I. General Considerations A. Public Utilities 1. Article XII, 1987 Constitution Art. XII, Section 11. No franchise, certificate or any other form of authorization for the operation of a public utility shall be granted except to citizens of the Philippines or to corporations or associations organized under the laws of the Philippines at least 60% of whose capital is owned by such citizens, nor shall such franchise, certificate or authorization be exclusive in character or for a longer period than fifty years. Neither shall any franchise or right be granted except under the condition that it shall be subject to amendment, alteration or repeal by the Congress when the common good so requires. The State shall encourage equity participation in public utilities by the general public. The participation of foreign investors in the governing body of any public utility enterprise shall be limited to their proportionate share in its capital, and all the executive and managing officers of such corporation or association must be citizens of the Philippines. Section 17. In times of national emergency, when the public interest so requires, the State may, during the emergency and under reasonable terms prescribed by it, temporarily take over or direct the operation of any privately owned public utility or business affected with public interest. Section 18. The State may, in the interest of national welfare or defense, establish and operate vital industries and, upon payment of just compensation, transfer to public ownership utilities and other private enterprises to be operated by the Government. Section 19. The State shall regulate or prohibit monopolies when the public interest so requires. No combinations in restraint of trade or unfair competition shall be allowed. (a) What is a public utility? A public utility is a business or service engaged in regularly supplying the public with some commodity or service of public consequence such as electricity, gas, water, transportation, telephone or telegraph service. Apart from statutes which define the public utilities that are within the purview of such statutes, it would be difficult to construct a definition of a public utility which would fit every conceivable case. As its name indicates, however, the term public utility implies a public use and service to the public. (Am. Jur. 2d V. 64, p.549.) (Albano vs Reyes) (b) What is a public service? The Public Service Act (CA No. 146 as amended) provides that the term public service "includes every person that now or hereafter may own, operate, manage, or control in the Philippines, for hire
or compensation, with general or limited clientele, whether permanent, occasional or accidental, and done for general business purposes, any common carrier, railroad, street railway, traction railway, subway motor vehicle, either for freight or passenger, or both with or without fixed route and whatever may be its classification, freight or carrier service or any class, express service, steamboat, or steamship line, pontines, ferries, and water craft, engaged in the transportation of passengers and freight or both, shipyard, marine repairshop, [warehouse], wharf or dock, ice plant, ice refrigeration plant, canal, irrigation system, gas, electric light, heat and power, water supply and power, petroleum, sewerage system, wire or wireless communications system, wire or wireless broadcasting stations and other similar public services..." [Sec. 13(b)] (Albano vs Reyes) Albano vs Reyes 175 SCRA 264 F: On 20 April 1987, the Phil. Ports Authority (PPA) adopted a resolution directing mgmt. to prepare the Invitation to Bid and all relevant bidding documents necessary for the public bidding of the development, mgmt., and operation of the Manila Intl. Container Terminal (MICT) and authorized the Board Chairman Secretary Reyes to oversee and implement the project. Secretary Reyes created a 7-man MICT Bidding Committee to evaluate all bids and recommend to the Board the best bid. The PPA published the Invitation to Bid with the reservation that it had the right to reject any bid and to accept such bid it may deem advantageous to the govt. Seven companies submitted bids. The Committee recommended that the contract be awarded to Intl. Container Terminal Services (ICTSI) on the ground that it offered the best technical and financial proposal. Secretary Reyes awarded the contract to ICTSI. Before the contract could be signed, two cases were filed questioning the legality or regularity of the bidding. The first was a special action for prohibition with prelim injunction filed by Alo, a concerned taxpayer. The second was a civil case for prohibition with prayer for TRO filed by Sharp Co. which actively participated in the bidding. The President approved the proposed MICT contract. The PPA and ICTFSI perfected the contract. Rodolfo Albano, a member of the House of Representatives filed the present case assailing the award of the contract on the ground that since the MICT is a public utility, it needs a legislative franchise before it can legally operate as a public utility. Issue : WON a legislative franchise is necessary. Held : NO. Petition dismissed. A franchise specially granted by Congress is not necessary for the operation of the MICT by a private entity. A contract entered into by the PPA and such entity is substantial compliance with the law. 1. Executive Order No. 30 authorized the PPA to take over, manage and operate the MICT in accordance with PD 857 (Revised Charter of the PPA). PD 857 expressly empowers the PPA to provide services within Port Districts "whether on its own, by contract or otherwise." Therefore, under EO 30 and PD 857, the PPA may contract with ICTSI for the mgmt., operation and devt. of the MICT. 2. Even if the MICT be considered a public utility or a public service on the theory that it is a wharf or a dock as contemplated by the Public Service Act, its operation would not necessarily call for a legislative franchise. Legislative franchises are not required before each and every public utility may operate. The law has granted certain administrative agencies the
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Carmelo vs Monserrat 55 Phil 644 F: Monserrat twice applied to Congress for an exclusive franchise to operate a taxicab service in Manila. The Governor General twice vetoed the bill. Monserrat then applied to the PSC for a CPC. It was granted. Carmelo and Oriol then applied to the PSC for a CPC to operate a taxicab service within Manila. Monserrat opposed. The PSC denied the application. Held : There is no valid, legal reason why Monserrat should have the exclusive right of operating a taxicab service. In the granting and refusal of a CPC, the question is what is for the best interest of the public. Tested by that rule, it is hard to conceive how it would be for the best interests of the public to have one taxicab service only, and how the public would be injured by the granting of the certificate in question, for it must be conceded that two companies in the field would stimulate the business, and the public would much sooner and much easier become educated in the use of taxi. Monserrat does not have a vested right in the business of any person that might want the use of a taxi, for the simple reason that the use of any taxi is the sole discretion of the customer. This is unlike the BTC case which dealt with an autobus service with fixed schedules and routes. San Pablo vs Pantranco South Express, Inc. 153 SCRA 199 F: Pantranco operates passenger buses from Metro Manila to Bicol and Eastern Samar. It wrote to the Maritime Industry Authority (MARINA) requesting authority to lease/purchase MV Black Double to be used in operating a ferryboat service from Matnog, Sorsogon and