Commerce is the exchange of goods, productions, or property of any kind.

. It is intercourse by way of trade traffic between different peoples or states and the citizens or inhabitants thereof, including not only the purchase, sale, and exchange of commodities, but also the instrumentalities and agencies by which it is promoted and the means and appliances by which it is carried on, and transportation of persons as well as goods. (Blacks Law Dictionary) - It is that branch of human activity, the purpose of which is to bring products to the consumer by means of exchanges or operations which tend to supply and extend to him, habitually, with intent to gain, at the proper time and place and in good quality and quantity. Commercial law is a phrase used to designate the whole body of substantive jurisprudence applicable to the rights, intercourse, and relations of persons engaged in commerce, trade, or mercantile pursuits. (Blacks Law Dictionary) - It is that branch of private law which regulates the juridical relations arising from commercial Acts of commerce / Commercial Transactions are those contained in the Code of Commerce and all others of analogous character  They are governed by the (1) Code of Commerce, (2) by commercial usages observed in each place, and (3) by the rules of civil law (in that preference) Sources of Commercial laws 1. Principal a. Statute law b. Agreements c. custom and d. court decisions 2. Auxiliary a. Natural law b. Scientific law c. Foreign statutory law and judicial decisions d. Opinions of authorities Portions of the Code of Commerce still in force 1. Merchants, Books of Merchants and General Provisions on Contracts (1-63) 2. Joint Account Associations (239-243) 3. Commercial Barter (346) 4. Transfers of Non-negotiable Credits (347-348) 5. Commercial Contracts of Overland Transportations (349-379) 6. Letters of Credit (567-572) 7. Maritime Commerce (573-869) Provisions in the Code of Commerce which have been repealed by the New Civil Code 1. Sales 2. Partnership 3. Agency 4. Loan 5. Deposit and 6. Guaranty

A. MERCHANTS AND COMMERCIAL TRANSATIONS (Code of Commerce Articles 1-63)

Who are merchants? 1. Those who having capacity to engage in commerce, habitually devote themselves thereto. 2. Commercial or Industrial associations organized in accordance with the Code of Commerce. What are the Classes of Merchants? 1. Foreign Merchants 2. Filipino Merchants 3. Commercial and Industrial companies created in accordance with the Code of Commerce and by special laws  Foreign Merchants 1) Engaging in Commerce Foreigners and companies created abroad may engage in commerce in the Philippines subject to (1) the laws of their country with respect to capacity to contract and to the (2) provisions of the Code of Commerce as regards the creation of their establishment in foreign territory, mercantile operations and the jurisdiction of the courts of the Philippines (3) Corporation Code and other laws - There is a need to obtain license from the SEC - However, the Board of Investment may impose requirements other that those set by the Corporation Code (172S490) 2) Investing in the Philippines Under the Foreign Investments Act of 1991, foreigners are allowed to invest up to 100% of the capital needs of the firm However, they are still prohibited from investing in industries covered by the negative list which includes: a. Those provided in the Constitution and other Philippine laws b. Defense related industries c. Those with health and moral implications d. Those with needing capital of not more that $500,000 e. Industries in areas already adequately covered Essential Requisites to be considered a Merchant 1. Legal capacity 2. Habitually engaged in commerce  The legal presumption of habitually engaging in commerce shall exist from the time the person who intends to engage therein gives announcement, by means of circulars, newspapers, handbills, poster exhibited to the public, or by other means whatsoever of an establishment, the purpose of which is to conduct commercial transaction Persons disqualified to be merchants 1. Absolutely disqualified a. Persons serving penalty of civil interdiction b. Insolvents c. Those absolutely disqualified by special laws 2. Relatively disqualified a. judicial and prosecuting officials in active service b. administrative, economic and military chiefs c. government collection agents and custodian of funds d. stock and commercial brokers e. those who by special laws cannot trade in specified territories

Commercial Contract is an agreement between two or more merchants or non-merchants binding themselves to give to do something in commercial transactions Contracts of Correspondence is a contract entered into by correspondence like letters, telegrams, by messengers, etc. but not including those made by phone or through agents When is a mercantile contract by correspondence perfected? Under the Code of Commerce it is perfected from the moment the offeree accepts the offer, even before knowledge of said acceptance by the offeror  NOTE: However, under the Civil Code, it is only perfected from the time the offeror has knowledge of the offerors acceptance. The contract is presumed to have been entered into the place where the offer was made.  This code of commerce rule is applicable to all commercial contracts except in deposit, guaranty, sale, loan, agency, and partnership where the Civil Code rule as to the perfection is applicable Rules to be observed in respect to commercial contracts 1. Governing law Commercial contracts shall be governed by the Code of Commerce; in default of such provisions, by the commercial usages observed in each place; and in the absence of both, by the general rules of civil law 2. Formalities and exceptions - Commercial contracts shall be valid and create an obligation and cause of action in suits, whatever may be the form or in whatever language they may be executed, the class to which they correspond, and the amount involved, PROVIDED their existence is proves by some means established by the civil law EXCEPT a. Contracts which must be in form necessary for their validity as provided by the Code of Commerce or special law, or by the foreign law where it is executed, although not required by Philippine law 3. Unlawful Agreements These cannot serve as the basis of any obligation or cause of action even they involve commercial transactions 4. Contracts through correspondence Contracts through entered into through correspondence shall be perfected from the time an answer is made accepting the proposition or the conditions by which the latter may be modified. 5. Availment of indemnification clause the aggrieved party may take legal steps to demand (1) fulfillment of the contract or (2) the indemnity as provided in the contract. 6. Standard Compliance It shall be executed and complied with in good faith according to the terms in which they are drafted, without evading the honesty, proper and usual meaning of written and spoken words with arbitrary interpretations, nor limiting the effects which are naturally derived from the manner in which the contracting parties may have explained their wishes and contracted their obligations 7. Commencement date of effects of default a. In contracts in which a day is fixed for their compliance by will of the parties or by law, on the day following the one they fall due b. In contracts in which no such day is fixed, (1)from the day on which the creditor legally makes demand upon the debtor or (2) notifies him of the protest of losses and damages made against him before a justice, notary or other public official authorized to admit the same Joint Account Partnership or Joint Partnership is a business arrangement whereby two or more persons interested themselves in the business of another making contribution thereto and participating in the results of the business. -- A joint account is a transaction of merchants where other merchants agree to contribute the amount of capital agreed upon, and participating in the favorable and unfavorable results thereof in the proportion they may determine (UP law center)

It may be formed without any formality and may be privately contracted orally or in writing

Features 1. Only one ostensible member others are silent 2. No common name 3. Only the ostensible partner can sue and be sued 4. No common fund

