 Some of them got sick because of the hassle and so was not
TRANSPORTATION LAW- Dec. 3, 2010
I. Air Transportation
Lhuiller v. British Airways case:
 says that the governing law is the Warsaw Convention
 issue is jurisdiction
 "high contacting parties" - countries which are signatories in
the Warsaw convention; countries who abide with the
provisions of the agreement in the WC
 "international flight" - flight between two high contracting
parties (according to WC)
 importance to determine if international flight - to know the
applicability of WC (if international flight, then WC applies)
 in this case, international flight (London-Italy) therefore, WC
applies
 Held: case shall be filed in the:
a) place of the main office of the airline (London)
b) place where you bought the ticket (Italy)
c) place where the incident happened
 Therefore: Philippine court has no jurisdiction over the case,
case dismissed for lack of jurisdiction
IN ONE CASE:
 One guy from Iloilo or Bacolod who joined a golf tournament
in Bangkok
 He needed to pass Singapore and so he bought ticket from PAL
going to Singapore
 since PAL has no direct flight from Singapore to Bangkok he
got a British Airways ticket going to Thailand from Singapore
 He arrived using PAL's plane but British Airways would not
accept them because the ticket was not indorsed by PAL
 BA: if we accept this ticket, there is a possibility that PAL will
not pay us
 He was not able to use the questioned ticket and Garuda
Airways going to Bangkok
able to play golf
 When they got back in the Phils, they filed a case for damages
for breach of contact against PAL
 PAL filed motion to dismiss
 ISSUES
1. Should the case be filed against BA?
2. Do the Philippine courts have jurisdiction
over the case given it is a flight from
Singapore to Thailand?
3. Does the WC apply?
 HELD
No. When he purchased ticket from PAL,
1.
PAL only used BA as their agent by virtue of
an agreement between airlines and the main
carrier is PAL and so PAL should be the one
sued.
2. Yes. The cause of contract here is not a
breach of contact of carriage but the
negligence of PAL in communicating the
ticket to the British Embassy as far as the
connection is concerned. Note that the
negligence happened before contact of
carriage was effected.
3. No. The cause of action is not the contract of
carriage but PAL's negligence making the
WC not applicable.
 NOTE: Compare the Lhuiller case and this case
II. OBLIGATIONS OF THE PARTIES
A. Vigilance over the Cargo
1733. Extraordinary diligence is required
1735. Presumption of negligence in case of loss, damage or
deterioration
1
  GR: as long as it is shown that there is damage then the
common carrier (CC) could be made liable
 EXP: CC could prove that it has exercised extraordinary
diligence over the goods
1736. Coverage of extraordinary diligence  lasts from the time the
cargoes are conditionally placed in the position of and
received/accepted for transportation by the carrier to be delivered to
the consignee, without prejudice to 1738
1737. Even if the cargoes are temporarily unloaded, CC is still
obligated to exercise extraordinary diligence UNLESS the
shipper/owner avails of the right to stoppage in transitu
 "stoppage in transitu" - right of an unpaid vendor to stop the
shipment or transportation of the cargo to the consignee
because the consignee is not capable of paying him, and so the
vessel becomes a warehouse, therefore shall exercise the
diligence of the good father of a family and not extraordinary
diligence
1738. CC has to continue to operate with extraordinary diligence even
if the goods are placed in the warehouse at the place of destination.
 Fact that it has reached the destination and place of the
warehouse it doesn't follow that the extraordinary diligence has
already ceased to exist.
 It would only cease to exist if CC has given a reasonable time
and given notice to the consignee to release the same
 If there is actual or constructive delivery, extraordinary
diligence ceases to exist
 Actual delivery - cargoes were given to the consignee and the
consignee receives the cargoes.
 Constructive delivery - notice was already given to the
consignee regarding the arrival of the cargoes and the
consignee was already given a reasonable time to release it
even if there is no actual release
 In cargoes, if there is delay, then one of the options of the shipper is
to abandon the cargo once in transit and ask for the full price of the
cargo. But to be able to do so,
Requisites:
1. there should be a demand in writing addressed to the CC
stating your intention to abandon the goods
2. it shall be done before the cargo reaches the destination
B. TRANSPORTATION OF PASSENGERS (CC)
1. Obligation to accept the passengers without discrimination
2. Obligation to transport them safely
3. Obligation to transport without delay
When will CC be liable in transporting passengers?
a. When there is delay (1740)
b. When there is deviation (1747)
III. DEFENSES OF THE COMMON CARRIER
1734. GR: CCs are responsible for the loss, destruction and
deterioration of the goods
EXP: if the same is due to any of the following causes ONLY:
memorize!!!
1. floods, storm, lightning, earthquake or other natural disasters
and calamities
2. in case of an act of a public enemy during war, international or
civil
3. act or omission of the owner of the cargo (shipper)
4. character of the goods or defects in the packing or container
5. order or act of competent public authority
REQUISITES:
Natural Disaster
1. this is the only cause of loss, destruction and deterioration of
the goods
2. that the CC has exercised the due diligence in preventing or
minimizing the loss before, during and after the occurrence of
the natural disaster (1739)
2