Allen, Samar that will provide service to co. buses and freight trucks that have to cross the Bernardo Strait. MARINA denied the petition on the ground that the Matnog- Allen run is adequately serviced by the Cardinal Shipping Corp. and Epitacio San Pablo and that market conditions cannot support the entry of additional tonnage. Pantranco acquired the vessel. It then applied to BOT claiming that it can operate a ferry service in connection with its franchise for bus operation in the highway from Pasay City to Tacloban City for the purpose of continuing the highway, which is interrupted by a small body of water, and that the proposed ferry operation is merely a necessary and incidental service to its main service and obligation of transferring passengers from Pasay City to Tacloban City. Accdg. to it, there is no need to obtain a separate CPC to operate a ferry service to cater exclusively to its passenger buses and ferry trucks. Pantranco began operating its ferry service. The BOT held that the ferryboat service is part of Pantranco's CPC and amended Pantranco's CPC to provide so. The two other ferry boat services filed motions for reconsideration. Issue : WON the sea can be considered as a continuation of the highway. WON a land transpo co. can be authorized to operate a ferry service or coastwise or interisland shipping service along its authorized route as an incident to its franchise without the need of filing a separate application for the same. Held : The water transport service between Matnog and Allen is not a ferryboat service but a coastwise or interisland shipping service. Before private respondent may be issued a franchise or CPC for the operation of the said service as a common carrier, it must comply with the usual reqts. of filing an application, payment of the fees, publication, adducing
Held : NO. Decision of PSC is revoked. An autobus line is a public utility, and as such, is a common carrier and an impt. factor in the business affairs of the community. The PSC has the power to specify and define the terms and conditions upon which any public utility shall operate and to make reasonable rules and regulations for its operation, and to fix the compensation that it shall receive for its service to the public, and for good cause may suspend or even revoke a license granted. It is not the policy of the law for the PSC to issue a CPC to a second operator to cover the same field and in competition with a first operator who is rendering sufficient, adequate and satisfactory service, and who in all things and respects is complying with the rules and regulations of the PSC. The power of the PSC to issue a CPC is founded on the condition precedent that after a full hearing and investigation, it shall find as a fact that the proposed operation is for the convenience of the public. So long as the first operator keeps and performs his terms and conditions of its license and complies with the reasonable demands of the public, it has more or less of a vested and preferential right over another who seeks to acquire a later license to operate over the same route. To carry out the purpose and intent for which the PSC was created, the law contemplates that the first license will be protected in his investment and will not be subjected to ruinous competition. The primary purpose of the PSC is to secure adequate, sustained service for the public at the least possible cost and to protect and conserve investments which have already been made for that purpose. A CPCN for the operation of an auto truck line in occupied territory should not be granted where there is no complaint as to existing rates and the co. in the field is rendering adequate service. It is the duty of the PSC to protect rather than to destroy the investment of a public utility. The policy of regulation upon which the present public utility commission plan is based and which tends to do away with competition among public utilities as they are natural monopolies, is at once the reason that the regulation of an existing system of transportation, which is properly serving a given field, or may be required to do so, is to be preferred to competition among several independent systems. While requiring a proper service from a single system for a territory in consideration for protecting it as a monopoly for all the service required and in conserving its resources, no economic waste results and service may be furnished at a minimum cost.
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(c) Water (i) Maritime Industry Authority EO 125, Sec. 14 as amended by EO 125-A, Sec. 3 The Maritime Industry Authority is hereby retained and shall have the ff. functions: a. develop and formulate plans, policies, projects xxx geared toward the promotion and devt. of the maritime industry, the growth and effective regulation of shipping enterprises, and for the national security objectives of the country; b. establish, prescribe and regulate routes, zones and/or areas of operation of particular operators of public water services; c. issue CPCs for the operation of domestic and overseas water carriers; d. register vessels as well as issue certificates, licenses or document necessary or incident thereto; e. undertake the safety regulatory functions pertaining to vessel construction and operation including the determination or manning levels and issuance of certificates of competency to seamen; f. enforce laws, prescribe and enforce rules and regulations, including penalties for violations thereof, governing water transportation and the Phil. merchant marine xxx; g. undertake the issuance of licenses to qualified seamen and harbor, bay and river pilots; h. determine, fix, prescribe charges/rates pertinent to the operation of public water transport utilities xxx; i. accredit marine surveyors and maritime enterprises engaged in shipbuilding, ship repair xxx; j. issue and register the continuous discharge book of Filipino seamen; k. establish and prescribe rules and regulations, standards and procedures for the efficient and effective discharge of the above functions; l. perform such other functions as may now or hereafter be provided by law. II. Common Carriers A. In General 1. Definitions; essential elements Art. 1732. Common carriers are persons, corporations, firms or associations engaged in the business of carrying or transporting passengers or goods or both, by land, water or air, for compensation, offering their services to the public. Aguedo F. Agbayani, COMMERCIAL LAWS OF THE PHILIPPINES, vol. 4, 1989 ed. (hereinafter 4 Agbayani) Transportation defined.-a contract transportation is one whereby a certain person association of persons obligate themselves transport persons, things, or news from one place another for a fixed price of or to to
