Trans Pol Aw

8/3/2019 Trans Pol Aw

1/46

MARINE TRANSPORTATION

Vessels or Watercraft are:

1. Any:a. barge;b. lighter;

c. bulk carrier;d. passenger ship;e. freighter;f. tanker;g. container ship;h. fishing boat or

i. other artificial contrivance utilizing any source of motive power;2. designed, used or capable of doing used as a means of water transportation3. operating either as common contract carrier,4. including fishing vessels covered under PD 43, except:a. those owned and/or operated by the AFP and by foreign governments for military purposes, and

b. bancas, sailboats and other waterbome contrivance of less than 3 gross tons capacity and not motorized.

MARINA [Maritime industry Authority]Functions:1. Issue Certificates of Public Convenience for the operation of domestic and oversea water carriers2. Register and issue certificates, licenses, or documents necessary or incidentthereto

Nature of Maritime contracts:

Admiralty jurisdiction over a contract as maritime ,such contract must relate tothe trade and business of the sea ,it must provide for maritime transactions ormaritime casualties.

RTC have exclusive jurisdiction over admiralty and maritime cases where claim the claim or demand(or worth of shipment lost) exceeds P300,000 or in Metro Manilawhere such demand or claim exceeds P400000. If less ,then it may be tried by lower courts under the Rule on Summary Procedure for Special Cases.

How OWNERSHIP of MERCHANT VESSELS may be Acquired:

1. By any means recognized by law (Art. 712 Civil Code):a. By lawb. By donationc. By testate and intestate succession

d. in consequence of certain contractse. By tradition


2/46

2. By Prescriptiona. 3 years

* if possession thereof was in good faith & with just titleb.10 years in the absence of above requisites

Requisites for legal Acquisition of a merchant Vessel

1. Must appear in a written instrument2. Must be recorded in the registry of vessels to bind third persons.

WHAT KIND OF PROPERTY IS A VESSEL?

1. PERSONAL property

2. BUT the ownership thereof is evidenced by a certificate of ownership and thetransfer thereof to be binding on 3rd persons must be registered in their properregistry.

A vessel more than 3 tons owned by Filipino citizens or corporation at least 60%of the capital of which belongs to said citizens shall be registered with theMaritime Industry Authority.-- the registration of those 3 tons or less is optional.-- thereafter, if vessel is more than 15 tons gross, it shall be issued a certificate of Philippine registry. The taking of a certificate of Philippine registry of 15 tons or less is optional. However, it domestic vessel not less than 5 tons does not take a certificate of Philippine Registry ,it shall be issued a certificate of ownership.

A foreign vessel under charter or lease to a Filipino national may be issued a temporary certificate of registration under the following conditions:1.said charter or lease is with the approval of MARINA2.duration is less than 1 year3.used exclusively in coastwise trade unless otherwise permitted by Marina to beused for overseas trade4.operation entirely in the hands of Filipinos5.vessel manned by completely Filipino crew

2005 notes: the records of the Bureau of Coast guard at the port of entry wherethe vessel is registered, which now is charged with registration of vessels operating in Philippine Waters would reveal the desired information.

2005 notes: Vessels are movable property hence, may be the subject of a chattelmortgage. The contract should however be registered with the Bureau of Coast Guard-- however, between a mortgage right on the vessel and the claim of persons whosuccessfully salvaged the vessel, the latter is entitled to better preference.--as such,PD 214 created a preferential lien in favor of a mortgage bank or financial institution funding the construction ,acquisition or purchase of the vessel.


3/46

When Repair and Maintenance of Vessel During the voyage is Required:

1. if the captain has to:a. Contract obligation for the repair equipment of the vesselb. Obtain loans on bottomry

2. Captain shall apply to:a. if he is in RP territory the judge or courtb. if he is outside RP territory * Filipino consul if there is one* Judge or court of the local proper authority if one is available

3. Captain must present:a. certificate of registry of the vessel, andb. instruments proving the obligation contracted

4. Omission of this formality shall make the captain personally liable for the credits which may be prejudiced through his fault.

ORDER OF PREFERENCE IN CASE OF SALE OF VESSEL

R.A. 6106P.D. 1521Effectivity date19691978ApplicabilityOverseas shipping onlyBoth domestic and overseas shippingKind of SafeJudicialJudicial and extrajudicialOrder of PreferenceA preferred mortgage shall have priority over all claims against the vessel, except the following preferences in the order stated:1. Judicial costs of the proceedings;2. Taxes due the Philippine Government;3. Salaries and wages of the Captain and Crew of the vessel during its last voyage;

4. General average or salvage including contract salvage, bottomry loans and indemnity die shippers for the value of goods transported but which were not delivered to the consignee;5. Costs of repair and equipment of the vessel, and provisioning of food, supplies and fuel during its last voyage and6. Preferred mortgages registered prior in timeThe preferred mortgage lien shall have priority over all claims against the vessel; except the following preferences in the order stated:1. Expenses and fees allowed and costs taxed by the court and taxes due to the Government;2. Crews wages;3. General average;4. Salvage, including contract salvage;5. Maritime liens arising prior in time to the recording of the preferred mortgage;6. Damages arising out of port; and7. Preferred mortgage ministered prior to time.

4blue 95 notes: Effect of sale. All pre-existing claims in the vessel are terminated. They will then be satisfied from the proceeds of the said subject to the order of preference.

Right to the Freightage of the Vessel Sold (Art. 577)


4/46

1. if sale takes place while on voyage - BUYER

a. is entitled to all freightage earned from the time vessel received her last cargo

b. is obliged to pay the crew and other person who go to make up the vessels complement for said voyage unless there is an agreement to the contrary.

2. if the sale takes place AFTER arrival of the vessel at port of destination SELLER

a. who is obliged to pay the crew and other person who go to make up the vesselscomplement for said voyage

b. unless there is an agreement to the contrary


5/46


6/46

to maritime contracts is confined to the vessel, which is hypothecated for suchobligations or which stands as the guaranty for their settlement.

* liability of the vessel owner and agent arising from the operation of such vessel were confined to the vessel itself, its equipment, freight ,and insurance, if any, which limitation served to induce capitalists into effectively wagering their resources against the consideration of the large profits attainable in the

trade.

* Only time the Limited Liability does not apply is when there is an actual finding of negligence on the part of the vessel owner or agent.

The shipowner and the ship agent are liable under the law in certain instances for acts of the captain under Article 586, Code of Commerce under the same provision, they are liable for contracts entered into by the captain for repair of the vessel or to obtain provisions or supplies for the vesselunder Article 587, Code of Commerce, they are liable for damages due third persons because to the con

duct of the captain they are liable for tort committed by the captain they arealso liable in case of collision

2006 notes:When shipowner was equality negligent, it cannot escape liability byvirtue of the limited liability rule (Central Shipping Co, vs. Insurance Co. ofN. America , G.R. No. 150751. September 20, 2004)

> The limited liability doctrine applies not only to the goods but also in all cases like death or injury to passengers, (Heirs of Ampare Delos Santos vs. CA, 186 SCRA 649)

> The rights of a vessel owner of agent under the limited liability rule are akin to those of the rights of shareholders to limited liability under our Corporat

ion laws. In both insolvency of a corporation and the sinking of a vessel the claimants or creditors are limited in their recovery to the remaining value of accessible assets ( Aboitiz Shipping Corp. vs. General Accident Fire and Life Assurance Corp. 217 SCRA 359)

4blue 95 notes: act of overloading vessel is negligence on part of his agent making owner liable to the heirs of passengers under the contract of transportation, the total loss ,even under hypothecary rule will not free him from liabilityto passengers.

4blue 95 notes: Limitied liability is not applicable when there is actual finding of negligence on part of the vessel owner or agent (even a small negligence finding negates limited liability)

GENERAL RULE: the liability of shipowner and ship agent is limited to the amountof interest in said vessel such that where vessels is entirely lost, the obligation is extinguished

Exceptions to the rule on limited liability:

1. when the shipowner is at fault.

* Don Juan case where the vessel departed although PAGASA already warned that th


7/46

ere is already an oncoming strong typhoon. And the vessel encountered that strong typhoon because it delayed its departure. Had it left on time, it would not have encountered the typhoon. The departure was delayed, because the captain overloaded it and the shipowner was aware of that and he did not order the captain toleave immediately. The vessel was overloaded, did not have radar which could have allowed it to navigate for shelter.* A fishing vessel entered into a contract to transport 2500 cases of Coca Cola.

It was a fishing vessel, so it was not equipped and designed to carry cargoes.It was not seaworthy to carry cargo, especially 2500 cases of softdrinks. So itbecame top heavy. The Court said that the liability of the shipowner is not extinguished.But for the liability to subsist, it should be the shipowner who is at fault. Ifit is the captain who is at fault, then the liability of the shipowner will beextinguished. The shipowner must be personally at fault.

2. If the vessel is insured, then the liability will not be extinguished becausethe proceeds of the insurance will take the place of the vessel. The liabilitywill be limited to the proceeds of the insurance.

the first consignee of the goods who was able to get a final judgment cannot collect because there were other consignees who were still suing. So you have to wait until all claims have been adjudicated so that the claimants can be paid prorata from the proceeds of the insurance.