 CC incurs delay (1740) or deviation - change of route (1742 or
1741)
 "Delay" - delay in the departure and/or arrival
 If there is delay, CC is still liable although the goods suffered
deterioration, loss or destruction caused by natural calamity,
which is an absolute defense.
Act of Public Enemy
there should be actual war between the place of destination and place
where the carrier belongs, international or civil
 "public enemy" - pirates are public enemy, thieves, robbers,
rioters and hijackers are not public enemies
Public enemy in war, whether civil or international , as a valid
defense of common carrier
There must be an actual war between the country where
the common carrier comes from and the country that
confiscated the goods. (hijackers, thieves, robbers are
not considered as public enemy; but a pirates are
considered as such.)
Character of the goods or defect in the packing of the container
Common carrier will not be liable if there are already
defects in the goods or in the packing of the goods.
But If the defect is apparent and the common carrier
still accepts it, then the fact that there was prior defect
could no longer be raised as a defense against the
shipper. If the common carrier does not know of the
defect then it can be raised as a defense. Provided, that
it had exercised the diligence to forestall or minimize
damage (Art. 1742).
Order of a Public Authority may be used as a defense when:
It is a valid order
There is a force that could compel the common carrier
to abide by the order of the competent authority.
LIABILITIES OF COMMON CARRIER:
Act of an employee that caused injury to the passenger would
still make the common carrier liable, whether or not the
employee is acting in accordance with his duty; or even if the
act of the employee that caused the injury is in violation of the
instruction of the common carrier.
It shall also be noted that, by express provision of the law, an
act of a stranger or co-passenger of the common carrier that
caused injury to another passenger would still make the
common carrier liable.
If a passenger was injured and he has not yet paid his fare, then
he is not considered a passenger and the common carrier will
not be liable to him; but if he has an intention to pay even if he
has not yet paid, then he can still be considered as a passenger.
If the passenger was not aware that he rode the wrong bus, he
is still considered as a passenger.
If the passenger pretended to be the owner of a plane ticket and
boarded the plane, he cannot be considered as passenger
because there was fraud on his part.
In the case of gratuitous passenger, the common carrier is still
liable; but the liability may be limited depending upon the
stipulation of the passenger and the common carrier. However
in the case of an ordinary passenger, the liability of the
common carrier cannot be lessened or diminished by
stipulation.
Note that the stipulated limitation of liability in the case of gratuitous
passengers shall only be valid in ordinary negligence. It is not valid if
the cause of injury is willful act of gross negligence.
Cause of action if the passenger is injured:
Culpa Contractual (breach of contract)
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 Case against the common carrier only. Cannot be filed
against the driver because he is only an agent.
Preponderance of evidence is needed to establish liability.
Quasi-delict
Case against the driver and the common carrier; based on
torts.
Culpa Criminal
Case against the driver. Common carrier is subsidiarily
liable if the driver is insolvent.
Possible damages:
Actual damages
(life expectancy=2/3 x 80 - age) x income and expenses
Moral damages
Hurt feelings, sleepless nights, mental anguish
In culpa contractual, moral damage is not awarded
except in the case of death or bad faith.
Exemplary damages
Awarded if there is one or more aggravating
circumstances
Nominal damages
Awarded to vindicate the right of the plaintiff.
Transportation Laws - Dec. 10, 2010
Code of commerce/ Maritime Law:
Corporation A - has bus1, bus 2, and bldg.
The owners of corporation A are:
B - who has a house and lot
C- who has a car
D - who has a car
• Corporation has a distinct and separate personality. So the
liability of A cannot be transfer to B, C ,D...
Nature of liability under maritime law: it is real and hypothetical in
nature...
What does real and hypothetical in nature mean? It is limited liability.
Limited liability- in case the vessel is totally loss through the fault or
negligence of the captain, the liability of ship owner is extinguished.
• Authority: Art. 837 under code of commerce: the owner shall
be civilly liable for the acts of the captain up to the actual value
of the ship, freight...
• Limited liability only applies to maritime transaction/
business...
• Elements of real and hypothetical in nature:
• The vessel is totally or partially loss
• Done through negligence or fault of the captain and not the
owner
• E.g. the real and hypo in nature will not apply: Negros
navigation v Miranda
During the voyage, there was a collision of negros navigation
and an oil tanker because of the negligence of the captain... but the
cause is that the boat is not sea worthy because it sunk within 5-10
minutes where in many people died. And allowing the boat to be
overloaded with people, that is why there was negligence on the part
of the owner and not only to the negligence of the captain... That is
why the limited liability rule will no longer apply in this case.
• Limited liability rule: Vessel, appearance, freight and insurance
4
 • It does not violate the civil code.
• In order to avail limited liability in partial loss there must be a
written notice of abandonment. That the owner is turning over
to the predator possessor of the thing or abandoning the vessel.
• Principle of Limited liability rule (LLR): no vessel, no
liability...
• Is there a need of abandonment? No there is no need because
there is nothing to abandon.
Exception of LLR:
• If there is a concurrence of owner or agent of the vessel
• In case if the vessel is insured
• The nature of the claim is in special law that the workers who
died in the performance of their duties. It is Workmen's
compensation claim.
• When all the expenses for repair incurred prior to the voyage,
because there was obligation already arise.
• The freight that was paid will not be included in the LLR. It is
only the value of the vessel will be extinguished.
Protests:
Within 24hrs
Or to the first point of entry in the Philippines
It is not applicable to all case... Only if the vessel was shipwreck,
hurricane, arrival under stress, in case of maritime collision (take note
of this, because it involves maritime vessels and it should be both
maritime vessel)
Where to file? In 1981, the jurisdiction is regarding to the amount
involved
In Metro Manila: RTC - exceeds 400k
Outside MM: RTC- exceeds 300k
Below this amount above stated: will in Metropolitan Trial Court.
Maritime Collision- there is a need to protest
Vessel - any barge, lighter, bulk vessel, freighter, passenger freighter,
tanker, fishing boats, contrabands... design and capable of transporting
person or cargo from one coast to another.