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Eastern Shipping Lines vs IAC 150 SCRA 463 F: These two cases, both for the recovery of value of cargo insurance, arose from the same incident, the sinking of the M/S ASIATICA when it caught fire, resulting in the total loss of ship and cargo. In the first case, the M/S ASIATICA, a vessel operated by petitioner Eastern Shipping Lines, loaded at Kobe, Japan for transportation to Manila 5,000 pieces of colorized lance pipes in 28 packages valued at P256,039 consigned to Phil. Blooming Mills and 7 cases of spare parts valued at P92,361.75 consigned to Central Textile Mills. Both sets of goods were insured against marine risk for their stated value with respondent Devt. Insurance and Surety Corporation. In the second case, the same vessel took on board 128 cartons of garment fabrics and accessories, in 2 containers, consigned to Mariveles Apparel Corporation, and 2 cases of surveying instruments consigned to Aman Enterprises and General Merchandise. The 128 cartons were insured by respondent Nisshin Fire and Marine Insurance Co. and Dowa Fire & Marine Insurance Co. En route for Manila, the ship caught fire and sank. The insurers paid the corresponding marine insurance values and were subrogated to the rights of the latter as the insured. They filed suits against the petitioner Carrier and won (affirmed by the CA). Petitioner carrier denies liability on the ff. grounds: (a) that the loss was due to an extraordinary fortuitous even which is an exempting circumstance under Sec. 4(2)(b) of the Carriage of Goods by Sea Act (COGSA); (b) that when fire is established, the burden of proving negligence is shifted to the cargo shipper. Issues: (1)Which law should govern : the Civil Code or the Carriage of Goods by Sea Act. (2)Who has the burden of proof to show negligence of the carrier. Ratio : (1) The law of the country to which the goods are to be transported governs the liability of the common carrier in case of their loss, destruction or deterioration. As the cargoes in question were transported from Japan to the Philippines, the liability of Petitioner Carrier is governed primarily by the Civil Code. However, in all matters not regulated by said
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4 Agbayani: Effect of New Civil Code.-- Transportation of the merchandise "at the risk and venture of the shipper" means that the shipper will suffer losses and deterioration arising from fortuitous event, force majeure, or inherent nature and defects of the goods. It does not mean that the carrier is free from liability for losses and deterioration arising from his negligence or fault, w/c is presumed. Thus construed, par. 1 of Art. 361 is not inconsistent with Art. 1735 of the NCC. Requisites for defense of natural disaster: 1. Art. 1739 -- natural disaster must have been the proximate and only cause of the loss 2. The CC must exercise due diligence to prevent or minimize the loss before, during and after the occurrence of flood, storm, or other natural disaster. If the CC does not exercise due diligence in minimizing the loss, he may yet be held liable notwithstanding the fact that the loss, destruction or deterioration of the goods arose out of natural disaster. 3. Art. 1740 -- the CC must not be in delay. If the CC incurs in delay, a natural disaster shall not free it from responsibility. Under Art. 1165 par. 3, if the obligor incurs delay, he shall be responsible for any fortuitous event until he has effected delivery. However, if between the delay or refusal of the CC to transport the goods and the loss of the goods due to an act of God there intervened the shipper's negligence, thus causing a break in the chain of causation between the act of God which caused their loss and the CC's fault, the act of God is the proximate cause of the loss and the carrier's delay or refusal to transport the goods, is merely the remote cause. In
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F: Macleod and Co. contracted the services of Cia Maritima for the shipment of bales of hemp from Davao to Manila. The bales were loaded into CC's lighters. One of the lighters sunk. The insurance co. paid Macleod and filed to collect from CC. CC denied liability on the grounds that the hemp was loaded on a barge owned by the CC free of charge, that there was no bill of lading issued thereby resulting to the nonexistence of a contract of carriage, that the sinking
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Shewaram vs PAL, 17 SCRA 606 F: Plaintiff bought a plane ticket from Zamboanga to Manila. When he arrived in Manila, his suitcase was tampered with and his camera and radio were lost. PAL contended that plaintiff was bound by the conditions printed at the back of his ticket which provided that the liability of PAL for any loss is limited to the value of the thing unless the passenger declares in advance a higher valuation and pays an additional charge, and that the value is conclusively deemed not to exceed P 100/ticket. Held : Two requisites must be fulfilled in order that the liability of PAL be limited according to the stipulations behind the ticket stub : (1) the contract is just and reasonable under the circumstances; and (2) it has been fairly and freely agreed upon. (Art. 1750) The fact that the conditions are printed at the back of the ticket stub in letters so small that they are hard to read would not warrant the presumption that plaintiff was aware of those conditions such that he had "fairly and freely agreed" to those conditions. PAL has admitted that passengers do not sign the ticket. Also the carrier cannot limit his liability for injury or loss of goods shipped when such injury or loss was caused by its own negligence. (Arts. 1734, 1735) Ong Yiu vs CA, 91 SCRA 223 F: Atty. Ong Yiu was a passenger on a PAL CebuButuan flight to attend court hearings in Butuan. His suitcase was accidentally sent to Manila. PAL-Manila sent the suitcase to Butuan but the lock had been opened and a folder containing court documents was missing. Plaintiff refused to accept the luggage. PALCebu delivered the luggage to Ong Yiu with the promise to investigate the matter. Plaintiff sued and was awarded moral and exemplary damages. CA reversed holding that PAL was guilty of simple negligence and denied moral and exemplary damages but ordered PAL to pay P100, the baggage liability
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4 Agbayani: Common carriers must exercise extraordinary diligence in carrying passengers.-Art. 1755 shows clearly the high degree of care and extra-o diligence required of a CC with respect to its passengers. Carrier's duty of extraordinary diligence extends also to crew members.-- The duty to exercise the utmost diligence on the part of CCs is for the safety of passengers as well as for the members of the crew or the complement operating the carrier. This must be so for any omission, lapse or neglect thereof will certainly result to the damage, prejudice, injuries or even death to all aboard the plane. Cangco vs MRR, 38 Phil 768 Facts: supra. EE riding on train who stepped on watermelons. Held: The conduct of plaintiff in undertaking to alight while the train was yet slightly underway was not characterized by imprudence and that he was not guilty of contributory negligence. It is not negligence per se for a traveler to alight from a slowly moving train. MRR failed to exercise due care in not providing for safe exit of its passengers. It also failed to provide adequate lighting for its station. It is impt. to note that the foundation of the legal liability of the defendant is the contract of carriage, and that the obligation to respond for the damage which plaintiff has suffered arises, if at all, from the breach of that contract by reason of the failure of defendant to exercise due care in its performance. Its liability is direct and immediate (culpa contractual), differing essentially, from that presumptive responsibility for the negligence of its servants, which can be rebutted by proof of the exercise of due care in the selection and supervision of EEs (culpa aquiliana). The liability of masters and employers for the negligent acts or omissions of their servants or agents, when such act or omissions cause damage which amount to the breach of a contract, is not based upon a mere presumption of the master's negligence in their selection or control, and proof of exercise of the utmost diligence and care in this regard does not relieve the master of his liability for the breach of his contract. When the facts averred show a contractual
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Art. 1761. The passenger must observe the diligence of a good father of a family to avoid injury to himself.
