lies in the peculiar nature of maritime law which is 94
shipper/consignee/pax cannot invoke Art. 1733 and 1755 of the Civil exclusively real and hypothecary that operates to limit such liability to
Code. the value of the vessel, or to the insurance thereon, if any (Yangco v.
Laserna, Ibid). As correctly stated by the appellate court, "(t)his rule is
Article 1733. Common carriers, from the nature of their business and found necessary to offset against the innumerable hazards and perils
for reasons of public policy, are bound to observe extraordinary of a sea voyage and to encourage shipbuilding and marine commerce.
diligence in the vigilance over the goods and for the safety of the (Decision, Rollo, p. 29). Contrary to the petitioners' supposition, the
passengers transported by them, according to all the circumstances of limited liability doctrine applies not only to the goods but also in all
each case. cases like death or injury to passengers wherein the shipowner or
agent may properly be held liable for the negligent or illicit acts of the
Article 1755. A common carrier is bound to carry the passengers captain (Yangco v. Laserna, Ibid). It must be stressed at this point
safely as far as human care and foresight can provide, using the that Article 587 speaks only of situations where the fault or
utmost diligence of very cautious persons, with a due regard for all the negligence is committed solely by the captain. In cases where the
circumstances. shipowner is likewise to be blamed, Article 587 does not apply
(see Manila Steamship Co., Inc. v. Abdulhanan, et al., 100 Phil. 32,
through the expedient of filing a notice of abandonment of the vessel by virtue of Art. 58
In (4)
ses) and passengers (about 241 more than the authorized 193 passengers) were loaded during the four thehour
1993 GAFLAC
interval" case,
(Decision, p. 13,Aboitiz
Rollo, p.argued that the
26). Perchance, realsupervision
a closer and could
hypothecary doctrine warranted the immediate stay of execution of
judgment to prevent the impairment of the other creditors‘ shares.
Invoking the rule on the law of the case, private respondent therein
countered that the 1990 GAFLAC case had already settled the extent
of Aboitiz‘s liability.
In the 1993 GAFLAC case, the Court applied the limited liability rule in
favor of Aboitiz based on the trial court‘s finding therein that Aboitiz
was not negligent.
In Monarch Insurance, the Court deemed it fit to settle 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 of both Aboitiz and the vessel‘s crew and master and
not because of force majeure. Notwithstanding this finding, the Court
did not reverse but reiterated instead the pronouncement
in GAFLAC to the effect that the claimants be treated as "creditors in
an insolvent corporation whose assets are not enough to satisfy the
totality of claims against it." The Court explained that the peculiar
G.R. No. 116940 June 11, 1997 circumstances warranted that procedural rules of evidence be set
THE PHILIPPINE AMERICAN GENERAL INSURANCE COMPANY, aside to prevent frustrating the just claims of shippers/insurers. Thus,
INC., petitioner, the Court in Monarch Insurance ordered Aboitiz to institute the
vs. necessary limitation and distribution action before the proper RTC and
COURT OF APPEALS and FELMAN SHIPPING to deposit with the said court the insurance proceeds of and the
LINES, respondents. freightage earned by the ill-fated ship.
BELLOSILLO, J.:
On the second issue, Art. 587 of the Code of Commerce is not Aboitiz Shipping vs New India (2006)
applicable to the case at bar. 8 Simply put, the ship agent is liable for
the negligent acts of the captain in the care of goods loaded on the However, on 02 May 2006, the Court rendered a decision in Aboitiz
vessel. This liability however can be limited through abandonment of Shipping Corporation v. New India Assurance Company, Ltd.44 (New
the vessel, its equipment and freightage as provided in Art. 587. India), reiterating the well-settled principle that the exception to the
Nonetheless, there are exceptional circumstances wherein the ship limited liability doctrine applies when the damage is due to the fault of
agent could still be held answerable despite the abandonment, as the shipowner or to the concurrent negligence of the shipowner and
where the loss or injury was due to the fault of the shipowner and the the captain. Where the shipowner fails to overcome the presumption of
captain. 9 The international rule is to the effect that the right of negligence, the doctrine of limited liability cannot be applied. In New
abandonment of vessels, as a legal limitation of a shipowner's liability, India, the Court clarified that the earlier pronouncement in Monarch
does not apply to cases where the injury or average was occasioned Insurance was not an abandonment of the doctrine of limited liability
by the shipowner's own fault. 10 It must be stressed at this point that and that the circumstances therein still made the doctrine applicable.
Art. 587 speaks only of situations where the fault or negligence is
committed solely by the captain. Where the shipowner is likewise to be In New India, the Court declared that Aboitiz failed to discharge its
blamed, Art. 587 will not apply, and such situation will be covered by burden of showing that it exercised extraordinary diligence in the
the provisions of the Civil Code on common carrier. transport of the goods it had on board in order to invoke the limited
It was already established at the outset that the sinking of "MV Asilda" liability doctrine. Thus, the Court rejected Aboitiz‘s argument that the
was due to its unseaworthiness even at the time of its departure from award of damages to respondent therein should be limited to its pro
the port of Zamboanga. It was top-heavy as an excessive amount of rata share in the insurance proceeds from the sinking of M/V P.
cargo was loaded on deck. Closer supervision on the part of the Aboitiz.
shipowner could have prevented this fatal miscalculation. As such,
FELMAN was equally negligent. It cannot therefore escape liability
G.R. No. 137801 October 17, 2008
ABOITIZ SHIPPING CORPORATION, petitioners, For the transportation of its cargo from the Port of Manilato the Port of
vs. Kobe, Japan, Osawa & Co., chartered―bareboat‖ M/V Ilog of
EQUITABLE INSURANCE CORPORATION, respondents. Karagatan Corporation. M/V Ilogmet a sea accident resulting in the
TINGA, J.: loss of the cargo and thedeath of some of the seamen manning the
vessel. Whoshould bear the loss of the cargo and the death of the
seamen? Why? (4%)
.R. No. 130752, the RTC concluded that Aboitiz failed to show that it had exercised the required extraordinary diligence ANSWER:
SUGGESTED in steering the vessel before, during and after the storm. In G.R. No. 1
(per Dondee) Osawa and Co. shall bear the loss becauseunder a
demise or bareboat charter, the charterer (Osawa& Co.) mans the
vessel with his own people and becomes,in effect, the owner for the
voyage or service stipulated,subject to liability for damages caused by
hipowner or ship agent may be held liable for damages when the sinking of the vessel is attributable tonegligence.
the actual fault or negligence of the shipowner or its failure to ensure the seaworthine
1. Common Carrier
No. The appeal of Coca-Cola will not prosper. UnderArticle 587 of the Sale of vessel before the Charter is rescinded - If the
Code of Commerce, the shipping agentis civilly liable for damages in charterer has begun to load the buyer of has loaded the vessel
favor of third persons due tothe conduct of the carrier's captain, and vessel for his own account BUT
the shipping agentcan exempt himself therefrom only by abandoning seller/owner must indemnify
thevessel with all his equipment and the freight he may haveearned charterer for damages suffered
during the voyage. On the other hand, assumingthere is bareboat
charter, the stipulation in the charterparty exempting the owner from Charter is NOT rescinded - If
liability is not againstpublic policy because the public at large is not buyer has NOT loaded the
involved(Home Insurance Co. v. American Steamship Agencies, Inc., vessel for his own account BUT
23 SCRA25(1968). the seller shall indemnify the
buyer if he did not inform the
Definition of Terms: buyer of the charter at the time
of making the sale
1. PRIMAGE – a small allowance or compensation payable:
1. Charterer [Art. 688] If the leased property is sold to If the vessel is sold to another,
2. Ship owner [Art. 689] one who knows of the existence the new owner cannot be
of the lease contract, the new compelled to respect the CP for
Rescission by Charterer owner of the property must as long as the new owner can
respect the lease load the vessel with his own
Abandonment of charter before He must pay ½ of freight agreed cargo
loading upon
Andcontents
ality, condition, a vessel andis value
cargoworthy
unknown."if itEvidently,
is sufficiently strong
the weight andcargo
of the equipped to be gauged from the bill of lading.
could not
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 right given to the charterer to inspect the vessel
before loading and to satisfy himself that she was fit for the contracted
ed weighed, cargo does
albeit the Bill not free qualified
of Lading the shipowner
it by thefrom
phrase his"said
obligation to 6,599.23
to weigh," provide MT
a at the port of origin when it was loaded onto the MV Hoegh, the fact of loss or shortage in the carg
cargoworthy ship. (Emphasis added)
An instrument in writing
Signed by a carrier or his agent
Describing the freight so as to identify it
Stating the name of the consignor, the terms of the
contract of carriage, and
Agreeing or directing that the freight be delivered to the
order or assigns of a specified person at a specified place
It must be RETURNED to the carrier who may have issued it, and by Can a carrier refuse to accept goods? In general, no because it is
virtue of the exchange of the BL for the object transported, the obliged to offer services to whoever wants to avail of its services but
respective obligations and actions shall be considered as cancelled may refuse if the goods are unfit for transportation.
What if the shipper cannot return the bill of lading to the shipper When can carrier examine the goods? When there is a reason of
due to loss or any other cause? Shipper must give the carrier a well-founded suspicion of falsity
receipt for the goods delivered
PROCEDURE:
What is the presumption if the carrier does not hold the bill of
lading after the fulfillment of the contract of transportation? 1. It must be made in the presence of witnesses
2. Shipper or consignee must be in attendance or before a
The carrier DID NOT DELIVER the goods to the consignee. Therefore notary public
it will be liable for the merchandise stated in the bill of lading. Burden of 3. It must open the goods in front of the shipper
proof is on the carrier to establish actual delivery of the merchandise 4. If after examination, the declaration is found to be true, the
called for in the bill of lading. expenses for examination and repackage shall be borne by
the carrier otherwise, it shall be paid by the shipper.
