CODE OF COMMERCE(ARTS 349-374)

TITLE VII – COMMERCIAL CONTRACTS FOR TRANSPORTATION

ARTICLE 349. A contract of transportation by land or water ways of any kind shall be considered
commercial:

1. When it has for its object merchandise or any article of commerce.

2. When, whatever its object may be, the carrier is a merchant or is habitually engaged in
transportation for the public.

ARTICLE 350. The shipper as well as the carrier of merchandise or goods may mutually demand that a
bill of lading be made, stating:

1. The name, surname and residence of the shipper.

2. The name, surname and residence of the carrier.

3. The name, surname and residence of the person to whom or to whose order the goods are to be sent
or whether they are to be delivered to the bearer of said bill.

4. The description of the goods, with a statement of their kind, of their weight, and of the external marks
or signs of the packages in which they are contained.

5. The cost of transportation.

6. The date on which shipment is made.

7. The place of delivery to the carrier.

8. The place and the time at which delivery to the consignee shall be made.

9. The indemnity to be paid by the carrier in case of delay, if there should be any agreement on this
matter.

ARTICLE 351. In transportation made by railroads or other enterprises subject to regulation rate and
time schedules, it shall be sufficient for the bills of lading or the declaration of shipment furnished by the
shipper to refer, with respect to the cost, time and special conditions of the carriage, to the schedules and
regulations the application of which he requests; and if the shipper does not determine the schedule, the
carrier must apply the rate of those which appear to be the lowest, with the conditions inherent thereto,
always including a statement or reference to in the bill of lading which he delivers to the shipper.

ARTICLE 352. The bills of lading, or tickets in cases of transportation of passengers, may be diverse, some
for persons and others for baggage; but all of them shall bear the name of the carrier, the date of
shipment, the points of departure and arrival, the cost, and, with respect to the baggage, the number and
weight of the packages, with such other manifestations which may be considered necessary for their easy
identification.

ARTICLE 353. The legal evidence of the contract between the shipper and the carrier shall be the bills of
lading, by the contents of which the disputes which may arise regarding their execution and performance
shall be decided, no exceptions being admissible other than those of falsity and material error in the
drafting.

After the contract has been complied with, the bill of lading which the carrier has issued shall be returned
to him, and by virtue of the exchange of this title with the thing transported, the respective obligations
and actions shall be considered cancelled, unless in the same act the claim which the parties may wish to
reserve be reduced to writing, with the exception of that provided for in Article 366.

In case the consignee, upon receiving the goods, cannot return the bill of lading subscribed by the carrier,
because of its loss or of any other cause, he must give the latter a receipt for the goods delivered, this
receipt producing the same effects as the return of the bill of lading.

ARTICLE 354. In the absence of a bill of lading, disputes shall be determined by the legal proofs which
the parties may present in support of their respective claims, according to the general provisions
established in this Code for commercial contracts.

ARTICLE 355. The responsibility of the carrier shall commence from the moment he receives the
merchandise, personally or through a person charged for the purpose, at the place indicated for receiving
them.

ARTICLE 356. Carriers may refuse packages which appear unfit for transportation; and if the carriage is
to be made by railway, and the shipment is insisted upon, the company shall transport them, being exempt
from all responsibility if its objections, is made to appear in the bill of lading.

ARTICLE 357. If by reason of well-founded suspicion of falsity in the declaration as to the contents of a
package the carrier should decide to examine it, he shall proceed with his investigation in the presence of
witnesses, with the shipper or consignee in attendance.

If the shipper or consignee who has to be cited does not attend, the examination shall be made before a
notary, who shall prepare a memorandum of the result of the investigation, for such purpose as may be
proper.

If the declaration of the shipper should be true, the expense occasioned by the examination and that of
carefully repacking the packages shall be for the account of the carrier and in a contrary case for the
account of the shipper.