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Art. 17. The carrier shall be liable for damages sustained in the event of death or wounding of a passenger or any other bodily injury suffered by a passenger, if the accident which caused the damage so sustained took place on board the aircraft or in the course of any of the operations of embarking or disembarking. Art. 18. (1) The carrier shall be liable for damage sustained in the event of the destruction or loss of, or of damage to, any checked baggage or any goods, if the occurrence which caused the damage so sustained took place during the transportation by air. (2) The transportation by air within the meaning of the preceding paragraph shall comprise the period during which the baggage or goods are in the charge of the carrier, whether in an airport or on board an aircraft, or, in case of a landing outside an airport, in any place whatsoever. (3) The period of the transportation by air shall not extend to any transportation by land, by sea, or by river performed outside an airport. If however, such transportation takes place in the performance of a contract for transportation by air, for the purpose of loading, delivery, or transshipment, any damage is presumed, subject to proof to the contrary, to have been the result of an event which took place during the transportation by air. Art. 19. The carrier shall be liable for damages occasioned by delay in the transportation by air of passengers, baggage or goods SC has held that these provisions merely declare the carrier liable for damages in the enumerated cases, if the conditions therein specified are present. Neither said provisions nor others in the Convention regulate or exclude liability for other breaches of contract by the carrier. D. Damages Recoverable from Common Carriers 1. In general Art. 1764. Damages in cases comprised in this Section shall be awarded with the title XVIII of this book concerning damages. Article 2206 shall also apply to the death of a passenger caused by the breach of contract by a common carrier. Art. 2197. Damages may be: (1) Actual or compensatory;
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G. Applicability of Provisions Art. 379. The provisions contained in Article 349 et seq. shall also be understood as relating to persons who, although they do not personally effect the transportation of commercial goods, contract to do so through others, either as contracts for a special and fixed transaction or as freight and transportation agents. In either case they shall be subrogated to the place of the carriers with regard to the obligations and liability of the latter, as well as with regard to their right. IV. ADMIRALTY AND MARITIME COMMERCE A. Concept of Admiralty; Jurisdiction over Admiralty Cases BP 129, Sec. 19. Regional Trial Courts shall exercise exclusive original jurisdiction: xxx (3) In all actions in admiralty and maritime jurisdiction where the demand or claim exceeds one hundred thousand pesos (P100,000) xxx. BP 129, Sec. 33. Metropolitan Trial Courts, Municipal Trial Courts and Municipal Circuit Trial Courts shall exercise: (1) Exclusive original jurisdiction over civil actions and probate proceedings, testate and intestate, including the grant of provisional remedies in proper cases, where the value of the personal property, estate or amount of the demand does not exceed one hundred thousand pesos (P100,000), or in Metro Manila where such personal property, estate, or amount of the demand does not exceed Two hundred thousand pesos (P200,000), exclusive of interest, damages of whatever kind, attorney's fees, litigation expenses, and costs, the amount of which must be specifically alleged: Provided, That interest, damages of whatever kind, attorney's fees, litigation expenses, and costs shall be included in the determination of the filing fees: Provided, further, That where there are several claims or causes of action between the same or different parties, embodied in the same complaint, the amount of the demand shall be the totality of the claims in all the causes of action, irrespective of whether the
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Arroyo vs Yu 54 Phil 511 F: The appeal of Yu relates to the preferences to the ten lorchas as between herself and the PNB. Among the facts found by the trial judge is that they were owned by Lim Ponzo Navigation Co. They were mortgaged to Po Pauco to guarantee a loan of P20,000. This was duly registered with the register of deeds. Po Pauco later mortgaged them in favor of PNB and registered with the register of deeds but was recorded in the Office of Collector of Customs much later. Meanwhile, Yu secured a judgment against Lim Ponzo Navigation Co. The notice of seizure was recorded by the collector of customs of Iloilo on which date the records of the office disclosed the vessels as free from encumbrances. HELD : Sec. 1171 of AC has modified the provisions of the Chattel Mortgage Law, particularly Sec. 4 thereof. It is now not necessary for a chattel mortgage of a vessel to be noted in the register of deeds. But it is essential that a record of documents affecting the title of a vessel be entered in the office of the collector of customs at a port of entry. This is designed to protect persons who deal with a vessel on the strength of the record title. Mortgages on vessels., although not recorded, are good as between the parties. But as against creditors of the mortgagor, an unrecorded mortgage is valid. However, we find an explanation of the delay of registration with the collector of customs-because of doubts entertained by the latter relative to the applicability of Act No. 3324 to a mortgage executed in 1918 in favor of a Chinese subject. This uncontradicted fact must be taken as curing the bank's defective title. That the collector did not perform his duty was no fault of PNB. Judgment affirmed in part in the sense that as between Yu and PNB, the latter has a superior right to its claim for P20,000, and set aside in part in the sense that the record is remanded for further proceedings. Rubiso vs Rivera 37 Phil 72 F: Defendant Rivera acquired by purchase the pilot boat Valentina on a date prior to that of the purchase and adjudication at public auction by plaintiff Rubiso. But the sale at public auction to Rubiso was recorded in the office of the collector of customs on Jan. 27, 1915 and in the commercial registry on March 4, 1915, while the sale to Rivera was entered in the customs registry only on March 17, 1915. Lower court decided for plaintiff. Defendant appealed. HELD : The requisite of registration in the registry of the purchase of a vessel is necessary and indispensable in order that the purchaser's rights may be maintained against a claim filed by a third person. Such registration is required both Art. 573 of the Code of Commerce in connection with Sec 2 of Act No. 1900 which Act amended said article. The amendments solely consisted in charging the Insular Collector of Customs, as at present, with the fulfillment of the duties of the commercial register concerning the registering of vessels, so that the registration of a bill of sale of a vessel shall be made in the Insular Collector of Customs, who, since May 18, 1909, has been performing the duties of the commercial registry in place of this latter official. In view of said legal provisions, it is undeniable that defendant's rights cannot prevail over those acquired by plaintiff in the ownership of said boat, in as much as defendant's registration came after plaintiff's registration.
Vessels exempt from Registration : AFP vessels, vessels owned and/or operated by the AFP or by foreign govt. for military purposes, and bancas, sail boats and other water craft which are not motorized of less than 3 gross tons shall not be subject to the requirements of these rules and regulations relative to registration and navigation, except in so far as may be prescribed by regulations of MARINA. The Phil. Coast Guard is vested with exclusive authority over the registration and documentation of Phil. vessels, as well as the issuance of all certificates, licenses, or other documents necessary or incident to such registration The registration shall be effected at its home port or at the nearest Coast Guard district or station when the home port does not have such Certificates of Philippine register: upon registration of a vessel of domestic ownership and of more than 15 tons gross, a certificate of Phil. register shall be issued for it The purpose of certificates of register of vessels : to declare the nationality of a vessel engaged in trade with foreign nations and to enable her to assert that nationality wherever found Privileges of certificate: It confers upon the vessel the right to engage, consistently with law, in the Philippines coastwise trade and entitles it to the protection of the authorities and the flag of the Philippines in all ports and on the high seas, and at the same time secures to it the same privileges and subjects it to the same disabilities as, under the laws of the Philippines, pertain to foreign built vessels transferred abroad to citizens of the Philippines Certificates of ownership : upon registration of a vessel of more than 5 tons gross, a certificate of ownership shall be issued for it 4. Significance of registration of transactions affecting vessels Presumption of ownership from registration : the presumption is that the person in whose name a vessel is registered has legal title thereto --> but such is not conclusive proof against the real owners It is essential that a record of documents affecting the title of a vessel be entered in the Philippine Coast Guard