3. The Court has said that liabilities for repairs and provisioning the vessel,before their loss, is not extinguished if the vessel sinks.4. No abandonment of the ship which is not entirely lost5. Workmens compensation claim

6. Breach of Duty to maintain ship in seaworthy condition

Vessel can only be considered sea worthy if both vessel and cargo are sea worthy

. In fortuitous event, the vessel must also be seaworthy in order to escape liability.

RULES:

1. Ship is not lost but cargoes were damage or lost, passengers died or injured.Shipowners liability is limited by the value of the ship with all her equipments,freightage earned during the voyage provided they abandoned the ship since without abandonement ,shipowner cannot avail of the limited liability rule (Luzon Stevedoring v CA)587 applies only when captain is the one who was at fault or negligent. If shipowner is also at fault or negligent, the provision of the Civil code on common carrier is applied.

2. Ship is totally lostNo vessel ,No liability. The total loss extinguished liability since there is no longer any res to which they can be attached.

4blue 95 notes: if captain is at fault, owner of vessel is free from liability for loss of cargo, as such liabliity is limited to the extent of his interest inthe ship. Total loss of the ship results in the total loss of his interest in the same, however, if loss of life, his liability is governed by the civil code which provides for his use of extraordinary diligence.

ABANDONMENT

Abandonment of the vessel is necessary to limit the liability of the shipowner.


8/46

It is equivalent to an offer the value of the vessel, her equipment an freight earned in return for an exemption from liability.The only instance were abandonment is dispensed with is when the vessel is entirely lost (Luzon Stevedoring vs. CA 156 SCRA 169).The owner can escape from his CIVIL liability in the cases mentioned by law by abandoning his property in the ship and any freight earned in the voyage.

4blue 95 notes:When ABANDONMENT is made in the instances provided by law, It cannot be refused.

Effects of the right to ABANDONMENT

The owner and ship agents liability:1. is COEXTENSIVE with his interest in the vessel and its freight and2. CEASES by abandonment and surrender of these to the parties sustaining the loss

Who can make ABANDONMENT in Maritime Transportation?1. Ship Owner Art. 5872. Ship Agent Art. 5873. Part Owner Art. 590

When ABANDONMENT in Maritime Transportation Can be made:For civil liability to third persons arising from the conduct of the captain inthe vigilance over the goods which the vessel carried (Art. 587)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)For civil liability incurred by the ship owner in case of collision (Art. 837)

Why Ship Owners and Ship Agents are given the right to Abandonment:1. To offset against the innumerable hazards and perils of the sea2. To encourage ship building and marine commerce (Heirs of Amparo vs. de los Santos 168 SCRA 649)

RIGHT OF ABANDONMENT OF THE FOLLOWING:

SHIPOWNER ORSHIP AGENTCONSIGNEEWhat may be abandonedVesselGoods shippedInstances1. In case of civil liability from indemnities to third persons (Art. 587);

2. Sec. 138, Insurance Code;

3. In case of leakage of at least 3/4 of the contents of a cargo containing liquids (Art. 687)1. Partial non-delivery where the goods are useless without the others (Art. 363);2. goods are rendered useless for sale or consumption for the purpose for whichthey are properly destined (Art. 365); and3. In case of delay through the fault of the carrier (Art. 3 71).Effects1. Transfer of ownership of the vessel from the shipowner to the shippers or insurer.2. In case of (2 above) the insurer must pay the insured as if there was actualtotal loss of the vessel1. Transfer of ownership on the goods from the shipper to the carrier.2. Carrier should pay the shipper the market value of the goods of the point of

destination.

When the ship owner of ship agent may be held liable for MORE than the value of


9/46

the vessel:

1. When the vessel is PROPERLY INSURED2. When the ship owner of ship agent is at FAULT3. When the liability for REPAIRS of the vessel was incurred BEFORE the loss ofsuch vessel4. When the vessel is NOT ENTIRELY LOST and the shipowner does NOT abandon such

vessel5. When the liability is one that arises from the provisions of the labor code6. When the voyage is NOT maritime, but only in a river bay, of gulf7. When the vessel is NOT acting as a common carrier by a private carrier

Abandonement of the vessel includes the following objects.

1.vessel itself2.equipment

3.freightage4.insurance proceeds if any

PARTICIPANTS IN MARINE TRANSPORTATION:1.SHIP AGENT

The Person:1. entrusted with provisioning of a vessel, or2. who represents the vessel in the port in which she happens to be

4blue 95:Ship agent cannot order a new voyage or make contract for a new charter, or insure the vessel without authority from the owner. He cannot discharge a captain or crew appointed by him for a definite period or voyage except for cause. Neither can he discharge captain who is a co-owner and who became a captain byvirtue of special agreement contained in the articles.

Liability of Ship Owners and Ship Agents

a. When Ship Agent shall be civilly liable for the indemnities in favor of thirdpersons which arise form the conduct of the captain in the care of the goods which the vessel carried

b. when Ship Agent may exempt himself from liability By ABANDONING the vessel with all her equipments and the freightage it may earned during the voyage.

Liability of OWNER and SHIP AGENT for obligations contracted by the captain IN EXCESS of his powers and privileges pertaining to him by reason of his position or conferred upon him by the owner or agent:a. General Rule Not liableb. Exception Liable if the amounts claimed were made use for the benefit of thevessel


10/46

Repairs made on a vessel ultimately redound to the benefit of the new owner forw/o said repairs ,the vessel will be unseaworthy.Such acts give rise to solutioindebiti and should be paid by the party benefited.

(BAR) It is not a mere defense on Rs part that it is a mere agent of X and therefore not liable, since Rs liability as a ship agent is solidary with that of X,its principal.

(BAR) B brokerage Company ,owner of the lighter which discharge the goods from Xsvessels, has no liability for the damaged goods ,it being evident that the goods got damaged while still in the custody of the vessel owned and operated by X Company and not while in the custody of the lighter owned by Bay brokerage Company.

2006 notes: Maritime creditor may attach the vessel without waiting for the settlement of his right.

Nature of Liability of SHIP AGENT for Acts of the Captain:

1. LAWFUL acts which are beneficial to the vessel SOLIDARY with the ship owner because such obligation arises from the contract of agency (provided the captaindoes not exceed his authority)

2. UNLAWFUL acts SUBSIDIARY CIVIL liability because this liability is limited tothe value vessel and does not extend further (Philippine Shipping vs. Garcia Phil. 261, 264)

Powers and Duties of a Ship Agent:

1. Art. 595 (2) Represent the ownership of the vessel and may, in his own name and in such capacity, take judicial and extra-judicial steps in matters relatingto commerce

2. Art. 596(1) occupy the duties of the captain, if he has the qualification ofa captain

3. Art 597- Select and come into an agreement with the captain and contract in the name of the owner, WHO shall be bound in all that refers to repairs, detailsof equipment, armament, provisions, fact, freight, and in general that pertainsto the requirement of navigation.

4. Art. 602 indemnity the captain for all expenses he may have incurred from hisown funds for from those of other persons for the BENEFIT of age vessel.


11/46

Discharge of the Captain and Crew:

1. Art. 609- BEFORE the vessel goes out to sea-Ship Agent may at his discretiondischarge the captain and crew WITHOUT being liable for indemnity whatsoever:

a. PROVIDED:* the contract did NOT state a fixed period or voyage* he pays them the salaries earned according to their contractsb. UNLESS there is a specific agreement in respect thereto

2. Art. 604 DURING the voyage if the captain and crew are discharged at this time:a. they shall CONTINUE to receive their salary UNTIL their RETURN to the port where the contract was madeb. UNLESS there be just motive for the discharge

3. Art. 605- if the contract of the captain and crew with the ship agent shouldbe for be DEFINITE VOYAGE:a. They CANNOT be discharged until the fulfillment of their contractsb. Except for reasons of:* insubordination in serious matters* robbery* theft* habitual drunkenness, and* damage caused to the vessel or its cargo by malice or manifest proven negligence

4. Art. 606 If the captain is PART OWNER of the vessel he can be discharge ONLY.

If the ship agent RETURNS to him the amount of his interest therein.

5. Art. 607 BUT if captain obtained his command by virtue of a special agreementcontained in the articles of co-partnership, he can only be deprived of his office by reasons mentioned in Art. 605

2.CAPTAIN and MASTERS of VESSEL

General Functions of a Captain (3 fold character)1. General agent of the ship owner2. Technical director of the vessel3. Representative of the government in the country under whose flag he navigates

Duties:1. Bring on board the proper certificate and documents and a copy of the Code ofCommerce;2. Keep a Log Book, Accounting Book, and Freight Book;

Logbook where he shall enter everyday, everything significant about the voyage

Accounting Book where he shall enter all the amounts collected and paid for he account of the vesselFreight book where he shall record the entry and exit of goods


12/46

Q. What is the probable value of the entries in the logbook?A: It is an official record of entries made by a person in the performance of aduty required by law and are prima facie evidence of the facts stated therein.