Not vessel: If the vessel is operated under Arm forces of the
Philippines, all foreign , Bangka, sailing boats, less than 3 gross tons,
boats that are accessory, yachts, health service, floating store houses
Requisites of maritime vessel:
1 Not accessory
2 Has a license to engage in the transportation
3 Using to transport crates or people by sea
Under code of commerce Art.835 regarding the person capability to
protest and that it should be both maritime vessels.
• Registration and extraordinary diligence
Vessel - is personal property. It is registered with conveyance and
customs
MARINA RULES IN REGISTRATION- it is the one who set the rules
How to acquire? Good faith with valid title: 3yrs
GF without valid title with adverse possession: 10 yrs
Through sale
Can you sell a vessel while in voyage? Yes
Who will pay the payment of wages? Purchaser
Who will collect the freight earn? Pertains to purchaser
Can you sell a vessel when you reach in the San Francisco or
destination? Yes
Who will collect? The Seller because he already finished the
transaction
Who will pay the wages? Seller
Who will abandon the ship? The ship owner or agent but not the
chartered.. Co-owner can abandon it only in proportion of his share.
All vessels must be registered.
What are the vessels need to be registered?
5
 Owned by the Philippine citizen or Phil. Companies that atleast
60% owned by Phil. Citizen Transpo Lecture- Jan 7
More 15 gross tons in capacity Charter Party - a special contract in maritime commerce. It is not the
Optional registration: 15 tons or less contracting parties but the contract itself. It is a contract by which the
Not required: war vessels, boats of private 3 tons or less, non- owner or agent of the vessel leases the whole or part of the vessel to
motorize boats, another for transportation of the cargo or passengers from one place to
Temporary certificate: another for a certain price.
May be given incase of charter or Marina Governing laws:
Charter must not be less than 1yr.. operation entirely by Filipino Common Carrier- civil code
citizens and man by Filipino citizens Private Carrier- Code of Commerce
When can you delete/cancel the registration? The moment CC becomes a private carrier- Code of Commerce
Phil.; incase of bare boat chartered by a foreign Importance of determining whether common carrier is considered a
Pre-termination of chartered agreement private carrier:
Sale of the vessel to a foreigner To know which law will govern
Scrapping or decommission of the vessel (no longer to be used) Stipulation that limits liability is valid in a private carrier but
Constructive or total loss not in a common carrier.
When is a common carrier considered as private carrier? BARE BOAT
CHARTER
BARE BOAT CHARTER
It is when a vessel is hired (including the crew and everything).
The control, management, and possession is with the charterer.
Article 652 of the code of commerce: Contents and formalities of the
chartered parties
The charter parties has to be drawn in duplicates, signed by the
parties.
Charter parties should also specify:
* the kind, the name, and the tonnage of the vessel.
* the origin of registry of the vessel.
* The name of the shipper, the owner, and the charterer.
* Port of loading and unloading.
* Capacity and the carriage agreed upon by the parties to be
loaded.
* The freightage
* the primage
* lay days.
Freight-fare or kind of cargo to be loaded
6
 Primage- fee given for the special care given to the cargo or by
using the equipment
Lay days- allowable number of days that a charterer may load
or unload the cargo
Why is this important to know?
Because we are dealing with cargoes and vessels, and they are
always in transit and delay would cause a lot of money for
additional charge for demorage
Demorage- fee charged in excess of the number of days
allowed to load and unload
Requisites for a valid charter party:
Consent of the contracting parties
Existence of the vessel at the disposal of the charterer
Stipulation as to the freightage
Compliance with Art. 652 o the Code of Commerce
What is the indication of Art 652- the charter party has to be in writing
as general rule
EXP: Art 653, if the cargoes be received and the charter party
has not yet been signed then it is understood that it has been executed
and the one that will govern the obligation of the parties are the
stipulations in the bill of lading
Kinds of Charter Party:
Bare Boat Charter Party or Demise Charter Party
a person hires the vessel and the crew, and so the charterer
would be the one who would take charge in paying the wages
of the crew and in control of provisioning everything in the
vessel, in effect, the crew became the employees of the
charterer
charterer party would be liable to third persons
charterer has command, possession and navigation of the
vessel; he acts as owner who handles everything
only instance where common carrier would be a private carrier
Contract of Afreightment - charterer hires the vessel either for a
deteminate period of time or per voyage or successive voyages
Voyage Charter - per voyage or successive voyages
Time Voyage - fixed time
Contract of Towage  contract of service where the barge is towed by
a vessel
Can a ship captain enter a charter party?
Art. 655, the ship captain can enter a charter party provided, in
the absence of a ship agent, even if it is in contravention or
against the instruction of the ship agent or owner - still valid
But the owner may go against the ship captain for damages
Art. 656 as to determine when demorage shall be given
if there is no time stipulated in the charter party then the usage
of the port shall be used
What if during the chartering, the vessel was found later on not
seaworthy anymore?
Art 657, the captain is obligated to look for a vessel and
continue the voyage within 150 kilometers from port
If the captain cant find vessel to deliver - he may apply for
deposit of the cargo
Art 658, the freight shall accrue as stipulated in the contract. But if the
stipulation is not clear, the rule will be, if on the charter there is a
month or a date, then the freight will accrue during the time of the
loading. If there is a fixed period, then the fright accrues on that very
date.
Art 659-if the cargoes are placed on the vessel, the captain may sell the
cargos subject to the following conditions:
if the money from the sale will be needed for the repair of
the problem of the vessel.
Unavoidable and urgent expenses
Effect- if after the repair, the cargo was able to reach the point of
destination, then the captain will pay the owner based on the price in
the place of destination. Same goes with if the vessel did not reach the
destination.
7
Will the cargo be liable for the freight? If the vessel was not able to
reach the destination, its liability shall be proportionate to the distance.
If it reaches the destination, it will be liable for the whole value.
Art. 659- partial freight
if the vessel was lost or did not reach the destination.
Under 661, when for reasons of shipwreck or stranding, or
when the goods were confiscated by enemies or pirates.
Under 660, when the cargo was thrown overboard and was
never recovered. (jettison)