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C. Persons Participating in Maritime Commerce 1. Shipowners and shipagents Art. 586. The owner of a vessel and ship agent shall be civilly liable for the acts of the captain and for the obligations contracted by the latter to repair, equip, and provision the vessel, provided the creditors proves that the amount claimed was invested therein. By agent is understood the person entrusted with the provisioning of a vessel, or who represents her in the port in which she happens to be. Art. 587. The ship agent shall also be civilly liable for the indemnities in favor of third persons which arise from the conduct of the captain in the care of the goods which the vessel carried; but he may exempt himself therefrom by abandoning the vessel with all her equipments and the freightage he may have earned during the voyage. Art. 588. Neither the owner of the vessel nor the agent shall be liable for the obligations contracted by the captain if the latter exceeds his powers and privileges inherent in his position or those which may have been conferred upon him by the former. However, if the amounts claimed were made use of for the benefit of the vessel, the owner or agent shall be liable. Liability of shipowner and shipagent : (1) under Art. 857, for the acts of the captain (2) for contracts entered into by the captain to repair, equip and provision the vessel, provided that the amount claimed was invested for the benefit of the vessel (3) for the indemnities in favor of third persons which may arise from the conduct of the captain in the care of the goods transported, as well as for the safety of passengers transported (4) for damages to third persons for tort or quasi-delict committed by the captain, except collision with another vessel (5) under Art. 826, for damages in case of collision due to the fault, negligence, or want of skill of the captain, sailing mate, or any other member of the complement The agent is liable to the shippers and owners of the cargo transported by it, for losses and damages occasioned to such cargo without prejudice to his rights against the owner of the ship, to the extent of the value of the vessel, its equipment and the freight Under 588, the shipowner and the shipagent are not liable for the obligations contracted by the captain if he exceeds his authority, unless the amounts claimed were invested for the benefit of the vessel --> however under Art. 1759, NCC, the ship owner is liable for the death of or injuries to the passengers which are caused by the negligence or wilful acts of his EEs although such EEs may have acted beyond the scope of their authority or in violation of the orders of the shipowner Art. 589. If two or more persons should part owners of a merchant vessel, an
be
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Yu Con vs Ipil 41 Phil 770 F: Yu delivered to Ipil and Solamo P 450 for delivery from Catmon to Cebu aboard a banca named Maria of which Lauron was the owner and Ipil and Solamo, the master and supercargo, respectively. The money together with various merchandise belonging to plaintiff was to be carried from the port of Cebu to Catmon in Cebu. The money was placed by Yu in his trunk and was transferred to that of Ipil. That night, the window of the stateroom in which the trunk containing the money was kept was broken through by persons not identified and through which the said trunk was stolen. It was found at the trial that Ipil and Solamo were negligent in guarding the money because they were sound asleep at the time of the theft and they assigned no one to stand guard during the night. Their defense was that Yu chartered and had control and responsibility of the banca and that the theft was due to Yu's negligence. The CFI held Ipil and Solamo negligent and held Lauron liable as ER and shipowner under Articles 586, 587 and 618 of the Code of Commerce. Held : Ipil and Solamo, as carriers and depositories of the money were liable under the Civil Code, the theft not being a fortuitous event or of force majeure and they being manifestly negligent and at fault. As to the liability of Lauron, the SC proceeded by first defining the banca "Maria" as within the meaning of the term "vessel." Thus, according to the foregoing definitions (by the Mercantile Code, by Reus in Commentaries on the Code of Commerce, and by Blanco) we hold that the banca "Maria" chartered by Yu Con from Lauron, was a "vessel" under Mercantile Law and the Code of Commerce. Ipil, the master of the banca, was also held to be the captain (masters are to small vessels as captains are to big ones). Under Arts. 587 and 618, the shipowner shall be civilly liable to third persons when the captain of the vessel causes the damage or loss to goods entrusted to him by said third persons under a contract to carry said goods. Thus, it is well and god that the shipowner be not held criminally liable for such crimes or quasi crimes but he cannot be excused from liability for the damage and harm which in consequence of those acts may be suffered by the third parties who contracted with the captain in his double capacity of agent and subordinate of the shipowner himself. In maritime commerce, the shippers and passengers in making contracts with the captain do so through the confidence they have in the shipowner who appointed him. The owner of a minor craft who has equipped and victualed it for the purpose of using it in the transportation of merchandise from one port to another is under the law a shipowner and the master of the craft is to be considered as its captain in the legal acceptation of this word, and the former must be held civilly liable for indemnities in favor of third parties to which the conduct of the master/captain may give rise in the custody of the effects laden on the craft, and for all losses which, through his fault or negligence, may occur to the merchandise or effects delivered to him for their transportation as well as for the damages suffered by those who contracted with him, in consequence of misdemeanors and crimes committed by him or by the members of the crew of the craft. Manila Steamship vs Abdulhaman 100 Phil 32 F: At around 7 p.m., M/L Consuelo V, owned by Lim Hong To, laden with cargoes and passengers left Zamboanga City bound for Siokon under the command
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A shipagent is liable notwithstanding the insolvency of the principal/owner BUT the ship agent may exempt himself from liability by abandoning the vessel with all her equipment and the freight it may have earned during the voyage --> the effect of abandonment is to extinguish the liability of the shipagent The ship agent's liability is confined to that which he is entitled as a matter of right to abandon : the vessel with all her eqpt. and the freight it may have earned during the voyage and to the insurance thereof Limited liability is not applicable when no abandonment of vessel is made Effect of abandonment: An abandonment amounts to an offer of the value of the vessel, of her equipment, and freight money earned --> results in the cessation of the responsibility of the owner/agent Abandonment cannot be refused by creditors This applies to all cases where the owner/agent may be held liable for the negligent or illicit acts of the captain Effect of loss or destruction of vessel: The shipagent's liability is merely co-extensive with his interest in the vessel such that the total loss thereof results in its extinction --> the total destruction of the vessel extinguishes a maritime lien as there is no longer any res to which it can attach. Thre (3) cases where the loss of the vessel extinguishes the liability of the shipowner: (1) under 587, liability arising from the conduct of the captain in the vigilance of the goods and for the safety of the passengers and for any liability arising from the negligent or illicit acts of the captain for which the shipowner or ship agent may be held liable (2) under 643, liability for the wages of the captain and the crew and for advances made by the shipagent if the vessel is lost by shipwreck or capture (3) under 837, liability for collision Exceptions: (1) Doctrine does not apply where shipowner is at fault : the doctrine is premised on the condition that the death or injury to the passenger occurred by reason of the fault or negligence of the captain only (2) Doctrine does not apply in cases of Workmen's Compensation --> such compensation has nothing to do with maritime commerce; it is an item in the cost of production which must be included in the budget of any well-managed industry (3) Total destruction of the vessel does not affect the liability of the owner for repairs on the vessel completed before its loss --> owners of a vessel are liable for necessary repairs; its liability for repairs remains unaffected by the loss of the thing Reason for limited liability: This doctrine had its origin when maritime trade and sea voyage was attended by innumerable hazards and perils --> to offset against these adverse conditions and to encourage shipbuilding and maritime commerce, it was deemed necessary to confine the liability of the owner or agent arising from the operation of a ship to the vessel, eqpt. and freight or insurance, if any Limited liability is evidence of the real and hypothecary nature of maritime law: (1) limitation of liability to the actual value of the vessel and freight; (2) right to retain the cargo and the embargo and detention of the vessel in cases where
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Art. 601. Should there be any profits, the co- owners may demand of the managing agent the amount due them, by means of an executory action without further requisite than the acknowledgment of the signatures in the instrument approving the account. 2. Captains and Masters