3. Examine the ship 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. Protest arrivals under stress and in case of shipwreck;7. Follow instructions of and render an accounting to the ship agent;8. leave the vessel last in case of wreck;9. Hold in custody properties left by deceased passengers and crew members;10. Comply with the requirements of customs, health, etc., at the port of arrival;11. Observe rules to avoid collision;12. Demand a pilot whole entering or leaving a port (Art. 612)

> A ships captain must be accorded a reasonable measure of discretionary authority to decide what the safety of the ship and of its crew and cargo specifically r

equires on a stipulated ocean voyage (Inter-Orient Maritime Enterprise Inc., vs.CA, 235 SCRA 267).

No Liability for the following:1. Damages caused to the vessel or to the cargo by force mejeure;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 (Art. 620)

Duration of Responsibility of Captain for Cargo on board his Vessel (Compare toArt. 1736 Civil Code)1. FROM the time it is turned over to him at the dock or afloat along side the vessel at the port of loading

2. UNTIL he delivers it on the shore or on the discharging wharf at the port ofunloading3. UNLESS otherwise expressly agreed upon

Solidary Liabilities of the Ship Agent/Shipowner for Acts Done by the Captain towards Passengers and Cargoes1. Damages to vessel and to cargo due to lack of skill and negligence;2. Thefts and robberies of the crew;3. Losses and fines for violation of laws;4. Damages due to mutinies;5. Damages due to misuse of power;6. For deviations;7. For arrivals under stress;8. Damages due to non-observance of marine regulations

ArtProhibitedActEffect/consequenceWhen Allowed613Making SEPARATE TRANSACTIONS for HIS OWNACCOUNT (if he navigates for freight in common or on shares)1His profit shall belong to other people in interest, but2His loosen shall be for his exclusive account614FAILURE TO MAKE Agreed Voyage1He shall indemnity all losses which his failure may causeIf he is prevented in making the voyage because of a forfuitous event2.He may be criminally penalized615SUBSTITUTING himself by OTHER PERSONS (unless be acquires approval of ship agent)1.He shall be liable for the acts of the substitute2Whatever profit is incurred by the substitute shall belong to other peoples inInterest3Whatever loss is incurred by the substitute shall be for his exclusive account4He and the substitute may be discharged by the ship agent617CONTRACT Loans on RESPONDENTIA by the cargoContract shall be VOID (because the captain is NOT the owner of the cargo)617BORROW Money on BOTTOMRY for his OWN Transactions1.Principal interests and costs shall be charged to his exclusive accountFor the portion of the vessel which he owns PROVIDED:1. No money has been previously borrowed on the whole vessel and2He may be discharged by the ship agent2. There does not exists any other kind of lien or obligation chargeable againstthe vessel3. he must necessarily state what interest he has in the vessel621BORROWS or SELLS outside of the cases and without the formalities prescribed bylaw1He shall be liable for the principal, interest, and costs2He shall indemnity for the damages he may cause621Commits FRAUD in his Accounts1He shall reimburse the amount defrauded2He shall be subject to the provisions of the RPC


13/46

MARITIME PROTEST:

1. it is a written statement under oath2. made by the captain or master of the vessel3. After the occurrence of an accident or disaster4. in which the vessel or cargo is lost or injured

5. With respect to circumstances attending such occurrence6. It is usually intended to show7. That the loss or damage resulted from:a. A peril of sea, orb. Some other cause for which neither the master or owner was responsible8. It concludes with the protestation against any liability of the owner for such loss or damage

It is made within 24 hours before the competent authority at the place where theaccident or disaster happened or at the first port of arrival if the Philippine

s or to a Philippine consul if the incident took place abroad.

There are 4 instances when a protest should be made:1. When there is a general average2. When there is a shipwreck3. When there is a collision4. When there is arrival under stress

Of course, if the captain cannot make the protest because of a fortuitous event,that is excusable. Like he was injured and was in the hospital, so he is not ina condition to make the protest.

How the Captain Can Raise funds to Comply with his Obligations (In successive order):

1. By requesting funds from the consignees of the vessel or correspondents of ship agent

2. By applying to the consignees of the cargo or to the persons interested therein

3. By drawing on the ship agent

4. By borrowing the amount required by means of a loan on bottomry

5. By selling sufficient quantity of the cargo to cover the amount absolutely necessary to repair the vessel and equip her to pursue the voyage.Note:In case # 4 and 5 he must comply with the provisions o Art. 583

SHIPWRECK

Loss of a vessel at sea as a consequence of its grounding or running against an


14/46

object in the sea or on the coast.

If wreck was due to malice, negligence or lack of skill of the captain, the owner of the vessel may demand indemnity from said captain.

Duties of the Captain with regard maritime protest

1. Protest must be made with a competent authority at the first port he toucheswithin 24 hours following his arrival2. He must ratify it within 24 hours when he arrives at the place of destinationwhere he must proceed immediately with the proof of the facts3. he must not open the hatches until all of the above is done


15/46

3.OFFICERS AND CREW OF VESSEL

SailingMate(Art.

627-631)The second chief of the vesselUnless the ship agent does not order otherwise, in case of absence, sickness, ordeath1Shall take the place of the captain, and2Shall then assume all his powers, obligations and liabilitiesSecondMateArt, 632-633Shall take command of the vessel in case of the liability or disqualification orthe captain and sailing mate, assuming therefore their powers and responsibilitiesCrew or Sailors Art, 634-37Enlisted by the captain with such number he may deem properQualifications:1In RP Vessels operating coast wide trade or in the high seas officers and crew must all be citizens of RP (Sec. 829 RA 1937 TCC)2Vessels Plying Foreign Routes1Filipino citizens minimum of 4/5 of total crew2Resident Aliens maximum of 1/5 of total crewIn foreign Ports if not enough Filipino

sailors, captain may make up the crew withforeigners with the consent of the consult ormarine authoritiesProhibited Acts When a Sailor has Contracted to serve on a Vessel1He cannot rescind his contract2He must not fail to comply therewithExcept by reason of a legitimate impediment which may have occurred to him3He cannot pass from the service of one vessel to another without obtaining the w

ritten permission of the captain of the vessel on which he may beDuration of Sailors Contract1Depends on duration of the contract2If Contract has NO fixed period he cannot be discharged until the terminology ofthe return voyage to the port where he enlistedGrounds for which a Sailor May be Discharged by Captain1The perpetration of a crime which disturbs order on the vessel2Repeated offenses of insubordination, or want or discipline, or non-fulfillmentof service3Incapacity and repeated negligence in the fulfillment of the service he should render4Habitual drunkenness5Any occurrence which incapacitates the sailor to perform the work under his charge (except Art. 644)6DesertionWhen Captain May Leave Sailor on Land1BEFORE setting out on a voyage1Without Giving Any Reason2But his wages have to be paid as if he rendered services2AFTER the voyage has begun UNTIL conclusion thereof-1Captain cannot abandon any sailor on land or sea2Unless by reason of some crime his imprisonment and delivery to competent authority in the first port of arrival should be proper (this should be obligatory tothe captain)

Art. 6387-639, Effect on the Crew of the Revocation of Voyage or Change of Destination:

1. Crew shall be indemnified by reason of rescission of the contract in accordance with the rate provided if after the crew has been engaged:

a. the voyage is revoked by the will of the ship agent or charterers (before orafter the vessel is put to sea)b. the vessel is given a different destination from that fixed in agreement with


16/46

the crew

2. Crew shall have no other right but that to collect the wages up to the day the revocation was made if:a. the revocation of the voyage should arise from a just cause beyond the control of the shi agent and charterers, andb. the vessel has not left port

Art. 340, Just Causes for Revocation of Voyage:

1. Declaration of war or interdiction of commerce with the Power to whose territory the vessel was bound.2. Blockade of the port of destination3. Breaking out of an epidemic after the agreement4. Prohibition to receive in said port the goods which make up the cargo of thevessel5. Detention or embargo of the goods by order of the government, or any cause beyond the control of the ship agent.6. Inability of the vessel to navigate

Rules in case of Death of a Seaman> the seamans heirs are entitled to payment as follows:

1. If death is natural;a. compensation up to time of death if engaged on wageb. if by voyage half of amount if death occurs on voyage out; and full, if on voyage inc. If by shares none, if before departure, full, if after departure

2. If death is due to defense of vessel full payment3. if captured in defense of vessel 0 full payment;

4. if captured due to carelessness wages up to the date of the capture (Art. 645)

Complement of Vessel

> All persons on board, from the captain to the cabin boy, necessary fro the management, maneuvers, and service, thus including the crew, the sailing mates, engineers, stokers and other employees on board not having specific designations.> Does not include the passengers or the persons whom the vessel is transporting.


17/46

4. SUPERCARGOES

> Persons who discharge administrative duties assigned to them by ship agent orshippers, keeping an account and record of transaction as required in the accoun

ting book of the captain. (Art 649)

5. PILOT

> A person duly qualified and licensed to conduct a vessel into or out of ports,or in certain waters.

