A.

OVERLAND TRANSPORTATION
(Arts. 349-379)

Applicability
1. Domestic land and water/maritime transportation. (Pandect of Commercial Law and
Jurisprudence, Justice Jose Vitug, 1997 ed.)
2. Domestic Air Transportation. (Commercial Law Review, Cesar Villanueva, 2004 ed.)
IMPORTANT CONCEPTS:
1. Bill of lading
2. Obligations of the carrier
3. Right of abandonment
4. Notice of damage
5. Combined carrier agreement
BILL OF LADING
The written acknowledgment of receipt of goods and agreement to transport them to a
specific place to a person named or to his order.
Rules:
1. It is not indispensable for the creation of a contract of carriage. (Compania Maritima vs.
Insurance Company of North America, 12 SCRA 213)
2. Ambiguity is construed against the carrier, the contract being one of adhesion.
3. The consignee, although the instrument is oftentimes drawn up only by the consignor and
carrier, becomes bound by all the stipulations contained therein by making a claim for loss
on the basis of said bill of lading. (Sea-Land Services Inc. vs. IAC)
4. The right of a party to recover for loss of shipment consigned to him under a bill of lading
drawn up only by and between the shipper and the carrier, springs from either a relation of
agency between him and the shipper, or his status as stranger in whose favor some
stipulation is made in said contract, and who becomes a party thereto when he demands
fulfillment of that stipulation. (Art. 1311 (2), (Mendoza vs. PAL Inc.)
5. Acceptance of the bill of lading without dissent raises the presumption that all the terms
therein where brought to the knowledge of the shipper and agreed to by him and, in the
absence of fraud or mistake; he is estopped from thereafter denying that he assented to
such terms. (Notes and Cases on the Law on Transportation and Public Utilities, Aquino, T. &
Hernando, R.P. 2004 ed. p.261)
Kinds:
1. On board - issued when the goods have been actually placed aboard the ship with very
reasonable expectation that the shipment is as good as on its way.
2. Received - one in which 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.
3. Negotiable - 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 therein.
4. Non-negotiable - One in which it is stated that the goods referred to therein will be
delivered to a specified person.
5. Clean One which does not indicate any defect in the goods.
6. Foul One which contains a notation thereon indicating that the goods covered by it
are in bad condition.
7. Spent One which covers goods that already have been delivered by the carrier
without a surrender of a signed copy of the bill.
8. Through One issued by the carrier who is obliged to use the facilities of other carriers
as well as his own facilities for the purpose of transporting the goods from the city of
the seller to the city of the buyer, which bill of lading is honored by the second and
other interested carriers who do not issue their own bills.
9. Custody One wherein the goods are already received by the carrier but the vessel
indicated therein has not yet arrived in the port.
10. Port One which is issued by the carrier to whom the goods have been delivered, and
the vessel indicated in the bill of lading by which the goods are to be shipped is already
in the port where the goods are held for shipment.
Functions:
1. Best evidence of the existence of the contract of carriage of cargo (Art. 353)
2. Document of title

3. Receipt of cargo
4. Contract to transport and deliver goods as stipulated
5. Symbol of the goods
OBLIGATIONS OF THE CARRIER
A. Duty to accept the goods
GENERAL RULE: A common carrier cannot ordinarily refuse to carry a particular class of
goods.
EXCEPTION: For some sufficient reason the discrimination against the traffic in such goods
is reasonable and necessary. (Fisher vs. Yangco Steamship Co. 31 Phil 1).
Instances when the carrier may validly refuse to accept the goods include the ff:
1.) Goods sought to be transported are dangerous objects, or substances including dynamite
and other explosives
2.) Goods are unfit for transportation
3.) Acceptance would result in overloading
4.) Contrabands or illegal goods
5.) Goods are injurious to health
6.) Goods will be exposed to untoward danger like flood, capture by enemies and the like
7.) Goods like livestock will be exposed to disease
8.) Strike
9.) Failure to tender goods on time. (Notes and Cases on the Law on Transportation and
Public Utilities, Aquino, T. & Hernando, R.P. 2004 ed. p.68)
In case of carriage by railway, the carrier is exempted from liability if carriage is insisted
upon by the shipper, provided its objections are stated in the bill of lading.
However, when a common carrier accepts cargo for shipment for valuable consideration,
it takes the risk of delivering it in good condition as when it was loaded. (PAL vs. CA)
B. Duty to deliver the goods
Not only to transport the goods safely but to the person indicated in the bill of lading. The
goods should be delivered to the consignee or any other person to whom the bill of lading
was validly transferred or negotiated.
Time of delivery
Stipulated in
Contract/Bill of
Lading
1.
Carrier
is
bound to fulfill
the contract and
is liable for any
delay; no matter
from what cause
it
may
have
arisen.

