Carriage of Goods
1. Shipper
2. Carrier
3. Consignee? (may be the shipper himself or a
third person)
Perfection
Carriage of Passengers
Carriage of Goods
1. Contract to carry
2. Contract of carriage
The presence of a ticket or a bill of lading or any
written contract is NOT necessary for the
perfection of the contract.
A CARRIER is a person or corporation
who undertakes to transport or convey
goods or persons from one place to
another, gratuitously or for hire. It is
classified either as a private/special carrier
or as a common/public carrier. [SPOUSES
PEREÑA vs. SPOUSES ZARATE, G.R.
No. 157917, August 29, 2012]
A PRIVATE CARRIER is one who,
• without making the activity a vocation,
• or without holding himself or itself out to
the public as ready to act for all who may
desire his or its services,
• undertakes, by special agreement in a
particular instance only, to transport goods
or persons from one place to another
either gratuitously or for hire.
The provisions on ordinary contracts of the Civil
Code govern the contract of private carriage.
• The above article makes no distinction between one whose principal business activity is the
carrying of persons or goods or both, and one who does such carrying only as an ancillary
activity (in local idiom, as "a sideline").
• Article 1732 also carefully avoids making any distinction between a person or enterprise
offering transportation service on a regular or scheduled basis and one offering such service
on an occasional, episodic or unscheduled basis.
• Neither does Article 1732 distinguish between a carrier offering its services to the "general
public," i.e., the general community or population, and one who offers services or solicits
business only from a narrow segment of the general population. [PEDRO DE GUZMAN vs.
COURT OF APPEALS and ERNESTO CENDANA, G.R. No. L-47822, December 22, 1988]
At the outset, it is essential to establish whether
the contract of carriage as entered into as a
common carrier or as a private carrier, since
the resolution of this preliminary question
determines:
a) The law applicable to the case;
b) Standard of diligence required of the carrier;
c) Burden of proof applicable to the case.
(National Steel Corp v. CA, 283 CRA 45)
As all the foregoing indicate, the true test for a
common carrier is not the quantity or extent
of the business actually transacted, or the
number and character of the conveyances
used in the activity, but whether the
undertaking is a part of the activity engaged
in by the carrier that he has held out to the
general public as his business or occupation.
The true test of a common carrier is the carriage
of goods or passengers, provided it has space
for all who opt to avail of it transportation for
a fee. [National Steel Corp vs. CA, December
29, 1998]
Common Carrier Private Carrier
Held: Babao knew of the impending typhoon on March 24, 1982 when
the Philippine Coast Guard denied him the issuance of a clearance
to sail. Less than 24 hours, having elapsed, a clearance was finally
issued on March 25, 1982.
Records show that Babao did not ascertain where the typhoon was
headed by the use of his vessel’s barometer and radio. Neither did
he monitor and record the weather conditions everyday as required
by Art. 612 of the Code of Commerce. Had he done so, he could
have anticipated the strong winds and big waves and taken shelter.
Furthermore, the crew did of M/L Maya did not have the qualifications
provided for in P.D. No. 97, all of whom were unlicensed.
Therefore, Arada is liable to SMC for the cargoes lost.
Article 1740. If the common carrier negligently
incurs in delay in transporting the goods, a
natural disaster shall not free such carrier
from responsibility.
If the natural disaster occurs when the carrier is
already in default (due to negligence), the
carrier can still be held liable.
If delay is inexcusable, the following are the
consequences:
HELD: Under Section 5 of Republic Act No. 4136, all motor vehicles
being operated on any highway must be registered with the Land
Transportation Office. Any encumbrances of motor vehicles must be
recorded to be valid against third parties. Even if a motor vehicle
has been sold, leased, or transferred to another person at the time it
figured in an accident, the registered owner is still liable for
damages caused by the accident. (FEB Leasing and Finance
Corporation vs. Baylon, 653 SCRA 22.)
Unlawful arrangements
1. Boundary system
1. In case of cancellations
a) Cancellation at least 24 hours (due to carrier)
i. Pax to be notified before fact of cancellation
ii. Rebook or reimburse, at option of pax
b) Cancellation less than 24 hours (due to carrier)
i. Pax to be notified before fact of cancellation
ii. Rebook ticket without additional charge
iii. or reimburse of the value of the fare, taxes
c) Cancellation due to other causes (force majeure,
etc.)
i. To be reimbursed of the value of the fare
2. Flight delay and exceptions thereto
1. As a receipt
2. As a contract
3. As a document of title (symbol of the goods)
such that...
