62315234 42786523 TRANSPO Final Midterm Reviewer

8/3/2019 62315234 42786523 TRANSPO Final Midterm Reviewer

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LAW ON TRANSPORTATION AND PUBLIC UTILITIES

Contract of Transportation person obligates himself to transportpersons or property from one place to another for a consideration.

2 KINDS:

1. CARRIAGE OF PASSENGERS

Parties: common carrier & passenger (carried gratuitously or not)

Perfection:

> contract to carry (agreement to carry the passenger at somefuture date) consensual contract and perfected by mere consent

* AIRCRAFT perfected even without issuance of ticket as long asthere was already meeting of minds with respect to the subjectmatter and consideration

> contract of carriage real contract; not until the facilities of the carrier are actually

used can the carrier be said to have assumed the obligation of thecarrier; perfected by actual use.

* AIRCRAFT perfected if it was established that the passengerhad checked in at the departure counter, passed through customsand immigration, boarded the shuttle bus and proceeded to theramp of the aircraft and baggage already loaded to the aircraft.

* Public Utility Bus or Jeepneys once it stops it is in effect makinga continuous offer to riders; perfected when passenger is alreadyattempting to board the vehicle

* TRAINS perfected when a person:a. purchased a ticket/ possess sufficient fare with whichto pay for his passageb. presented himself at the proper place and in a propermanner to be transportedc. has a bona fide intention to use facilities of the carrier

2. CARRIAGE OF GOODS

Parties: shipper & carrier

Perfection:> contract to carry goods consensual> contract of carriage - act of delivery of goods ( goods areunconditionally placed in the possession and control of the carrierand upon their receipt by the carrier for transportation)

CARRIER:Common carriers (CC) (1732)

persons, corporations, firms or associations engaged inthe business of carrying or transporting passengers orgoods or both, by land, water, or air, for compensation,offering their services to the public. (NOT the means oftransportation)

one that holds itself out as ready to engage in thetransportation of goods for hire as a public employmentand not as a casual occupation.

Tests for determining WON a party is a common carrier of goods:1. He must be engaged in the business of carrying goods

for others as a public employment, and must hold himselfout as ready to engage in the transportation of goods forpersons generally as a business and not as a casualoccupation.

2. He must undertake to carry good of the kind to which hisbusiness is confined.

3. he must undertake to carry by the method by which hisbusiness is conducted and over his established roads

4. transportation must be for hire.

Characteristics of Common carriers (CC):

no distinction between one whose principal business isthe transportation of persons/goods and one who doessuch as an ancillary business

still a CC even if services offered to a limited clientele

pipeline operators are CCs not necessarily motorvehicles

CHARTER PARTY:- contract by which an entire ship or some principal part thereof let by the owner to another person for a specified time or use.

2 types:

1. Contract of affreightment involves the use of shipping space on vessels leased by theowner in part or as a whole, to carry goods for another- CC = observe extraordinary diligence; in case of loss,deterioration or destruction of goods of goods, CCs are presumeto be at fault or have acted negligently

2. Charter by demise/ Bareboat Charter whole vessel is let to the charterer with a transfer to him of itsentire command and possession and consequent control over itsnavigation including the master and the crew who are hisservants.- charter includes both vessel and crewCC becomes privatecarrier (PC) insofar as that particular voyage is concerned- if PC- ordinary diligence in the carriage of goods will suffice- PC = undertaking is a single transaction, not a part of thegeneral business or occupation, although involving the carriage goods for a fee; NO presumption of negligence applies whosoever alleges damage to or deterioration of the goods

carried has the burden of proving that the cause was thenegligence of the carrier.

CCs v. Towage, Arrastre and Stevedoring

Towage- a vessel is hired to bring another vessel to another place.g. a tugboat may be hired by CC to bring the vessel to a port(operator of tugboat not CC)

Arrastre operators functions has nothing to do with the trade abusiness of navigation nor to the use or operation of vessels.Services are not maritime.

Stevedoring- involves the loading and unloading of coastwisevessels calling at the port.

>>> Common carriers are public utilities, impressed with publicinterest and concern subject to regulation by the state.

REGISTERED OWNER RULE

- the registered owner of a vehicle is liable fromany damage caused by the negligent operation of the vehicalthough the same was already sold or conveyed to anotherperson at the time of the accident.