a.
b.
c.
d.

No stipulation
1.
Within
a
reasonable time.
2.
Carrier
is
bound to forward
them in the 1st
shipment of the
same or similar
goods which he
may make to the
point of delivery.
(ART. 358 Code
of Commerce)

Effects of delay
Merely suspends and generally does not terminate the contract of carriage
Carrier remains duty bound to exercise extraordinary diligence
Natural disaster shall not free the carrier from responsibility (Art.1740)
If delay is without just cause, the contract limiting the common carriers liability cannot be
availed of in case of loss or deterioration of the goods (Art.1747)

RIGHT OF CONSIGNEE TO ABANDON GOODS

Instances:
1. Partial non-delivery, where the goods are useless without the others (Art. 363);
2. Goods are rendered useless for sale or consumption for the purposes for which they are
properly destined (Art. 365); and
3. In case of delay through the fault of the carrier (Art. 371).
NOTICE OF DAMAGE (ART. 366)
Requisites for applicability:
1. Domestic/inter-island/coastwise transportation
2. Land/water/air transportation

3. Carriage of goods
4. Goods shipped are damaged
Rules:
a. Patent damage: shipper must file a claim against the carrier immediately upon delivery (it
may be oral or written)
b. Latent damage: shipper should file a claim against the carrier within 24 hours from
delivery.
Note: These rules does not apply to misdelivery of goods. (Roldan vs. Lim Ponzo)
Purpose of notice: To inform the carrier that the shipment has been damaged, and it is
charged with liability therefore, and to give it an opportunity to make an investigation and
fix responsibility while the matter is fresh.
The filing of notice of claim is a condition precedent for recovery.
Shorter period may be stipulated by the parties because it merely affects the shippers
remedy and does not affect the liability of the carrier. (PHILAMGEN vs. Sweetlines, Inc.)
Prescriptive Period
Not provided by Article 366. Thus, in such absence, Civil Code rules on prescription apply.
If despite the notice of claim, the carrier refuses to pay, action must be filed in court.
1. No bill of lading was issued: within 6 years
2. Bill of lading was issued: within 10 years.
ARTICLE 366
COGSA Sec.3
(6)
Applicability
Domestic/inter1. International/
island/coastwise
overseas/foreig
transportation
n (from foreign
Land, water, air country
to
transportation
Phils.)
Carriage
of Note: subject to
goods
the
rule
on
Paramount
Clause
2.
Water/maritime
transportation
3. Carriage of
goods
Notice of damage
1. Condition
1. Not a condition
precedent
precedent
2. 24-hour period 2. 3-day period for
for claiming
claiming latent
latent damage
damage
Prescriptive period
None
provided; One year from
Civil
Code the
date
of
applies.
delivery
(delivered
but
damaged
goods), or date
when the vessel
left port or from
the
date
of
delivery to the
arrastre
(nondelivery
or
loss).
COMBINED CARRIER AGREEMENT (ART. 373)
GENERAL RULE: In case of a contract of transportation of several legs, each carrier is
responsible for its particular leg in the contract.
EXCEPTION: A combined carrier agreement where a carrier makes itself liable assuming
the obligations and acquiring as well the rights and causes of action of those which preceded
it.