Art. 662- shipwreck but cargo was recovered= liable only up to the
extent of the damage (partial freight)

Art. 665 the moment the cargo is placed in the vessel, the common
carrier is already liable. There is already a lien created in the cargo.

What are the liabilities?

Freight
Expenses
Average (expense that inure to the benefit of cargo
holders) accorded to him. Ex: Jettison.
If you cannot pay the liabilities, then under…

Art 668 the cargos be sold in the auction. Cargos to be sold in auction
by the captain:
cargos under 665 and 666
if the cargo is at the risk of deteriorating
consignee cannot be found or refuses to claim the cargo
if it is very expensive to preserve the cargo.

Instances where cargo is liable for full freight: art 659

The cargo was sold for the repair, and the vessel reached the
destination.
Under 662, when the vessel was repaired but after the repair
the cargo was not sold and the vessel reached the destination.
Under 663, deterioration due to packing
Fortuitous event

When not required to pay a freight?

8
 Transpo Lecture - Loan on Respondentia and
Bottomry (January 28, 2011)
LOAN ON RESPONDENTIA AND BOTTOMRY (same)
 it is a contract of loan in the nature of mortgage
 subject matter in RESPONDENTIA: Cargo || BOTTOMRY:
Vessel
 there should be marine risk
 unlike other loans, may assume higher interest and not covered
by any regulation or usury law because of the risk the lender is
taking the moment the vessel goes on voyage
 obligation is paid only if the subject matter is lost
(respondentia), or extinguishment of obligation to pay when
lost (bottomry), so when payment should be made at all costs,
then it is an ordinary loan
d) GR: it is presumed that LOR or LOB covers round trip
e) EXP: when it is expressly stipulated that a particular trip is
covered by loan
f) Should be recorded in the registry of vessel, but failure to
register the same does not invalidate the contract
g) Effect of the non-recording  it will not bind third parties and
you will lose as a lender, your preference of credit (note: LOB
or LOR has preference of credit over ordinary loans)
h) GR: When vessel or cargo is lost, then the LOR or LOB is
extinguished  the borrower will no longer pay the lender
because the subject matter is lost
i) EXP:
1. if the loss is caused by the inherent defect of the cargo
2. fault of borrower himself
3. Barratry or malice on the part of the captain of the vessel
4. If the damage was caused because the borrower was
engaging in contraband goods
5. If the goods loaded were different from that designated in
the contract
j) RULE in obligation when it comes to General Average
(expense on deterioration): incurred to save cargo or vessel by
jettisoning  owners and lender benefited from such
- Lender shall suffer or share in proportion to their respective
interest in General Average which may take place in the goods in
which the loan is made (Art. 732)
Ex. Cargo worth 1M, loan on respondentia is 500k, General Average is
100k, How much should the lender pay? - his interest is one half. Then
he should pay 50k
k) in the case of shipwreck, and the vessel is stranded but some of
the goods were salvaged or recovered, there is salvaging
expenses in doing the same, What is the basis of determining
the payment of the borrower? - Not the original value of the
loan. Law states that in shipwreck it is based on the value of
the goods saved minus the expensed for salvaging or saving the
same
Ex. Cargo is worth 1M, salvaged cargo is worth 500k, salvaging
expenses of 100k then 400k would be the basis of loan on respondentia
and not 1M
l) Where goods or vessel is covered by insurance:
GR: if it is 100% covered by loan it cannot be covered by
insurance because there is no more insurable interest on the part of
the owner
EXP: Insurance and LOB/LOR may co-exist but there should be a
determination of the insurable interest. How to determine? - if the
value of the goods or vessel is 1M and subject to LOB/LOR for
700k, How much is insurable interest of insurance company? 300k
only
m) Is insurance company also liable in case of damage? -Yes.
Because it has interest in the subject matter
n) Once insurance and loan co-exist, both shall be liable for
damages in proportion to their interest
9
o) Difference of Insurance and LOB/LOR:
b) Insurance: in case of loss, may be paid anytime in all events
even without marine risk
c) LOB/LOR: there should be the presence of marine risk; in
case of loss, loan is extinguished
p) Preference of Credit
Ex. Series of loans were made = Manila  Iloilo  Cebu (100k)
 CDO; vessel not longer worthy to travel and so was sold for
110k
 first to be paid in the loan made in Cebu (100k) then pay Iloilo
(10k) don't proportionate anymore, pay everything that is left if
the loan is bigger than the difference
 last one has preference, because of the principle that the last
loan incurred saved the cargo or vessel and so preference must
be given since first loan also benefited
Transpo Lecture - Average and Collision
(February 4, 2011)
AVERAGE
- Expenses and damages of the vessel or to the cargo (ex.
Extraordinary, accidental expenses, loss or deterioration)
- Who will shoulder loss in damages and expenses? Identify what kind
of average first!
- GR: nothing more than expenses and damages
- EXP: Art. 806  technical meanings:
1. Average is all extraordinary and accidental expenses incurred during
the voyage for the preservation of the vessel, cargo or both
2. Average refers to damages and deterioration suffered by the vessel
from the time it is put in sea until it arrives at the port of destination
and also those suffered by the cargo from the time it is loaded to the