2 characteristics:
But:
captain – applied to those who govern vessels that
navigate high seas or ships of large dimension
master – those who command smaller ships engaged
exclusively in coastwise trade (Yu vs. Ipil, 1919)
Powers and Functions
3 distinct roles:
Art. 618. The captain shall be civilly liable to the ship agent, and
the latter to the third persons who may have made contracts
with the former;
1. For all damages suffered by the vessel and its cargo by
reason of want of skill or negligence on his part. If a
misdemeanor or crime has been committed, he shall be
liable in accordance with the Penal Code.
2. For all thefts committed by the crew, reserving his right of
action against the guilty parties.
3. For the losses, fines and confiscations imposed an account of
violation of customs, police, health, and navigation laws and
regulations.
4. For the losses and damages caused by mutinies on
board the vessel or by reason of faults committed by
the crew in the service and defense of the same, if
he does not prove that he made timely use of all his
authority to prevent or avoid them.
5. For those caused by the misuse of the powers and
the non-fulfillment of the obligations pertaining to
him in accordance with Arts. 610 and 612.
6. For those arising by reason of his going out of his
course or taking course which he should not have
taken without sufficient cause, in the opinion of the
officers of the vessel, at a meeting with the shippers
or supercargoes who may be on board.
7. For those arising by reason of his voluntarily
entering a port other than that of his
destination, outside of the cases or without
the formalities referred to in Art. 612.
8. For those arising by reason of non-observance
of the provisions contained in the regulations
on situation of lights and maneuvers for the
purpose of preventing collisions.
Art. 619. The captain shall be liable for the cargo
from the time it is delivered to him at the dock
or afloat alongside the vessel at the port of
loading, until he delivers it on the shore or on
the discharging wharf at the port of
unloading, unless the contrary has been
expressly agreed upon.
Art. 620. The captain shall not be liable for the
damages caused to the vessel or to the cargo by
force majeure; but he shall always be so for
those arising through his own fault, no
agreement to the contrary being valid.
1. Public instrument
2. A policy signed by the contracting parties and
the broker taking part therein
3. Private instrument
• Respondentia
1. Cargo owner
2. Captain? VOID loan [Art. 617]
ARTICLE 731. The actions which may be brought
by the lender shall be extinguished by the
absolute loss of the goods on which the loan
was made, if said loss arose from an accident
of the sea at the time and during the voyage
designated in the contract, and should it be
proven that the cargo was on board.
EXCEPTIONS:
The proof of the loss is incumbent upon the person who received the
loan, as well as the proof of the existence in the vessel of the
goods declared to the lender as the object thereof.
Barratry
Any willful misconduct on the part of the
master or crew,
in pursuance of some unlawful or fraudulent
purpose,
without the consent of the owners, and
to the prejudice of the owner’s interest
Art. 725. No loans on bottomry may
be made on the salaries of the
crew or on profits expected.
Averages
ARTICLE 806. For the purposes of this Code the
following shall be considered averages:
1. All extraordinary or accidental expenses which
may be incurred during the navigation for the
preservation of the vessel or cargo, or both.
2. All damages or deterioration the vessel may
suffer from the time she puts to sea from the port
of departure until she casts anchor in the port of
destination, and those suffered by the
merchandise from the time it is loaded in the port
of shipment until it is unloaded in the port of
consignment.
What are Considered as Averages
[Art. 806]
1. All extraordinary or accidental expenses which may be
incurred during the voyage for the preservation of the
vessel, cargo, or both
2. All damages or deterioration:
a. which the vessel may suffer:
i. from the time she puts to sea at the port of departure
ii. until she casts anchor at the port of destination b.
suffered by the goods:
iii. from the time they are loaded in the port of shipment
iv. until they are unloaded in the port of their consignment
What are NOT averages?