TRANSPORTATION LAWS COMMON CARRIERS (ARTICLES 1732-1766) - are PERSONS, CORPORATION, FIRMS, or ASSOCIATIONS engaged in CARRYING or TRANSPORTING PASSENGERS or GOODS or BOTH, by LAND, WATER, or AIR for COMPENSATION OF OFFERING THEIR SERVICES TO THE PUBLIC. Extraordinary diligence is required to common carriers in transporting goods and passengers Reasons: 1. nature of the business 2. public policy Registered owner primarily and solidarily with driver under the KABIT SYSTEM. Kabit system is contrary to public policy; therefore, void and inexistent. CIRCUMSTANCES UNDER WHICH COMMON CARRIERES CANNOT BE HELD LIABLE FOR THE LOSS/DESTRUCTION OF GOODS: 1. flood, storm, earthquake, or other natural calamities 2. act of public enemy in war, either international or local act or omission of the shipper or owner of the goods 3. character of the goods or defects of the packing 4. order of competent authority Extraordinary diligence lasts from the time the cargoes are loaded in the vessel until they are discharged and delivered to the consignee. Air carriers can terminate services of pilots for serious misconduct and drunkenness because of its extraordinary diligence. INSTANCES WHICH ARE NOT CASO FORTUITO: 1. hijacking 2. acts of strangers like thieves or robbers acted with grave or violence 3. accidents due to defects of carrier 4. where tie blow-out Fire is not a natural disaster Notice of arrival of goods amounts to constructive delivery Shipper bound to observe all diligence in obtaining delivery of goods

Common Carriers may be exempted from responsibility PROVIDED that natural disaster is the proximate and only cause of the loss. STIPULATIONS LIMITING LIABILITY IS VALID PROVIDED THAT: 1. the stipulation be in writing signed by both parties 2. the stipulation be supported by a valuable consideration other than the service rendered by common carrier 3. the stipulation be reasonable, just and not contrary to public policy

SOME VALID STIPULATIONS LIMITING CARRIER'S LIABILITY: 1. account as strikes or riot 2. value of the goods appearing in bill of lading UNLESS shipper declares a greater value 3. contract fixing the sum that may be recovered VOID STIPULATIONS LIMITING CARRIER'S LIABILITY: 1. the goods are transported at the risk of the shipper 2. that the shipper is not liable for any loss or destruction of the goods 3. that the common carrier need not observed any diligence and less than that of good father of a family 4. that the common carrier shall not be responsible for any acts of its employee The law of the country to which the goods are to be transported shall govern the liability of common carrier for their loss, destruction, or deterioration. The act of the thief or robbers who entered the common carrier's vehicle is not deemed force majeure UNLESS it is done with the use of arms or through irresistible force. A common carrier is bound to carry the passengers safely as far as human care and foresight can provide using the utmost diligence of a very cautious person with a regard of circumstances. In case of death or injuries to passengers, common carriers are presumed to be at fault UNLESS proved that they observe extra ordinary diligence.

LAST CLEAR CHANCE - this principle applies only in a suit between owners and drivers of two colliding vehicles. This is not applicable to Contract of Carriage. Carrier not ordinarily liable for injuries to passengers due to fires, and explosions caused by articles brought into conveyance by other passengers. Ticket is a complete written contract by and between the shipper and passenger for it contains: 1. consent of the contracting parties 2 cause or consideration which is the fare paid by the passengers 3. object which is the transportation of the passenger from the place of departure to the place of destination.

Reduction of fare does not justify any limitation of the common carrier's liability. Passenger bound notwithstanding his failure to sign plane ticket containing stipulation limiting liability known as contract of adhesion. The extraordinary diligence required for carriage of passengers cannot be dispensed with: 1. by stipulation 2. by posting of notices 3. by statement of tickets 4. otherwise however as an exception, parties may stipulate limiting carrier's liability where the passenger is carried gratuitously Common Carrier is liable for damages for defects of its equipment. Common Carrier is liable for the misconduct of its employees done in their own interest. Reason: the servant is clothed with the delegated authority and charged with duty by the carrier to execute his undertakings to carry the passenger safely. Carrier exempt from acts of employees not done in line of duty. The passenger must observe the diligence of a good father of a family or ordinary diligence to avoid injury to himself. EFFECTS OF NEGLIGENCE- where the proximate cause of the death/ injury to the passenger is his own negligence, common carrier is exempted from liability. EFFECT OF PASSENGER'S CONTRIBUTORY NEGLIGENCE- passenger's contributory negligence does not justify carrier's exemption from liability. However, the damages will be equitably reduced. A common carrier is responsible for injuries suffered by a passenger on account of the lawful acts/negligence of other passengers or of strangers provided that the employees could have prevented the act or omission through the exercise of a good father of a family. Degree of diligence required of carriers employees- merely that of the good father of a family or ordinary diligence. Liability of air carrier under Warsaw Convention of October 12,1929, article 17, the carrier shall be liable for damages sustained in the event of death or injury of a passenger if accident took place on board the aircraft or in the course of embarking or disembarking. Article 18(1), the carrier shall be liable for damages sustained in the event of destruction or loss of or of damage to any checked baggage or any goods in the course of transportation. (2), the transportation of air shall comprise the period during which the baggage or goods are in the charge of the carrier whether an airport or on board an aircraft or in case of landing outside an airport. (3), the period of transportation by air shall not extend to any transportation by land, sea, or river outside an airport. Article 19, the carrier shall be liable for damages passengers, baggage, or goods. occasioned by delay in transportation by air of

DAMAGES RECOVERABLE WHEN DEATH OCCURS DUE TO COMMISSION OF A CRIME:

1. 2. 3. 4. 5. 6.

indemnity for death of a victim indemnity for loss of earning moral damages exemplary damages attorney's fees and expenses of litigation, interest and properties

FACTORS TO BE CONSIDERED IN AWARDING DAMAGES ARISING FROM DEATH: 1. number of years on the basis of which the damages shall be computed 2. rate at which the losses sustained should be fixed For fixed indemnity for death, there is no need to interrogate witness. Common carrier not liable for moral damages to passenger s injured due to negligence of driver. Carrier is liable when it issues to passenger a confirmed ticket for a particular ticket if he is not put in that flight. Carrier liable only for damages that are natural and probable consequence and breach of contract which includes medical, hospital and other expenses. ITEMS INCLUDED IN ACTUAL DAMAGES: 1. income to be earned upon completion of studies 2. the sum being carried by deceased passenger which was lost 3. amount spend to her funeral 4. attorney's fees and court expenses 5. loss of the merchandise carried by the deceased 6. loss of baggage containing medicine, boxes, and suitcases of personal belongings EXCEPTIONS TO RULE THAT CARRIER NOT LIABLE FOR MORAL DAMAGES IN BREACH OF CONTRACT: 1. where the mishap results in the death of passenger 2. where it is proved that the carrier is guilty of fraud or bad faith even if death does not result 3. where the passenger suffers social humiliation, wounded feelings, anxiety and mental anguish Surviving passenger is not entitled to moral damages. Mere carelessness of the carrier does not per se constitute an inference of malice or bad faith on its part. Carrier subsidiary liable for moral damages in actions ex delicto. Exemplary damages cannot be recovered as a matter of right. Nominal and exemplary damages awarded for willful breach of contract committed through agent or employee. Carrier incurring only delay not liable for moral and exemplary damages but only to the limited amount printed in the plane ticket. Exemplary damages is allowable under Kabit System.