- The registered owner is liable to the injuredparty subject to his right of recourse against the transferee the buyer- Applicable in case of lease

- Registered owner not liable if vehicle was takefrom him without his knowledge and consent.

- Applicable to people involved on a kabitsystem (arrangement whereby a person who has beengranted a certificate of public convenience allows otherpersons who own motor vehicles to operate them under hislicense, sometimes for a fee or percentage of the earnings -contrary to public policy)

parties to the kabit systemcannot invoke the same as against each other either toenforce their illegal agreement or to invoke the same toescape liability --- pari delicto rule

having entered into an illegacontract, neither can seek relief from the courts and eamust bear the consequences of his acts

also applicable to aircrafts avessels basic rule that no person can operate a


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common carrier without securing a certificate of publicconvenience and necessity.

CHAPTER 2OBLIGATIONS OF THE PARTIES

I. Obligations of the carrierA. DUTY TO ACCEPT

A common carrier granted a certificate of publicconvenience is duty bound to accept passengers or cargowithout any discrimination.

It is illegal for domestic ship operators to refuse to accept orcarry passengers or cargo without just cause. (Section 16, RA9295)

In air transportation, passengers with confirmed tickets whowere not allowed to board are provided with denied boardingcompensation and priority boarding rules. No compensationfor refusal if it is because of 1) government requisition of thespace, 2) substitution of equipment of lesser capacity whenrequired by operational and or safety and/or other causesbeyond the control of the carrier, and 3) if arrangementshave been made for the passenger to take another flight in acomparable air transportation which will arrive not later thanthree hours after the time of flight on which the confirmedspace is held is supposed to arrive. (Civil Aeronautics BoardEconomic Regulation)

a. Grounds for valid refusal to accept goods1. dangerous objects or substances includingdynamites and other explosives2. goods are unfit for transportation3. acceptance would result in overloading4. contrabands or illegal goods5. goods injurious to health6. goods will be exposed to untoward dangerlike flood, capture by enemies and the like7. goods like livestock will be exposed todiseases8. strike9. failure to tender goods on time

In Fisher v. Yangco, factors in determining reasonablediscrimination include, 1) suitability to the vessel for thetransportation of such products; 2) reasonable possibility ofdanger or disaster resulting from their transportation in the formand under the conditions in which they are offered for carriage;and 3) the general nature of the business done by the carrier.

(1) Hazardous and Dangerous SubstancesCarrier not properly equipped to transport dangerous chemicals orexplosives may validly refuse to accept the same for transport.Those which are not authorized by the Maritime Industry Authorityto carry such goods may also validly refuse the same fortransport. There must be a Special Permit to Carry from theMARINA.

(2) Unfit for TransportCarriers may refuse to accept goods that are unfit fortransportation (by nature be unfit for transportation or are unfit

because of improper packaging or defect in their containers).However, carriers may accept the goods and limit its liability bystipulation.

If by reason of well-founded suspicion of falsity in the declarationas to the contents of the package carrier should decide toexamine and investigate it in the presence of witnesses, with theshipper and consignee in attendance. If declaration of shipper istrue, expenses occasioned by the examination and of repackingthe packages shall be for the account of the carrier

Even if the cause of the loss, destruction or deterioration of thegoods should be caused by the character of the goods, or thefaulty nature of the packing or of the containers, the commoncarrier must exercise due diligence to forestall or lessen the loss.

B. DUTY TO DELIVER THE GOODSa. Time of DeliveryWhere a carrier has made an express contract, the goods must delivered within a specified time otherwise he is liable for adelay (indemnity for damages). In the absence of any agreemegoods must be delivered at its destination within a reasonabtime (depending on the attending circumstances, nature of tgoods).

b. Consequences/Effects of Delay

Excusable delays in carriage suspend, but do not generaterminate, the contract of carriage; when the cause is removethe master must proceed with the voyage and make deliveDuring the detention or delay, vessel continues to be liable ascommon carrier, not a warehouseman, and remains duty bound exercise extraordinary diligence.

If common carrier negligently delays in transporting the gooda natural disaster shall not free it from responsibility.

If common carrier delays , without just cause, in transportithe goods or changes the stipulated or usual route, the contralimiting its liability cannot be availed of in case of the lodestruction, or deterioration of the goods.