ARTICLE 807. The petty and ordinary expenses of
navigation, such as pilotage of coasts and ports,
lighterage and towage, anchorage dues,
inspection, health, quarantine, lazaretto, and
other so-called port expenses, costs of barges,
and unloading, until the merchandise is placed on
the wharf, and any other expenses common to
navigation shall be considered ordinary expenses
to be defrayed by the shipowner, unless there is
a special agreement to the contrary.
The law on averages under the Code of
Commerce cannot be applied in determining
liability where there is negligence. [American
Home vs. CA, 1992]
Claims not admissible
Art. 848. Claims for averages shall not be admitted if
they do not exceed 5% of the interest which the
claimant may have in the vessel or in the cargo if it is
GROSS average, and 1% of the goods damaged if
PARTICULAR average, deducting in both cases the
expenses of appraisal, unless there is an agreement
to the contrary.
5%↓ - gross
1% ↓- particular
Kinds of Averages
1. Simple or Particular
2. General
Particular Average
All the expenses and damage caused to the
vessel or to her cargo which have NOT inured
to the common benefit and profit of ALL the
persons interested in the vessel and her cargo
[Art. 809]
1. The damages suffered by the cargo from the time of its
embarkation until it is unloaded, either on account of the
nature of the goods or by reason of an accident at sea or
force majeure, and the expenses incurred to avoid and
repair the same.
2. The damages suffered by the vessel in her hull, rigging, arms,
and equipment, for the same causes and reasons, from the
time she puts to sea from the port of departure until she
anchored in the port of destination.
3. The damages suffered by the merchandise loaded on deck,
except in coastwise navigation, if the marine ordinances allow
it.
4. The wages and victuals of the crew when the vessel should be
detained or embargoed by a legitimate order or force
majeure, if the charter should have been for a fixed sum for
the voyage.
5. The necessary expenses on arrival at a port, in
order to make repairs or secure provisions.
6. The lowest value of the goods sold by the
captain in arrivals under stress for the
payment of provisions and in order to save the
crew, or to cover any other requirement of the
vessel against which the proper amount shall
be charged.
7. The victuals and wages of the crew during the
time the vessel is in quarantine.
8. The damage suffered by the vessel or cargo by
reason of an impact or collision with another, if it
were accidental and unavoidable. If the accident
should occur through the fault or negligence of
the captain, the latter shall be liable for all the
damage caused.
9. Any damage suffered by the cargo through the
faults, negligence, or barratry of the captain or of
the crew, without prejudice to the right of the
owner to recover the corresponding indemnity
from the captain, the vessel, and the freight.
The owner of the goods that suffered the
damage bears the loss. [Art. 810]
Liquidation of Particular Average
Art. 869. The experts which the judge or court or
the persons interested may appoint, as the
case may be, shall proceed with the
examination and appraisment of the average
in the manner prescribed in Arts. 853 and 854,
Rules 2 to 7, in so far as they are applicable.
General Average
All the damages and expenses which are
DELIBERATELY CAUSED in order to save the
vessel, her cargo, or both at the same time
from a REAL KNOWN risk. [Art. 811]
Requisites of a General Average
1. There must be a common danger, a danger in
which ship, cargo and crew all participate
2. For the common safety or for the purpose of
avoiding an imminent peril, part of the vessel or
cargo or both is sacrificed deliberately
3. This attempt to avoid the imminent peril must
be successful in a sense that the vessel and
some of the cargo are saved
4. The expenses were incurred or damages were
afflicted after taking the proper legal steps and
authority [A. Magsaysay, Inc. vs. Agan, 1955]
Common Danger
“means that both the ship and the cargo, after
being loaded, are subject to the same danger,
whether during the voyage, or in the port of
loading or unloading;
that the danger arises from accidents of the sea,
dispositions of authority, or faults of men,
provided that the circumstances producing the
peril should be ascertained and imminent or may
rationally be said to be certain or imminent.”
Note: even if there is a common peril, the same
may not justify a voluntary sacrifice if the
same can be easily be avoided by the ship
without sacrifice.
a) Ship owner
b) Cargo owners
c) Insurers of vessel/cargo [Art. 859/ secs. 166-167,
ICC]
d) Lenders on bottomry/ respondentia
The owners of goods sacrificed is entitled to
receive the general average contribution.