G.R. No. 125524
Effect when Transshipment is without
BENITO Legal
MACAM Excuse:
doing business under the name an
vs.
1. It is a violation of COURT
the contract of carriage
OF APPEALS, CHINA OCEAN SHIPPING CO., and/or
2. Carrier shall be liable to the shipper if cargo is lost even by a BELLOSILLO
cause otherwise excepted
Can
In petitioner‘s several years of business relationship with GPC and respondents, there was not the consignee
a single be the
instance when changed? Yes
bill of lading was(Long voyagebefore
first presented and the
therelease of th
consignee refuses to pay)
Conditions:
JRT Inc entered into a contract with C Co of Japan toexport anahaw Period for Bringing a Claim Against the Carrier [Art. 366]
fans valued at $23,000. As payment thereof,a letter of credit was
issued to JRT by the buyer. The letterof credit required the issuance of 1. IMMEDIATELY UPON RECEIPT of the package – if
an on-board bill of ladingand prohibited the transshipment. The damage is APPARENT from exterior of package [for such
President of JRTthen contracted a shipping agent to ship the anahaw purpose, a VERBAL CLAIM made immediately is
fansthrough O Containers Lines, specifying the requirementsof the SUFFICIENT compliance with the law]
letter of credit. However, the bill of lading issued bythe shipping lines
bore the notation ―received for shipment‖ and contained anentry 2. WITHIN 24 HOURS following RECEIPT of package – if the
indicating transshipment in Hongkong. The Presidentof JRT personally damage CANNOT BE KNOWN from exterior of package
received and signed the bill of lading anddespite the entries, he
delivered the corresponding check inpayment of the freight. The All Claims are EXTINGUISHED – if consignee RECEIVES
shipment was delivered at theport of discharge but the buyer refused themerchandise, and PAYS the freight charges WITHOUT PROTEST
to accept theanahaw fans because there was no on-board bill of
lading,and there was transshipment since the goods weretransferred in What is the PURPOSE of the above Rules?
Hongkong from MV Pacific, the feedervessel, to MV Oriental, a mother
vessel. JRT argued thatthe same cannot be considered transshipment To compel the consignee of goods entrusted to a carrier to make
because bothvessels belong to the same shipping company. 1) Was prompt demand for settlement of alleged damages suffered by the
theretransshipment? Explain 2) JRT further argued thatassuming that goods while in transport, so that the carrier will be enabled to verify all
there was transshipment, it cannot bedeemed to have agreed thereto claims, fix responsibility and secure evidence as to the goods while the
even if it signed the bill oflading containing such entry because it was matter is still fresh in the minds of the parties [Roldan v. Lim Ponzo
made known tothe shipping lines from the start that transshipment 37 PHIL 285]
wasprohibited under the letter of credit and that, therefore, ithad no
intention to allow transshipment of the subjectcargo. Is the argument
tenable? Reason.
When shall the above period commence to run?
The twenty-four-hour period prescribed by Art. 366 of the Code of
When the goods are ACTUALLY turned over by the carrier and Commerce within which claims must be presented does not begin to
RECEIVED by the consignee run until the consignee has received such possession of the
merchandise that he may exercise over it the ordinary control pertinent
G.R. No. L-7311. September 30, 1955 to ownership. In other words, there must be delivery of the cargo by
the carrier to the consignee at the place of destination. In the case at
bar, consignee Sumitomo has not received possession of the cargo,
NEW ZEALAND INSURANCE CO., LTD., Plaintiff-Appellant, v. and has not physically inspected the same at the time the shipment
ADRIANO CHOA JOY, ETC.,Defendant-Appellee. was discharged from M/V Lorcon IV in Davao City. Petitioner Lorenzo
BAUTISTA ANGELO, J.: Shipping failed to establish that an authorized agent of the consignee
Sumitomo received the cargo at Sasa Wharf in Davao City.
Respondent Transmarine Carriers as agent of respondent Gearbulk,
Ltd., which carried the goods from Davao City to the United States,
and the principal, respondent Gearbulk, Ltd. itself, are not the
authorized agents as contemplated by law. What is clear from the
evidence is that the consignee received and took possession of the
entire shipment only when the latter reached the United States‘ shore.
Only then was delivery made and completed. And only then did the 24-
hour prescriptive period start to run.
e that the delivery was actually being made, cannot be given great weight as no driver was presented to the witness stand to prove this. XXX
a case, we held:
arrier to make prompt demand for settlement of alleged damages suffered by the goods while in transport, so that the carrier will be enabled to verify all such claims at the time of delivery o
Did the prescriptive periods under the Civil Code repeal Art. 366
of Code of Commerce?
NO. The limitations of actions mentioned in the Civil Code are without
prejudice to those specified in the Code of Commerce [Art. 1148 New
Civil Code]
If there is a bill of lading – 10 years [Art. 1144 – based on a G.R. No. 168402 August 6, 2008
written contract] ABOITIZ SHIPPING CORPORATION, petitioner,
If there is NO bill of lading – 6 years [Art. 1145 – based on vs.
a an oral or quasi-contract] INSURANCE COMPANY OF NORTH AMERICA, respondent.
If it involves overseas trading – 1 year [COGSA] REYES, R.T., J.:
ty. Circumstances peculiar to this case lead Us to conclude that the notice requirement was complied with. XXX
G.R. No. 147724 June 8, 2004
3, that letter, together with the
LORENZO
notice ofSHIPPING
claim, was
CORP.,
received
petitioner,
by petitioner
vs. only on September 21, 1993. But petitioner admits that even before it received the written notice of claim, Mr. Ma
HUBB and SONS, Inc., GEARBULK, Ltd. and PHILIPPINE TRANSMARINE CARRIERS, INC., respondents.
PUNO, J.:
redecessor-in-interest, validly made a claim for damages against Lorenzo Shipping within the period prescribed by the Code of Commerce;
dent Chubb and Sons‘ claim for damages, we rule that it has not yet prescribed at the time it was made. XXX
7. quarantine,
In the case of Philippine Charter Insurance Corporation (PCIC) v. 8. lazaretto, and
ChemoilLighterage Corporation, the notice was allegedly made by the 9. other so called port expenses, costs of barges, and
consignee through telephone. The claim for damages was denied. This unloading, until the goods are placed on the wharf, and
Court ruled that such a notice did not comply with the notice 10. Other usual expenses of navigation
requirement under the law. There was no evidence presented that the
notice was timely given. Neither was there evidence presented that the Who Shall Defray or Reimburse the Ordinary or Petty Expenses
notice was relayed to the responsible authority of the carrier. [Art. 807]
As adverted to earlier, there are peculiar circumstances in the instant General Rule: the Ship owner
case that constrain Us to rule differently from the PCIC case, albeit this
ruling is being made pro hac vice, not to be made a precedent for other Exception:unless there is an express agreement to the contrary
cases. XXX
Kinds of Averages [Art. 808]
Bernhard Willig, the representative of consignee who received the
shipment, relayed the information that the delivered goods were 1. Simple or Particular
discovered to have sustained water damage to no less than the Claims 2. General
Head of petitioner, Mayo B. Perez. Immediately, Perez was able to
investigate the claims himself and he confirmed that the goods were, Particular Average
indeed, already corroded.
Definition [Art.
Provisions specifying a time to give notice of damage to common
carriers are ordinarily to be given a reasonable and practical, rather
809]
than a strict construction. We give due consideration to the fact that
the final destination of the damaged cargo was a school institution
where authorities are bound by rules and regulations governing their All the expenses and damage caused to the vessel or to her cargo
actions. Understandably, when the goods were delivered, the which have NOT inured to the common benefit and profit of ALL the
necessary clearance had to be made before the package was opened. persons interested in the vessel and her cargo
Upon opening and discovery of the damaged condition of the goods, a
report to this effect had to pass through the proper channels before it Who bears the loss?
could be finalized and endorsed by the institution to the claims
department of the shipping company. The OWNER of the things which gave rise to the expenses or
suffered the damage
The call to petitioner was made two days from delivery, a reasonable
period considering that the goods could not have corroded instantly General Average
overnight such that it could only have sustained the damage during
transit. Moreover, petitioner was able to immediately inspect the Definition [Art. 811]
damage while the matter was still fresh. In so doing, the main objective
of the prescribed time period was fulfilled. Thus, there was substantial All the damages and expenses which are DELIBERATELY CAUSED
compliance with the notice requirement in this case. in order to save the vessel, her cargo, or both at the same time
from a REAL KNOWN risk
Who bears the loss? All the persons having an interest in the vessel
Risks, Damages and Accidents of Maritime Commerce and cargo therein at the time of the occurrence of the average shall
contribute
Averages[Art. 806-816, 665-677, 732]
Requisites of a General Average
What are considered as Averages [Art. 806]
1. There must be a common danger, a danger in which ship,
1. All extraordinary or accidental expenses which may be cargo and crew all participate
incurred during the voyage for the preservation of the 2. For the common safety or for the purpose of avoiding an
vessel, cargo, or both imminent peril, part of the vessel or cargo or both is
sacrificed deliberately
2. All damages or deterioration: 3. This attempt to avoid the imminent peril must be
successful in a sense that the vessel and some of the cargo
a. which the vessel may suffer: are saved
b. from the time she puts to sea at the port of 4. The expenses were incurred or damages were afflicted
departure after taking the proper legal steps and authority
c. until she casts anchor at the port of destination
d. suffered by the goods: G.R. No. L-6393 January 31, 1955
e. from the time they are loaded in the port A. MAGSAYSAY INC., plaintiff-appellee, vs.
ofshipment ANASTACIO AGAN, defendant-appellant.