Common Carrier in Nominal Damages for failure of carrier to bring passenger to his destination but mere violation of a Contract of Carriage does not warrant recovery for moral damages. In case of breach of the carrier's contractual obligation to carry his passenger safely to their destination, the carrier is solidarily liable for his driver's negligence. Exercise of due diligence in selecting driver is not a defense. Preponderance of evidence sufficient to prove civil liability arising from negligence.

OVER LAND TRASPORTATION (arts. 349379, Code of Commerce) Effect of Civil Code on the provisions of the Code of Commerce on Overland Transportation The NCC does not expressly repeal the provisions of the Code of Commerce on overland transportation. Instead, it makes such provision suppletory to the provisions of the NCC on common carriers Bill of Lading, Defined Written acknowledgement of receipt of goods and agreement to transport them to a specific place to a person named or to his order or bearer.  Ambiguity is construed against the carrier, the contract being one of adhesion.  Not essential to contract. Kinds of Bills of Lading They are: (1). Negotiable bill of Lading one in which it is stated that the goods referred to therein will be delivered to the bearer, or to the order of any person named in such document. (2). NonNegotiable bill of Lading the goods referred to therein will be delivered to a specified person. (3). Clean bill of Lading One which does not indicate any defect in the goods (4). Foul bill of Lading Contains a notation indicating that the goods are in bad Condition. (5). Spent bill of Lading Covers goods that have already been delivered by the carrier without a surrender of a signed copy of the Lading. (6). Through bill of Lading Issued by a carrier who is obliged to use the facilities of other carriers. (7). On Board bill of lading one in which it is stated that the goods have been received on board the vessel which is to carry the goods. (8). Received for Shipment bill of lading it is stated that the goods have been received for shipment with or without specifying the vessel by which the goods are to be shipped. (9). Custody bill of Lading issued by the carrier to the whom the goods have been delivered for shipment but the vessel indicated in the bill of leading which is to carry the goods has not yet reached the port where the goods are held for shipment. (10). Port bill of Lading one which is issued by the carrier to whom the goods have been delivered, and the vessel to carry the goods is already in the port where the goods are held for shipment. ThreeFold nature of bills of Lading (1). A contract in itself and the parties are bound by its terms; (2). A receipt; and

(3). A symbol of the covered by it  They are also documents of title, and if negotiable in form they can constitute negotiable documents of title. Legal effect of the Issuance of Bill of Lading Bill of leading constitute the legal evidence of the contract between the shipper and the carrier by the contents of which the disputes which may arise regarding their execution and performance shall be decided, no exception being admissible other than those of falsity and material error in the drafting. Effect of absence of a bill of lading It does not preclude liability on a contract of transportation. The disputes shall be determines by the legal proofs which the parties may present in support of their respective claims, according to the general provisions established in the Code for commercial contracts. When responsibility of carrier begins The responsibility of carrier commences from the moment he receives the merchandise. The Delivery to him must be made either to him personally, or through his duly authorized agent.

Right to refuse packages Gen. Rule: a common carrier cannot ordinarily refuse to carry a particular class of gods to the prejudice of the traffic in those goods. Exception: However, under Art. 365, carrier are authorized to refuse packages if they are unfit for transportation. Time for delivery of goods Where no period fixed The carrier shall be bound to forward them in the first shipment of the same or similar goods, which he makes to the points where he must deliver them. Should he not do so, the damages caused by the delay shall be for his account. Where for delivery of goods The carrier must deliver the goods within the time fixed. For failure to do so, the carriers shall pay the indemnity stipulated in the bill of lading. Also, damages shall be paid if the carrier refuses to pay the stipulated indemnity or is quality of fraud in the fulfillment of his obligation. Limitation as to carriers liability (1). No Liability The carrier will not be liable at all for the negligent acts of its crew and employees. This is NULL and VOID for being contrary to public policy (2). Limited Liability Regardless of the value of the cargo, the maximum liability of the carrier will be, for example, P500. This id VOID for being contrary to public policy. (3). Qualified Liability A stipulation in the bill of lading limiting the liability of the carrier to a valuation unless the shipper declares a higher value and pays a higher rate of freight is valid.  However, the carrier cannot limit its liability for injury to, or loss of, good shipped where such injury or lose was caused by its own negligences. Recovery of Damages from carriers for carriage of goods: (1) Inter-island if gods arrived in damaged condition: y If damage is apparent, the shipper must file a claim immediately. y If damage is Not apparent he should file a claim within 24 hours from delivery.  The filing of claim is a condition precedent for recovery.  If the claim is filed, but the carrier refuses to pay: Enforce carriers liability in court by filing a case: y Within 6 years, if no bill of lading has been issued, or

y Within 10 years, if a bill lading has been issued. (2) Overseas Where goods arrived in a damaged condition from a foreign port to a Philippines Port of Entry: y Upon discharge of goods, if the damage is apparent claim should be filed immediately; y If damage is not apparent, claim should be filed within 3 days from delivery. When may a consignee of goods abandon the goods and recover the value thereof from the carrier? In any of the following cases: (1) Under Art. 363, in case of partial non-delivery, where the consignee proves that he cannot make use of the goods capable of delivery independently of those not delivered. (2) Under Art. 365, where the goods are rendered useless for sale and consumption for the purpose for which they are properly destined; or (3) Under Art. 371, where there is delay through the fault of the carrier. Two special sanctions for the enforcement by the carrier of the payment of expenses and transportation charges. They Are: (1). Under Art. 374, judicial sale of the goods transported; and (2). Under Art. 375, by creating a lien in favor of the carrier on the goods transported. Exemption from liability of the common carrier A common carrier may be freed from liability for loss or damage if it proves any of the following: (a) Natural disaster (b) Act of the Public enemy in war Act or omission of the shipper (d) Defect in the packing and character of the goods (e) Order of competent public authority

MARITIME COMMERCE I. VESSELS (in general) -extends to everything floating in and on the water, built in the form of vessel and used for navigation regardless of form, right or motive power.

MERCHANT VESSELS- engaged in the transportation of passengers and freight from one port to another or from one place to another. *Are vessels real or personal property? PERSONAL- but they partake to a certain extent, of the nature and conditions of real property, on account of their value and importance of the world of commerce. CHARACTERISTICS OF MARITIME TRANSACTIONS: 1. Real- similar to transactions over real property with respects too effectively against third persons, which is done through registration. The evidence of real nature is shown by (1) the limitation of the liability of the agents to the actual value of the vessel and the freight money and (2) the right to retain the cargo and embargo and detention of the vessel. 2. Hypothecary- the liability of the owner of the value of the vessel is limited to the vessel itself. 3. Preference of credits- Mortgage of a vessel properly registered becomes of preferred mortgage lien which shall have priority over all claims against the vessel in an extrajudicial foreclosure for: a. credit in favor of the public treasury

b. c. d. e. f. g. h. i. j.

judicial cost of the proceedings; pilotage and tonnage charges and other sea and port changes; salaries of depositories and keepers of the vessel captain and crew's wages; general average salvage including contract salvage; maritime liens arising prior in time to the recording of the preferred mortgage; damages arising out of tort; and Preferred mortgage registered prior in time.