> The term generally connotes a person taken on board at a particular place forthe purpose of conducting a ship through a river, road or channel, or from a port.> Master pro hac vice (for the time being) in the command and navigation of theship.> While exercising his functions a pilot is in sole command of the ship and supersedes the master for the time being in the command and navigation of the ship;the master does not surrender his vessel to the pilot and the pilot is not the master. There are occasions when the master may and should interfere and even displace the pilot, as when the pilot is obviously incompetent or intoxicated (FarEastern Shipping Company vs. CA, 297 SCRA 301).> Compulsory Pilotage States possessing harbors have enacted laws or promulgatedrules requiring vessels approaching their ports to take on board pilots license

d under the local laws (Notes and Cases on the Law on Transportation and PublicUtilities. Aquino T. & Hernando, R.P. 2004 ed p. 518)

Liability of Pilot

GENERAL RULE: On compulsory pilotage grounds, the Harbor Pilot is responsible for damage to a vessel or to life or property due to his negligence.

EXCEPT:1. Accident caused by force majeure or natural calamity provided the pilot exercised prudence and extra diligence to prevent or minimize damages.2. Countermand or overrule by the master of the vessel in which case the registered owner of the vessel is liable. (Sec. 11, Art.III PPA Admin Order 03-85)

> The fact that the law compelled the master to take the pilot does not exonerate the vessel from liability. The owners of the vessel are responsible for the acts of the pilot, and against, him. (Far Eastern Shipping vs. CA)


18/46

SPECIAL CONTRACTS IN MARITIME

1.)CHARTER PARTY> A contract by virtue of which the owner or agent binds himself to transport merchandise or persons for a fixed price.> A contract by which an entire ship, or some principal part thereof is let/leased by the owner to another person for a specified time or use.

Parties:1. Ship owner or ship agent2. Charterer

Charterer has no obligation before transporting its cargo to ensure that the ves

sel it chartered complied with all legal requirements. Duty rest upon the commoncarrier simply for being engage in public service.

Classes:

1.Bareboat or demise

The charterer provides crew, a food and fuel. The charterer is liable if he were the owner, except when the cause arises from the unworthiness the vessel.The shipowner leases to the charterer the whole vessel transferring to the latter the entire command, possession and consequent control over the vessels navigation, including the master and the crew, who thereby become the charters servants.It transforms a common carrier into a private carrier.

4blue:private carrier who enters into a charter party remains a private carrier.

The charterer becomes the owner of the vessel pro hac vice, just for that one particular purpose only. Because the charterer assumes the customary rights and liabilities of the shipowner to third persons and is held liable for the expense of the voyage and the wages of the seamen.

It is the charterer who will be liable to the holders of the goods if the goodsget lost. And since it is a private carrier, if the charterer does not pay the s


19/46

hipowner the stipulated fees, the shipowner cannot ask that the cargoes be soldto satisfy his claims because he has no lien on the goods. Because the one who is liable and who is dealing with the owners of the goods is the charterer. Thereis no privity of contract between the shipowner and the owners of the goods sohe cannot ask that the goods be sold to satisfy his claim for his fees.

4blue: The Court has said that in a bareboat charter of a private carrier, a sti

pulation there that the shipowner will not be liable in case of loss and damage,the Court said since this is a private carrier, not a common carrier, that stipulation is valid. So the shipowner will not be liable for the loss of the goodsdue to the negligence of the captain.

A stipulation in the bill of lading limiting the liability of the carrier unlessthe shipper declares a higher value, that is valid and that is binding upon theconsignee. (inaudible) The consignee becomes a party to the bill of lading, thecontract for the benefit of a third party.

Time Charter: Vessel is chartered for a period of time or duration of the voyage

. The charterer acquires the right to use the carrying capacity, facilities of the vessel and he could designate the designations. The owner retains possessionand control of the vessel.

Voyage/Trip Charter: It is a contract for the carriage of goods of a vessel forone or more series of voyages.

In Time Charter and Voyage Charter, the shipowner remains in control of the vessel. So the vessel remains a common carrier.If goods are lost, it is the shipowner who will be liable.

The Court said that a stipulation in a voyage charter that the charterer will beliable for the loading and unloading of the goods, while the owner will be liab

le for the care of the cargo during the voyage, that is valid.

Like in the Don Juan case, whereby latter collided with a tanker which Caltex chartered to transport oil. Don Juan wanted to run after Caltex since it had moremoney than the tanker. However, SC said that they cannot run after Caltex sinceit is a voyage charter, therefore, the tanker remained common carrier, and sinceit is negligent due to the fact that it was navigating at night without lights,Caltex (the charterer) is not liable, it will be the owner of the tanker who will be liable.

The charterer will usually be liable for deadfreight. Like I had a case where the client (inaudible) the vessel to transport molasses he is selling to somebodyin Japan. So the vessel arrived here. When they loaded the molasses, there was ashortage in the molasses. It was the fault of the warehouseman. Anyway, so theshipowner filed a claim for deadfreightwere there was shortage in the molasses sothat freight he could have earned was an opportunity lost. You have to make good that amount because you agreed to load so many tons of molasses. That is deadfreight.

The charterer will not be liable for the voyage if the delay in loading is due to fortuitous evente.g., the arrastre workers went on strikethat is beyond the control of the charterer, he wont be liable for the demurrage.

The goods may be deposited(a) if there are reasons to believe that freight will not be paid or

(b) the consignee cannot be found or(c) the consignee refuses to receive the goods. On the other hand, the goods maybe sold to pay for the freight, expenses and those due the captain, to pay for


20/46


21/46

SHIPOWNER ORSHIP AGENTCHARTERER1. If the vessel is chartered wholly, not to accept cargo from others;2. To observe represented capacity;3. To unload cargo clandestinely placed4. To substitute another vessel if load is less that 3/5 of capacity;5. To leave the port if the charterer does not bring the cargo within the lay da

ys and extra lay days allowed;6. To place in a vessel in a condition to navigate;7. to bring cargo to nearestneutral port in case of war or blockade1. To pay the agreed charter price;2. To pay freightage on unboarded cargo;3. To pay losses to others for loading uncontracted cargo and illicit cargo;4. To wait if the vessel needs repair;5. To pay expenses for deviation. (Art. 679-687)Art. 654. Probable Value of a Charter party

Full evidence in courtIf executed with the intervention of a broker who testifies to authenticity of signatures of contracting partiesIf there is a discrepancyWhat shall govern is that which agrees with the copy which the broker must keepin his registryMay also be admitted in evidenceEven without intervention of a broker if the contracting parties acknowledge sig

natures as their ownIf not broker and parties do not acknowledge their signaturesDoubts shall be decided by:1What is provided for in the bill of lading, or2Proof presented by the parties

Art. 698-689 Rescission of Charter Parties:

Art. 688. when Charter Party may be rescinded at the Request of the CHARTERERGroundCondition/Consequence1ABANDONMENT of the charter before loading of the vesselHe must PAY HALF of the freight agreed upon2Capacity of the vessel is FOUND to be NOT in CONFIRMITY with that stated in thecertificate of the tonnageOwner must indemnity the charterer for damages sufferedThere is an ERROR in the statement of the FLAG under which the vessel navigatesOwner must Indemnity the charterer for damages suffered3NON PLACEMENT of the vessel at the DISPOSAL of the charterer within the period and manner agreed uponOwner must Indemnity the charterer for damages suffered4AFTER the vessel has been put to sea, it RETURNS to the port of departure on account of the risk from:Shipper must agree to unload the vessel1. Pirates2. Enemies, or

3. Inclement weatherShip Owner shall have the right to the freight in full for the voyage out5DURING the voyage, In order to make URGENT REPAIRS the vessel should MAKE PORTCharterer prefers to DISPOSE the goods4blue: fortuitous event to cause a rescission are: (1)war (2) blockade (3)prohibition to receive cargo (4) embargo (5) inability of the vessel to navigate

Art. 689. when Charter Party May be Rescinded at the Request of the SHIP OWNER (from whom the vessel is chartered)GroundCondition/Consequence1FAILURE of the charterer, at the termination of the extra lay days, to place thecargo alongside the vesselCharterer must pay1HALF pf the freight stipulated2Demurrage for the lays days and extra lay days2SALE of the vessel by the owner BEFORE the charterer1If the buyer of the vessel has loaded the vessel for his own account Seller/ Owner must indemnity the charterer for damages suffered2If the buyer does not load the vessel for his own account.1The charter shall be respected2The seller shall indemnify the buyer if he did not inform the buyer of the pending charter at the time of making of the sale

4blue 95:Arastre operations are not maritime transactions and the provisions ofCOGSA do not apply to arrastre services.4blue 95:Against the arrastre operator, the suit should be preceded by a claim within 15 days from the discharge of the last cargo, and the suit itself should be filed within 2 yrs from said discharge.


22/46


23/46

2.) LOANS on BOTTOMRY and RESPONDENTIA

Loan on Bottomry or Respondentia is :

1. A Loana. Under which any condition whatsoever;b. The repayment of the sum loaned and of the premium stipulatedc. Depends upon the safe arrival of the effectsd. In the port on which it is made

2. A loan with things exposed to maritime risks as collateral to be paid if thecollateral are safety transported and the lender shall lose his money if the collateral is lost3. It is a loan on:a. Bottomry if the security is a vesselb. Respondentia if the security is cargo

Characteristics of a loan on BOTTOMRY1. It is a loan the security of which is the vessel itself2. Conditioned on the safe arrival at the point of destination3. The vessel must be exposed to maritime peril therefore if the vessel is only

docked under a covered shed and it is hit by lighting and the vessel burns, thebank can still recover from the shipowner because the vessel was not exposed tomaritime peril.