(c) Specific rights and prerogatives Art. 575. Part owners of vessels shall enjoy the right of pre-emption and redemption in the sales made to strangers; but they can only exercise it within the nine days following the record of the sale in the registry and by delivering the price at once. Art. 593. The owners of a vessel shall have preference in her charter over other persons, offering equal conditions and price. If two or more of the former should claim said right the one having greater interest shall be preferred, and should they have an equal interest it shall be decided by lot. Art. 594. The part owners shall elect the manager who is to represent them in the capacity of agent. The appointment of director or agent shall be revocable at the will of the partners. Art. 596. The agent may discharge the duties of captain of the vessel, subject, in every case, to the provisions contained in Article 609. If two or more co-owners request the position of captain, the disagreement shall be decided by a vote of the members; and if the vote should result in a tie, the position shall be given to the part owner having the larger interest in the vessel. If the interest of the petitioners should be the same, and there should be a tie, the matter shall be decided by lot. Art. 609. Captains, masters or patrons of vessels must be Filipinos, have legal capacity to contract in accordance with this Code, and prove the skill, capacity, and qualifications necessary to command and direct the vessel, as established by marine or navigation laws, ordinances, or regulations, and must not be disqualfied according to the same for the discharge of the duties of the position. If the owner of a vessel desires to be the captain thereof, without having the legal qualifications therefor, he shall limit himself to the financial administration of the vessel, and shall intrust the navigation to a
(a) Qualifications and licensing RA 5173 Sec. 3. The Philippine Coast Guard shall perform the following functions : (e) to issue licenses and certificates to officers, pilots, major and minor patrons and seamen, as well as suspend and revoke such licenses and certificates. Art. 609. Captains and masters of vessels must be Filipinos having legal capacity to bind themselves in accordance with this Code, and must prove that they have the skill, capacity, and qualifications required to command and direct the vessel, as established by marine laws, ordinances, or regulations, or by those of navigation, and that they are not disqualified according to the same for the discharge of the duties of that position. If the owner of a vessel desires to be the captain thereof and does not have the legal qualifications therefore, he shall limit himself to the financial administration of the vessel, and shall entrust her navigation to the person possessing the qualifications required by said ordinances and regulations. notes: - Captain - one who governs vessels that navigate the high seas or ships of large dimensions and importance, although they may be engaged in coastwise trade - Master - one who commands smaller ships engaged exclusively in coastwise trade - captain and master have the same meaning for maritime commerce - patron - bancas - Roles of the captain : (1) general agent of the shipowner (2) technical director of the vessels (3) represents the government of the country under whose flag he navigates (b) Inherent Powers Art. 610. The following powers are inherent in the position of captain or master of a vessel: 1. To appoint or make contracts with the crew in the absence of the ship agent and propose said crew, should said agent be present; but the agent may not employ any member against the captain's express refusal. 2. To command the crew and direct the vessel to the port to its destination, in accordance with the instructions he may have received from the ship agent. 3. To impose, in accordance with the contracts and the laws and regulations of the
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(not included in the outline) Art. 624. A captain whose vessel has gone through a hurricane or who believes that the cargo has suffered damages or averages, shall make a protest thereon before the competent authority at the first port he touches within the twenty-four hours following his arrival, and shall ratify it within the same period when he arrives at the place of his destination, immediately proceeding with the proof of the facts, it not being permitted to open the hatches until after this has been done. The captain shall proceed in the same manner if, the vessel having been wrecked, he is saved alone or with part of his crew, in which case he shall appear before the nearest authority, and make a sworn statement of the facts. The authority or the consul abroad shall verify the said facts, receiving sworn statements of the members of the crew and passengers who
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International Harvester vs Hamburg American Line 42 Phil 845 F: In the spring of 1917, defendant undertook to carry agricultural machineries, belonging to the plaintiff, from Hamburg to Vladivostok, Russia. Freight charges were prepaid to ultimate destination and defendant reserved the right to forward the machineries at its own expense by some other means in case of its inability to effect discharge at the port of destination. When the voyage was almost completed at the China Sea, war broke out between Germany and Russia, and the ship put in to the port of Manila, where it was interned. Captain of the vessel refused to surrender the machineries to the owner's agent unless the latter would agree to subject said cargo to liability upon general average to satisfy the cost and expenses of the vessel incident to its stay in Manila. Plaintiff did not assent and brought an action for recovery of the machineries plus damages. The plaintiff later obtained said cargo by a writ of replevin and forwarded it to Vladivostok by another streamer. Defendant denied liability asserting its lien on the cargo for general average. Trial court awarded the plaintiff damages. Defendant appealed. Held: It is clear that the cargo in question is not liable to a general average. It is not claimed that said cargo was contraband of war and being neutral goods, they were not liable to forfeiture in the event of capture by the enemies of the ship's flag. It follows that when the master of the vessel decided to take refuge in Manila, he acted exclusively with a view to the vessel's protection. There was no common danger to the ship and cargo; and, therefore, it was not a case for a general average. The outbreak of the war between Germany and Russia absolved the defendant from conveying the cargo to Russia, and no damage could be recovered by the plaintiff from the defendant for the latter's failure to convey the cargo to the port of destination on that ship. But by the terms of the contract of affreightment, the defendant was bound to forward the cargo to Vladivostok at its expense, not necessarily by a streamer of defendant. It does not by any means follow that it is not liable for the expenses incurred by the plaintiff in completing the unfinished portion of the voyage in another ship. Defendant is,
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(e) Jason Clause Jason Clause, Rule D, York-Antwerp Rules Rights to contribution in general average shall not be affected, though the event which gave rise to the sacrifice or expenditure may have been due to the fault of one of the parties to the adventure; but this shall not prejudice any remedies which may be open against that party for such fault. (b) Proof and Liquidation of Averages (1) Modes Art. 846. Those interested in the proof and liquidation of averages may mutually agree and bind themselves at any time with regard to the liability, liquidation and payment thereof. In the absence of agreements, the following rules shall be observed: 1. The proof of the average shall take place in the port where the repairs are made, should any be necessary, or in the port of unloading. 2. The liquidation shall be made in the port of unloading, if it is a Philippine port. 3. If the average occurred outside of the jurisdictional waters of the Philippines, or the cargo has been sold in a foreign port by reason of an arrival under stress, the liquidation shall be made in the port of arrival. 4. If the average has occurred near the port of destination, so that said port can be made, the proceedings mentioned in rules 1 and 2 shall be held there.
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(2) Appraisal of general average Art. 850. If by reason of one or more accidents of the sea, particular and gross averages of the vessel, of the cargo, or of both, should take place on the same voyage, the expenses and damages corresponding to each average shall be determined separately in the port where the repairs are made, or where the merchandise is discharged, sold, or utilized. For this purpose the captains shall be obliged to demand of the expert appraisers and of the contractors making the repairs, as well as of those appraising and taking part in the unloading, repair, sale, or utilization of the merchandise, that in their appraisements or estimates and accounts they set down separately and accurately the expenses and damages pertaining to each average, and in those of each average those corresponding to the vessel and to the cargo, also stating separately whether or not there are damages proceeding from inherent defect of the thing and not from accident of the sea; and in case there should be expenses common to the different averages and to the vessel and its cargo, the amount corresponding to each must be estimated and stated distinctly. Art. 851. At the instance of the captain, the adjustment, liquidation, and distribution of gross averages shall be held privately, with the consent of all the parties in interest. For this purpose, within forty-eight hours, following the arrival of the vessel at the port, the captain shall convene all the persons interested in order that they may decide as to whether the adjustment or liquidation of the gross average is to be made by experts and liquidators appointed by themselves, in which case did shall be so done if the interested parties agree.