DOCTRINE OF LIMITED LIABILITY: General Rule: The liability of ship owners is limited to the amount of interest in said vessel such that where vessel is entirely lost, the obligation is extinguished. The interest extends to (1) the vessel itself, (2) equipment, (30 freightage and (4) insurance proceeds. Exceptions: 1. claims under Workmen's Compensation 2. injury or damage due to ship owners fault 3. the vessel is insured 4. expenses for repair on vessel before loss; 5. the vessel is not abandoned PHILIPPINE COAST GUARD (PCG) -vested with exclusive authority over the registration and documentation of Philippine vessels, issuance of all certificates, licenses or documents, necessary or incident to registration. VESSELS REQUIRED TO BE REGISTERED: 1. All vessels used in Philippine water. 2. Vessels of 3 tons gross shall not be registered UNLESS the owner shall so desire. 3. All undocumented vessels. Where Registration to be effected? - at its home port (when a coast guard district or station is on the same port); if none, at the nearest COAST GUARD DISTRICT OR STATION). OPTIONS AS TO SMALL BOATS: 1.) If vessel is of domestic ownership and 15 tons gross or less certificate of Philippine registry is optional. Purpose: declare nationality of a vessel 2.) Vessel (5 tons gross or less) & no certificate of Philippine registry certificate of ownership is optional. Privileges: right to engage in Phil. Coastwise trade and protection of the authorities and the flag is also subject to the same privileges. 3.) Vessel (3 tons gross or less) not be registered unless the owner shall so desire. PURPOSE OF REGISTRATION: - Purchaser's rights maybe maintained against a claim filed by the THIRD PERSON. *Who shall be entitled to the freightage and who shall be obliged to pay the crew and other persons who make up the compliment of the vessel? A: It depends upon the time of the sale. If made while it is on a voyage, freightage shall pertain entirely to PURCHASER and payment of the crew and other persons who make up its compliment for same voyage shall be for his account.

If made after the vessel has arrived at the port of its destination, freightage shall pertain to the VENDOR and other individuals who make up its complement shall be for his account, UNLESS the contrary is stipulated in either case. FORMALITIES FOR VOLUNTARY SALE ABROAD: 1. Execution of the bill of sale before consul of the Philippines at the port where it terminates its voyage. 2. Inscription in the registry of the consulate 3. Forwarding by the consul of a true copy of the instrument of purchase and sale to the registry of vessel. 4. Statement whether the vendor receives its price in whole or in part. FORMALITIES FOR SALE WHEN VESSEL RENDERED USELESS: 1. application for examination 2. notification of the consignee/ insurer 3. proof of damage and impossibility of the repair of the vessel 4. order for the sale of vessel at public auction RULES FOR THE SALE OF VESSEL AT PUBLIC AUCTION: 1. articles of the vessel shall be appraised after making an inventory 2. posting of the order of the auction 3. announcement 4. auction shall be held on the day fixed 5. Observance of special provisions, governing the sale of the vessel while it is on the foreign country. 2 METHODS OF SALE: 1. judicial 2. voluntary

EFFECT OF REGISTRATION OF JUDICIAL SALE - extinguish all other liabilities of the vessel *Effect of Registration of Voluntary Sale - if it take place while the vessels is on a voyage, the preferred & hypotyhecary nature of the credit subsists against the vessel until after its return to the port of registry and 3 months after the inscription of the sale in the registry of vessels or after the return, so as to prevent the possibility of fraud upon creditors through voluntary sale. PARTICIPANTS IN MARITIME COMMERCE: a. shipowners and ship agents b. captains and masters of the vessel c. officers and crew of the vessel c.1 sailing (1st mate) c.2 quartermaster (2nd mate) c.3 engineer d. seamen e. supercargoes A. SHIPOWNERS AND SHIP AGENTS Ship owner- person who has possession control in management of the vessel and the consequent right to direct her navigation and receive freight earned and paid, while his possession continues. Ship agent-person entrusted with provisioning and representing the vessel in the port in which it may be found; also includes the ship owner

LIABILITY OF SHIPOWNER AND SHIPAGENT: 1. for the acts of the captain 2. contracts entered into by the captain to repair, equip, and provision the vessel PROVIDED that the amount claimed was invested for the benefit of the vessel 3. Indemnities in favor of third person that may arise from the conduct of the captain in the care of goods and safety of passengers transported. 4. Tort or quasi-delict committed by captain EXCEPT collision with another vessel. 5. Damages in case of collision due to the fault, negligence or want of skill of captain, sailing mate or by other member of the complement. SHIPAGENT'S AND OWNERS LIABILITY LIMITED: - By abandoning the vessel with all her equipment and the freight it may have earned during the voyage(by NECESSARY IMPLICATION); limited to the value of the vessel or its insurance in view of the so-called REAL AND HYPOTHECARY nature of maritime law. - Effect: cessation of the responsibility of the owner POWER AND FUNCTIONS AND LIABILITIES OF SHIP AGENT: 1. capacity to trade; 2. discharge duties of the captain in case of the latter's absence; 3. contract in the name of the owners with respect to repairs, details of equipment, armament, and all that relate to the requirements of navigation; 4. order of new voyage and make a new charter or insure the vessel after obtaining authorization from the ship owners. DUTY OF SHIPAGENT TO DISCHARGE THE CAPTAIN AND MEMBERS OF THE CREW: - If the seamen contract is not for a definite period or voyage, he mat discharge them at his discretion - If for a definite period, he may not discharge them until after the fulfillment of their contracts EXCEPT on the ff. Grounds: a. insubordination in serious matters b. robbery c. theft d. habitual drunkenness e. damage caused to the vessel or to its cargo through malice, manifest or proven negligence

EFFECT/LOSS/DESTRUCTION OF VESSEL: 1. extinguishes liability arising from the conduct of the captain in the vigilance of the goods and for the safety of the passengers and for any liability arising from negligent acts of the captain 2. extinguishes liability for the wages for the captain and the crew and for advances made by the ship agent if the vessel is lost by shipwreck or capture 3. liability for collision B. CAPTAINS AND MASTERS OF THE VESSEL Captain- who govern vessels that navigate the high seas or ships of large dimensions and importance, although engaged in the coastwise trade Masters- who command smaller ships engaged exclusively in the coastwise trade NATURE OF POSITION: 1. General agent of the ship owner 2. Technical Director of the vessel 3. Representative of the Government of the country under whose flag he navigates