24/46

Who may contract a Loan on Bottomry1. The owner of the vessel2. Captain of the vessel in the absence of the owner

Distinction

Ordinary LoanLoan on Bottomry orRespondentiaMay or may not have a collateral1Must have a collateralCollateral may be any property, real or personal2The collateral must either be a vessel or cargo subject to marine risksAbsolutely repayable3Payment depends on the safe arrival by the collateral at the port of the loanNeed not be in writing4Must be in writingTo be binding on 3rd persons, need not be registered5Must be registered in the registry of vessels of the port of registry of the vessel, to be binding on 3rd personsLoss of collateral, if any, does not extinguish the loan6Loss of collateral extinguishing the loan2005 notes: The 30% interest rate cannot be questioned as being violative of Usury law. Loans of bottomry are maritime loans, and there is no limit to the rateof interest (more conveniently called as premium) to be charged, in view of thefact that there are different classes and various accidents to which maritime voyages are exposed. If vessel ,to whose owner the bottomry loan was granted doesnot negotiate the voyage safely, the lender loses all rights to collect and itis this factor, the high risk involved, which prevents the Usury law interest rates from being applicable to bottomry loans.Hence Impositon of 30% cannot later on be questioned as violative of the Usury L

aw.

Art. 730. Preference of Loans on Bottomry:PreferredOverLoans made during the voyageLoans before clearing of the vesselLoans for the last voyageLoans made over prior voyagesArt. 731 Effect of Total Loss of Collateral on the Loan on Bottomry or Respondentia (as compared to Abandonement)

GeneralRuleTotal loss of the collateralEXTINGUISHES the loan it:1It arose from an accident of the sea at the time and during the voyage designated in the contract, and2It is proven that the cargo was on boardExceptionThe loan is NOT extinguished if:1The loss was caused by the inherent defect of the thing, or2The loss was caused by the fault or malice of the borrower3The loss was caused by the damages suffered by the vessel as a consequence of being engaged in contraband5When the cargo loaded on the vessel be different from the change should have bee

n made by reason of force majeure(BAR) G obtained loan from Jo payable in installments.G executed a chattel mortgage in favor of Jo whereby she transferred in favor of Jo its successors and assigns all her title and rights to a vessel which G is the absolute owner. The chattel was registered with the MARINA and had a total accountability of P3M.but Jocould not forclose mortgage on vessel since it sank during typhoon. Meanwhile Lwhich rendered salvage services for refloating the vessel sued G. Whose lien should be given preference?HELD: Ls lien should be given preference since lien of Jo was extinguished when vessel sank,her right to recover was predicated on the safe arrival of the vesselat port of destination(PD 1521).

2006 notes: captain of vessel can contract loans on bottomry and if he does so at the place where the owners reside,then only that part owned by him is liable.If he does so at other places to have funds to comply with the powers inherentin his office, then the whole vessel may be made liable by him as he then is acting as agent for all the owners.

2006 notes: captain may constitute a loan on bottomry on that portion, if any, of the vessel owned by him to finanace his personal transactions provided no prior loan on bottomry has been executed on the whole vessel and provided further that no other lien or encumbrance exists on said vessel.

2006 notes: captain cannot contract loan of respondentia since he is not owner o

f cargo which is the security in a loan on respondentia. Neither is he an agentof these cargo owners. Besides, the Code specifically prohibits it.


25/46

Remedy of respondentia creditor:

Even if ship and its cargo perished, the principle of limited liability cannot be invoked ,the captain in this case assuming a personal responsibility for the sums received by him from the loan on respondentia consummated by him, the loan being considered as a personal loan of the captain not extinguished by the loss o

f the goods.

3) CONTRACT OF PASSENGERS4) MARINE INSURANCE5.)CARRIAGE OF GOODS (BILL OF LADING)

Bill of Lading is:

1. An Instrument in writing2. Signed by a carrier or his agent

3. Describing the freight so as to identify it4. Stating the name of the consignor, the terms of the contract of carriage, and5. Agreeing or directing that the freight be delivered to the order or assigns of a specified person at a specified place

A stipulation in the bill of lading limiting the carriers responsibility to the value stated, unless the shipper declares a higher value and pays ad valorem charges is valid.

1.Agreed limit usually based on value of goods2.Absence of agreement where the ship owner stated in the bill and the shipper did not declared a higher value, the amount stated in the bill.

3.Total absence of limit--for interisland or coastwise tradecourt may determine the limit--overseas trade-- $500 provided by COGSA

2005 notes: $500 per package prescribed by COGSA is not applicable where there is a stipulated limit in the bill of lading and when there was declared higher value.

2005 notes: failure to file notice of claim w/in 3 days from receipt of the cargo will not bar recovery of damages by the consignee if action is filed within the 1 year period under the COGSA.

2005 notes: Under NCC, automatic presumption of fault or negligence in case of damage to cargoes carried unless it falls under exempting causes (art 1734)

2005 notes: Common carrier is liable for goods discharge by it in bad order conditionand the arrastre operator for goods damaged in its custody.

2005 notes: the insertion in the Bill of Lading of the word LC No. 901 which state the amount of the LC obtained by the shipper will not effect the declarationof the value of the goods and cannot be the basis for the carriers liability .


26/46

2-Fold Character of BL

1. A RECEIPT w/ca. specifies the quantity, condition and character of the goods received and recites, and

b. recites the date an place of shipment and the fees paid by the shipper

2. it is evidence of a CONTRACT by which the 3 parties (shipper, carrier, consignee) undertake specific responsibilities and assume stipulated obligations; alsofixes the route, destination, freight charges, and stipulates the rights and obligations assumed by he parties (Art. 353)

Effect of issuance by carrier of an UNSIGNED bill of lading when ACCEPTED by shipper or consignee:

Acceptance with full knowledge of its-contents gives rise to the presumption that the same was a perfected and binding contract (Keng Hua vs CA 286 SCRA 257)

2005 notes: Where consignee did not sign the bill of lading, he is liable as agent of the shipper or by ratification if he presents the bill of lading to the carrier and received the goods.

To whom Goods deliverable:The goods are deliverable to the consignee named in the Bill of Lading or to aperson to whom he endorses the bill of lading ,if negotiable.Where the customs brokers authorized representative accepted the cargo OK and Compl

ete as shown in surveyors report countersigned by him, and it was obviously his assigned task to note defects in the cargo ,said acceptance, if not binding outright upon the customs broker, is at least evidentiary of the condition of the goods when thus received.Where shipper consigned the goods to Shippers Order with address arrival notice to Consolidated Mines Makati as stated in bill of lading, and the consolidated Mine and the bank where the letter of credit was procured entered into an agreement where the goods when they arrived should be released to the bank, the carrier having no knowledge of said arrangement until 5 months after the release of the goods to the designated consignee, the release of the goods to said designated consignee, even without the surrender of the Bill of Lading is lawful and the carrierdid not commit any fault sufficient to render it liable to the bank.

(BAR) a shipment of rice arrives in Manila from Thailand .the agreement betweenthe shipper and the ship owner is that freight was to be paid upon the discharge of the cargo. The shipper ,however does not pay the freight but offers a bondto respond therefore. Notwithstanding this offer, the owner of vessel refuse todeliver the rice. May not he charterer be ordered to deliver the rice by the court before which the shipper brings action ,upon furnishing of the bond by the shipper?HELD: NO, the ship owner cannot be ordered to deliver the rice by mere offer togive a bond. The ship owner is entitled to be paid in legal tender on delivery of the cargo.

A shipper may be held liable for bills of lading signed by another person,wherethe shipper does not appear as shipper or consignee, or where persons other thanthe shipper appear as the shpper, or where bill of lading is not actually singe


27/46

d by the shipper, if the evidence shows that the goods actually shipped belongedto the shipper.

Diligence Required:Extaordinary diligence . A common carrier ,in allowing its unseaworthy vessel toleave the port of origin and undertake the contracted voyage, with full awareness that it was exposed to perils of the sea, deliberately disregarded its solemn

duty to exercise extraordinary diligence and obviously acted with bad faith andin wanton and reckless manner thus making it liable for moral and exemplary damages.Art 359 Route to be Taken by Carrier:

1The Route AGREED UPON by the partiesCan the carrier CHANGE the agreed route?1General rule NO otherwise, he shall be liable for1All damages suffered by the \goods transported for any other cause, and2The amount stipulated for such event2Exception by reason of force majeure2The SHORTEST, LEAST EXPENSIVE and PRACTICAL route ( In absence of an agreement)

Art. 363 and 365, When Consignee may REFUSE to RECEIVE the Goods:

1. Art. 363When only a PART of the goods have been delivered to him and he PROVES that he CANNOT make use of the goods delivered without the others.

E.g.Like they are components of an equipment and without the missing parts you cannot use the equipment.