f. until they are unloaded in the port of their REYES, A. J.:
consignment
place described
What asare
"very shallow". It would
Considered thus or
Ordinary appear
Pettythat vessel and
Expenses cargo
[Art. were at the time in no imminent danger or a danger which might "rationally be sought to be certain and immin
807]
SUGGESTED ANSWER:
shall not be affected, though the event which gave rise to the
sacrifice or expenditure may have been due to the fault of
G.R. No. L-13695 October 18, 1921 one of the parties to the adventure; but
STANDARD OIL COMPANY OF NEW YORK, plaintiff-appellee, vs. this shall not prejudice any remedies which may be open
MANUEL LOPEZ CASTELO, defendant-appellant. against that party for such clause
STREET, J.:
Distinctions
s: "No jettison of deck cargo shall be made good as general average." The reason for this rule is found in the fact that deck cargo is in an extra-hazardous position and, if on a sailing vessel, its
GENERAL PARTICULAR
At said port- captain must request and await orders from the
shippers
Definitions:
1. In a strict sense:
Arrival Under Stress[Art. 819-821] 1. Each vessel must bear its own loss, and
2. Both shipowners shall be solidarily liable to the shippers for
The arrival of the vessel at the nearest and most damages suffered
convenient port
Because the vessel CANNOT continue the trip to the port Who is at Fault: A 3rd vessel [Art. 831]
of destination
On account of: Said vessel shall be liable for:
First Ground: Lack of provisions; When Not Considered Lawful Who is at Fault: None [Fortuitous event] [Art. 830]
[Art. 820]
None – each one must bear his own loss
If the lack of provisions should arise from the failure to take
the necessary provisions for the voyage according to Error in Extremis
the usage and customs, or
Where a navigator,
If they should have been rendered useless or lost through suddenly realizing that a collision is imminent
bad stowage or negligence in their care by no fault of his own,
in confusion and excitement of the moment,
does something which contributes to the collision, or
omits to do something by which the collision may be In fact, it is a general principle, well established maritime law and
avoided, custom, that shipowners and ship agents are civilly liable for the acts
Such act or omission is ordinarily considered to be in of the captain (Code of Commerce, Article 586) and for the indemnities
extremis, and due the third persons (Article 587); so that injured parties may
The ordinary rules of strict accountability do NOT apply immediately look for reimbursement to the owner of the ship, it being
universally recognized that the ship master or captain is primarily the
When does the rule of ―error in extremis‖ apply? representative of the owner (Standard Oil Co. vs. Lopez Castelo, 42
Phil. 256, 260). This direct liability, moderated and limited by the
It must appear that there was an imminent danger and it is the actual owner's right of abandonment of the vessel and earned freight (Article
risk of danger and not apprehension merely that determines the 587) has been declared to exist not only in case of breached contracts,
question whether the error is one in extremis but also in cases of tortious negligence (Yu Biao Sontua vs. Osorio, 43
Phil. 511; 515):
Doctrine of Inscrutable Fault:
xxxxxxxxx
The court can see that a fault has been committed, It is easy to see that to admit the defense of due diligence of a bonus
But is unable from the conflict of testimony, or otherwise, paterfamilias (in the selection and vigilance of the officers and crew) as
to locate it [the fault] exempting the shipowner from any liability for their faults, would render
Hence, when it is impossible to determine to what direct and nugatory the solidary liability established by Article 827 of the Code of
specific acts the collision is attributable, it is a case of Commerce for the greater protection of injured parties. Shipowners
damage arising from a cause that is inscrutable would be able to escape liability in practically every case, considering
that the qualifications and licensing of ship masters and officers are
Doctrine of Inscrutable Fault (1997) determined by the State, and that vigilance is practically impossible to
exercise over officers and crew of vessels at sea. To compel the
Explain the doctrine in Maritime accidents – Doctrine ofInscrutable parties prejudiced to look to the crew for indemnity and redress would
Fault be an illusory remedy for almost always its members. are, from
captains down, mere wage earners.
SUGGESTED ANSWER:
We, therefore, find no reversible error in the refusal of the Court of
Under the ―doctrine of inscrutable fault,‖ where fault isestablished but Appeals to consider the defense of the Manila Steamship Co., that it is
it cannot be determined which of the twovessels were at fault, both exempt from liability for the collision with the M L "Consuelo V " due to
shall be deemed to have been atfault. the absence of negligence on its part in the selection and supervision
of the officers and crew of the M/S "Bowline Knot.
Doctrine of Inscrutable Fault (1998)
However, insofar as respondent Lim Hong To, owner of M L "Consuelo
A severe typhoon was raging when the vessel SS Masdaamcollided V" who admittedly employed an unlicensed master and engineer and
with MV Princes. It is conceded that the typhoonwas the major cause who in his application for permission to operate expressly assumed full
of the collision, although there was avery strong possibility that it could risk and responsibility thereby (Exh. 2) this Court held that the liability
have been avoided ifthe captain of SS Masdaam was not drunk and of Lim Hong To cannot be limited to the value of his motor launch by
the captainof the MV Princes was not asleep at the time of collisions. abandonment of the vessel as invoked in Article 587 of the Code of
Who should bear the damages to the vessels and theircargoes? (5%) Commerce, We said:
SUGGESTED ANSWER: The international rule is to the effect that the right of abandonment of
vessels, as a legal limitation of a shipowner's liability, does not apply to
The shipowners of SS Masdaam and MV Princess shalleach bear their cases where the injury or the average is due to shipowner's own fault.
respective loss of vessels. For the lossesand damages suffered by Farina (Derecho Commercial Maritima Vol. 1, pp. 122-123), on the
their cargoes both shipownersare solidarily liable. authority of judicial precedents from various nations, sets the rule to be
as follows:
What kind of AVERAGE is damage caused by a collision due to a
storm or force majeure?
Can the ship owner raise the defense that he exercised the Contracts Covered by the COGSA
diligence of GFOF in the selection and supervision of the
captain?
ALL contracts:
o for the carriage of GOODS by SEA
Culpa Contractual – NO
o to and from Philippine Ports in FOREIGN Trade
Culpa Aquiliana – YES excepti in cases of collision when
both parties or vessel are at fault
G.R. No. L-24515November 18, 1967
Culpa Criminal - NO
THE AMERICAN INSURANCE COMPANY, plaintiff-appellant, vs.
COMPAÑIA MARITIMA, ET AL., defendants.
The case of Manila Steamship Company, Inc. vs. InsaAbdulhaman MAKALINTAL, J.:
and Lim HongTo 17 is a case of collision of the ML "Consuelo V" and
MSby
nally entered into "Bowline Knot"
Macondray, as as a result
general of for
agent which the ML
the "M/S "ConsueloIt V"
TOREADOR". wascapsized
part of Macondray's obligation under the contract of carriage and the fact that the transshipment was ma
and was lost where nine (9) passengers died or were missing and all
its cargoes were lost. In the action for damages arising from the
collision, applying Article 837 of the Code of Commerce, this Court
held that in such case where the collision was imputable to both of
them, each vessel shall suffer her own damages and both shall be
solidarily liable for the damages occasioned to their cargoes.18 Thus,
We held:
The carrier and the ship shall be DISCHARGED from all liability from
What is the effect of the COGSA on our Maritime Laws? such loss or damage
in the cargo was discovered by petitioner on the same date; and that this action was given to respondent, as local agent of the owner of the ship, also on the same date; and that this action
It shall not:
3. if the loss or damage is NOT apparent – the notice must be G.R. No. 77638 July 12, 1990
given within 3 days of delivery MARITIME AGENCIES & SERVICES, INC., petitioner,
vs.
G.R. No. 119571 March 11, 1998 COURT OF APPEALS, and UNION INSURANCE SOCIETY OF
MITSUI O.S.K. LINES LTD., represented by MAGSAYSAY CANTON, LTD., respondents.
AGENCIES, INC., petitioner, vs. CRUZ, J.:
rdance with the Carriage of Goods
COURT by Sea Act.
OF APPEALS andXXX
LAVINE LOUNGEWEAR MFG.
20, 1979, when the last item wasCORP., delivered to the consignee. 18 Union's complaint was filed against Hongkong on September 19, 1980, but tardily against Macondray on April 20, 1
respondents.
MENDOZA, J.:
y have been in the value of the goods is not due to their deterioration or disappearance because they AA entered
had into a contract
been damaged with
in transit. XXXBB thruCC to transport ladies' wear
from Manila to France withtranshipment at Taiwan. Somehow the
goods were notloaded at Taiwan on time. Hence, when the goods
What
vered by §3(6) of COGSA but petitioner's potential liability for the damages it has caused in the general senselaw shall
and, prevail,
as such, with is
thearrived
matter respect toby
governed prescriptive
theAA
Civilwas periods?
Code, CodeCivil
theonlyforof Commerce an
arrivedin France, they "off-season" and paid
Code or COGSA?
one-half the value by the buyer. AA claimed damagesfrom the shipping
he COGSA but by Art. 1144 of the Civil Code which provides for a prescriptive period of ten years. The company and its agent. The defense ofthe respondents was
New CivilConsidering
prescription. Code did NOT that impliedly
theladies'repeal the period
wear suffered of prescription
"loss of value,"
under the COGSA.
as claimed by AA,shouldAs a SPECIAL LAW period
the prescriptive the COGSA
be oneprevails over the
year under the
general provisions of the Civil Code on prescription
Carriage of Goods by Sea Act, or ten years under the CivilCode? of actions
[Maritime Agencies
Explain briefly. (5%) v. CA 187 SCRA 346]
SUGGESTED ANSWER:
This shall not affect or prejudice the right of the shipper to bring the suit
within the one [1] year period [EE Elser vs CA, Nov 29, 1954]
What is the effect of failure to BRING THE ACTION within one [1]
year period?