QUALIFICATIONS: 1. Filipino citizen 2. Legal capacity to contract 3. Must have passed the required physical, mental examination required for licensing him as such INHERENT POWERS OF THE CAPTAIN: 1. appoint crew in the absence of ship agent 2. command and direct crew 3. impose correctional punishment on those who while on board vessel fail to comply with his orders or are wanting in discipline 4. make contracts for the charter of vessel in the absence of ship agent 5. supply, equip, and provision the vessel 6. order repair of vessel to enable it to continue its voyage SOURCES OF FUNDS TO COMPLY WITH THE INHERENT POWERS OF THE CAPTAIN: 1. from the consignee of the vessel 2. from the consignee of the cargo 3. by drawing on the ship agent 4. by a loan on bottomry 5. by sale of part of the cargo DUTIES OF THE CAPTAIN: 1. bring on board the proper certificate and document and a copy of the Code of Commerce 2. keep a logbook, accounting book and freight book 3. examine before the voyage 4. stay on board during the loading and unloading of the cargo 5. be on deck while leaving or entering the port 6. seeks protest, arrival under stress and in case of shipwreck 7. follow instruction of and render accounting to the ship agent 8. save the vessel lost in case of wreck 9. hold in custody properties left by deceased by passengers and crew members 10. comply with the requirements of customs, health, etc. at the port of arrival LIABILITIES OF THE SHIPAGENT/SHIPOWNER FOR ACTS DONE BY THE CAPTAIN TOWARDS PASSENGERS AND CARGOES MAKING THEM SOLIDARILY LIABLE TO THE LATTER: 1. damages to vessel and to cargo due to lack of skill and negligence 2. theft and robbery of the crew 3. losses and fines in violation of laws 4. damages due to mutinies 5. damages due to misuse of power 6. deviations 7. arrival under stress 8. damages due to non-observance of marine regulations NO LIABILTY FOR THE FOLLOWING: 1. damages caused to the vessel by force majeure 2. obligations contracted for the repair, equipment and provisioning of the vessel UNLESS he has expressly bound himself personally or has signed a bill of exchange or promissory note in his name CARGO- which includes all goods, wares and merchandise aboard a ship which do not from part of the ship's stores. REQUIREMENTS FOR DEFENSE OF PUBLIC ENEMY:

1. act of public enemy in war was the proximate and only cause of the loss 2. common carrier exercise due diligence to prevent, minimize loss before, during, and after occurrence of the act of the public enemy in war FORMALITIES REQUIRED WHERE VESSEL HAS GONE THROUGH HURRICANE 1. Captain must make a protest before competent authority at the first port he touches 2. Such a protest must be made within 24 hours following his arrival 3. captain must ratify it within some period when he arrives at his destination 4. he must immediately proceed with the proof of the facts FORMALITIES REQUIRED WHERE VESSEL SHIPWRECKED: 1. captain must make a protest before the nearest competent authority 2. protest be made within 24 hours following his arrival 3. make sworn statement of the facts 4. authority/consul abroad shall verify said facts 5. such authority shall take other steps in carrying at the facts 6. such authority shall also make statements of what may be the result of the proceeding in the logbook and in that of the sailing mate 7. he shall deliver the original records to the captain 8. captain must ratify the protest C. OFFICERS AND CREW 1. Sailing mate/First mate - second chief of the vessel who takes the place of the captain in case of absence, sickness, or death and shall assume all of his duties, powers, and responsibilities DUTIES: 1. provide himself with maps, and charts with astronomical tables necessary for the discharge of his duties 2. keep the Binnacle book 3. Change the course of the voyage on consultation with captain and the officers of the boat, following the decision of the captain in case of disagreements. 4. Responsible for all the damages caused to the vessel or to the cargo by reason of his negligence 2. Second mate - takes command of the vessel in case of the inability or disqualification of the captain and the sailing mate, assuming in such case their powers and responsibilities and duties DUTIES: 1. preserve the hull and rigging of the vessel 2. arrange well the cargo 3. discipline the crew 4. assign work to crew members 5. Inventory the rigging and equipment of the vessel, if laid up. 3. Engineers - Officers of the vessel but have no authority EXCEPT in matters to motor apparatus. When 2 or more are hired, one of them should be the Chief Engineer DUTIES: 1. in charge of motor apparatus, spare parts, and other instruments pertaining to the engines 2. keep the engines and boilers in good condition

3. 4. 5. 6.

not to change or repair the engine without authority of the captain inform the captain of any damage to the motor apparatus keep an Engine book supervise all personnel maintaining the engine

4. Members of the Crew - hired by the ship agent. Where he is present and in his absence, the captain hires them preferring Filipinos, and in their absence, he ,ay take in foreigners but not exceeding 1/5 of the crew. CLASSES OF SEAMAN'S CONTRACT: 1. by the voyage 2. by the month 3. by share of profits or freightage JUST CAUSES FOR THE DISCHARGE OF SEAMAN WHILE CONTRACT SUBSISTS: 1. perpetration of a crime 2. repeated insubordination, want of discipline 3. repeated incapacity and negligence 4. habitual drunkenness 5. physical incapacity 6. desertion CAUSES OF REVOCATION OF VOYAGE: 1. war 2. blockade 3. prohibition to receive cargo at destination 4. embargo 5. inability of the vessel to navigate RULES IN CASE OF DEATH OF A SEAMAN: - The seaman's heirs are entitled to the payment as follows: 1. if death is natural: a. compensation up to time of death if engaged on voyage b. if by voyage- half of amount if death occurs on voyage out; and full if on voyage in c. if by shares- none if before departure; full if after departure 2. if death is due to defense of vessel- full payment 3. if captured in defense of vessel- full payment 4. if captured due to carelessness- wages up to the date of the capture NO LIABILY UNDER THE FOLLOWING CIRCUMSTANCES: 1. If before beginning voyage, captain attempts to change it or a naval war with the power to which was destined occurs 2. If a disease breaks out and be officially declared an epidemic in the port of destination 3. If the vessel change owner or captain

COMPLEMENT OF THE VESSEL - All persons on board, from the captain to the cabin boy, necessary for the management, maneuvers, and service, thus including the crew, the sailing mates, engineers, stalkers and other employees on board not having specific designations - It does not include the passengers or the person whom the vessel is transported

FORMALITIES REQUIRED FOR SEAMAN'S AGREEMENT: 1. reduced to writing in Accounting Book 2. signed by parties 3. visaed by marine authority if executed in Philippine territory/consul or consular agents if executed abroad 4. read to the seaman concerned and such fact must be stated in the agreement Interdiction of Commerce - a governmental prohibition of commercial intercourse intended to bring about an entire cessation for the time being of all trade Embargo - a proclamation or order of the State usually issued in time of war/ threatened hostilities prohibiting the departure ships/ goods from some or all the ports of such State until further order Blockade - a sort of circumvallation of place by all foreign connections and correspondence is as far as human power can affect it to be cut-off D. SUPERCARGOES - person who discharge administrative duties assigned to him by ship agent or shippers, keeping an account and record of transaction as required in the accounting book of the captain

CHARTER PARTY - contract by virtue of which the owner or agent binds himself to transport merchandise or persons of a fixed price