2. Art. 363 when the goods are DAMAGED and RENDERED USELESS for sale or consumption for particular purposes for which they are to be used (he can also demand payment of their value at the current market price on that day)E.g. you imported a thoroughbred and the legs of the horse were broken during the shipment.

3. Art. 365 when among the damages goods, there should be some in good condition, he is not required to receive those which are sound if he PROVES the impossibi

lity of utilizing the same in this form.

Now, if upon delivery of the goods, it is obvious from the external appearance of the packages that there were damages, the consignee must immediately file a claim. If that is not apparent from the external condition of the packages, then he has 24 hours from delivery within which to file a claim. If the claim is not filed within this period as mentioned in the law, then that will be barred because compliance with that is a condition precedent for a filing a case in court.

Art. 365. Period for Bringing a Claim Against the Carrier

1. IMMEDIATELY UPON RECEIPT of the Package - if the damage is APPARENT from theexterior of the package (for such purpose, a VERBAL CLAIM made immediately is SUFFICIENT compliance with the law)

2. WITHIN 24 HOURS following RECEIPT of the Package if the damage CANNOT BE KNOWN from the exterior part of the package

3. All Claims are EXTINGUISHED - if the consignee RECEIVES the merchandise, PAYING the freight charges WITHOUT PROTEST.

BAR: Did the prescriptive periods under the Civil code repeal Art. 366 of code of Commerce?HELD. 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)

Carriers Lien on Goods


28/46

Consignee may not defer payment of the TRANSPORTATION CHARGES and EXPENSES afterthe lapse of 24 hours following their deliveryEven if consignee did not sign the bill of lading, he is bound to pay the freight charges as agent of the shipperor by ratification if he presents the bill of lading to the carrier and acceptsthe goods.

In case of delay in payment, the carrier may demand the judicial sale of part of

the goods to pay for the expenses and cost of transportation. The goods transported are bound for this obligation, and the carrier acquires a 30 day lien overthese goods during which the goods may be sold to satisfy the credit of the carrier.

Change of Consignee on Orders of Shipper

(BAR) If shipper without changing the place of delivery changes the consignmentor consignee of goods (after said goods had been delivered to the carrier) under

what conditions will carrier be required to comply with the new orders of the shipper?

HELD: Shipper who after delivering the goods to the carrier and having been issued a bill of lading designating a consignee and a place of consignment wants tochange the consignee of the goods can be required by the carrier to surrender all copies of the bill of lading in order that a new one may be issued now bearingthe name of the consignee. Expenses incurred in the process will have to be borne by the shipper. This can only be done if shipment has not been made yet.

2006 notes: ambiguity in a bill of lading is construed against the carrier ,thecontract being one of adhesion (Eastern v Margarine)

When to File Claim for Loss/ Undelivered Goods:A claim for lost goods against a merchant vessel must be made within 30 days from receipt of the last package of the goods. Failure of the shipper to do so is fatal as it is a condition precedent to the accrual of the cause of action against the carrier.

Prescriptive Period to File for Recovery of Undelivered Cargo:

1. If there is a bill of lading 10 years from non-delivery

2. If there is NO bill of lading 6 years from non-delivery

3. If it involved overseas trading 1 year from non- delivery

An action for misdelivery of cargo under the civil code, and not under the COGSA, prescribes in 10 years. The 1 yr prescriptive period under the latter law isapplicable to loss or damage but not to its misdelivery.


29/46

Transshipment of Goods:

Transshipment or act of taking cargo from one ship and loading it in another(itis immaterial whether or not same person or entity owns two vessels), if done without legal exercise, however competent and safe the vessel into which the transfer is made is a violation of the contract and infringement of the right of the

shipper and subjects the carrier to liability if the freight is lost even by a cause otherwise excepted.

If the goods are to be transshipped, the last carrier to deliver the goods shallbe liable for either damage or loss, even if that occurred while the goods werein the custody of a previous vessel.Suppose the goods were imported from Japan. They were brought by Japanese vesselfrom Tokyo to Manila. Then they were transshipped to Cebu by domestic shippingcompany, Sweetlines. And the goods arrived in Cebu in a damaged condition, the consignee can run after Sweetlines even if the goods might have been damaged while in custody of that Japanese vessel. The recourse of Sweetlines is to run after

that Japanese vessel for reimbursement.Magellan Case. The letter of credit, which the buyer of the imported goods opened, contained a provision prohibiting transshipment of the goods. The shipping transshipped the goods on another vessel. And, there was a provision in the billof lading issued that there be a transshipment. The seller accepted the bill oflading without protesting. Although the in the letter of credit there was a stipulation there will be no transshipment, the bill of lading said there will be atransshipment. The buyer refused to accept the goods, our agreement was that there shall be no transshipment. The seller now was running after the vessel. The court said: No, because that agreement that there shall be no transshipment is just between the two of you. The carrier is not bound by that and in the bill of lading which the seller issued there is a stipulation that the goods would be transshipped, and you accepted it, you did not object. So in the contract between y

ou and the [carrier] there was a provision for transshipment, you cannot sue thecarrier if the buyer refuse to take delivery of the goods.4blue 95 notes: there is transshipment even if the 2 vessels are owned by same company.

Claims against carrier for Damages

Where goods are damaged and same are externally visible, such fact should appearon the bill of lading on date of receipt. If damage can only be determined onlyupon opening of packages, the consignee must file claim within 24 hours from his receipt of the goods from the carrier.

Request by consignee of goods for bad order examination within the period for filing formal claim is equivalent to a formal claim and tolls the running of the period.A formal claim filed 70 days later retroacts to date of request for a bad orderexamination.

Even if consignee was not a signatory to the contract of carriage between the shipper and the carrier, the consignee can still be bound by the contract.

AVERAGES

AVERAGES


30/46

Art. 806. The following Shall be Considered as Average:1. All extraordinary or accidental expenses which may be incurred during the voyage for the preservation of the vessel, cargo, or both

2. All damages or deterioration:a. which the vessel may suffer* from the time she puts to sea at the port of departure

* until she casts anchor at the port of destination

b.suffered by the goods* from the time they are loaded in the port of shipment* until they are unloaded in the port of their consignment

Kinds of Averages

Simple orParticularGeneralDefinitionAll the expenses and damage caused to the vessel or to her cargo which have NOTInured to the common benefit and profit of all the persons interested in the vessel and her cargo (Art. 809)All the damages and expenses which are deliberately cause in order to save the v

essel, her cargo, or both at the same time from a REAL KNOW risk (Art. 811)Who bears the loss?The OWNER of the things which gave rise to the expenses or suffered the damage (Art. 810)All the persons having an interest in the vessel and cargo therein at the time of the occurrence of the average shall contributeDistinction:PARTICULAR orSIMPLEGENERALHave not inured to the common benefit of all persons interested in the vessel and her cargo1Caused for the benefit of those interested in the vessel and her cargoMay be done to causes other than a deliberate act2Deliberately caused in order to save the vessel and/or her cargoAre borne by the owner of the thins damages3Shall be shared and contributed by all persons having an interest in the vesseland cargo

Art. 723 Liability of Lenders of Bottomry or Respondentia for a General or particular Average in the Things on which the Loan was Made:

1. General Average Lenders on bottomry or respondentia shall suffer in proportion to their interest, the general average which may take place in the things on which the loan was made

2. Particular Average - in the absence of an express agreement between the contracting parties, lenders shall also contribute in proportion to their interestprovided they do not fall under the exception in Art. 731(see loan on bottomryand respondentia)1.PARTICULAR OR SIMPLE

Includes expenses and damages caused to the vessel or cargo which have not inured to the common benefit and borne by their respective owners.

(BAR) Cargo of copra was loaded on board a Phil vessel bound for Holland. The owner of the vessel incurred the ff expenditures in course of trip: P15000 for repairs to the hull due to a collision with another vessel in the Gulf of Aden, P10000 for additional provisions for the crew and passengers while repairs were being made, P10000 for deterioration in the value of the copra due to the delay caused by repairs and P10000 for towing vessel thru the Suez canal .By whom and inwhat amount shall each of the above expenses be borne?HELD: Repair expense of P15000 is a particular average to be borne by the ownerwithout prejudice to said owner running after the other vessel, if negligent. The average is particular as it was not deliberately incurred for common benefit.Additional provision for the crew and passengers of P10000 is also particular av

erage and is borne by the owner of the vessel .the expense is a consequence ofthe repair of the vessel, which itself is a particular average.


31/46

P10000 deterioration in value of copra is particular average to be borne by copra owner. Loss in value is not a consequence of a sacrifice for common benefit.

Towage expense is an ordinary expense incident to navigation and is borne by theowner of vessel.

CONTRACT OF TOWAGE:

Contract whereby one vessel usually motorized, pulls another, whether loaded ornot with merchandise from one place to another for compensation.

It is a contract for services (lease contract) rather than a contract of carriage.