A local consignee sought to enforce judicially a claimagainst the carrier These arguments might merit weightier consideration were it not for
for loss of a shipment of drums oflubricating oil from Japan under the the fact that the question has already received a definitive answer,
Carriage of Goods bySea Act (COGSA) after the carrier had rejected adverse to the position taken by Dole, in The Yek Tong Lin Fire &
its demand.The carrier pleaded in its Answer the affirmative defense Marine Insurance Co., Ltd. vs. American President Lines,
ofprescription under the provisions of said Act inasmuch as Inc. 15 There, in a parallel factual situation, where suit to recover for
the suit was brought by the consignee after one (1) yearfrom the damage to cargo shipped by vessel from Tokyo to Manila was filed
delivery of the goods. In turn, the consigneecontended that the period more than two years after the consignee's receipt of the cargo, this
of prescription was suspendedby the written extrajudicial demand it Court rejected the contention that an extrajudicial demand toiled the
had made against thecarrier within the one-year period, pursuant to prescriptive period provided for in the Carriage of Goods by Sea Act,
Article 1155of the Civil Code providing that the prescription of actions viz:
is interrupted when there is a written extrajudicial demandby the
creditors. In the second assignment of error plaintiff-appellant argues that it was
error for the court a quo not to have considered the action of plaintiff-
a) Has the action in fact prescribed? Why? appellant suspended by the extrajudicial demand which took place,
b) If the consignee‗s action were predicated on according to defendant's own motion to dismiss on August 22, 1952.
misdelivery or conversion of the goods, would your answer We notice that while plaintiff avoids stating any date when the goods
be the same? Explain briefly. arrived in Manila, it relies upon the allegation made in the motion to
dismiss that a protest was filed on August 22, 1952 — which goes to
SUGGESTED ANSWER: show that plaintiff-appellant's counsel has not been laying the facts
squarely before the court for the consideration of the merits of the
a) The action taken by the local consignee has, in fact,prescribed. The case. We have already decided that in a case governed by the
period of one year under the Carriage ofGoods by Sea Act (COGSA) is Carriage of Goods by Sea Act, the general provisions of the Code of
not interrupted by a writtenextrajudicial demand. The provisions of Art Civil Procedure on prescription should not be made to apply. (Chua
1155 of theNCC merely apply to prescriptive periods provided for Kuy vs. Everett Steamship Corp., G.R. No. L-5554, May 27, 1953.)
insaid Code and not to special laws such as COGSA exceptwhen Similarly, we now hold that in such a case the general provisions of the
otherwise provided. (Dole v Maritime Co 148 s 118). new Civil Code (Art. 1155) cannot be made to apply, as such
application would have the effect of extending the one-year period of
b) If the consignee‗s action were predicated onmisdelivery or prescription fixed in the law. It is desirable that matters affecting
conversion of goods, the provisions of theCOGSA would be transportation of goods by sea be decided in as short a time as
inapplicable. In these cases, the NCCprescriptive periods, including Art possible; the application of the provisions of Article 1155 of the new
1155 of the NCC willapply (Ang v Compania Maritama 133 s 600) Civil Code would unnecessarily extend the period and permit delays in
the settlement of questions affecting transportation, contrary to the
COGSA; Prescription of Claims (2000) clear intent and purpose of the law. * * *
RC imported computer motherboards from the UnitedStates and had Instances Where the One [1] Year Prescriptive Period under the
them shipped to Manila aboard an oceangoingcargo ship owned by BC COGSA is INTERRUPTED:
Shipping Company. Whenthe cargo arrived at Manila seaport and
delivered to RC,the crate appeared intact; but upon inspection of the 1. In case an action has been already filed in court
contents, RC discovered that the items inside had all beenbadly [F.H.Stevens v. Nordeutscher Lloyd [6 SCRA 180]
damaged. He did not file any notice of damage oranything with
anyone, least of all with BC ShippingCompany. What he did was to 2. When there is an express agreement to the effect
proceed directly to youroffice to consult you about whether he should [Universal Shipping v. IAC [188 SCRA 170]
have given anotice of damage and how long a time he had to initiate a
suit under the provisions of the Carriage of Goods by SeaAct (CA 65). G.R. No. L-25266 January 15, 1975
What would your advice be? (2%) AETNA INSURANCE COMPANY, plaintiff-appellant,
vs.
SUGGESTED ANSWER: BARBER STEAMSHIP LINES, INC., and/or LUZON STEVEDORING
CORPORATION and/or LUZON BROKERAGE
My advice would be that RC should give notice of thedamage CORPORATION, defendants-appellees.
sustained by the cargo within 3 days and that hehas to file the suit to AQUINO, J.:
recover the damage sustained by thecargo within one year from the The trial court correctly held that the one-year statutory and contractual
date of the delivery of thecargo to him. prescriptive period had already expired when appellant company filed
on April 7, 1965 its action against Barber Line Far East Service. The
COGSA; Prescriptive Period (1995) one year period commenced on February 25, 1964 when the damaged
cargo was delivered to the consignee. (See Chua Kuy vs. Everrett
What is the prescriptive period for actions involving lostor damaged Steamship Corporation, 93 Phil. 207; Yek Tong Fire & Marine
cargo under the Carriage of Goods by SeaAct? Insurance Co., Ltd. vs. American President Lines, Inc., 103 Phil. 1125).
XXX
SUGGESTED ANSWER:
Appellant company invokes the rule that where the original complaint
ONE YEAR after the delivery of the goods or the datewhen the goods states a cause of action but does it imperfectly, and afterwards an
should have been delivered (Sec 3(6),COGSA) amended complaint is filed, correcting the defect, the plea of
prescription will relate to the time of the filing of the original complaint
(Pangasinan Transportation Co. vs. Phil. Farming Co., Ltd., 81 Phil.
273). It contends that inasmuch as the original complaint was filed
within the one year period, the action had not prescribed.
What is the effect of EXTRAJUDICIAL DEMAND made to the
carrier? That ruling would apply to defendants Luzon Stevedoring Corporation
and Luzon Brokerage Corporation. But it would not apply to Barber
G.R. No. L-61352 February 27, 1987 DOLE PHILIPPINES, INC., plaintiff-appellant, Line Far East Service which was impleaded for the first time in the
vs. amended complaint.
MARITIME COMPANY OF THE PHILIPPINES, defendant-appellee.
NARVASA, J.: It should be recalled that the original complaint was dismissed as to
Barber Steamship Lines, Inc. in the lower court's order of April 19,
1965. New summons had to be issued to Barber Line Far East Service which had replaced Barber Steamship Lines, Inc. as a defendant.
The filing of the original complaint interrupted the prescriptive period as to Barber Steamship Lines, Inc. but not as to Barber Line Far East Service, an entity supposedly distinct fr
The defendant-appellee, Philippine Ports Terminals, Inc., is neither a charterer nor a ship
1. ONLY the carrier‘s liability is extinguished if no suit is 2. This declaration, if embodied in the bill of lading, shall be
brought within one [1] year from delivery of goods prima facie evidence, BUT shall not be conclusive on the
2. BUT the liability of the insurer is NOT extinguished carrier.
3. Insurers are governed by the Insurance Code and not
the COGSA [Mayer Steel v. CA 274 SCRA 432] 3. Shipper and carrier may agree on another maximum amount
4. BUT the insurer CANNOT file an action against the but should not be less than $500
carrier beyond the one [1] year prescriptive period
[Filipino Merchants v. CA 179 SCRA 638] 4. Carrier can NOT be liable for:
ar after delivery of the goods or the date when the goods should have been delivered," does not apply. The reason is not difficult to see. Said one-year period of limitation is designed to mee
the ship arrived in Manila and he filed suit on October 30, 1963.
On the US $500 Per Package Limitation:
It is to be noted that the Civil Code does not of itself limit the liability of the common car
ARRASTRE
A broad tern which refers to a contract for the unloading of goods from
a vessel
This is done by the arrastre operator, who will then deliver the cargo to
the customs warehouse
Ownership of the cargo will pass to the buyer upon delivery by the
seller to the vessel. AIR TRANSPORTATION
The Warsaw Convention shall apply to: territories of 2 High Contracting Parties, or
territory of a single High Contracting Party, IF there is an
All INTERNATIONAL transportation of persons, baggage or agreed stopping place within a territory subject to the
goods sovereignty, mandate or authority of another power, even
Performed by aircraft FOR HIRE though that power is not a party to this convention
Any transportation, in which according to the CONTRACT made by the A signatory to the Warsaw Convention and one who subsequently
parties, the place of departure and the place of destination, w/n there adheres to it Montreal Convention 1999
be a break in the transportationare situated either within the: Convention for the Unification of Certain Rules for International
Carriage by Air, opened for Signature at Montreal on 28 May
Regulatory Body in Air Transportation: Civil Aeronautics Board 1999 (ICAO Doc No 4698)
[CAB] Article 1 — Scope of Application
Requisite to Engage in Air Commerce: A Certificate of Public 1. This Convention applies to all international carriage of persons,
Convenience and Necessity is a permit issued by the CAB authorizing baggage or cargo performed by aircraft for reward. It applies equally to
a person to engage in air commerce and/or air transportation, foreign gratuitous carriage by aircraft performed by an air transport
and/or domestic [RA 776 Sec. 11] undertaking.
NOTE: Compare & Contrast Warsaw and Montreal Convention 2. For the purposes of this Convention, the expression international
carriage means any carriage in which, according to the agreement
NG IN THE ACCESSION TO THE 1999 MONTREAL CONVENTION FOR THE UNIFICATION OF CERTAIN RULES between the parties, the
FOR INTERNATIONAL place BY
CARRIAGE of AIR
departure and the place of
destination, whether or not there be a break in the carriage or a
transhipment, are situated either within the territories of two States
Parties, or within the territory of a single State Party if there is an
agreed stopping place within the territory of another State, even if that
XXX
State is not a State Party. Carriage between two points within the
territory of a single State Party without an agreed stopping place within
Rules for International Carriage by Air signed on 28 May 1999 in Montreal, with the reservation thatthe territory of shall
the Convention another State
not apply to is not international carriage for the
purposes
d duties as a sovereign State; and (b) the carrige of persons, cargo, and baggage for its military authoritIes of thisregistered
on aircraft Convention.
in or leased by the Philippines, the whole capacity of which h
NOTE: All boxes similarly shaded were taken from Montreal Convention
The pitch issue to be resolved under the petitioner's first assigned error
is whether the contracts of transportation between Purita and
WARSAW CONVENTION CarminaMapa, on the one hand, and TWA, on the other, were
contracts of "international transportation" under the Warsaw
In General: Convention.