CLASSES OF CHARTER PARTY 1. As to extent of vessel hired a. total- whole of the vessel is chartered b. partial- only part of the vessel is chartered 2. As to time a. until a fixed day/ for a determined number of days and months b. for a voyage(outgoing/return/roundtrip) 3. As to freightage a. for a fixed amount for the whole cargo b. for a fixed amount per ton c. for an amount per month FORMAILITIES REQUIRED FOR A CHARTER PARTY: 1. in writing 2. drawn in duplicate 3. signed by the parties 4. contain stipulation y not all requisites are essential for the validity of charter party Primage - belongs to owner/ freighters;

increase of the freight rate considered gratuity to master if is stipulated

Demurrage - sum which is fixed by the contract of carriage, or which is allowed, as remuneration to the owner of a ship for the detention of his vessel beyond the number of days allowed by the charter party for loading/unloading/sailing. "Lay days" - days allowed to charter parties for loading and unlading "Extra Lay Days" - days which followed after lay days have elapsed GOODS TRANSFERRED MAY BE: 1. sold by captain to necessary repairs 2. jettisoned for the common safety 3. loss by reason of shipwreck/stranding 4. seized by pirates/enemies 5. suffer deterioration/diminutions 6. increase by natural cause and weight or size

RIGHTS AND OBLIGATIONS OF CHARTER PARTY: A. Of the ship owner or ship agent 1. If the vessel chartered wholly not to accept cargo from others 2. To observe represented capacity 3. To unload cargo clandestinely placed 4. To substitute another vessel if load is less than 3/5 of capacity 5. To leave the port if the charter does not bring the cargo within the lay days and extra lay days allowed. 6. To place in a vessel in a good condition to navigate 7. To bring cargo to nearest neutral port in case of war or blockade B. Of the charterer 1. to pay the agreed charter price 2. to pay freightage or unboarded cargoes 3. to pay losses to others for loading uncontracted cargo and illicit cargo 4. to wait if the vessel needs repair 5. to pay expenses for deviation

RESCISSION OF CHARTER PARTY A. At charterer's request 1. by abandoning the charter and paying half of the freightage 2. error in tonnage or flag 3. failure to place the vessel at the charterer's disposal 4. return of the vessel due to pirates, enemies or bad weather 5. arrival at the port for repairs B. At ship owners request 1. If the extra lay days terminate without cargo being placed alongside the vessel

2. Sale by the owner of the vessel before loading C. Fortuitous causes 1. war 2. blockade 3. prohibition to receive cargo 4. embargo 5. inability of the vessel to navigate Loan on Bottomry - loan made by ship owner or ship agent guaranteed by vessel itself and repayable upon arrival of vessel at destination

Loan on Respondentia - loan , taken on security of the cargo laden on the vessel, and repayable upon safe arrival of cargo at safe designation

COMMON ELEMENTS OF LOANS ON BOTTOMRY AND RESPONDENTIA 1. exposure of security or marine peril 2. obligation of the debtor conditioned only upon safe arrival of security at the point of destination EXCEPTIONS TO THE HYPOTHECARY NATURE OF BOTTOMRY AND RESPONDENTIS: 1. loss due to inherent defect 2. loss due to the barratry on the part of the captain 3. loss due to the fault or malice of the borrower 4. that the vessel is engaged in contraband 5. that the cargo loaded on the vessel be different from that agreed upon ACCIDENTS IN MARITIME COMMERCE: 1. AVERAGES 2. ARRIVAL UNDER STRESS 3. COLLISION 4. SHIPWRECK I. Averages an extraordinary or accidental expense incurred during the voyage in order to preserve the cargo, vessel or both and all damages or deterioration suffered by the vessel from departure to the port of destination and to the cargo from the port of loading to the port of consignment

CLASSES: 1. Particular/Simple - damage / expenses caused to the vessel or cargo that did not inured to the common benefit and borne by respective owner - the owner of the goods which give rise to expense or suffer damage shall bear this average 2. Gross/ General - damage/ expenses deliberately caused in order to save the vessel, its cargo or both from real or known risk -REQUISITES: a. common danger

b. deliberate sacrifice c. success d. proper formalities and legal steps ORDER OF GOODS TO BE CAST OVERBOARD IN CASE OF JETTISON: 1. those which are on the deck, preferring the heaviest one with the least utility of value 2. those which are below the upper deck beginning with the one with greatest weight and smallest value

II. Arrival Under stress - arrival of a vessel at a port of destination on account of lack of provision, well-founded fear of seizure, pirates, or accidents in sea disabling navigation - when unlawful: 1. lack of provisions due to negligence to carry according to usage and customs 2. risk of enemies not well-known or manifest 3. defect due to improper repair 4. malice, negligence, lack of foresight, lack of skill III. COLLISION - impact of two vessels both of which are moving ALLISION - impact between a moving vessel and stationary one ZONES OF TIME IN COLLISION OF VESSELS: 1. First zone- all time up to the moment when risk of collision begins 2. Second Zone- time between moment when risk of collision begins and moment it becomes a practical certainty 3. Third Zone- time when collision is certain and time of impact CASES COVERED BY COLLISION AND ALLISION: 1. one vessel at fault- such vessel is liable for damage caused to innocent vessel as well as damages suffered by owners of cargo of both vessels 2. both vessels at fault- each vessel must bear its own loss but the shippers of both vessel may go against the ship owner who will be solidarily liable 3. vessel at fault not known- same as rule 2 4. third vessel at fault- same rule 1 5. fortuitous event- no liability, each bear its own loss IV. SHIPWRECK - loss of the vessel at sea as a consequence of its grounding or running against an object in sea or on the coast - if the wreck was due to malice, negligence or lack of skill of the captain, the owner of the vessel may demand indemnity from said captain.

CONVENTION FOR THE UNIFICATION OF CERTAIN RULES RELATING TO INTERNATIONAL CARRIAGE BY AIR, SIGNED AT WARSAW ON OCT. 12 1929 (WARSAW CONVENTION) I) Scope

This Convention applies to all international carriage of persons, luggage, or goods performed by aircraft for reward. It applies equally to gratuitous carriage by aircraft performed by an air transport undertaking. >This also applies to carriage performed by the State or by legally constituted public bodies provided it complies with the condition of the above stated. >This does not apply however to carriage performed under the terms of any international postal convention. International carriage: means any carriage in which according to the contract made by the parties, the place of departure and the place of destination, whether or not situated either within he territories of two High Contracting parties, or within the territory of a single High Contracting party, if there in agreed stopping place within the territory subject to the to the laws of the state. >A carriage without such agreed stopping place between territories subject to he law of the contracting parties is not deemed to be international for the purposes of this act. A carriage to be performed by several successive air carriers is deemed, for the purpose of this act to be one undivided 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 of a series of contract. II) Documents of carriage

A) Passenger ticket For the carriage of passenger the carrier must deliver a passenger ticket which shall include the place and date of issue, destination and date of departure, agreed stopping place, and the liability or the carrier under international law. >The absence, irregularity, or loss of the passenger ticket does not affect the existence and the validity of the contract. >Should the carrier accept passenger without ticket, the carrier cannot avail of the provision of this Convention to exclude or limit his liability. B) Luggage ticket For the carriage of luggage, other than small personal objects of which the passenger takes charge himself, the carrier must issue a luggage ticket. which shall be in duplicate, one part for the passenger and the other for the carrier. >The absence, irregularity, or loss of the luggage ticket does not affect the validity of the contract unless in case the carrier did not deliver a ticket, or the ticket did not contain the statement of the number and weight of the luggage and the statement that the carriage is subject to the rules relating to liability established by this convention, the carrier cannot avail of the provision of the convention limiting his liability. C) Air consignment note Every carrier of goods has the right to require the consignor to make out and deliver to him an Air consignment note And every consignor has the right to require the carrier to accept this document.