(BAR) While at sea, the captain of vessel A received distress signals from vessel B and vessel A responded and found vessel B with engine failure and drifting off course. Upon acceptance by vessel B of vessel As offer, vessel A connected towlines to vessel B and towed it safely to port. There was no grave marine peril

since the sea was smooth and vessel b was far from the rocks. In a suit for compensation for towage, who are entitled to recover, the owner, the crew or both?HELD: Owner of vessel A since a towage contract is a lease of services and the lessor ,owner of vessel A is entitled to reasonable compensation for said services. Members of the crew of vessel A are not entitled to compensation since the operation in the problem was not one of salvage.

2.GENERAL AVERAGE

Requisites:1. A common danger, a danger in which ship, cargo and crew all participate2. There must be a voluntary jettison or casting away of some portion of the cargo for the purpose of avoiding this imminent peril3. This attempt to avoid the imminent peril must be successful in a sense that the vessel and some of the cargo are saved

Liability of the Goods for General Average; BAR

1. The cargo shall be especially liable;a. for the payment of freight;b. for expenses and duties arising therefrom, which must be reimbursed by the shippers, as well asc. for the part of the general average which may correspond to it;

2. However it shall NOT be legal for the captain to delay the unloading of the cargo by reason of fear that the said obligation may not be complied with


32/46

3.If there are reasons for distrust, the judge or court, at the instance of thecaptain, may order the deposit of goods until he has been paid in full

Effect of a Declaration of War of Blockade on a Charterer Party:1. the charter party shall remaining force if the captain should not have any in

struction from the charterer2. Captain must proceed to the nearest safe and neutral port3. At said port captain must request and await orders from the shippers4. Expenses and salaries accruing during detention in said port shall be paid asgeneral average5. of, by order of the shipper, the cargo should be discharged at the port of arrival, the freight for the voyage our shall be paid in full

COMMON TO SIMPLE & GENERAL AVERAGE:

Proof

Made at port of repairs, if any is made, or in port of unloading .Liquidation is done in the port of unloading if in the Philippines, or in the port of arrival

,if in a foreign country.Common carriers cannot limit their liability for injury or loss of goods where such injury or loss was caused by its negligence. Otherwise stated, the law on averages under the Code cannot be applied where there is negligence.

Liquidation

Done by private agreement or if the parties cannot agree, then by judicial authority.

ARRIVAL UNDER STRESS

Art. 819. Arrival Under Stress

A.The arrival of the vessel at the nearest and most convenient court

B.Because the vessel CANNOT continue the trip to the port of destination

C.This situation arises when the vessel does not reach its destination on schedule because it has to go to another port due to:

1. lack of provisions or fuel but this should not be due to the lack of foresight of the captain, crew or owner of the vessel

2. seizure, privateers, or pirates but this should be well founded3. inability to navigate but this must not be attribute to the negligence of thecaptain, crew or owner


33/46

Art. 821, Liability for Expenses of an Arrival Under Stress:1. Shall be for the account of the ship owner or ship agent.2. BUT they shall not be liable for the damage which may be caused the shippersby reason of the arrival (provided the arrival is lawful)

Not lawful when:

1.lack of provisions due to failure to carry the provisions necessary accordingto usage and customs2.risk of enemies is not well known and manifest3.defect of vessel is a consequence of an improper repair4and malice ,negligence ,lack of foresight ,lack of skill of the captain causedthe damage.

2006 notes: all expenses for arrivals under stress are borne by the ship owner,but if the arrival under stress is unlawful ,the ship owner also answers for damages to the owners of the cargo and the passengers.

4blue 95 notes: Jason Clause: it means that the rights to contribution in a general average need not be affected even if it may have been due to the fault of one of the parties (as such, even the guilty party may collect)However, this is without prejudice to the rights of the other parties as with reference to the party at fault.

COLLISION:

Definitions:1. In a strict sense:a. collision the impact of 2 vessels, both or which are moving

b. Allision the striking of a moving vessel against onethat is stationary

2. In a broad sense collision includes allision, and perhaps another species ofencounters between vessels, or a vessel and other floating, though non-navigableobject

Rule when there is a Collision or AllisisonThe guilty vessel must pay for the damage EXCEPT when the guilty vessel sinks, b

ecause of its hypothecary nature.


34/46

5 Cases Covered by Allision or Collision:Who is at faultLiability1One vessel and faultSaid vessel shall be liable for1Damage caused to the innocent vessel2Damages suffered by the owners of the cargo of1The innocent vessel, and2Its own vessel2Both vessels at fault (Art. 827)1Each vessel must bear its own loss2Both shipowners shall be solidarily liable to the shipper for the damages occasioned to cargo3It cannot be determined which vessel caused the collision (Art. 828)1Each vessel must bear its own loss2Both shipowners shall be solidarily liable to the shipper for the damages occasioned to cargo4A 3rd vessel is at fault (Art. 831)The 3rd vessel shall be liable for:1Damage caused to the 2 innocent vessels2Damages suffered by the owners of the cargo of1The 2 innocent vessels, and2Its own vessel5Fortuitous Event (Art. 830)None Liable, each vessel must bear its own loss

Art. 826 Collision Through Fault of Captain or Crew

The OWNER of the vessel at fault shall indemnify the damages suffered, after anexpert appraisal

Rules to Follow After a Collision1. After collision, the captain of the Innocent vessel must file a marine protest w/in 24 hours from the time he reaches the nearest port (Art. 835)

2. General Rule Failure to file such protest bars the Innocent vessel from recovering from the guilty vessel, no matter how meritorious the case is

Art. 836. When Protest After Collision Not Necessary:

1. In case of the basis of the action is quasi-delicts2. On case of collision of a motor boat engaged in conveying passengers betweenship and shore, and a larger vessel (only sea going vessels are covered by the principle of collision)3. In case the person interested in the damage was not on board or was not in acondition to make known his wishes.

Art. 837. Limit of the Liability of Ship owners in Cases of Collision, Limited to the:

1. Value of the vessel2. All her appurtenances3. Freight earned during the voyage

The loss of the vessel extinguishes the liability of shipowner for the damage caused by collision. (Unless covered by the exceptions)


35/46

Fault undeterminable (Doctrine of Inscrutable Fault. )

If you cannot determine which vessel is at fault, each one bears its own loss and the shipowners of the two vessels will be jointly and severally liable for theowners of the cargoes of both vessels. This is the doctrine of inscrutable faul

t. Inscrutable, you cannot determine. Where two vessel collides and you cannot determine who is at fault, then each vessel bears its own loss and the vessels will be jointly and severally liable for the owners of the cargoes of both vessels.

2006 notes: Doctrine of last clear chance is not applicable to collisions specially where both are at fault or under doctrine of inscrutable fault.

Collision of a Moving vessel against a Stationary object

There is presumption of fault against a moving vessel that strikes a stationaryobject such as a dock or navigational aid. The moving vessel must show that it was without fault or that the collision was occasioned by the fault of the stationary object or was the result of the inevitable accident.

CARRIAGE OF GOODS BY SEA ACT

Contracts (Covered by the COGSA) are All contracts for the carriage of goods:1. By Sea2. To and from Philippine Ports3. In FOREIGN Trade

Q: What is the effect of the COGSA on our Maritime laws?

It did not repeal any existing provision of the code of commerce which is now in force or limit its application.American insurance vs Compania Maritime transshipment is a continuity of the contract which originated in N.Y. hence, COGSA applies.

Procedure to be undertaken by shipper or consignee in case of loss or damage ofcargo1. A NOTICE of loss OR damage and the general nature of the such loss or damageIN WRITIBG; must be given to the carrier or his agent.

a. at the PORT of DISCHARGE, orb. at the TIME of REMOVAL of the good into the custody of the person entitled todelivery thereof (such removal shall be prima of the evidence of delivery by the carrier of the good as described in the bill of ladingc. if the lose or damage is not apparent- the notice must be given within 3 daysof delivery2. when notice in writing need not be given to the carrier- if the state of goods has, at the time of their receipt, been the subject of joint survey inspection

Limit of the Liability of the Carrier for Loss or Damage to Goods Transported Sec. 4(5)(1);

1. $500 per package

UNLESS the nature and value of such goods have been declared by the shipper before shipment and inserted in the bill of lading


36/46

2. This declaration, if embodies in the bill of ladinga. Shall be prima facie evidenceb. But shall not be conclusive on the carriers3. Shipper and carrier may agree on another maxim amount but should no be less than $5004. Carrier can NOT be liable for:a. MORE than the amount of damage ACTUALLY sustained

b. Loss or damage to goods if the value thereof has been knowingly and fraudulently MISSTATED by the shipper in the bill of lading- Code of commerce is brooder than COGSA- Mayer Steel vs CA only the carriers liability is extinguished if no sin is bradet within 1 year. But not the insurer. Insurer cant five we againt carrier by 1year period.