vessel until it arrives in the place of destination for unloading
Art. 807: Petty and ordinary expenses or expenses incidental to
navigation (pilotage, lighterage, inspection, health, maritime fee)
should be borne by the owner of the ship because these are expenses in
order to travel or have a voyage
4. important thing to determine is the kind of average because if it
is an average then the next thing you should think of is "who
will bear the loss?"
C. Simple or Particular Average - expenses or damages to the
vessel or her cargo which do not inure the common benefit of
those who are interested; loss borne by the owner of the cargo
or vessel itself;
i. Art. 809: losses suffered by the cargo from the
time of its embarkation until it is unloaded
either by the inherent defect of the cargo or
through force majeure
10
 5. wages and victuals or provisions of the workers  depends
whether the vessel is chartered on a fixed voyage or a monthly
charter
6. if monthly then wages and victuals of the crew for the reason
that the vessel was detained, then General Average
7. if fixed voyage charter, only Particular Average
8. During quarantine, wages and victuals are only Particular
Averages
ii. Damages inflicted upon the vessel or cargo by
reason of impact or collision with another if it
is accidental and inevitable
iii. Damages suffered by the cargo through the fault
or negligence of the captain of the vessel, the
owner of cargo bears loss without prejudice in
filing a case against the owner of the vessel
Ex: American corporation loaded equipment and agricultural
machineries on a German vessel for Russia but during the voyage, a
war brought out in Russia and Germany, so the vessel decided to go to
Philippine port to seek refuge. Who would bear the expenses while in
the Phils? General or Particular?
c. Particular only, the risk is not common (because of war, and
so safety to the vessel only and not the cargo because the
latter is a legal material, therefore, owner of vessel shall
incur loss)
D. General or Gross Average- Art 811: expenses or losses
deliberately incurred for the purpose of saving the vessel or
cargo or both from real marine risk; not accidental
Magsaysay case: SC gave requisites of General Average
a. There must be a common risk which is certain and
imminent
b. Part of the vessel or cargo or both is sacrificed
deliberately
c. The sacrifice was successful
d. The expenses or damages should be incurred or
inflicted after taking proper judicial steps; captain
cannot do it discriminately
iv. There must be an assembly of saving made with
the captain
v. Coming out with a resolution
vi. Resolution and minutes be entered in a log book
stating reasons or basis of action or vote;
although majority would not vote for the
jettisoning of the cargoes, the captain has the
last say or decision, but he would be
accountable to the cargo owners
vii. Objects to be jettisoned should be identified in
the log book and the injuries if kept on board
viii. Within 24 hours upon arrival at the first port,
the captain shall deliver a copy of the minutes
to the judicial authority
9. you cannot jettison a cargo because of hearsay or speculative,
there should be clear and imminent risk
10. if the cargo accidentally fell, vessel benefited because of
weight loss which stabilized the same during the storm
(incidental only), still no General Average because no
deliberate sacrifice to save V or C or both
11. despite the cargo being jettisoned, the rest of the cargo still was
destroyed, no General Average because sacrifice was not
successful
12. If vessel was saved because the cargos were jettisoned, voyage
continued and another accident happened, saved cargoes were
exposed again to marine risk and was also destroyed, but those
destroyed cargoes were salvaged or saved because of previous
jettisoning, owner of jettisoned cargo asked for contribution
which is proper. How much is the basis of contribution? - the
cost of the cargo after it was salvaged less the salvage expenses
13. JETTISON - throwing out of cargoes
14. Who directs the jettison? Captain
15. Hierarchy of Jettisoning Cargoes (first to last)
11
 3. heavy, less valued cargoes which impels the maneuvering of
the vessel
4. cargoes which deloads the upper deck, always beginning with
the biggest weight and smallest value
Ex. On a fair weather, vessel was stranded, crew needed to do
something to keep it afloat, incurred expenses or averages to keep
afloat. Is it a General Average? -No. Particular Average only because
there was no common peril  the weather was good. It only benefits
the vessel and not the cargo. Only personal obligation on the part of
the owner to continue the voyage.
16. Usually, General Average happens during the voyage but it also
happens in the port.
Art. 817 or 818: when there are lots of vessels and a vessel caught fire
then it was made to sink in order to save the others and it did together
with her cargoes, is it considered General Average? -Yes. Because it
was deliberately made to save the other vessels and their cargoes
17. When the vessel was close to the port, and because it is
shallow, some of the cargoes need to be unloaded to barges in
preparation of a coming storm, in doing that there are expenses
and there is a risk that those you unloaded would suffer from
loss or deterioration. General Average? -Yes. It is for the
benefit of everybody. Vessel was saved, and so cargoes were
saved because of jettisoning the same
COLLISION
d. an impact or sudden contact between the moving vessels, or
one moving and another in stationary
18. applies only to maritime vessels  fishing boats are not