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Art. 820. An arrival shall not be considered lawful in the following cases: 1. If the lack of provisions should arise from the failure to take the necessary provisions for the voyage according to usage and custom, or if they should have been rendered useless or lost through bad stowage or negligence in their care. 2. If the risk of enemies, privateers, or pirates should not have been well known, manifest, and based on positive and provable facts. 3. If the defector the vessel should have arisen from the fact that it was not repaired, rigged, equipped, and prepared in a manner suitable for the voyage, or from some erroneous order of the captain. 4. Whenever malice, negligence, want of foresight, or lack of skill on the part of the captain exists in the act causing the damage. Arrival under stress: Arrival of a vessel at the nearest and most convenient port, if during the voyage the vessel cannot continue the trip to the port of destination due to : (1) lack of provisions, (2) wellfounded fear of seizure, privateers, or pirates, (3) by reason of any accident of the sea disabling it to navigate (b) Formalities Art. 819. If during the voyage the captain should believe that the vessel cannot continue the trip to the port of destination on account of the lack of provisions, well-founded fear of seizure, privateers, or pirates, or by reason of any accident of the sea disabling it to navigate, he shall assemble the officers and shall summon the persons interested in the cargo who may be present, and who may attend the meeting without the right to vote; and if,
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safe
no limit view of
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Effect of registration: 1. the loan shall have, with regard to other credits, the preference which, according to its nature, it should have (Art. 580 - 8th in the order of preference) 2. effective against third persons from the time of execution/registration Art. 721. In a contract on bottomry or respondentia the following must be stated: 1. The kind, name, and registry of the vessel. 2. The name, surname, and domicile of the captain. 3. The names, surnames, and domiciles of the person giving and the person receiving the loan. 4. The amount of the loan and the premium stipulated.
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F. BILL OF LADING B/L operates both as a receipt and as a contract; it is a receipt for the goods shipped and a contract to transport and deliver the same as stipulated A stipulation that a CC's liability is limited to the value of the goods appearing in the B/L, unless the owner declares a greater value, is valid and binding Bill of Lading vs Charter party 1. Charter party - entire or complete contract B/L - private receipt which the captain gives to accredit that such goods belong to such persons
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4. Responsibilities of Captain Art. 701. The convenience or the interest of the passengers shall not obligate nor empower the captain to stand in-shore or enter places which may take the vessel out of her course, nor to remain in the ports he must or is under the necessity of touching for a period longer than that required by the needs of navigation. Art. 702. In the absence of an agreement to the contrary, the subsistence of the passengers during the voyage shall be deemed included in the price of the passage; but should it be for their account, the captain shall be under the obligation, in case of necessity, to supply the food necessary for their sustenance at a reasonable price. Art. 705. In case of the death of a passenger during the voyage the captain shall be authorized, with respect to the body, to take the steps required by the circumstances, and shall carefully take care of the papers and goods of said passenger which may be on board, complying with the provisions of case No. 10 of Article 612 with regard to members of the crew. Art. 612. The following duties are inherent in the office of captain: 1. To have on board before starting on a voyage a detailed inventory of the hull, engines, rigging, tackle, stores, and other equipments of the vessel; the navigation certificate; the roll of the persons who make up the crew of the vessel, and the contracts entered into with the crew; the list of passengers; the health certificate; the certificate of the registry proving the ownership of the vessel; and all the obligations which encumber the same up to that date; the charters or authenticated copies thereof; the invoices or manifest of the cargo, and the instrument of the expert visit or inspection, should it have been made at the port of departure. 2. To have a copy of this Code on board. 3. To have three folioed and stamped books, placing at the beginning of each one a note of the number of folios it contains, signed by the marine official, and in his absence by the competent authority. In the first book, which shall be called "log book," he shall enter every day the condition of the atmosphere, the prevailing winds, the course sailed, the rigging carried, the horsepower of the engines, the distance covered, the maneuvers executed, and other incidents of navigation. He shall also enter the damage suffered by the vessel in her hull engines, rigging, and tackle, no matter what is its cause, as well as the imperfections and averages of the cargo, and the effects and consequence of the jettison, should there be any; and in cases of grave resolutions which require the advice or a meeting of the officers of the vessel, or even of the passengers and crew, he shall record the decision adopted. For the informations indicated he shall make use of the binnacle book, and of the steam or engine book kept by the engineer.
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RISKS Sec. 2. Subject to the provisions of Section 6, under every contract of carriage of goods by sea, the carrier in relation to the loading, handling, stowage, carriage, custody, care, and discharge of such goods shall be subject to the responsibilities and liabilities and entitled to the rights and immunities hereinafter set forth.