(1) Abandonment

In case of delay through the fault of the carrier, the consignmay refuse to accept the goods or may leave the goods in thhands of the carrier. It must be communicated to the carrier writing. This right must be exercised between the time of deland before the arrival of the goods at its destination. The carrmust pay the full value of the goods as if they had been lost mislaid.

If abandonment is not made, indemnification for the losses adamages by reason of the delay cannot exceed the current priwhich the goods would have on the day and at the place they ato be delivered.

The value of the goods which the carrier must pay in case of loor misplacement shall be that what is declared in the bill of ladin

Consignee must not defer the payment of the expenses atransportation charges of the goods otherwise carrier mdemand the judicial sale of the goods.

(2) Rights of Passengers in Case of DelayAs to the rights and duties of the parties strictly arising out delay, the Civil Code is silent. However, the Code of Commerprovides for such a situation:

ARTICLE 698. In case a voyage already begun should interrupted, the passengers shall be obliged to pay the fare proportion to the distance covered, without Right to recover flosses and damages if the interruption is due to fortuitous eveof force majeure, but with a right to indemnity if the interruptishould have been caused by the captain exclusively. If tinterruption should be caused by the disability of the vessel andpassenger should agree to await the repairs, he may not

required to pay any increased price of passage, but his liviexpenses during the stay shall be for his own account.

In case the vessel is not able to depart on time and the delay unreasonable, the passenger may opt to have his/her tickimmediately refunded without any refund service fee from tauthorized issuing/ticketing office.

C. WHERE AND TO WHOM DELIVEREDa. PlaceGoods should be delivered to the consignee in the place agreupon by the parties.

The shipper may change the consignment of the goods providthat at the time of ordering the change of the consignee the billlading signed by the carrier be returned to him, in exchange f


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another wherein the novation of the contract appears. Theexpenses occasioned by the change shall be for the account ofthe shipper.

b. ConsigneeDelivery must generally be made to the owner or consignee or tosomeone lawfully authorized by him to receive the goods for hisaccount or to the holder of the negotiable instrument.

c. Delay to Transport PassengersEffects ofdelayed and unfinished voyagein inter-island vessels:

vessel can not continue or complete her voyage for anycause carrier is under obligation to transport the

passenger to his/her destination at the expense of thecarrier including free meals and lodging before thepassenger is transported to his/her destination; thepassenger may opt to have his/her ticket refunded in fullif the cause of the unfinished voyage is due to thenegligence of the carrier or to an amount that will sufficeto defray transportation cost at the shortest possibleroute if the cause of the unfinished voyage is fortuitousevent.

vessel is delayed in arrival at the port of destination free meals during mealtime

delay in departure at the point of origin due to carriersnegligence; fortuitous event - free meals duringmealtime; carrier not obliged to serve free meals

carrier is not obliged to inform passengers of sailingschedule of the vessel

B.DUTY TO EXERCISE EXTRAORDINARY DELIGENCEGoods should be delivered in the same condition that they

were received and to transport the passengers withoutencountering any harm or loss.

ARTICLE 1755. A common carrier is bound to carry thepassengers safely as far as human care and foresight can provide,using the utmost diligence of very cautious persons, with a dueregard for all the circumstances. (Civil Code)

a. Presumption of NegligenceTwo conditions for the birth of the presumption of negligence:

1. there exists a contract between the passenger or theshipper and the common carrier

2. the loss, deterioration, injury or death took place during

the existence of the contract

Doctrine of Proximate Cause there is presumption of negligenceIf the goods are lost, destroyed or deteriorated, common carriersare presumed to have acted negligently, unless they prove thatthey observed extraordinary diligence. In case of death of orinjuries to passengers, common carriers are presumed to havebeen at fault or to have acted negligently, unless they prove thatthey observed extraordinary diligence.

b. Duration of Duty(1) Carriage of GoodsARTICLE 1736. The extraordinary responsibility of the commoncarrier lasts from the time the goods are unconditionally placedin the possession of, and received by the carrier fortransportation until the same are delivered, actually orconstructively, by the carrier to the consignee or to the person

who has a right to receive them

ARTICLE 1737. The common carriers duty to observeextraordinary diligence over the goods remains in full force andeffect even when they are temporarily unloaded or stored intransit, unless the shipper or owner has made use of the right ofstoppage in transitu. (common carrier becomes a warehouseman ordinary diligence)

ARTICLE 1738. The extraordinary liability of the common carriercontinues to be operative even during the time the goods arestored in a warehouse of the carrier at the place if destination,until the consignee has been advised of the arrival of the goodsand has had reasonable opportunity thereafter to remove them orotherwise dispose of them.