maritime vessels, not covered here
19. RULE: if in collision, a vessel is at fault and the other is not,
and it is due to the negligence or want of skill of the captain,
who will be liable for damages? -Owner of the vessel at fault
20. If both vessels are at fault  each one will bear its own loss
but as far as the cargoes are concerned, they are solidarily
liable (plaintiff may file another for the whole amount of loss,
and such person may ask for reimbursment)  owner of
cargoes may claim from any of the vessels
21. If the liability is not clear as to who is negligent  same rule
as when both are at fault
22. Vessel A has proximate negligence and Vessel B has
contributory negligence only, who is liable? - same rule when
both are at fault because the proximate principle does not apply
to maritime collision, it only applies in ordinary collision
23. What if Vessel A has the last clear chance to avoid the accident
but it did not avail the same, liable? - No. The principle of last
clear chance is not applicable in maritime collision, considered
as though both vessels are at fault
24. If it is caused by force majeure  each owner of the vessels
will bear its own loss, same rule as to the owners of cargoes
25. Zone of Time Collision (law governing)
Zone 1- all the time up to the time when the risk starts
Zone 2- when the risk starts up to the time the risk is particularly
certain to happen
Zone 3- when collision is certain up to the time the collision happened
e. Only in Zone 3, the vessel was about to collide and it is
inevitable that they have to collide, the privileged vessel
swerved to the right but there was another vessel on its
right and so it also swerved. Who is liable? - the one who
caused the privileged vessel to cause such error or swerving
(there is a technical term, I cant understand! Haha "error in
_______________")
f. In Zone 1 and 2, the one who made an error should be the
one liable
26. In Manila, the vessel arrives to port, captain would delegate the
anchoring and positioning to a pilot because he is more eligible
in maneuvering big vessels
27. If accident happens during the maneuvering of the pilot, is
captain still liable? -Yes. But captain has recourse against the
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 pilot. Because the captain is still there to ensure that
maneuvering is done properly
28. GR: Protest is always needed in maritime collision. No
damages without protest. Given within 24 hours at the place of
collision or at the port of destination. (condition precedent)
29. Other instances wherein Protests are needed before filing for
reconveyance: needed only in maritime vessels
arrival and distress
shipwreck
collision
when the vessel has gone through a hurricane
30. EXP: Case: Ferry carrying passengers to Iloilo. There is a
small vessel carrying passengers to the Ferry. Due to the fault
of the one handling the small vessel, it went near the propeller
of the ferry and so it sunk and one of the passengers was
severely injured. They filed a case against the vessel but the
latter argued that case would not prosper because there was no
protest.  SC ruled that protest is not needed when there is
injuries to persons or passengers and what was involved is not
a maritime vessel since it is only a small vessel
g. Other EXPs:
the one involved (cargo) is not on board the vessel
the person involved is not in the capacity to make the protest
(applicable also in the said case because the victim was in the hospital
for 6 months)
the means used is not a maritime vessel
TRANSPO LECTURE: February 18
Arrival under stress and Shipwreck
If the common carrier (cc) is bound to travel, the route
stipulated shall not be violated. Otherwise, there will be deviation. If
there is deviation, cc will be liable even if loss or damage was due to a
fortuitous event. It is the same thing with delay.
In arrival under stress, vessel does not reach its destination. It
anchors to the nearest port or most convenient port. This is not
considered deviation.
Valid reasons for Arrival under stress
1. Well founded fear of seizure by priviteer or pirates
2. Accident at sea disabling the vessel to continue voyage
If it is an arrival under stress, CC will not be liable for the
damages suffered by the cargo/ vessel. If it is not a legitimate arrival
under stress, ship owner will suffer the damage as to the vessel; and
cargo owner as to the cargo.
Even the presence of valid reasons will not automatically mean
an arrival under stress because there are formalities that must be
observed.
Steps to be taken to determine the propriety of arrival under
stress:
Determination must be made by the Captain
Summon all officers and those who have interest over the
vessel; but the latter have no voting rights
Deliberation and objections
In case there will be disagreements, decision of the captain will
still prevail
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Instances when arrival under stress is not valid:
If the lack of provision is caused by failure of the captain to
observe the usage and the customs of the
particular place, and the distance of the voyage.
No well-founded fear of seizure by pirates and priviteer
Vessel is defective caused by the fact that it was not
maintained nor repaired prior to the voyage.
Ship owner as to the vessel; Cargo owner as to the cargo;
assuming that there was no malice, negligence, lack of foresight, or
lack of skill on the part of the captain. Otherwise, indemnity may be
demanded from him.
Captain will be personally liable if:
there is malice, negligence, lack of foresight, lack of skill
the vessel that was put to sea was insufficiently repaired.