>The absence or irregularity or loss of this note shall not affect the validity and existence of the contract. Provided that if the carrier accepts goods without the air consignment note or the particulars such as the place of destination, name and address of the consignee, apparent condition of the goods quantity and volume of the goods, the carrier cannot avail of the provision limiting his liability in case of a loss or damage top the goods. > The air consignment note is prima pacie evidence of the conclusion of the contract, of the receipt of the goods and of the condition of carriage. D) Rights of the consignor 1) Consignor is responsible for the correctness of the particulars of the goods 2) Liable for damage suffered by the carrier or any other person by reason of the irregularity, incorrectness, or incompleteness of the said particulars and statements. 3) Right of stoppage or to withdraw the goods at the aerodrome of departure or destination or to be delivered to other person other than the consignee. >If it is impossible to carry out the orders of the consignor the carrier must inform him of such impossibility. > If it involves the disposition of the goods the carrier must demand the consignment note, otherwise the carrier is liable to the consignee or to anyone in possession of the goods in case of damage to the goods. >The right of the consignor ceases at the moment the consignee received the goods. E) 1) 2) 3) 4) Right of the consignee To deliver to him the goods upon arrival at the place of the destination. To deliver to him the consignment note To be given notice of the arrival of the goods. Right to enforce liability against the carrier in case of loss.

F) Liability of the carrier 1) Liable for damage in the event of death or wounding of passenger or any other bodily injury if the injury or damage take place on board or in the course of the operation of embarking or disembarking. 2) To damages if the goods were damaged during the carriage by air. >The period of carriage does not extend to carriage by land or by sea except if the carriage by land is for the purpose of loading, delivery, transshipment, any damage is presumed to have been the result of an event which took place during the carriage by air. 3) Liable for damage in case of delay in the carriage of the goods or luggage. F) Carrier is not liable. 1) If the carrier act with necessary measure to avoid the damage 2) If the carrier proves that the damage loss was due to negligence in the handling of the aircraft or pilotage. 3) May be exonerated wholly or partially if carrier proves contributory negligence on the part of the injured person.  The carrier cannot avail of the provision of this convention in limiting or excluding him from any liability if the damage was caused by the willful misconduct on his part.  Carrier is not entitled to the provision limiting his liability if the damage was caused by the agent of the carrier acting within the scope of his employment. G) 1) 2) 3) Venue of action. RTC where the business of the carrier is located RTC of the place where the contract was made Court of the place of destination

4) Court of the place of departure 5) Court where the place has stopped over H) Presciption of action. Within two (2) years from the date of arrival at the destination, or from the time the aircraft ought to have arrived, or from the time the carrier was stopped.

MCQS 1. In cases of maritime collision, may the doctrine of last clear chance be invoked? a. Yes, it is available in order to exonerate the vessel from liability to the other vessel involved in the collision, as well as to the owners of the cargoes carried by both vessels b. Yes, it is available in order to exonerate the vessel from liability to the other vessel involved in the collision, but not as to the liability to the owners of the cargoes carried by both vessels c. Yes, it is available in order to exonerate the vessel from liability to the other vessel involved in the collision and to the goods carried by the other vessel, but not as to the liability to the owners of the cargoes carried by vessel claiming the applicability of the doctrine of last clear chance d. No, it is not available in cases of maritime collision 2. The following are available defenses of common carriers in cases of extra-contractual suits, except: a. Observance of due diligence in the rendition of the contract of carriage b. The damage/loss/injury/death was caused by a fortuitous event c. Due diligence in the selection and supervision of employees d. The damage/loss/injury/death was caused solely by the shipper/passenger 3. When is the doctrine of inscrutable fault applicable? a. When there is a maritime collision b. When two or more vessels collide and it cannot be determined which vessel is at fault c. When two or more vessels collide and both were at fault d. When two or more vessels collide and fault is present but it cannot be determined which vessel is at fault 4. The following are requisites for a common carrier to be exonerated from liability by reason of a natural disaster, except: a. The natural disaster should be the proximate or only cause of the loss b. The natural disaster should not have been foreseen c. The common carrier exercised due diligence in preventing the loss before, during and after the occurrence of the disaster d. The common carrier is not guilty of delay 5. Is it valid to stipulate that the common carriers degree of diligence shall be less than that of extraordinary? a. Yes, it is valid as no prohibition is present under the law b. Yes, it is valid, provided that it is in writing c. Yes, it is valid, provided that the decree of care is not less than ordinary d. No, it is not valid, as it is contrary to public policy 6. Is a common carrier liable for losses to goods brought about by acts of thieves or robbers? a. Yes, because common carriers act as insurers during the course of carriage b. Yes, common carriers are liable even if the cause of the loss are acts of thieves or robbers c. No, common carriers are not liable for acts that are beyond their control d. No, if the thieves or robbers acted with grave or irresistible force 7. Is a common carrier liable for losses to goods brought about by delays on the occasion of strikes of employees? a. Yes, strikes will not exonerate common carriers from liability b. Yes, because common carriers act as insurers during the course of carriage

8.

9.

10.

11.

12.

13.

14.

15.