(2) Carriage of PassengersBy trains the extraordinary responsibility of common carrcommences the moment the person who purchases the ticket (a token or card) from the carrier presents himself at the propplace and in a proper manner to be transported with a bona fiintent to ride the coach.

* Mere purchase of a ticket does not of itself create the relationcarrier and passenger but it is an element in the inception of trelation.

* A proper person who enters upon the carriers premises (statioticketing office, or waiting room) with the intention of becoming

passenger will ordinarily be viewed as assuming the status ofpassenger.

* One who goes to the railroad station to inquire as to tpossibility of securing passage on a freight train, which he knowby the rules of the company, is not allowed to carry passengerand to secure passage thereon if possible, is not entitled to trights of a passenger but is a mere trespasser.

* One who rides upon any part of the vehicle or conveyance whiis unsuitable or dangerous, or which he knows is not intended fpassengers, is not presumed to be a passenger.

* One who secures free passage by fraud or stealth is precludefrom recovery for injuries sustained through the negligence of tcarrier, for he has not assumed the status of a passenger.

* A person riding on a freight train, on a drivers pass or similarrangement, to look after livestock being transported and incident to such transportation is, generally regarded as passenger for hire.

* Motor vehicles like jeepneys and buses are duty bound to sttheir conveyances for a reasonable length of time in order afford passengers an opportunity to board and enter, and they aliable for injuries suffered by boarding passengers resulting frothe sudden starting up or jerking of their conveyances while thdo so. Once a public utility bus or jeepney stops, it is makingcontinuous offer to bus riders.

Duty to exercise utmost diligence with respect to passengers wnot ordinarily terminate until the passenger has, after reaching hdestination, safely alighted from the carriers conveyance or hadreasonable opportunity to leave the carriers premises.

E. DEFENSES OF COMMON CARRIERS1. Flood, storm, earthquake, lightning, or other natural disaster calamity2. Act of the public enemy in war, whether international or civil3. Act or omission of the shipper or owner of the goods4. The character of the goods or defects in the packing or in thcontainers5. Order or act of competent public authority6. Exercise of extraordinary diligence

Fortuitous Event to be a valid defense must be established to bthe proximate cause of the loss

Requisites:

1. The cause of the unforeseen and the unexpected occurrencor of the failure of the debtor to comply with his obligation,

must be independent of the human will2. It must be impossible to foresee the event which constitutthe caso fortuito, or if it can be foreseen, it must be impossible

to avoid3. The occurrence must be such as to render it impossible for thdebtor to fulfill his obligation in a normal manner4. The obligor (debtor) must be free from any participation in the aggravation of the injury resulting to the creditor

In order for the common carrier to be exempted froresponsibility, the natural disaster must have been the proximaand only cause of the loss. However, the common carrier muexercise due diligence to prevent or minimize loss before, duriand after the occurrence of flood, storm or other natural disast


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in order that the common carrier may be exempted from liabilityfor the loss, destruction, or deterioration of the goods.

Fire not considered as a natural calamity or disaster

Fire caused by lightning a natural calamity

Hijacking does not fall under the categories of exemptingcauses; the common carrier is presumed to be at fault or to haveacted negligently unless there is a proof of extraordinary diligenceon its part

Mechanical defects damage or injury resulting from mechanical

defects is not a damage or injury that was caused by fortuitousevent; carrier is liable to its passengers for damages caused bymechanical defects of the conveyance (breakage of a faulty drag-link spring, fracture of the vehicles right steering knuckle,defective breaks)

Pages 123-190Juntilla v. FontanarTire-blowouts was not considered as fortuitous event although itwas alleged that the tires were in good condition; no evidencewas presented to show that the evidence were due to adverseroad conditions the carrier must prove all angles.The explosion could have been caused by too much air pressureinjected into the tires and the fact that the jeepney wasoverloaded and speeding at the time of the accident.

b. OTHER INVALID DEFENSES1. Damage to cargo due to EXPLOSION of another cargo notattributable to peril of the seas or accidents of navigation.2. Damage by WORMS and RATS resulting to damage to cargoes cant be cited as an excuse by the carrier.3. Damage by WATER through a port which had been left open orinsufficiently fastened on sailing.4. Carrier cannot escape liabilities to third persons if damage wascaused by BARRATRY where the master or crew of the shipcommitted unlawful acts contrary to their duties includes theftand fraudulently running the ship ashore.