RESPONSIBILITIES AND LIABILITIES Sec. 3. (1) The carrier shall be bound before and at the beginning of the voyage to exercise due diligence to(a) Make the ship seaworthy; (b) Properly man, equip, and supply the ship; (c) Make the holds, refrigerating and cooling chambers, and all other parts of the ship in which goods are carried, fit and safe for their reception, carriage, and preservation (2) The carrier shall properly and carefully load, handle, stow, carry, keep, care for, and discharge the goods carried. (3) After receiving the goods into his charge the carrier, or the master or agent of the carrier, shall, on demand of the shipper, issue to the shipper a bill of lading showing among other things(a) The loading marks necessary for identification of the goods as the same are furnished in writing by the shipper before the loading of such goods starts, provided such marks are stamped or otherwise shown clearly upon the goods if uncovered, in such a manner as should ordinarily remain legible until the end of the voyage. (b) Either the number of packages or pieces, or the quantity or weight, as the case may be, as furnished in writing by the shipper. (c) The apparent order and conditions of the goods: Provided, that no carrier, master, or agent of the carrier, shall be bound to state or show in the bill of lading
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The plaintiff cannot dispute said limitation on the ground that it was not freely and fairly agreed upon or that it is against public policy, since the LAW ITSELF PROVIDES FOR SAID LIMITATION; THE SAME IS DEEMED READ INTO THEIR CONTRACT Package - means individual packaging of the goods - does not cover 1 container van Parties may agree to amount of liability less than $500 under Sec. 4(5). By providing that $500 is the maximum liability, the law does not disallow an agreement for liability at a lesser amount. Moreover, Art. 1749 of the NCC expressly allows th limitation of the carrier's liability. (Eastern v. Great American) SURRENDER OF RIGHTS AND IMMUNITIES AND INCREASE OF RESPONSIBILITIES AND LIABILITIES Sec. 5. A carrier shall be at liberty to surrender in whole or in part all or any of his rights and immunities or to increase any of his responsibilities and liabilities under this Act, provided such surrender or increase shall be embodied in the bill of lading issued to the shipper. The provisions of this Act shall not be applicable to charter parties; but if bills of lading are issued in the case of a ship under a charter party, they shall comply with the terms of this Act. Nothing in this Act shall be held to prevent the insertion in a bill of lading of any lawful provisions regarding general average. SPECIAL CONDITIONS Sec. 6. Notwithstanding the provisions of the preceding section, a carrier, master or agent of the carrier, and a shipper shall, in regard to any particular goods be at liberty to enter into any agreement in any terms as to the responsibility and liability of the carrier for such goods, and as to the rights and immunities of the carrier in respect to such goods, or his obligation as to seaworthiness, (so far as the stipulation regarding seaworthiness is not contrary to public policy), or the care or diligence of his servants or agents in regard to the loading, handling, stowage, carriage, custody, care and discharge of the goods carried by sea; provided, that in this
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Sec. 11. When under the custom of any trade the weight of any bulk cargo inserted in the bill of lading is a weight ascertained or accepted by a third party other than the carrier or the shipper and the fact that the weight as ascertained or accepted is stated in the bill of lading, then notwithstanding anything in this Act, the bill of lading shall not be deemed to be prima facie evidence against the carrier of the receipt of goods of the weight so inserted in the bill of lading, and the accuracy thereof at the time of shipment shall not be deemed to have been guaranteed by the shipper. Sec. 12. Philippines.) (Not applicable to the
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HELD: No. Art. 28 (1) provides that an action for damage must be brought at the option of the plaintiff: (a) before the court of the domicile of the carrier; (b) the court of its principal place of business; (c) the court where it has a place of business thru w/c the contract had been made; (d) the court of the place of destination. In this case, the ff. were not followed, and hence the Philippines, not being one of the courts mentioned in Art.28 (1), does not have jurisdiction over the case. (1) court of domicile is Minnesota, U.S.A; (2) principal place of business of carrier is also U.S.A; (3) place of business where contract was made was in San Francisco; (4) place of destination is also San Francisco, Santos having purchased a round trip-ticket from SFO-TYOMNL, then back to TYO- SFO. The "ultimate destination" being San Francisco. The court called upon to determine the applicability of the limitation provision must first be vested with the appropriate jurisdiction. If the carrier is indeed is indeed not guilty of WILLFUL MISCONDUCT, it can avail itself of the limitations set forth in this article. But it can be done only if the action has first been commenced properly under the rules set forth in Art.28 (1). Notes: The enumeration of the causes of action in the WC is not an exclusive list. You can have a cause of action even if it is not: (a) death or wounding of passenger; (b) damage or loss or destruction of checked baggage; (c) delay in transportation of passengers, luggage and goods. The case of Northwest is actually overbooking. Delay still a cause of action under WC. Note however, that the limitations of liability in the Convention favors the carrier. C. When Applicable Art. 1. (1) This convention shall apply to all international transportation of persons, baggage, or goods performed by aircraft for hire. It shall apply equally to gratuitous transportation by aircraft performed by an air transportation enterprise. (2) For the purpose of this convention the expression "international transportation" shall mean any transportation in which, according to the contract made by the parties, the place of departure and the place of destination, whether or not there be a break in the transportation or a transshipment, are situated either within the territories of two High Contracting Parties, or within the territory of a single High Contracting Party, if there is an agreed stopping place within a territory subject to the sovereignty, suzerainty, mandate, or authority of another power, even though that power is not a party to this convention. Transportation without such an agreed stopping place between territories
NORTHRWEST V. CUENCA [14 S 1063 (1965)] F: Nicolas Cuenca, an official delegate of Philippines to a conference in Tokyo, was transferred from first class to tourist class despite his first class ticket. The Northwest agent also treated him rudely in front of other passengers. Northwest argues that according to the Warsaw Convention, Arts. 17, 18, 19, an air carrier is liable only in the event of (a) death
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E. Limitations on Liability RE: PASSENGERS Art.22. (1) In the transportation of passengers the liability of the carrier for each passenger shall be limited to the sum of 125,000 francs. (Now $100,000) Where, in accordance w/ the law of the court to w/c the case is submitted, damages may be awarded in the form of periodical payments, the equivalent capital value of the said payments shall not be exceed 125,000 francs. Nevertheless, by special contract, the
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A: YES. It just can't avail of the limitation on liability. Thus it can still invoke the provisions on NOTICE or PRESCRIPTION/LACK OF CAUSE OF ACTION. e.g. If damage wasn't one of the enumerations in the WC, & case was filed beyond the 2 year requirement. The carrier can invoke prescription. But if suit is brought w/in 2 years, carrier may be liable for a higher amount than the limitation. The only time when WC isn't applicable is when it's not intl. air transport. There is nothing in Art.25 w/c says that the WC doesn't apply entirely. ALITALIA v.IAC (supra) The Convention does not regulate or exclude liability for other breaches of contract by the carrier or misconduct of its officers and employees or for some particular or exceptional damage. The Con. has been held inapplicable where there was proof of malice or bad faith attributable to its officers & employees. HERE, HOWEVER, no bad faith of EES. Nominal damages however, was awarded because of the presence of some special species of injury caused to Dr. Pablo. TWA v. CA (165 SCRA) F: Vinluan, ACCRA lawyer, was downgraded from 1st class to economy & was issued refund application, in his MNL-Europe-NYK- SFO-MNL flight. (His NYK-SFO flight particularly) He also noticed that white Caucasian passengers who checked in later than him were given preference in 1st class seats, w/c became available due to "no show" passengers. He sued in CFI for breach of contract & bad faith. ISSUE: WON Warsaw Con. limit on liability can be availed of --- NO. There was obvious discrimination & humiliation to w/c Vinluan was subjected. Such inattention & lack of care for interest of its passengers amount to bad faith w/c entitles passenger to moral damages. NOTES: His entire trip, even though he availed of the services of other airlines, is equal to one transport. E.g. MNL-SFO via PAL } one continuing SFO-NYK via United } ticket Hence, if injury appears in SFO-NYK, Warsaw can be applied. F. Conditions of Liability Art.26. (1) Receipt by the person entitled to the delivery of baggage of goods w/o complaint shall be prima facie evidence that the same have been delivered in good condition & in accordance w/ the document of transpo. (2)In case of 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 BAGGAGE and 7 days from the date of receipt in the case of GOODS. In case of DELAY the complaint must be made at the latest w/in 14 days from the date on w/c the baggage or goods have been placed at his disposal. (3) Every complaint must be made in writing upon the document of transportation or by separate notice in writing dispatched w/in the times aforesaid.
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