1. Full Title – Warsaw Convention for the Unification of Certain There are then two categories of international transportation, viz., (1)
Rules Relating to International Carriage by Air that where the place of departure and the place of destination are
2. Date and Place Signed – Warsaw Poland, October 12, situated within the territories of two High Contracting Parties regardless
1929 of whether or not there be a break in the transportation or a
transshipment;
ginal conjunction ticket. The and (2) that argument
petitioner's where thethat
place
it of departure
is not and the
a designated placeinofthe
carrier destination are within the
original conjunction territory
tickets of a itsingle
and that High
issued its Contracting
own ticket isParty if there of
not decisive is an
its agreed
liability.stopping
The newpla
tic
The contracts of transportation in this case are evidenced by the two TWA tickets, No. 015:9475:153:304 and No. 015:9475:153:305, both
purchased and issued in Bangkok, Thailand. On the basis alone of the provisions therein, it is obvious that the place of departure and the place of destination are all in the territo
tract as a single operation. The evident purpose underlying this Article is to promote international air travel by facilitating the procurement of a series of contracts for air transportation throu
1.3. Carriage to be performed by several successive carriers is Art. 17 provides for the liability of the carrier for damage suffered by a
deemed, for the purposes of this Convention, to be one undivided passenger, sustained in the event of:
carriage if it has been regarded by the parties as a single operation,
whether it had been agreed upon under the form of a single contract or 1. the death, or
of a series of contracts, and it does not lose its international character 2. the wounding of a passenger, or
merely because one contract or a series of contracts is to be 3. any other bodily injury
performed entirely within the territory of the same State.
Conditions for Liability [Art. 17]
G.R. No. 116044-45 arch 9, 2000
AMERICAN AIRLINES petitioner, vs. The accident, which caused the damage so sustained, took place:
COURT OF APPEALS, HON. BERNARDO LL. SALAS and
DEMOCRITO MENDOZA, respondents. 1. on board the aircraft, or
2. in the course of any of the operations of embarking or
GONZAGA-REYES, J.:
disembarking
Art. 18 provides for the liability of the carrier for damage sustained in
the event of the
1. destruction or
2. loss of, or
3. of damage to any checked baggage or goods
wed even by telephone and it has become an accepted practice among them. A member airline which enters into a contract of carriage consisting of a series of trips to be performed by differ
The occurrence, which caused the damage, so sustained took place
during the transportation by air.
It shall comprise the period during which the baggage or goods are in
charge of the carrier whether:
1. in an airport, or
2. on board an aircraft, or,
3. in the case of a landing outside an airport, in any place
whatsoever
Accordingly, the respondent court erred in holding that the Julianos are
not entitled to a refund because the purchase of the Thai Airways
tickets was unnecessary. XXX
SUGGESTED ANSWER:
X took a plane from Manila bound for Davao via Cebuwhere there was
a change of planes. X arrived in Davaosafely but to his dismay, his two
suitcases were left behindin Cebu. The airline company assured X that
the suitcaseswould come in the next flight but they never did. X
claimed P2,000 for the loss of both suitcases, but theairline was willing
to pay only P500 because the airlineticket stipulated that unless a
higher value was declared,any claim for loss cannot exceed P250 for
each piece ofluggage. X reasoned out that he did not sign the
stipulationand in fact had not even read it. X did not declare a greater
value despitethe fact that the clerk had called his attention to
thestipulation in the ticket. Decide the case (5%)
SUGGESTED ANSWER:
Even if he did not sign the ticket, X is bound by thestipulation that any
claim for loss cannot exceed P250 foreach luggage. He did not declare
a higher value. X isentitled to P500 for the two luggages lost.
To support this contention, petitioner cites the case of Ong Yiu v. Court
of Appeals [G.R. No. L-40597, June 29, 1979, 91 SCRA 223], where
the Court sustained the validity of a printed stipulation at the back of an
airline ticket limiting the liability of the carrier for lost baggage to a
specified amount and ruled that the carrier's liability was limited to said
amount since the passenger did not declare a higher value, much less
pay additional charges.
G.R. No. 121824 January 29, 1998 BRITISH AIRWAYS, petitioner,
We find the ruling in Ong Yiu squarely applicable to the instant case. vs.
XXX COURT OF APPEALS, GOP MAHTANI, and PHILIPPINE
AIRLINES, respondents.
In view thereof petitioner's liability for the lost baggage is limited to ROMERO, J.:
$20.00 per kilo or $600.00, as stipulated at the back of the ticket.
t is the position of BA that there should have been no separate award for the luggage and the contents thereof since Mahtani failed to declare a separate higher valuation for the luggage, 18
G.R. No. 92501 March 6, 1992 PHILIPPINE AIR LINES, petitioner,
vs.
Considering the facts of the case, we cannot assent to such specious argument. XXX
HON. COURT OF APPEALS and ISIDRO CO, respondents.
GRIÑO-AQUINO, J.:
n addition, we have held that benefits of limited liability are subject to waiver such as when the air carrier failed to raise timely objections during the trial when questions and answers regard
t as private respondent Co did not declare the contents of his baggage nor pay traditional charges before the flight (p. 3, tsn, July 18, 1985).
Given the foregoing postulates, the inescapable conclusion is that BA had waived the defense of limited liability when it allowed Mahtani to testify as to the actual damages he incurred due to
ent's evidence, proving that the carrier's negligence was the proximate cause of the loss of his baggage. Furthermore, petitioner acted in bad faith in faking a retrieval receipt to bail itself out
Exception
the acts complained – save
of were in the by
impelled case of fraud on
an intention his [carrier‘s]
to violate the law,part [Art.in26]
or were persistent disregard of one's rights. It must be evidenced by a flagrantly or shamefully wrong or improper
PANGANIBAN, J.:
s. The shipper or consignee must allege and prove the fulfillment of the condition. If it fails to do so, no right of action against the carrier can accrue in favor of the former. The aforementione
being charged with liability therefor; and (2) to give it an opportunity to examine the nature and extent of the injury. "This protects the carrier by affording it an opportunity to make an inve
be prevented and the liability cannot be imposed on the carrier. To stress, notice is a condition precedent, and the carrier is not liable if notice is not given in accordance with the stipulation.
period. While respondents may have had a cause of action then, they cannot now enforce it for their failure to comply with the aforesaid condition precedent.
ss, or where it has a place of business through which the contract has been made or before the court at the place of destination.
n which at the time of the accident the passenger has his or her principal and permanent residence and to or from which the carrier operates services for the carriage of passengers by air, eit
G.R. Nos. 100374-75 November 27, 1992
RUFINO Y. LUNA, RODOLFO J. ALONSO and PORFIRIO
RODRIGUEZ, petitioners,
vs.
HON. COURT OF APPEALS, HON. CRISTINA M. ESTRADA in her
capacity as Presiding Judge, RTC-Pasig, Br. 69, Metro Manila,
HON. TERESITA D. CAPULONG in her capacity as Presiding
Judge, RTC-Valenzuela, Br. 172, Metro Manila, and NORTHWEST
AIRLINES, INC., respondents.
BELLOSILLO, J.:
Previously, We ruled that the Warsaw Convention was a treaty
commitment voluntarily assumed by the Philippine government;
consequently, it has the force and effect of law in this country. 15 But,
in the same token, We are also aware of jurisprudence that the
Warsaw Convention does not operate as an exclusive enumeration of
the instances for declaring an airline liable for breach of contract of
carriage or as an absolute limit of the extent of that liability. 16 The
Convention merely declares the carrier liable for damages in the
enumerated cases, if the conditions therein specified are
present. 17 For sure, it does not regulate the liability, much less
exempt, the carrier for violating the rights of others which must simply
be respected in accordance with their contracts of carriage. The
ket was bought, Adopting
nationality of the
the plaintiffs'
passengertheory would
shall not at adetermining
be the minimum blur these
factor carefully
in this drawn distinctions by creating a third intermediate category. It would obviously introduce uncertainty
regard.
4. Questions of procedure shall be governed by the law of the court seised of the case
Manila, and Philippine courts are clothed with jurisdiction over this case. We note that while this case was filed in Cebu and not in Manila the issue of venue is no longer an issue as the petitio
ted by both the petitioner and respondent, it appears that the ticket was issued in Rome, Italy. Consequently, under the third jurisdictional rule, the petitioner has the option to bring her case
G.R. No. 101538 June 23, 1992
AUGUSTO BENEDICTO SANTOS III, represented by his father and
legal guardian, Augusto Benedicto Santos, petitioner,
vs.
NORTHWEST ORIENT AIRLINES and COURT OF
APPEALS, respondents.
CRUZ, J.:
The petitioner claims that the lower court erred in not ruling that
under Article 28(1) of the Warsaw Convention, this case was
properly filed in the Philippines, because Manila was the
destination of the plaintiff. XXX
The private respondent notes, however, that in Compagnie Nationale The right to damages shall be extinguished
Air France vs. Giliberto, 19 it was held:
In United Airlines v. Uy,18 this Court distinguished between the (1)
The plaintiffs' first contention is that Air France is domiciled in the damage to the passenger‘s baggage and (2) humiliation he suffered at
United States. They say that the domicile of a corporation includes any the hands of the airline‘s employees. The first cause of action was
country where the airline carries on its business on "a regular and covered by the Warsaw Convention which prescribes in two years,
substantial basis," and that the United States qualifies under such while the second was covered by the provisions of the Civil Code on
definition. The meaning of domicile cannot, however, be so extended. torts, which prescribes in four years.