Exception: if the law applicable is not the COGSA example: code of commerce

As a summary, the order of liability limit are(4blue 95):

1.declared value2.bill of lading3.in absence of 1 and 2 then $500Prescriptive Period of Actions Under COGSA: (filing of case in court)

1. Must be brought within one (1) year after:a. The delivery of the goods, orb. The date when the goods should have been delivered2. FAILURE to: Give the notice is not a condition precedent unlike in C.O.C.a. bring the action within one (1) year the carrier and the ship shall be discharged from all liability from such loss or damage.b. Give the required NOTICE of LOSS- this shall not affect or prejudice the right of the shipper to bring the sult within the one (1) year period (EE Elser vs C

A Nov 20, 1954)

4blue 95:Joint survey- no need to bring notice in writing

Q: what law shall prevail, with respect to prescriptive periods? Civil Code orCOGASA?A. The New Civil Code did NOT impliedly repeal the period of prescription underthe COGSA, AS a SPECIAL LAW the COGSA prevails over the general provisions of the Civil Code on prescription of action (Maritime Agencies vs CA 187 SCRA 346)

From what point should 1 year period be counted:

1. If delivery was made- from the date of delivery (included delivery to arrastre operator)2. No delivery- from the date when the good should have been delivered.

Instance Where the One (1) Year Prescriptive period Under the COGSA IS INTERRUPT

ED:

1.in case an action has already been filed in court


37/46

2.when there is an express agreement to the effect3.if it is delivered to wrong party

Effect of Extrajudicial Demand it shall not interrupt the running of the prescriptive period.

1. the general provisions of the Civil Code (Art 1155) cannot be made to apply,as such application would have the effect of extending the one-year period fixed

by law

2. it is desirable that matters affecting transportation of goods by sea be decided in as short a time as possible

AIR TRANSPORTATION

Regulatory Body in Air TransportationCivil Aeronautics Board (CAB)

Requisite Engage in Air Commerce- CPCNRA 776 Sec. 11

A certificate of Public Convenience and Necessity is a permit issued by the CABauthorizing a person to engage in air commerce and/or air transportation foreignand/or domestic.

WARSAW CONVENTION

In General :1. full title Warsaw Convention for the Unification of Certain Rules Relating toInternational Carriage by Air2. Date and Place Signed Warsaw Poland, October 12, 19293. Formal Adherence September 23, 1955 by Proclamation 201 issued by President Ramon Magsaysay

Is the Warsaw Convention Binding in the Philippines?

1. General Rule- YES, it has the force and effect of a law, being a treaty commitment assured by the Philippine Government.2. However- it does NOT operate as:a. an Exclusive enumeration of the instances for declaring a carrier liable forbreach of contract carriage, orb. an ABSOLUTE limit of the extent of that liability3. it must NOT be construed as to PRECLUDE the operation of the Civil Code and other pertinent laws- it does not regular, much less exempt the carrier from liab

ility for damages for violating the rights of the passengers under the contractof carriage, ESPECIALLY if willful misconduct on the part of then carriers employees is found or established.


38/46

Applicability (Art. 1.1)The Warsaw Convention shall apply to1All INTERNATIONAL Transportation of persons, baggage or goods2Performed by aircraft for HIREMeaning of International TranspirationAny transportation, in which according to the contract made by the parties, theplace of departure and the place of destination, whether or not there be a breakin the transportation or a transshipment are situated either:1Within the territories of two high Contracting parties or is a signatory to the

Warsaw convention & adverse to the agreement2Within the territory of a signle high contracting Party, if there is an agreed stopping, place within a territory subject to the sovereignty, mandate or authority of another power, even though that power is not a party to this convention,Case:1. Mapa vs CA- Jul 8, 1997 :Transportation to be performed by Several successiveAir Carriers

Art. 1(3)

Transportation to be performed by several successive air carries shall be deemed, for the purpose of this convention, to be one undivided transportation. If it

has been regarded by the parties as a single operation, whether it has been agreed upon under the form of a single contract or of a series of contracts, and itshall not lose its international character merely because one contract or a series of contracts is to be performed entirely within a territory subject to the sovereignty, suzerainty, mandate , or authority of the same high contracting Party

Limitation to the Liability of the Air CarrierArt. 22(1) In transportation of PASSENGERS- 125,000 francs but the carrier and pax may

agree to a higher limit of liability:(2) In transportation of CHEKED BAGGAGE of GOODS- 125 francs per kilo, unless the consigner declares a higher value and pays a supplementary sum .(3) As regards OBJECTs of which pax takes charge HIMSELF (hand carried luggage) 15,000 francs per pax .Are 22 applies only to simple loss.

Cases Where Art. 22 was applied by SC:Pan Am vs. IAC -164 SCRA 286

Cases Where Art. 22 was NOT Applied by SC:1. Alitalia vs. IAC 192 SCRA 92. Pal vs. CA 207 Scra 100 if there is bad faith, Art. 22 cant be involve3. Sabena vs CA (Mar 14, 1996) gross negligence4. British Airwys vs CA is failure to raise obj. deny trial makes Art. 22 waived.

When the Air Carrier Shall Not be entitled to the Warsaw convention provisions which EXCLUDE or Limit his LiabilityArt. 25(1) if the damage is caused by his WILLFUL MISCONDUCT or by such default on hispart as, in accordance with the law of the court to which the case is submitted

, is equivalent to willful misconduct(2) if the damage is caused by under the same circumstance by any agent of the carrier acting within the scope of his employment


39/46

Art. 25 in relation to art. 22 Liability of Air Carriers

Luna vs CA -216 SCRA 107 (Nov 27, 1992) :limitation only applies to Art 22, & noother in the Warsaw convention

Art. 26 When to file a complaint for Delay or Damage to goods or baggage with the carrier this is condition precedent for fluting case against the carrier

1. receipt by the person entitled to delivery of luggage or good without complains is prima facile evidence that the same have been evidence that the same havebeen delivered in good condition and in accordance with the document of transportation2.in case of:

a. damage- the person entitled to delivery must complain to the carrier forthwith after the discovery of the damage, and at the latest within

* 3 days from the date of receipt in the case of luggage, and* 7 days from date of receipt in the case of goods

b.Delay latest within 14 days from the date on which the luggage or goods have been placed at his disposal

3.every complaint must be made in writing upon the documents of carriage or by separate notice in writing dispatched within the times aforesaid.

Requisites for the Application of WC

1) It must be an international flight. If the ticket was bought in Bangkok fora flight in the US, from LA to Chicago, that is domestic flight (even if boughtin Bangkok)

2) Two countries must both be signatories. Singapore is not a signatory.

Art. 29.Prescriptive Period in Filing Case for Damages.

The right to damages shall be extinguished if an action is not brought within 2years reckoned from;

1.) The date of arrival at the destination or2.) The date on which the aircraft ought to have arrived, or3.) The date on which the transportation stopped

Art. 30. Transportation by Successive Carriers in relation to art 1(3)

1). In the case of transportation to be performed by various successive carriers, each carrier who accepts passengers, baggage or goods shall be deemed to beone of the contracting parties to the contract of transportation insofar as the

contract deals with the part of transportation which is performed under his supervision .


40/46

(2) In the case of transportation of this nature, the passengers or his representative can take action only against the carrier who performed the transportationduring which the accident or delay occurred. Save in the case where, by express agreement, the first carrier has assumed liability for the whole journey.

(3) As for baggage or goods, the passengers or consignor shall have a right to action against the first carriers, and the passengers or consignee who is entitle

last delivery, shall have a right of action against the last carrier, and further, each may take action against the carrier who performed the transportation during which the destruction, loss, savaged, or delay took place. The carriers shall be jointly liable to the passengers or to the consignor or consignee.The provisions under the WC do not bar the passenger to sue instead under the Civil Code. Like theres a provision there for lost luggage, you have to file a claim from the airline company within 14 days, otherwise, your claim will be barred. The Court has said that even if the passenger does not do that, the WC doesnot bar him to claim under the Civil Code. Or the 2-year prescriptive period under the WC.That will not apply if the passenger was humiliated and treated discourteously.In the United Airlines case, the passenger made a demand, but he was given the

run around. The Court said that since the delay in filing was due to the evasiveness of the airline company, the prescriptive period under the WC shall not apply.

PAL casePAL unloaded luggage of passengers to take in cargoes to earn more freight.Held:There was misconduct. So you cant invoke limited liability.

British AirwaysPassenger proved that the value of his lost suitcase was greater than the valueprovided in the WC. No objection was made.Held: That is waiver of the limited liability under the WC.

Theres a limitation on liability of lost luggage. However, the court has said that:1) Under the WC, if a passenger was not given a baggage claim tab, the Airline Company cannot invoke that limited liability.2) WC says that limited liability cannot be invoked when the word used is the French word, dol, equivalent to the Spanish word, dolo. But in the English translation of the WC, it was translated as willful misconduct. The Court has said time andagain that when the luggage is lost because of recklessness of the airline company, it cant invoke its limited liability under the WC.

Santos v. NW Orient AirlinesSantos was a student in California. He was planning to go home for a Christmasvacation, so he bought a ticket in San Francisco, NW Orient. He had his ticketconfirmed. On the day of departure, while checking in, he was told, We cant guarantee that youll be accommodated from Narita to Manila. You might be stranded in Japan.Santos backed out. He was eventually accommodated but he sued for damages. NW Orient said that under Article 18 of the WC, you could sue an airline company only in any of the following places:1) Place where it is incorporated2) Place where it has its principal office3) Place where ticket was bought4) Destination

NW Orient claimed that NW was incorporated in Minnesota; it has its principal of

fice there; the ticket was bought in San Fr

Documents

Trans Pol Aw