Appraisal and Liquidation
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 48 hours following the
arrival of the vessel at the port, the captain
shall call all the persons interested, in order
that they may decide as to whether the
adjustment or liquidation of the gross is to be
made by experts and liquidators appointed by
themselves, in which case it shall be done if
the interested persons agree.
Should an agreement not be possible, the
captain shall apply to the judge or court of
competent jurisdiction, who shall be the one
in the port where these proceedings are to be
held in accordance with the provisions of this
Code, or to the consul of the Philippines,
should there be one, and otherwise to the
local authority when they are to be held in a
foreign port.
Art. 853. After the experts have been appointed
by the persons interested, or by the judge or
court, and after the acceptance, they shall
proceed to the examination of the vessel...
separating those loses and damages from
those arising from the inherent defect of the
things.
With regard to merchandise, if the average
should be visible at a mere glance, the
examination thereof must be made before
they are delivered. Should it not be visible at
the time of unloading, said examination may
be made after delivery, provided it is done
within 48 hours from the unloading and
without prejudice to other proofs which the
experts may deem proper.
Art. 857. After the appraisment of the goods
saved has been concluded by the experts, as
well as that of the goods lost which constitute
the gross average, and after the approval of
the accounts of the same by the persons
interested or by the judge or court, the entire
record shall be turned over to the liquidator
appointed, in order that he may proceed with
the distribution of the average.
Art. 865. The distribution of the gross average
shall not be final until it has been agreed to, or
in the absence thereof, until it has been
approved by the judge or court after an
examination of the liquidation and a hearing
of the persons interested who may be
present, or of their representatives.
Who collects?
Art. 866. After the liquidation has been
approved, it shall be the duty of the captain
to collect the amount of the distribution, and
he shall be liable to the owners of the goods
averaged for the damages they suffer through
his delay or negligence.
Art. 867. If the contributions should not pay the
amount of the assessment within the third
day after having been requested to do so, the
goods saved shall be attached, at the request
of the captain, and shall be sold to cover the
payment.
York- Antwerp Rules*
The parties may by stipulation agree that the
Rules shall be applied.
e. Both vessels may be blamed for the collision: Each one shall
be liable for his own damages, and both shall be jointly
responsible for the losses and damages suffered by their
cargoes. [Art. 827, Code of Commerce].
The charterer mans the vessel with his own people and
becomes the owner pro hac vice (just for that one
particular purpose only), subject to liability to others for
damages caused by negligence.
NY Manila Cebu
Yes. The transhipment from Manila to Cebu was
not a separate transaction from that of
originally entered into by Macondray. It was
part of Macondray’s obligation under the
contract of carriage.
Duties of a Carrier
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 carrier, or
the master or agent of the carrier, shall, on
demand of the shipper, issue to the shipper a
BOL...
(4) Such BOL shall be prima facie evidence of the
receipt by the carrier of the goods...
(8) Any clause, covenant, or agreement in a
contract of carriage relieving the carrier of the
ship from liability for loss or damage to or in
connection with the goods, arising from
negligence, fault, or failure in the duties and
obligations provided in this section or
lessening such liability otherwise than as
provided in this Act, shall be null and void and
of no effect.
Defenses and Immunities
(5) Neither the carrier nor the ship shall in any event be or
become liable for any loss or damage to or in connection with
the transportation of goods in an amount exceeding $500 per
package of lawful money of the United States, or in case of
goods not shipped in packages, per customary freight unit, or
the equivalent of that sum in other currency, unless the
nature and value of such goods have been declared by the
shipper before shipment and inserted in the bill of lading. This
declaration, if embodied in the bill of lading, shall be prima
facie evidence, but shall not be conclusive on the carrier.
By agreement between the carrier, master or agent
of the carrier, and the shipper another maximum
amount than that mentioned in this paragraph
may be fixed: Provided, that such maximum shall
not be less than the figure above named. In no
event shall the carrier be liable for more than the
amount of damage actually sustained. Neither
the carrier nor the ship shall be responsible in
any event for loss damage to or in connection
with the transportation of the goods if the nature
or value thereof has been knowingly and
fraudulently misstated by the shipper in the bill of
lading.
Limitation of Liability
Under Sec. 4(5), the limit is set at a maximum of
$500 per package or customary freight unit in the
absence of a higher declaration. The condition is
deemed part of the bill even if not expressly
stated.
Good Luck!