ARTICLE 358. If there is no period fixed for the delivery of the goods the carrier shall be bound to forward
them in the first shipment of the same or similar goods which he may make point where he must deliver
them; and should he not do so, the damages caused by the delay should be for his account.

ARTICLE 359. If there is an agreement between the shipper and the carrier as to the road over which the
conveyance is to be made, the carrier may not change the route, unless it be by reason of force majeure;
and should he do so without this cause, he shall be liable for all the losses which the goods he transports
may suffer from any other cause, beside paying the sum which may have been stipulated for such case.

When on account of said cause of force majeure, the carrier had to take another route which produced
an increase in transportation charges, he shall be reimbursed for such increase upon formal proof thereof.

ARTICLE 360. The shipper, without changing the place where the delivery is to be made, may change the
consignment of the goods which he delivered to the carrier, provided that at the time of ordering the
change of consignee the bill of lading signed by the carrier, if one has been issued, be returned to him, in
exchange for another wherein the novation of the contract appears.

The expenses which this change of consignment occasions shall be for the account of the shipper.

ARTICLE 361. The merchandise shall be transported at the risk and venture of the shipper, if the contrary
has not been expressly stipulated. As a consequence, all the losses and deterioration which the goods may
suffer during the transportation by reason of fortuitous event, force majeure, or the inherent nature and
defect of the goods, shall be for the account and risk of the shipper. Proof of these accidents is incumbent
upon the carrier.

ARTICLE 362. Nevertheless, the carrier shall be liable for the losses and damages resulting from the
causes mentioned in the preceding article if it is proved, as against him, that they arose through his
negligence or by reason of his having failed to take the precautions which usage has established among
careful persons, unless the shipper has committed fraud in the bill of lading, representing the goods to be
of a kind or quality different from what they really were.

If, notwithstanding the precautions referred to in this article, the goods transported run the risk of being
lost, on account of their nature or by reason of unavoidable accident, there being no time for their owners
to dispose of them, the carrier may proceed to sell them, placing them for this purpose at the disposal of
the judicial authority or of the officials designated by special provisions.

ARTICLE 363. Outside of the cases mentioned in the second paragraph of Article 361, the carrier shall be
obliged to deliver the goods shipped in the same condition in which, according to the bill of lading, they
were found at the time they were received, without any damage or impairment, and failing to do so, to
pay the value which those not delivered may have at the point and at the time at which their delivery
should have been made.

If those not delivered form part of the goods transported, the consignee may refuse to receive the latter,
when he proves that he cannot make use of them independently of the others.

ARTICLE 364. If the effect of the damage referred to in Article 361 is merely a diminution in the value of
the goods, the obligation of the carrier shall be reduced to the payment of the amount which, in the
judgment of experts, constitutes such difference in value.

ARTICLE 365. If, in consequence of the damage, the goods are rendered useless for sale and consumption
for the purposes for which they are properly destined, the consignee shall not be bound to receive them,
and he may have them in the hands of the carrier, demanding of the latter their value at the current price
on that day.
If among the damaged goods there should be some pieces in good condition and without any defect, the
foregoing provision shall be applicable with respect to those damaged and the consignee shall receive
those which are sound, this segregation to be made by distinct and separate pieces and without dividing
a single object, unless the consignee proves the impossibility of conveniently making use of them in this
form.

The same rule shall be applied to merchandise in bales or packages, separating those parcels which appear
sound.

ARTICLE 366. Within the twenty-four hours following the receipt of the merchandise, the claim against
the carrier for damage or average be found therein upon opening the packages, may be made, provided
that the indications of the damage or average which gives rise to the claim cannot be ascertained from
the outside part of such packages, in which case the claim shall be admitted only at the time of receipt.

After the periods mentioned have elapsed, or the transportation charges have been paid, no claim shall
be admitted against the carrier with regard to the condition in which the goods transported were
delivered.