The domicile of a corporation is customarily regarded as the place
where it is incorporated, and the courts have given the meaning to the
term as it is used in article 28(1) of the Convention. (See Smith v.
Canadian Pacific Airways, Ltd. (2d Cir. 1971), 452 F2d 798, 802; Nudo G.R. No. 127768 November 19, 1999 UNITED AIRLINES, petitioner,
v. Societe Anonyme Belge d' Exploitation de la Navigation Aerienne vs.
Sabena Belgian World Airlines (E.D. pa. 1962). 207 F. Supp, 191;
WILLIE J. UY, respondent.
Karfunkel v. Compagnie Nationale Air France (S.D.N.Y. 1977), 427 F.
Suppl. 971, 974). Moreover, the structure of article 28(1), viewed as a
whole, is also incompatible with the plaintiffs' claim. The article, in BELLOSILLO, J.:
stating that places of business are among the bases of the jurisdiction,
As for respondent's second cause of action, indeed the travaux The instant case is comparable to the case of Lathigra v. British
preparatories of the Warsaw Convention reveal that the delegates Airways.23
thereto intended the two (2)-year limitation incorporated in Art. 29 as In Lathigra, it was held that the airlines‘ negligent act of reconfirming
an absolute bar to suit and not to be made subject to the various tolling the passenger‘s reservation days before departure and failing to inform
provisions of the laws of the forum. This therefore forecloses the the latter that the flight had already been discontinued is not among
application of our own rules on interruption of prescriptive periods. the acts covered by the Warsaw Convention, since the alleged
Article 29, par. (2), was intended only to let local laws determine negligence did not occur during the performance of the contract of
whether an action had been commenced within the two (2)-year carriage but, rather, days before the scheduled flight.
period, and within our jurisdiction an action shall be deemed In the case at hand, Singapore Airlines barred private respondent from
commenced upon the filing of a complaint. Since it is indisputable that boarding the Singapore Airlines flight because PAL allegedly failed to
respondent filed the present action beyond the two (2)-year time frame endorse the tickets of private respondent and his companions, despite
his second cause of action must be barred. Nonetheless, it cannot be PAL‘s assurances to respondent that Singapore Airlines had already
doubted that respondent exerted efforts to immediately convey his loss confirmed their passage. While this fact still needs to be heard and
to petitioner, even employed the services of two (2) lawyers to follow established by adequate proof before the RTC, an action based on
up his claims, and that the filing of the action itself was delayed these allegations will not fall under the Warsaw Convention, since the
because of petitioner's evasion. purported negligence on the part of PAL did not occur during the
performance of the contract of carriage but days before the scheduled
In this regard, Philippine Airlines, Inc. v. Court of Appeals 19 is flight. Thus, the present action cannot be dismissed based on the
instructive. In this case of PAL, private respondent filed an action for statute of limitations provided under Article 29 of the Warsaw
damages against petitioner airline for the breakage of the front glass of Convention.
the microwave oven which she shipped under PAL Air Waybill No. 0- Had the present case merely consisted of claims incidental to the
79-1013008-3. Petitioner averred that, the action having been filed airlines‘ delay in transporting their passengers, the private
seven (7) months after her arrival at her port of destination, she failed respondent‘s Complaint would have been time-barred under Article 29
to comply with par. 12, subpar. (a) (1), of the Air Waybill which of the Warsaw Convention. However, the present case involves a
expressly provided that the person entitled to delivery must make a special species of injury resulting from the failure of PAL and/or
complaint to the carrier in writing in case of visible damage to the Singapore Airlines to transport private respondent from Singapore to
goods, immediately after discovery of the damage and at the latest Jakarta – the profound distress, fear, anxiety and humiliation that
within 14 days from receipt of the goods. Despite non-compliance private respondent experienced when, despite PAL‘s earlier assurance
therewith the Court held that by private respondent's immediate that Singapore Airlines confirmed his passage, he was prevented from
submission of a formal claim to petitioner, which however was not boarding the plane and he faced the daunting possibility that he would
immediately entertained as it was referred from one employee to be stranded in Singapore Airport because the PAL office was already
another, she was deemed to have substantially complied with the closed.
requirement. The Court noted that with private respondent's own These claims are covered by the Civil Code provisions on tort, and not
zealous efforts in pursuing her claim it was clearly not her fault that the within the purview of the Warsaw Convention. Hence, the applicable
letter of demand for damages could only be filed, after months of prescription period is that provided under Article 1146 of the Civil
exasperating follow-up of the claim, on 13 August 1990, and that if Code:
there was any failure at all to file the formal claim within the Art. 1146. The following actions must be instituted within four years:
prescriptive period contemplated in the Air Waybill, this was largely (1) Upon an injury to the rights of the plaintiff;
because of the carrier's own doing, the consequences of which could (2) Upon a quasi-delict.
not in all fairness be attributed to private respondent. Private respondent‘s Complaint was filed with the RTC on 15 August
1997, which was less than four years since PAL received his
In the same vein must we rule upon the circumstances brought before extrajudicial demand on 25 January 1994. Thus, private respondent‘s
us. Verily, respondent filed his complaint more than two (2) years later, claims have not yet prescribed and PAL‘s Motion to Dismiss must be
beyond the period of limitation prescribed by the Warsaw Convention denied.
for filing a claim for damages. However, it is obvious that respondent
was forestalled from immediately filing an action because petitioner Rule when Transportation Performed by Successive Carriers
airline gave him the runaround, answering his letters but not giving in under Art. 1.3
to his demands. True, respondent should have already filed an action
at the first instance when his claims were denied by petitioner but the Each carrier who accepts pax, baggage or goods shall be:
same could only be due to his desire to make an out-of-court
settlement for which he cannot be faulted. Hence, despite the express subject to the rules set out in the WC, and
mandate of Art. 29 of the Warsaw Convention that an action for deemed to be one of the contracting parties to the contract
damages should be filed within two (2) years from the arrival at the of transportation insofar as the contract deals with the part of
place of destination, such rule shall not be applied in the instant case transportation which is performed under his supervision [Art.
because of the delaying tactics employed by petitioner airline itself. 30]
Thus, private respondent's second cause of action cannot be
considered as time-barred under Art. 29 of the Warsaw Convention. Against whom can Pax take Action:
G.R. No. 149547 July 4, 2008 General Rule – only against the carrier who performed the
PHILIPPINE AIRLINES, INC., petitioner, transportation during which the accident or delay occurred,
vs.
Exception – against the first carrier when, by express agreement, it
N. ADRIANO SAVILLO, Presiding Judge of RTC Branch 30 , Iloilo City, and SIMPLICIO GRIÑO,respondents.
CHICO-NAZARIO, J.: has assumed liability for the whole journey
motional harm suffered by the private respondent as a result of having been unreasonably and unjustly prevented from boarding the plane should be distinguished from the actual damages w
nally prestigious KLM, naturally had the right to expect that their tickets would be honored by Aer Lingus to which, in the legal sense, the KLM had indorsed and in effect guaranteed the perf
ondent, with the former endorsing to PAL the Hong Kong-to-Manila segment of the journey. Such contract of carriage has always been treated in this jurisdiction as a single operation. This ju
ip agreement, the ticket-issuing airline is the principal in a contract of carriage, while the endorsee-airline is the agent. XXX
CAL. In the same way that we ruled against British Airways and Lufthansa in the aforementioned cases, we also rule that CAL cannot evade liability to respondent, even though it may have b
General Rule: YES, it has the force and effect of a law, being a treaty
commitment assumed by the Philippine Government
G.R. No. 83612 November 24, 1994 a) an EXCLUSIVE enumeration of the instances for
LUFTHANSA GERMAN AIRLINES, petitioner, declaring a carrier liable for breach of contract of
vs. carriage, or
COURT OF APPEALS and TIRSO V. ANTIPORDA, b) an ABSOLUTE limit of the extent of that liability
SR., respondents.
ROMERO, J.: The WC must NOT be construed as to PRECLUDE the operation of
Lufthansa maintains that its liability to any passenger is limited to the Civil Code and other pertinent laws
occurrences in its own line, and, thus, in the case at bench, its liability
to Antiporda is limited to the extent that it had transported him from It does not regulate, much less exempt the carrier from liability for
Manila to Singapore and from Singapore to Bombay; that therefrom, damages for violating the rights of the passengers under the contract
responsibility for the performance of the contract of carriage is of carriage, ESPECIALLY if willful misconduct on the part of then
assumed by the succeeding carriers tasked to transport him for the carrier‘s employees is found or established.
remaining leg of his trip because at that stage, its contract of carriage
with Antiporda ceases, with Lufthansa acting, no longer as the principal
in the contract of carriage, but merely as a ticket-issuing agent for the
other carriers.XXX FREEDOMS OF THE AIR
First Freedom of the Air - the right or privilege, in respect of scheduled international air services, granted by one State to another State or States to fly across its te
We, therefore, reject Lufthansa's theory that from the time another
carrier was engaged to transport Antiporda on another segment of his
trip, it merely acted as a ticket-issuing agent in behalf of said carrier. In
the very nature of their contract, Lufthansa is clearly the principal in the
Second Freedom of the Air - the right or privilege, in respect of 2. Damages cannot be presumed – to be recoverable, they
scheduled international air services, granted by one State to another must be pleaded and proven in court; in no instance may
State or States to land in its territory for non-traffic purposes (also a judge award more than those so pleaded and proven
known as a Second Freedom Right). 3. Speculative damages cannot be awarded
4. The award thereof must be based on the evidence
Third Freedom of The Air - the right or privilege, in respect of presented, not on the personal knowledge of the court;
scheduled international air services, granted by one State to another and certainly not on flimsy, remote, speculative and non-
State to put down, in the territory of the first State, traffic coming from substantial proof
the home State of the carrier (also known as a Third Freedom Right).