Cases:1. Problem: A carrier bus on its way to its destination

encountered an engine failure, thus, it has to be repairedfor 2 days. And while in the repair shop, a typhoon cameresulting to the spoilage of cargoes.Answer: A typhoon although a natural disaster, is not avalid defense if it is shown that it was not the only causeof the loss. Especially when the facts indicate that thetyphoon was foreseeable and could have been detectedthrough the exercise of reasonable care. Cargoes shouldhave been secured while the bus was being repaired for2 days.

2. Problem: A passenger told the driver that he has valuableitems in his bag which was placed under his feet and heasked the driver (to which he is seated near) to watch forthe bag while he is asleep.

(a) There have been incidents of throwing of stones atpassing vehicles in the North Express Way. While thebus was traversing the super highway, a stone

hurled from the overpass and hit the passengerresulting to injuries. Can the passenger hold the busliable for damages?Answer: Yes. The incident was foreseeable due theprior incidents of stone hurling. The bus should haveexercised utmost diligence and employed adequateprecautionary measures to secure safety ofpassengers since the incident was foreseeable. .HOWEVER, if the stone throwing was entirelyunforeseeable and the carrier exercised the utmostdiligence, then, the bus cant be held liable.Nonetheless, the burden of proof Is on the carrier toprove such exercise of diligence. It is up to thecarrier to overthrow the presumption of negligence.If the passenger decides to file a case, al thepassenger has to do is to prove that she was a

passenger of the bus and that she suffered injuriwhile on board the bus.

(b) Supposing that there were armed men who stagedhold-up while the bus was speeding along thighway. One of them stole the passengers bag awallet while pointing a gun him. Is the bus liable?Answer: No. Hand-carried luggages are governed necessary deposit. Besides, theft with use of arms through irresistible force is a force majeure whiexempts carriers from liability.

3. Hi-jacking cannot exculpate the carrier from liability if

is shown that the employees of the carrier were noverwhelmed by the hijackers and that there was showing of irresistible force. Since, there were employers while there were only 2 hijackers and only oof them was armed with bladed weapon.ON THE OTHER HAND, a hijacking by 3 armed men is event which is considered to be beyond the control of tcarrier. Thus, the carrier may be adjudged from liabilityit can be proven that the hijacking was unforeseeable.

c. PUBLIC ENEMY- presupposes a state of war and refers to the government offoreign nation at war with the country to which the carrbelongs, though not necessarily with that to which the owner the gods owes allegiance.- Thieves, rioter, and insurrectionists are not included. They a

merely private depredators for whose acts a carrier is answerab- Rebels in insurrection against their own government agenerally not embraced in the definition of public enemHowever, if the rebels hold a portion of territory, they hadeclared their impendence, cast off their allegiance and horganized armed hostility to the government, and the authority the latter is at the time overthrown, such an uprising may take the dignity of a civil war, and so matured and magnified, tparties are belligerent and are entitled to belligerent rights.- Depredation by pirates (which are enemy of all civilized natioexcuses the carrier from liability.- Common carriers may be exempted from responsibility onlythe act of the public enemy has been the proximate and oncause of the loss. Moreover, due diligence must be exercised

prevent or at least minimize the loss before, during and after thperformance of the act of the public enemy in order that tcarrier may be exempted from liability for the loss, destruction,deterioration of the goods.

d. IMPROPER PACKING

Character of the goods and defects in the packaging or in tcontainers are defenses available to the common carriSimilarly, the Carriage of Good b Sea Act provides that carrishall not liable for: (1) wastage in bulk or weight or any damagarising form the inherent defect, quality or vice of goods; (insufficiency of packing; (3) insufficiency or inadequacy of tmarks, or (4) latent defects no discoverable by due diligence.

However, NCC likewise provides:Art. 1742. Even if the loss, destruction, or deterioration the goods should be caused by the character of the good

or the faulty nature of the packing or the containers, thcommon carrier must exercise due diligence to forestall lessen the loss.