ARTICLE 367. If doubts and disputes should arise between the consignee and the carrier with respect to
the condition of the goods transported at the time their delivery to the former is made, the goods shall
be examined by experts appointed by the parties, and, in case of disagreement, by a third one appointed
by the judicial authority, the results to be reduced to writing; and if the interested parties should not agree
with the expert opinion and they do not settle their differences, the merchandise shall be deposited in a
safe warehouse by order of the judicial authority, and they shall exercise their rights in the manner that
may be proper.

ARTICLE 368. The carrier must deliver to the consignee, without any delay or obstruction, the goods
which he may have received, by the mere fact of being named in the bill of lading to receive them; and if
he does not do so, he shall be liable for the damages which may be caused thereby.

ARTICLE 369. If the consignee cannot be found at the residence indicated in the bill of lading, or if he
refuses to pay the transportation charges and expenses, or if he refuses to receive the goods, the
municipal judge, where there is none of the first instance, shall provide for their deposit at the disposal of
the shipper, this deposit producing all the effects of delivery without prejudice to third parties with a
better right.

ARTICLE 370. If a period has been fixed for the delivery of the goods, it must be made within such time,
and, for failure to do so, the carrier shall pay the indemnity stipulated in the bill of lading, neither the
shipper nor the consignee being entitled to anything else.
If no indemnity has been stipulated and the delay exceeds the time fixed in the bill of lading, the carrier
shall be liable for the damages which the delay may have caused.

ARTICLE 371. In case of delay through the fault of the carrier, referred to in the preceding articles, the
consignee may leave the goods transported in the hands of the former, advising him thereof in writing
before their arrival at the point of destination.
When this abandonment takes place, the carrier shall pay the full value of the goods as if they had been
lost or mislaid.

If the abandonment is not made, the indemnification for losses and damages by reason of the delay
cannot exceed the current price which the goods transported would have had on the day and at the place
in which they should have been delivered; this same rule is to be observed in all other cases in which this
indemnity may be due.

ARTICLE 372. The value of the goods which the carrier must pay in cases if loss or misplacement shall be
determined in accordance with that declared in the bill of lading, the shipper not being allowed to present
proof that among the goods declared therein there were articles of greater value and money.

Horses, vehicles, vessels, equipment and all other principal and accessory means of transportation shall
be especially bound in favor of the shipper, although with respect to railroads said liability shall be
subordinated to the provisions of the laws of concession with respect to the property, and to what this
Code established as to the manner and form of effecting seizures and attachments against said
companies.

ARTICLE 373. The carrier who makes the delivery of the merchandise to the consignee by virtue of
combined agreements or services with other carriers shall assume the obligations of those who preceded
him in the conveyance, reserving his right to proceed against the latter if he was not the party directly
responsible for the fault which gave rise to the claim of the shipper or consignee.

The carrier who makes the delivery shall likewise acquire all the actions and rights of those who preceded
him in the conveyance. The shipper and the consignee shall have an immediate right of action against the
carrier who executed the transportation contract, or against the other carriers who may have received
the goods transported without reservation.
However, the reservation made by the latter shall not relieve them from the responsibilities which they
may have incurred by their own acts.

ARTICLE 374. The consignees to whom the shipment was made may not defer the payment of the
expenses and transportation charges of the goods they receive after the lapse of twenty-four hours
following their delivery; and in case of delay in this payment, the carrier may demand the judicial sale of
the goods transported in an amount necessary to cover the cost of transportation and the expenses
incurred.
BILL OF LADING(ARTS 706-718)