In Breach of Contract of Carriage – If the Common Carrier is in:
Fourth Freedom of The Air - the right or privilege, in respect of
scheduled international air services, granted by one State to another 1. GOOD Faith – it shall be responsible for:
State to take on, in the territory of the first State, traffic destined for the
home State of the carrier (also known as a Fourth Freedom Right). a. The NATURAL and PROBABLE consequences of
the breach of the obligations; AND
Fifth Freedom of The Air - the right or privilege, in respect of
scheduled international air services, granted by one State to another b. Damages which the parties FORESAW or COULD
State to put down and to take on, in the territory of the first State, traffic HAVE FORESEEN
coming from or destined to a third State (also known as a Fifth
Freedom Right). 2. BAD Faith – it shall be responsible for ALL damages which
may be REASONABLE ATTRIBUTED to the non-
ICAO characterizes all "freedoms" beyond the Fifth as "so-called" performance of the obligation (relation of cause and effect is
because only the first five "freedoms" have been officially recognized enough) [Art. 2201]
as such by international treaty.
In Crimes and Quasi-Delicts:
Sixth Freedom of The Air - the right or privilege, in respect of
scheduled international air services, of transporting, via the home 1. The common carrier shall be liable for ALL damages which
State of the carrier, traffic moving between two other States (also are the natural and probable consequences of the act or
known as a Sixth Freedom Right). The so-called Sixth Freedom of the omission complained of
Air, unlike the first five freedoms, is not incorporated as such into any
widely recognized air service agreements such as the "Five Freedoms 2. It is not necessary that such damages have been foreseen
Agreement". or could have reasonably been foreseen by the common
carrier [Art. 2202]
Seventh Freedom of The Air - the right or privilege, in respect of
scheduled international air services, granted by one State to another Moral Damages
State, of transporting traffic between the territory of the granting State
and any third State with no requirement to include on such operation Moral Damages include:
any point in the territory of the recipient State, i.e the service need not
connect to or be an extension of any service to/from the home State of 1. physical suffering,
the carrier. 2. mental anguish,
3. fright,
Eighth Freedom of The Air - the right or privilege, in respect of 4. serious anxiety,
scheduled international air services, of transporting cabotage traffic 5. besmirched reputation,
between two points in the territory of the granting State on a service 6. wounded feelings,
which originates or terminates in the home country of the foreign 7. moral shock,
carrier or (in connection with the so-called Seventh Freedom of the Air) 8. social humiliation, and
outside the territory of the granting State (also known as a Eighth 9. similar injury
Freedom Right or "consecutive cabotage").
In Breach of Contract of Carriage:
Ninth Freedom of The Air - the right or privilege of transporting
cabotage traffic of the granting State on a service performed entirely
within the territory of the granting State (also known as a Ninth 1. General Rule – Moral Damages are NOT recoverable in
Freedom Right or "stand alone"cabotage). damage actions predicated on a breach of contract of
carriage
Source: Manual on the Regulation of International Air Transport (Doc
9626, Part 4) 2. Exceptions – moral damages may be awarded when:
1. They pertain to such injuries or losses that are actually G.R. No. 124110 April 20, 2001
sustained and susceptible of measurement
UNITED AIRLINES, INC., Petitioner vs. Exemplary or corrective damages are imposed, by way of example or
COURT OF APPEALS, ANICETO FONTANILLA, in his personal correction for the public good, in addition to the moral, temperate,
capacity and in behalf of his minor sonMYCHAL ANDREW FONTANILLA, Respondents. liquidated or compensatory damages [Art. 2229]
KAPUNAN, J.:
Note:
2. not for the purpose of indemnifying the pax, shipper or Indemnity for Death. Art. 2206 provides for the payment of indemnity
consignee for any loss suffered by him [Art. 2221] for death caused by a crime or quasi-delict. Initially fixed in said article
of the Civil Code at P3,000.00, the amount of the indemnity has
Note: through the years been gradually increased based on the value of the
peso. At present, it is fixed at P50,000.00. 26 To conform to this new
1. Nominal Damages stand alone ruling, the Court of Appeals correctly increased the indemnity it had
originally ordered the spouses Rosales to be paid from P30,000.00 to
a. There can NO longer be an award for nominal P50,000.00 in its resolution, dated September 12, 1996. XXX
damages IF there already has been an award for
actual, moral, temperate, liquidated and exemplary Actual Damages. Art. 2199 provides that "except as provided by law or
damages by stipulation, one is entitled to an adequate compensation only for
such pecuniary loss suffered by him as he has duly proved." The
b. An award of nominal damages precludes the spouses Rosales are claiming actual damages in the amount of
award of actual, moral, temperate, liquidated and P239,245.40. However, during the trial, they submitted receipts
exemplary damages showing that expenses for the funeral, wake, and interment of Liza
Rosalie amounted only to P60,226.65 XXX The spouses Rosales claim
2. When the act of the common carrier did not amount to fraud, moral damages in the amount of P5,000,000.00. In People v.
malice or bad faith, moral damages cannot be awarded. Teehankee, Jr., 32 this Court awarded P1 million as moral damages to
However, if there was an invasion of the plaintiff‘s right, the heirs of a seventeen-year-old girl who was murdered. This amount
nominal damages may be awarded. seems reasonable to us as moral damages for the loss of a minor
child, whether he or she was a victim of a crime or a quasi-delict.
Temperate or Moderate Damages Hence, we hold that the MMTC and Musa are solidarily liable to the
spouses Rosales in the amount of P1,000,000.00 as moral damages
which are more than nominal but less than compensatory for the death of Liza Rosalie.
damages,
may be recovered when the court finds that some pecuniary Moral Damages. Under Art. 2206, the "spouse, legitimate and
loss has been suffered illegitimate descendants and ascendants of the deceased may demand
but its amount can not, from the nature of the case, be moral damages for mental anguish by reason of the death of the
provided with certainty [Art. 2224] deceased." XXX In the instant case, the spouses Rosales presented
evidence of the intense moral suffering they had gone through as a
result of the loss of Liza Rosalie who was their youngest child.
Liquidated Damages
Liquidated damages are those agreed upon by the parties to a Exemplary Damages. Art. 2231 provides that exemplary damages may
contract, to be paid in case of breach thereof [Art. 2226] be recovered in cases involving quasi-delicts if "the defendant acted
with gross negligence." This circumstance obtains in the instant case.
Exemplary Damages The records indicate that at the time of the mishap, there was a
pending criminal case against Musa for reckless imprudence resulting
in slight physical injuries with another branch of the Regional Trial Court, Quezon City. 33 The evidence also shows that he failed to stop his vehicle at once even after eye witnes
and the noncommittal responses to private respondent's entreaties for settlement of her claim for damages belies petitioner's pretension that there was no bad faith on its part. This unprof
All told, therefore, respondent appellate court did not err in ruling that
the provision on limited liability is not applicable in this case. We,
however, note in passing that while the facts and circumstances of this
case do not call for the direct application of the provisions of the
Victor's claim for deprivation of his right to consortium, although argued Respondents in the instant case should be awarded moral damages to
before Respondent Court, is not supported by the evidence on record. compensate for the grief caused by the death of the deceased
His wife might have been badly disfigured, but he had not testified that, resulting from the petitioner‘s breach of contract of carriage.
in consequence thereof, his right to marital consortium was affected. Furthermore, the petitioner failed to prove that it exercised the
Clearly, Victor (and for that matter, Lucila) had failed to make out a extraordinary diligence required for common carriers, it is presumed to
case for loss of consortium, unlike the Rodriguez spouse. Again, we have acted recklessly. Thus, the award of exemplary damages is
emphasize that this claim is factual in origin and must find basis not proper. Under the circumstances, we find it reasonable to award
only in the evidence presented but also in the findings of the respondents the amount of P100,000.00 as moral damages and
Respondent Court. For lack of factual basis, such claim cannot be P100,000.00 as exemplary damages. These amounts are not
ruled upon by this Court at this time. excessive.
Fourth Issue: Exemplary Damages G.R. No. 157009 March 17, 2010
SULPICIO LINES, INC., Petitioner, vs.
The claim of Lucila has been favorably considered in view DOMINGO
of the E. CURSO, LUCIA E. CURSO, MELECIO E. CURSO, SEGUNDO E. CURSO, VIRGILIO E. CURSO, DIOSD
finding of gross negligence by Respondent Court on the part of CURSO, and CECILIA E. CURSO, Respondents.
Pantranco. This is made clear by Respondent Court in granting BERSAMIN, J.:
Lucila's claim of exemplary damages:
ons and, as in this case, when the act of breach of contract itself constitutes the tort that results in physical injuries. By special rule in Article 1764 in relation to Article 2206 of the Civil Code,
Purposes:
or limited clientele, whether permanent, occasional or accidental, and done for general business purposes, any common carrier, railroad, street railway, traction railway, sub-way motor vehi
Section
passengers or freight or both, shipyard, marine railways, marine repair shop, [warehouse] 14.
wharf or Theice
dock, following are exemptedplant,
plant, ice-refrigeration from the provisions
canal, irrigation of the gas, electric lig
system,
preceding section:
(a) Warehouses;
What do you mean by public? This means individuals in general (e) Public services owned or operated by any instrumentality of the
without restriction or selection to the extent that the capacity of the National Government or by any government-owned or controlled
utility may admit of such service or use corporation, except with respect to the fixing of rates. (As amended
by Com. Act 454, RA No. 2031, and RA No. 2677 )
Public Utility - business or service which is engaged in regulating,
supplying the public with some commodity or service of public
consequence, such as transportation Requisite for operation of public utility
Entities that are exempt from the provisions of Public Service Act
CPC CPCN
―Prior or Old Operator Rule‖ under thePublic Service Act only applies as a policy of the
Requisites for the Grant of a CPC or CPCN
2. Applicant must be financially capable of undertaking the When ―Protection of Investment‖ Rule NOT Applicable:
proposed service and meeting the responsibilities incident to its
operation; If the application of the rule would be conducive to monopoly of
service, and contrary to the principle that promotes healthy competition
3. Applicant must prove that the operation of the public service [Villa Rey v. Pangasinan, 5 SCRA 234]
proposed and the authorization to do business will promote the public
interest in a proper and suitable manner Grounds for Suspension or Revocation of CPC:
What is the primordial consideration in granting franchises or 1. Sec. 16(m) – The facts and circumstances on the strength
CPC’s? PUBLIC INTEREST on which CPC was issued have been misrepresented or
materially changed
Rules in Issuing CPC
The Commission shall have power, upon proper notice and hearing in
Prior Operator Rule accordance with the rules and provisions of this Act, subject to the
limitations and exceptions mentioned and saving provisions to the
Before permitting a new operator to invade the territory of another contrary :
already established with a CPC, the prior operator must first be given
the opportunity to extend its service in order to meet the public (m) To amend, modify or revoke at any time certificate issued under
needs in the matter of transportation the provisions of this Act, whenever the facts and circumstances on
the strength of which said certificate was issued have been
Prior Applicant Rule misrepresented or materially changed.