Thus, if the carrier accepted the goods knowing the fact improper packing or even if the carrier does not know bthe defect was nonetheless apparent upon ordinaobservation, it is not relived form liability for loss or injury goods resulting therefrom.

Cases:1. Problem: A carrier knowing that some of a cargo of sac

of rice had big holes and others had openings just loosetied with strings resulting to the spillage of rice durithe trip. Thus, there was shortage in the delivery of tcargoes. When sued due to the shortage, the carr


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interposed a defense that it was not liable since theshortage was due to the defective condition of the sacks.Decide.Answer: Carrier must still exercise extraordinarydiligence if the fact of improper packing is known to thecarrier or its servants, or apparent upon ordinaryobservation. If the carrier accepted the cargo despitesuch defects, the carriers becomes liable for the damageresulting therefrom.Apply Article 1742.

e. ORDER OF PUBLIC AUTHORITYArt. 1743. If through the order of public authority the goods areseized or destroyed, the common carrier is not responsible,

provided said public authority had power to issue order.

Cases:1. Carrier was not excused from liability since the order of

an acting mayor was not considered as a valid order of apublic authority. It is required that public authority whoissued the order must be duly authorized to issue theorder.

2. Carriage of Goods by Sea Act provides that carrier shallnot responsible for loss or damage resulting from arrestor restraint of princes, rulers, or people, or seizure underlegal process and from quarantine restrictions.

F. DEFENSES IN CARRIAGE OF PASSENGERS

- Primary defense of carrier is exercise of extraordinary

diligence in transporting passengers. Even if there is a fortuitousevent, the carriers must also present proof of exercise ofextraordinary diligence.

Art. 1759. Common carriers are liable for the death of orinjuries to passengers through the negligence or willfulacts of the carriers employees, although such employeesmay have acted beyond the scope of their authority or inviolation of the orders of the common carriers.The liability does not cease even upon proof that theyexercised diligence in the selection and supervision oftheir employees.

Art. 1763. Carrier is responsible for injuries suffered by apassenger on account of the willful acts or negligence ofother passengers or of strangers, if the common carriersemployees through the exercise of the diligence of a goodfather of a family could have prevented or stopped the actor omission.

a. Employees- Carrier is liable for the acts of its employees. It cant

escape liability by claiming that it exercised duediligence in supervision and selection of its employees(unlike in quasi-delicts).

Reasons for the rule:1. Undertaking of the carrier requires that its passenger

that full measure of protection afforded by the exerciseof high degree of care prescribed by law, inter alia fromviolence and insults at the hands of strangers and otherpassengers, but above all, from the acts of the carriersown servants.

2. The liability of the carrier for the servants violation ofduty to performance of his contract to safely transportthe passenger, delegating therewith the duty ofprotecting the passenger with utmost care prescribed bylaw.

3. As between the carrier and the passenger, the formermust bear the risk of wrongful acts or negligence of thecarriers employees against passenger, since it, and notthe passenger, has the power to select and removethem.

b. Other Passengers and Third Persons

With respect to acts of strangers and other passengersresulting in injury to apassenger, the availability of such

defense is also subject to the exercise of a carrier of dudiligence to prevent or stop the act or omission.Negligence of the carrier need not be the sole cause of tdamage or injury to the passenger or the goods. The carriwould still be liable even if the contractual breach concuwith the negligent act or omission of another person.

G. PASSENGERS BAGGAGESRules that are applicable to goods that are being shipped are alapplicable to baggage delivered to the custody of the carriArts. 1733. 1734 and 1736 of Civil Code are applicable.However, if the luggage was hand-carried, Arts. 1998, 2000-20shall apply.