Article 706
The captain and the freighter of the vessel are obliged to draft the bill of lading, in which there shall be
stated:
1. The name, registry, and tonnage of the vessel.
2. The name of the captain and his domicile.
3. The port of loading and that of unloading.
4. The name of the shipper.
5. The name of the consignee, if the bill of lading is issued to order.
6. The quantity, quality, number of packages, and marks of the merchandise.
7. The freight and the primage stipulated.
The bill of lading may be issued to bearer, to order, or in the name of a specific person, and must be
signed within twenty-four hours after the cargo has been received on board, the freighter being able to
request the unloading thereof at the expense of the captain should he not sign it, and in every case
indemnity for the losses and damages suffered thereby.
Article 707
Four true copies of the original bill of lading shall be made, all of which shall be signed by the captain
and by the freighter. Of these copies the freighter shall keep one and send another to the consignee; the
captain shall take two, one for himself and another for the agent.
There may, furthermore, be made as many copies of the bill of lading as may be considered necessary
by the persons interested; but when they are issued to order or to the bearer there shall be stated in all
the copies, be they either of the first four or of the subsequent ones, the destination of each one,
stating whether it is for the agent, for the captain, for the freighter, or for the consignee. If the copy sent
to the latter should be duplicated there must be stated in said duplicate this fact, and that it is not valid
except in case of the loss of the first one.
Article 708
The bills of lading issued to the bearer sent to the consignee shall be transferable by the actual delivery
of the instrument; and by virtue of an indorsement, those issued to order.
In either case, the person to whom the bill of lading is transferred shall acquire all the rights and actions
of the assignor or indorser with regard to the merchandise mentioned in the same.
Article 709
A bill of lading drawn up in accordance with the provisions of this title shall be proof as between all
those interested in the cargo and between the latter and the underwriters, proof to the contrary being
reserved by the latter.
Article 710
Should the bills of lading not agree, and there should not be observed any correction or erasure in any
of them, those possessed by the freighter or consignee signed by the captain shall be proof against the
captain or agent in favor of the consignee or freighter; and those possessed by the captain or agent
signed by the freighter shall be proof against the freighter or consignee in favor of the captain or agent.
Article 711
The legitimate holder of a bill of lading who does not present it to the captain of the vessel before her
unloading, obliging the latter thereby to unload it and place it in deposit, shall be liable for the cost of
warehousing and other expenses arising therefrom.
Article 712
The captain can not himself change the destination of merchandise. In admitting this change at the
instance of the freighter, he must first take up the bills of lading he may have issued, under the penalty
of being liable for the cargo to the legitimate holder of the same.
Article 713
If before delivering the cargo a new bill of lading should be demanded of the captain, it being alleged
that the previous ones are not presented on account of their loss or for any other sufficient cause, he
shall be obliged to issue it, provided security for the value of the cargo is given to his satisfaction; but
without changing the consignment and stating therein the circumstances prescribed in the last
paragraph of Article 707, when the bills of lading referred to therein are in question, under the penalty
otherwise to be liable for said cargo if not properly delivered through his fault.
Article 714
If before the vessel puts to sea the captain should die or should discontinue in his position through any
accident, the freighters shall have a right to demand of the new captain the ratification of the first bills
of lading, and the latter must do so, provided all the copies previously issued be presented or returned
to him, and it should appear from an examination of the cargo that they are correct.
The expenses arising from the examination of the cargo shall be defrayed by the agent, without
prejudice to the right of action of the latter against the first captain, if he ceased to be such through his
own fault. Should said examination not be made, it shall be understood that the new captain accepts the
cargo as it appears from the bills of lading issued.
Article 715
Bills of lading will give rise to a most summary action or to judicial compulsion, according to the case, for
the delivery of the cargo and the payment of the freightage and proper expenses.
Article 716
If several persons should present bills of lading issued to bearer or to order, indorsed in their favor,
demanding the same merchandise, the captain shall prefer in delivering the same, the person presenting
the copy first issued, with the exception of the case when the latter one was issued on account of the
loss of the first one, and if they are held by different persons.
In such case, as well as when only second or subsequent copies issued without this proof are presented,
the captain shall apply to the judge or court, so that he may order the deposit of the merchandise, and
that through him it may be delivered to the proper person.
Article 717
The delivery of the bill of lading shall effect the cancellation of all the provisional receipts of prior date
given by the captain or his subalterns for partial deliveries of the cargo which may have been made.
Article 718
After the cargo has been delivered, the bills of lading which the captain signed shall be returned to him,
or at least the copy by reason of which the delivery is made, with the receipt for the merchandise
mentioned therein.
The delay on the part of the consignee shall make him liable for the damages which may be caused the
captain thereby.
 PART III
ELECTRONIC COMMERCE IN SPECIFIC AREAS