Article 822: The scenario is that there is a need to repair the vessel
but the cargo is already loaded. The cargo should be unloaded from the
vessel. Who will shoulder the expenses?
The owner of the vessel if the purpose is to preserve the
vessel.
If the purpose is to protect the cargo=the owner of the
cargo.
If the reason is for both= both of them proportionally

Article 823: Custody of the cargo after temporarily unloaded is still

under the captain, which makes him liable in case of damages or loss.

If the cargo was already damaged (partly or wholly), the

captain has to apply in the proper judicial authority for the sale of the
cargo. In order to effect the sale, captain must comply with certain
formalities such as publishing, acquiring consent from persons who
have interests over the cargoes.

The captain shall be responsible for delay. If the cause of

arrival under stress has ceased, he shall continue with the voyage. If he
does not continue, then there is delay.

Shipwreck
Injuries or loss suffered by the vessel because of the
swallowing by the waves, or grounding or running an object in the sea,
rendering it incapable for navigation.

Who will shoulder the damages?

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 TRANSPO LECTURE: February 25 Vessel is floating in distress, beyond the control of the crew,
then one swimmer a member of the crew, was able to save
SALVAGE LAW and COGSA cargoes. Is he entitled to reward? No, because it has to be done
voluntarily. He is a crew, and it is part of his duty to save the
cargo.
Salvage Law
Actual case: M/V Alfonso owned by William Lines was giving
Salvage- Saving the vessel and saving the cargo distress signals. The engine stopped causing the vessel to drift
Contract or service which one person renders to the owner away. The weather was perfectly fine. Capt. Barios, captain of
of the ship or goods, that by his own labor it preserves the another vessel M/V Henry, responded to the signals and towed
goods or ship, which the owner or those entrusted with the the vessel to a safer place and the vessel was saved. William
care of them either abandon, or during distress at sea, were Lines waived renumeration. Capt. Barios filed a case for a
not able to protect them. salvage reward. Is he entitled to a reward? Court said that there
is no marine peril.
When is salvage necessary? If there is a derelict-- cargo or vessel has
been abandoned by the captain and the crew, without intention of He, who shall save merchandise at sea, has the obligation to
recovering the same or when safety is already beyond their control. If deliver it to the collector of custom or treasurer or mayor.
there is till intention to recover, it is not considered a derelict. Otherwise, he can be held criminally liable or will not be
rewarded salvage fee.
What are the subjects of salvage?
Vessel itself
Jettisoned Contract of towage vs. salvage
Goods floating at the sea -Towing may be an act of salvaging but it may not be
Laigon- goods attached to the buoy considered salvage unless all requisites of salvage concur.
-In salvage, all the crew of the vessel who undertook the
What is the nature of the possession of the finder of derelict? salvage will receive a reward. In towage, they will not a receive a
The finder has possession but not ownership. Even the owner reward, only their salaries.
may take back the derelict without paying the expenses of salvage.
Finder has the right to keep the derelict until the owner posts a How to determine the bond to be posted?
bond. Customs or the judge of the RTC where the goods where
recovered will be the one to determine the amount of bond.
Elements of valid salvage:
marine peril Obligation of collector of custom
service is voluntary safeguard and inventory of goods
successful in whole or in part subject the goods to public auction if the conservation is
vessel is abandoned prejudicial to the owner and when no objection was made.
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 advertisement (30 days after salvage)
People who cannot validly conduct salvage
Crew of the vessel shipwrecked or salvaged.
If there was an objection by the captain, the person still
insists.
If the person who salvaged did not deposit it to the
collector of customs.
How much salvaged to be given will be based on:
Labor
Competence and Skill
Value of the materials being used to salvaged
Risk being assumed
Value of the goods being salvaged
Salvage reward must not exceed 50% of the value of the goods
salvaged.
Things that have to be paid by the owner:
Expenses for custody
Advertisement
auction sale
taxes over the goods when it was brought to the country
expenses for salvage
salvage reward
If the owner does not claim the deposits within three years, then
half of the proceeds will go to the finder and half will go to the
government.
If the one who salvaged sought for the help of another vessel but
the shipowner was not there, then 50% of the salvage fee will go to the
owner, 25% will go to the captain, another 25% will go to the crew of
the vessel.
COGSA Carriage of Goods by Sea Act (enacted by US Govt. Act.
521, 1936)
Primary Law that will govern transportation by sea is the Civil
Code. Why Civil Code? Latest law will be the governing law.
COGSA is suppletory. In international shipment, COGSA
could be the primary law, if it was stipulated by the parties. Note that it
does not apply to coastwise shipment even if it was stipulated.
Responsibilities and liabilities of parties
Implied warranty of the ship's seaworthiness
When the cargo was loaded to the vessel, it is presumed
that it is seaworthy. The owner of cargo does not have
the obligation to check or validate its seaworthiness.
Recovery of loss or damage
There should be notice of damage. Common carrier has
to file the notice of damage immediately upon the
receipt of goods if the damage is apparent. If it is not
apparent, it should be filed within 3 days.
Effect if there is no notice of damage:
presumption (ONLY) that the goods delivered
are in the same condition as it appeared in the
bill of lading. Thus, a case of recovery of loss or
recovery filed beyond three days will still
prosper.
Supposing in the bill of lading it was
stated that primary law is COGSA, and it
was stipulated that no case will prosper
unless the notice is filed within 30 days.
Is it valid? No… because under
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 COGSA, notice shall only be filed
within 3 days.
What if it was stipulated that before the
case must prosper notice within 3 days
must be filed. Is it valid? No… because
notice is not a prerequisite to be able to
file a case.
a case against B. B invokes prescription
of action. Is B correct? NO, B is not
correct because A's claim is against an
insurance company and not the vessel.
According to the Insurance Code, the
prescriptive period for money claims is
10 years.

Case for recovery of loss or damage AGAINST

THE VESSEL shall be filed within one year
from delivery. Except in cases of loss or
damage because of misdelivery and
conversion, which under 1144 of the Civil
Code, the prescriptive period is 10 years.

Filing within one year period may be

extended if there is agreement between
the parties.