Protection of Investment Rule (n) To suspend or revoke any certificate issued under the provisions of
this Act whenever the holder thereof has violated or willfully and
One of the purposes of the Public Service Law is to protect and contumaciously refused to comply with any order rule or regulation of
conserve investments which have already been made for that purpose the Commission or any provision of this Act: Provided, That the
by public service operators Commission, for good cause, may prior to the hearing suspend for a
period not to exceed thirty days any certificate or the exercise of any
When ―Prior Operator‖ Rule NOT Applicable: right or authority issued or granted under this Act by order of the
Commission, whenever such step shall in the judgment of the
Commission be necessary to avoid serious and irreparable damage or
1. Where public interest would better be served by the new
inconvenience to the public or to private interests.
operator [Guico v. Estate of Buan, Aug 30, 1957]
3. Art. 1765, Civil Code – The common carrier repeatedly fails
2. Where the prior operator has failed to make an offer to meet
to comply with his duty to observe extraordinary diligence as
the increase in traffic [Manila Yellow Taxicab v. Castelo,
prescribed by law
May 30, 1960]
Due Process in Revocation or Cancellation of CPC:
3. Where the CPC granted to the new operator is a maiden
CPC, which does not overlap with the entire route of the old
operator but only a short portion thereof as a convergence 1. Notice and Hearing
point [Mandbusco v. Francisco, 32 SCRA 405] 2. Formal Charge – not necessary for as long as the holder of
CPC is given his day in court [CIR v. Buan, Jul 31, 1958]
pite its efforts of improving thesame. Pasok Transportation, Inc., now applies for theissuance to it by To
the Land
fix Transportation
and determine Franchising andRegulatory
individual or joint Board
rates,of tolls,
a certificate of public conven
charges,
classifications, or schedules thereof, as well as commutation, mileage,
kilometrage, and other special rates which shall be imposed observed
and followed thereafter by any public service.
(c) To fix and determine individual or joint rates, tolls, charges, classifications, or schedu
and notice to the concerns operating in the territory affected: Provided, further, That in What requirements
case the public servicemust be metofbefore
equipment a certificate
an operator is usedofpublic
principally or secondarily for the
convenience may be granted under the PublicService Act?
SUGGESTED ANSWER:
2. The only standard which the legislature is required to b) The applicant must prove public necessity.
prescribe for the guidance of the administrative authority is
that the rate be reasonable and just. [RP v. Meralco, Nov c) The applicant must prove that the operation ofthe public service
15, 2002] proposed and the authorization to dobusiness will promote the public
interest in a proper andsuitable manner. (Sec 16a CA 146 as
3. The power to fix the rates of public utilities is a power that amended)
has been delegated to the regulatory administrative
agencies. As such it cannot be further delegated by the said d) The applicant must be financially capable ofundertaking the
administrative agencies. [KMU v. Garcia, Dec 23, 1994] proposed service and meeting theresponsibilities incident to its
operation.
4. Discrimination in the charging of rates is NOT allowed [US v.
Quinajon, Jul 30, 1915] Revocation of Certificate (1993)
Domestic Shipping Rates This is done by the arrastre operator, who will then deliver the cargo to
the customs warehouse
Acts Which are UNLAWFUL Without Approval of the Commission
[Sec. 20]
Parties in Arrastre Contract
Sec. 20[a] – To increase its rates
1. Republic of the Philippines
Sec. 20[b] – To operate new units [Ammen Transportation
2. The party awarded the privilege of operating the arrastre
v. Francisco, Nov 29, 1957]
service
Sec. 20[g] – Sell, mortgage or lease its CPC, property,
franchise or rights [Cogeo-Cubao v. CA 207 SCRA 346]
Sec. 16[n] – Suspension of CPC:
Requirement to Entitle a Common Carrier to Increase his Unit
May be done PRIOR to a hearing BUT cannot exceed 30 days
1. He must show that there is a PUBLIC NEED for it, in other
Ground – to avoid serious and irreparable damage or inconvenience
words, he must prove that:
to the public or private interests 2. He had regularly undertaken all his authorized trips
3. His vehicles were sufficiently loaded with pax
Operators of Public Services 4. Many travelers could not be conveniently accommodated
Unlawful Service (Sec. 19[a]) Effect of Sale or Lease of CPC Without Prior Approval of
Regulatory Body:
It shall be unlawful for any public service to:
1. The sale or lease is valid and binding between the parties
provide or maintain any service that is unsafe, improper, or 2. BUT it is not effective against the regulatory body concerned
inadequate, or 3. The approval is only necessary to protect the public interest
withhold or refuse any service which can reasonably be 4. The registered owner is liable for damages sustained by a
demanded and furnished 3rd person [regardless of who the actual owner is]
Johnny owns a Sarao jeepney. He asked his neighbor Van ifhe could
operate the said jeepney under Van‗s certificate ofpublic convenience.
Van agreed and, accordingly, Johnnyregistered his jeepney under Van
name. On June 10, 1990,one of the passenger jeepneys operated by
Van bumpedTomas. Tomas was injured and in due time, he filed a
complaint for damages against Van and his driver for theinjuries he
suffered. The court rendered judgment in favorof Tomas and ordered
Van and his driver, jointly andseverally, to pay Tomas actual and moral
damages,attorney‗s fees, and costs.The Sheriff levied on the jeepney
belonging to Johnny butregistered in the name of Van. Johnny filed a
3rd partyclaim with the Sheriff alleging ownership of the jeepneylevied
upon and stating that the jeepney was registered in
the name of Van merely to enable Johnny to make use ofVan‗s
certificate of public convenience. May the Sheriffproceed with the
public auction of Johnny‗s jeepney.Discuss with reasons.
SUGGESTED ANSWER:
Yes, the Sheriff may proceed with the auction sale ofJohnny‗s
jeepney. In contemplation of law as regards thepublic and third
persons, the vehicle is considered theproperty of the registered
operator (Santos v Sibug 104 S 520)
SUGGESTED ANSWER:
The law does not penalize the parties to a kabit agreement.But the
kabit system is contrary to public policy and therefore void and
No. L-64693 April 27, 1984 LITA ENTERPRISES, INC., petitioner, inexistent.(Art. 1409[1], Civil Code)
vs.
OND CIVIL CASES DIVISION, INTERMEDIATE APPELLATE COURT, NICASIO M. OCAMPO and FRANCISCA P. Kabit System; Agent of the Registered Owner (2005)
GARCIA, respondents.
Procopio purchased an Isuzu passenger jeepney fromEnteng, a holder
ESCOLIN, J.:
of a certificate of public convenience forthe operation of public utility
vehicle plying theCalamba-Los Baños route. While Procopio
nferred by the government . Abuse of this privilege by the grantees thereof cannot be countenanced.continuedoffering
The "kabit system"the
hasjeepney for public
been Identified transport
as one of the services,
root causesheofdid
the prevalence of gr
not have the registration of the vehicle transferred in hisname. Neither
did he secure for himself a certificate ofpublic convenience for its
where it finds them. Upon this premise, it was flagrant error on the part of both the trial and appellateoperation. Thus,
courts to have per thethe
accorded recordsof the Land
parties relief from Transportation Franchising
their predicament. Article 1412 of the Ci
and RegulatoryBoard, Enteng remained its registered owner and
operator.One day, while the jeepney was traveling southbound,
itcollided with a ten-wheeler truck owned by Emmanuel.
The driver of the truck admitted responsibility for theaccident,
explaining that the truck lost its brakes.Procopio sued Emmanuel for
damages, but the lattermoved to dismiss the case on the ground that
Procopio isnot the real party in interest since he is not the registered
owner of the jeepney. Resolve the motion with reasons.(3%)
SUGGESTED ANSWER:
An arrangement between:
1. the owner of a motor vehicle who holds a CPC, and Art. XII. Sec. 19.
2. the driver who uses the motor vehicle for a fixed number
of hours and pays to the owner a fixed amount and The State shall regulate or prohibit monopolies when the public interest
shoulders the gasoline used so requires.
The share of the driver in lieu of a fixed compensation is the excess of No combinations in restraint of trade or unfair competition shall be
the total amount of fares earned or collected over and above the allowed.
amount paid to the owner
SUGGESTED ANSWER:
Yellow Cab Company shall be liable with Baldo, on asolidary basis, for
the death of passenger Pietro. Baldo isan employee of Yellow Cab
under the boundary system.As such, the death of passenger Pietro is
breach ofcontract of carriage, making both the common carrierYellow
Cab and its employee, Baldo, solidarily liable.(Hernandez v. Dolor,
G.R, No. 160286, July 30, 2004)
Constitutional Provisions
Neither shall any such franchise or right be granted except under the
condition that it shall be subject to amendment, alteration, or repeal by
the Congress when the common good so requires.
tionalization
e interest of national welfare or defense, establish and operate vital industries and, upon payment of just compensation,