CHAPTER I.
CARRIAGE OF GOODS

Section 25. Actions Related to Contracts of Carriage of Goods. - Without derogating from the provisions
of part two of this law, this chapter applies to any action in connection with, or in pursuance of, a
contract of carriage of goods, including but not limited to:

(a) (i) furnishing the marks, number, quantity or weight of goods;

(ii) stating or declaring the nature or value of goods;

(iii) issuing a receipt for goods;

(iv) confirming that goods have been loaded;

(b) (i) notifying a person of terms and conditions of the contract;

(ii) giving instructions to a carrier;

(c) (i) claiming delivery of goods;

(ii) authorizing release of goods;

(iii) giving notice of loss of, or damage to goods;

(d) giving any other notice or statement in connection with the performance of the contract;

(e) undertaking to deliver goods to a named person or a person authorized to claim delivery;

(f) granting, acquiring, renouncing, surrendering, transferring or negotiating rights in goods;

(g) acquiring or transferring rights and obligations under the contract.

Section 26. Transport Documents. - (1) Where the law requires that any action referred to contract of
carriage of goods be carried out in writing or by using a paper document, that requirement is met if the
action is carried out by using one or more data messages or electronic documents.

(2) Paragraph (1) applies whether the requirement there in is in the form of an obligation or
whether the law simply provides consequences for failing either to carry out the action in
writing or to use a paper document.

(3) If a right is to be granted to, or an obligation is to be acquired by, one person and no person,
and if the law requires that, in order to effect this, the right or obligation must be conveyed to
that person by the transfer, or use of, a paper document, that requirement is met if the right or
 obligation is conveyed by using one or more electronic data messages or electronic documents
unique;

(4) For the purposes of paragraph (3), the standard of reliability required shall be assessed in the
light of the purpose for which the right or obligation was conveyed and in the light of all the
circumstances, including any relevant agreement.

(5) Where one or more data messages are used to effect any action in subparagraphs (f) and (g)
of Section 25, no paper document used to effect any such action is valid unless the use of
electronic data message or electronic document has been terminated and replaced by the used
of paper documents. A paper document issued in these circumstances shall contain a statement
of such termination. The replacement of the electronic data messages or electronic documents
by paper documents shall not affect the rights or obligation of the parties involved.

(6) If a rule of laws is compulsorily applicable to a contract of carriage of goods which is in, or is
evidenced by, a paper document, that rule shall not be inapplicable to such a contract of
carriage of goods which is evidenced by one or more electronic data messages or electronic
documents by reason of the fact that the contract is evidenced by such electronic data messages
or electronic documents instead of by a paper document.

CASES:

I. THREE-FOLD CHARACTER
a.) Lorenzo Shipping vs Chubb and Sons
b.) Samar Mining vs Nordeutscher Lloyd
c.) Mindanao Bus vs CIR
d.) MOF Company, Inc vs Shin Yang Brokerage
e.) Sweet Lines vs Teves
f.) Ong Yiu vs CA

II. DELIVERY OF GOODS

A. PERIOD OF DELIVERY
g.) Mendoza vs Philippine Air Lines
h.) Saludo Jr vs CA

B. DELIVERY WITHOUT SURRENDER OF BILL OF LADING

i.) Macam vs CA

C. REFUSAL OF CONSIGNEE TO TAKE DELIVERY

j.) MOF vs Shin Yang

III. PERIOD FOR FILING CLAIMS

k.) Magellan Manufacturing Marketing Corp vs CA
l.) Provident vs CA