A case has been filed in December 18,

1972. Claim for damages was filed in
May 4, 1973. Does the action prescribe
if there was a filing of extrajudicial
demand in May 4, 1972? No. The
moment extrajudicial demand was filed,
it interrupts the prescriptive period.
Prescriptive period will then again start
on May 4, 1972 and not December 18,
1972.

Supposing A insured his cargo to B

insurance company. Cargo arrived in
2009 in the Philippines and there were
damages. A filed a demand letter to B,
but the latter did not respond to the
demand. So three years after, he filed for
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 TRANSPO: March 11 FINAL REVIEW
Parties:
Shipper vs Passenger
Common Carrier vs Consignee
Laws governing conduct of transportation:
1. In coastwise shipping: Civil Law, Code of Commerce, Special Laws
2. International Shipping: Law of the particular country where the
goods are to be delivered
COGSA: Carriage of Goods by Sea Act
From abroad to the Phil- civil code; code of commerce;
COGSA (primary if stipulated)
COGSA- General Rule: Only for international shipment (not for
coastwise)
Exception: when there is a stipulated transshipment
Ex: from San Francisco-Cebu (There was a stipulation that
COGSA will apply)-then the vessel ducted in Manila. Then COGSA
will still apply.
Note: transshipment is not valid unless stipulated.
3. Land transportation: Civil Code and code of commerce
4. Air transportation: Civil Code and Code of commerce (local); or
Warsaw Convention (international) especially when the parties are
highly contracting parties. If the flight is from a country that the
parties are not highly contracting…Warsaw convention will not apply.
Obligations of common carrier
A. General rule: accept goods and passenger without
discrimination
Exception: 1. If the goods are contraband.
2.livestock exposed to diseases
3.subject to capture, accepting the passenger or goods
will result to overloading. (pls refer to the civil code)
B. Deliver the goods/ Transport the passengers
Where? in the place stipulated in the bill of lading. When? Reasonable
time. To whom? Authorized person, consignee. How? Delivery must
be done without delay.
C. Exercise extraordinary diligence
Sea transportation- the vessel must be seaworthy (fit, properly
manned, adequately equipped) cargo-worthy.
In transportation of passengers, common carrier must observe
safety as far as human care and foresight can provide.
Coverage of observance of extraordinary diligence:
It starts from the time the goods are unconditionally placed in
the possession of the common carrier and accepted by the same; and
delivered actually or constructively to the consignee or authorized
person. (Notice of delivery is important)
General Rule: Even if the goods are temporarily unloaded,
extraordinary diligence must still be observed. Exception: stoppage in
transitu (right of the creditor to stop the transportation).
Defenses of the common carrier:
1. Article 1734 of the Civil Code
For Force Majeure to be considered to be a valid defense it
must be the proximate cause. Common carrier must have exercised
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due diligence before, during, and after. Also, that common carrier did 1. Land: visible only to the naked eye unless there is imminent danger
not incur delay and overloading. or strong suspicion
2. Airline: it is a must
2.Defective packing of cargo
The moment the common carrier accepts the defective packing Law on bottomry (vessel) and respondentia (cargo)
of the cargo, it already assumes liability. Except when it has done -A loan, payment of which is subject to marine risk
something to prevent or forestall damages. -If the cargo or vessel is safe then the debtor is obligated to
pay.
Special Contracts -If there is no stipulation then it is presumed that it is a
roundtrip risk.
Charter party * Loan more than the value of the cargo or vessel through fraud is still
valid but only up to the amount of the cargo or vessel.
1.Bare boat/ demise
-provide for the crew, including their salaries Order of payment
-responsible to pay damages -Those transactions made during the voyage has preference
than those made before the boat was put into voyage.
2. Contract of Afreightment -Inverse preference.
time charter and voyage charter -Those loans taken in the same place and time during the
shipwreck, the debtors will share payment pro rata.

Shipwreck
Liabilities of common carrier
- Without malice of the cc, expenses shall be borne by the ship
1. Transportation of cargoes owner. There should be a protest.
Stipulation as to the liability is valid: must be in writing, must -Vessel, common carrier, cargo owner shall bear the loss.
be reasonable, must be for a consideration other than the freight. Captain shall be liable if there is malice, negligence, and the vessel
was insufficiently repaired.
2. Transportation of passengers
Generally, limiting the liability is void except for gratuitous Salvage - saving the cargo
passenger. Exception to the exception: if there is negligence but not for Requisites:
gross negligence or willful act. 1. Marine risk
2. Voluntary
*If the person is not a passenger…then CC is not liable. Basis: 3. Successful
contract of carriage. 4. Abandoned or beyond the control

Obligation to conduct inspection When? If the shipment is derilict OR If the vessel is already
abandoned (totally).
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Average

General- inures to the benefit of everyone. All who benefited must

share to pay the expenses.
Special/Particular- expense inures only to the benefit of a particular
person.

COGSA
-Applies to International voyage.
-Applies to local if there is stipulated transshipment.
-Implied Warranty

* If the damage is apparent, notice of damage must be filed. Not

apparent=notice of damage must be filed within 3 days.

* Failure to file within 3 days does not bar one to file a case. The
purpose of the notice is to show that there was damage. If it was not
filed, then there is a presumption that the cargo was received in the
same condition as it was loaded.

* Must be filed within 1 year even without notice of damage in case of

Common Carrier. If filing for recovery for damage against insurance
company, the prescription period is 10 years.

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