c. No, because common carriers should not be liable for acts beyond their control d. No, because strikes are classified as fortuitous events The following are examples of special maritime contracts, except: a. Charter parties b. Bottomry Loans c. Averages d. Respondentia Loans For the prior operator rule to be invoked, the prior operator is not required to prove: a. That the prior operator is capable of increasing its facilities b. That the prior operator is operating an impeccable service to the public c. That the increased service requirement may be filled in by the prior operator d. That the present applicants service may not be needed For the transportation of its cargo from the Port of Manila to the Port of Kobe, Japan, Osawa & Co., chartered "bareboat" M/V Ilog of Karagatan Corporation. M/V Ilog met a sea accident resulting in the loss of the cargo and in the death of some of the seamen manning the vessel. Who should bear the loss of the cargo and the death of the seamen? a. The vessel owner, Karagatan Corporation b. The charterer, Osawa & Co. c. The vessel owner, Karagatan Corporation, shall be liable for the loss of cargoes, while the charterer, Osawa & Co. shall be liable for the death of the seamen d. The vessel owner, Karagatan Corporation, shall be liable for the death of the seamen, while the charterer, Osawa & Co. shall be liable for the loss of the cargoes What is the prescriptive period for actions involving damaged cargo under the Carriage of Goods by Sea Act? a. One year from the time of the delivery to the consignee b. One year from the time of the delivery to the arrastre operator c. Ten years from the time of delivery to the consignee d. Ten years from the time of the delivery to the arrastre operator Is a stipulation limiting the sum that may be recovered by the shipper or owner to 90% of the value of the goods in case of loss due to theft valid? a. Yes, as it is not contrary to public policy b. Yes, because the amount of recovery is very reasonable c. No, because it allows the carrier to escape from full liability; hence, contrary to public policy d. No, because the carrier is always liable to the extent of the full value of the loss of the goods damaged or lost Facts for this and the next two numbers: The goods of X were carried by the vessel of Y from the port of Batangas to General Santos. Upon arrival, the goods of X were found to have been contaminated. Immediately, a representative of X made a phone call to the Vice President of Y informing the latter of the contamination of the goods. When Y failed to pay the value of the goods, X sued Y. Y raised the defense that no proper notification was made pursuant to Article 366 of the Code of Commerce. Question: Within what period should the notice be made? a. Within 24 hours from delivery b. Within 3 days from delivery c. Within 3 months from delivery d. Within 1 year from delivery Same facts above. The notification requirement has specific purposes. Which is not a purpose thereof? a. To give notice to the carrier that goods were damaged upon arrival, and to notify the carrier of an impending liability b. To give the carrier an opportunity to inspect the nature and extent of injury c. To afford the carrier an opportunity to make an investigation of a claim while the matter is still fresh and easily investigated so as to safeguard itself from false and fraudulent claims d. To relieve the carrier from liability in the event of failure to notify Same facts above. Is the carrier liable?

16.

17.

18.

19.

a. Yes because there was breach of the contract of carriage b. Yes because the notification issue does not affect the right of the shipper to sue for damages c. Yes because the notification was properly made by the shipper d. No because there was failure to observe the notification requirement Facts for this and the next number: WS imported medicines from Germany. Upon arrival of the medicines at the airport, the same were turned over to SB Brokerage, a licensed customs broker, which was contracted by WS to calculate the taxes that has to be paid for the imported medicines, and to prepare the processing and claiming from the Bureau of Customs until their final delivery to the warehouse of WS. In bringing the cargoes from the airport to the jurisdiction of the Bureau of Customs, SB Brokerage hired motor vehicles. After the release of the medicines from customs jurisdiction, SB Brokerage delivered the medicines to WS. The latter, however, noted some damage to the medicines and demanded from SB Brokerage the value of the damaged medicines. SB Brokerage, however, denied liability on the ground that it is not the one negligent in the handling of the medicines. WS countered that SB Brokerage is a common carrier. WS, however, does not have any direct proof that SB was negligent. Question: Is SB Brokerage a common carrier? a. Yes because all the elements of being a common carrier are present b. No because it was merely handling a definite scope of work which is the settlement of duties, and all other activities were mere incidents of the main function c. No because there was not any contract of carriage between the parties d. No because it was not rendering services in favor of the public Same facts above. Is the SB Brokerage liable for the damaged medicines? a. Yes because the negligence of SB is presumed b. Yes because SB has the obligation to take care of the goods with the diligence of a good father of a family; and the fact that the goods were damaged indicates that it failed to observe the said diligence c. No because WS cannot prove the negligence of SB d. No because SB is a mere brokerage firm whose function is to settle customs duties PR purchased an Isuzu passenger jeepney from EG, a holder of a certificate of public convenience for the operation of public utility vehicle plying the Baguio-San Fernando route. While PR continued offering the jeepney for public transport services, he did not have the registration of the vehicle transferred in his name. Neither did he secure for himself a certificate of public convenience for its operation. Thus, per the records of the Land Transportation Franchising and Regulatory Board, EG remained its registered owner and operator. One day, while the jeepney was traveling along Naguillian Road, it collided with a ten-wheeler truck owned by ML. The driver of the truck admitted responsibility for the accident, explaining that the truck lost its brakes. PR sued ML for damages, but the latter moved to dismiss the case on the ground that PR is not the proper party to file the suit since he is not the registered owner of the jeepney. Resolve the motion. a. The motion must be granted. The registered owner, in this case, EG, should file the suit. This is the purpose of registration, so that the sale will bind third persons. b. The motion must be granted. Because PR was not operating under a valid license, he does not have any personality to sue ML. c. The motion must be denied. PR is the party who was damaged, and it is but proper that he was the one who filed the suit. d. The motion must be denied. Registration of sale of motor vehicles is a mere formality. Q boarded a passenger bus. Q sat beside T. Subsequently, a fight ensued between Q and T; thereafter, T stabbed to death Q. It turned out during the investigation that T is a conductor of the passenger bus but was on leave that day and was on his way home. Qs heirs sued the passenger bus, which denied liability for the act of T, alleging that it was not liable for the acts of strangers or co-passengers. Decide. a. The contention of the bus company is not tenable. Since T is a conductor of the bus, the act of T is binding upon the common carrier even if T acted without authority b. The contention of the bus company is not tenable. Common carriers are liable even for acts of co-passengers.

The bus company is correct. Since T is not on duty, he is considered as a co-passenger; thus, it was incumbent upon the heirs of Q to prove that the carrier could have prevented the death by the exercise of ordinary diligence d. The bus company is correct. In fact, when the employees of common carriers act beyond the scope of their authority, they are doing so not as employees but as strangers, for which the carrier should not be liable. 20. While in the US, J, a Filipino businessman, bought a plane ticket from American Airways for his flight from the US to the Philippines and with an open-schedule return flight to US. American Airways is a resident airline carrier which has landing rights in the Philippines. In the course of his flight from the US to the Philippines, J suffered damage. Upon reaching the Philippines, J sued American Airways, which raised the defense that the Philippine courts have no jurisdiction over the dispute. Decide. a. Our courts have no jurisdiction by reason of the Warsaw convention b. Our courts have jurisdiction because the Warsaw convention merely fixes the rules regarding venue c. Our courts have jurisdiction because both parties are residents of the Philippines d. Our courts have jurisdiction even applying the Warsaw convention because Philippines was the destination of the flight 21. X Shipping Company spent almost a fortune in refitting and repairing its luxury passenger vessel, the MV Marina, which plied the inter-island routes of the company from La Union in the north to Davao City in the south. The MV Marina met an untimely fate during its post-repair voyage. It sank off the coast of Zambales while en route to La Union from Manila. The investigation showed that the captain alone was negligent. There were no casualties in that disaster. Faced with a claim for the payment of the refitting and repair, X Shipping Company asserted exemption from liability on the basis of the hypothecary or limited liability rule under Article 587 of the Code of Commerce. Is X Shipping Company's assertion valid? a. Yes, it is valid. The ship owner shall become liable only beyond the value of the vessel if the ship owner has concurring negligence with the ship captain, which is absent in this case b. Yes, it is valid. Article 587 of the Code of Commerce expressly exempts from liability the ship owner in the event of loss of the vessel c. No, it is not valid. The ship captain is an agent of the ship owner, thus, the acts of the ship captain is binding upon the owner d. No, it is not valid. The limited liability rule is not applicable for repairs done the vessel and completed prior to its loss.

c.