Art. 1998. The deposit of effects made by the travellers hotels or inns shall also be regarded as necessary. Thkeepers of hotels or inns shall be responsible for them adepositaries, provided that notice was given to them, or their employees, of the effects brought by the guests anthat, on the part of the latter, they take the precautionwhich said hotel-keepers or their substitutes advisrelative to the care and vigilance of their effects. (1783)

Art. 2000. The responsibility referred to in the twpreceding articles shall include the loss of, or injury to thpersonal property of the guests caused by the servants employees of the keepers of hotels or inns as well strangers; but not that which may proceed from any forcmajeure. The fact that travellers are constrained to rely othe vigilance of the keeper of the hotels or inns shall b

considered in determining the degree of care required him. (1784a)

Art. 2001. The act of a thief or robber, who has enterethe hotel is not deemed force majeure, unless it is donwith the use of arms or through an irresistible force. (n)

Art. 2002. The hotel-keeper is not liable for compensatioif the loss is due to the acts of the guest, his famiservants or visitors, or if the loss arises from the charactof the things brought into the hotel. (n)

Art. 2003. The hotel-keeper cannot free himself froresponsibility by posting notices to the effect that he not liable for the articles brought by the guest. Astipulation between the hotel-keeper and the guewhereby the responsibility of the former as set forth articles 1998 to 2001 is suppressed or diminished shall bvoid. (n)

Cases:1. Despite the fact that the carrier gave notice that it sh

not be liable for baggage brought in by passengers, tcarrier is still liable for lost hand-carried luggage sinceis governed by rules on necessary deposits. Under A20000, the responsibility of the depositary includes tloss of property of the guest caused by strangers but nthat which may proceed from force majeure. Moreovearticle 2001 considers theft as force majeure if it is dowith use of arms or through irresistible force.

2. Even if the passenger did not declare his baggage npay its charges contrary to the regulations of the bcompany, the carrier is still liable in case of loss of tbaggage. Since, it has the duty to exercise extraordinadiligence over the baggage that was turned over to thcarrier or placed in the baggage compartment of the buThe non-payment of the charges is immaterial as long the baggage was received by the carrier ftransportation.

II. OBLIGATIONS OF SHIPPER, CONSIGNEE and PASSENGER.A. Negligence of Shipper or PassengerThe obligation to exercise due diligence is not limited to tcarrier. The shipper is obliged to exercise due diligence avoiding damage or injury. Nevertheless, contributo


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negligence on the part of the shipper/ passenger would onlymitigate the carriers liability; it is not a total excuse.However, if the negligence of the shipper/ passenger is theproximate and only cause of the loss, then, the carrier shallnot be liable. The carrier may overcome the presumption ofnegligence and any be able to prove that it exercisedextraordinary diligence in handling the goods or intransporting the passenger.The carrier may be able to prove that the only cause of theloss of the goods is any of the following:1. Failure of the shipper to disclose the nature of the goods;2. Improper marking or direction as to the destination;3. Improper loading when he assumes such responsibility.

The shipper must likewise see to it that the goods areproperly packed; otherwise, liability of the carrier may eitherbe mitigated or barred depending on the circumstances.

Art. 1741. If the shipper or owner merely contributedto the loss, destruction or deterioration of the goods,the proximate cause thereof being the negligence ofthe common carrier, the latter shall be liable indamages, which however, shall be equitably reduced.

Art. 1761. The passenger must observe the diligence of agood father of a family to avoid injury to himself.

Art. 1762. The contributory negligence of the passengerdoes not bar recovery of damages for his death or injuries,

if the proximate cause thereof is the negligence of thecommon carrier, but the amount of damages shall beequitably reduced.

a. Last Clear Chance

A negligent carrier is liable to a negligent passenger in placinghimself in peril, if the carrier was aware of the passengers peril,or should have been aware of it in the reasonable exercise of duecare, had in fact an opportunity later than that of the passenger toavoid an accident.

Last clear chance applies in a suit between the owners and driversof colliding vehicles. It does no tarise where a passenger demandsresponsibility from the carrier to enforce its contractual

obligations. For it would be inequitable to exempt the negligentdriver of the carrier and its owner on the ground that the otherdriver was likewise guilty of negligence.

b. Assumption of Risk

Carriers are not insurers of the lives of their passengers. Thus, inair travel, adverse weather conditions or extreme climaticchanges are some of the perils involved in air travel, theconsequence of which the passenger must assume or expect.

However, there is no assumption of risk in a case wherein apassenger boarded a carrier that was filled to capacity. The act ofthe passenger in taking the extension chair does not amount toimplied assumption of risk.

Case:Although, there is a sign in the bus that says: do not talk to thedriver while the bus is in motion, otherwise, the company wouldnot assume responsibility for any accident:. Nonetheless, thepassengers dared the driver to race with another bus, as the busspeeds up in the attempt to overtake the other bus, it failed toslow down. As a result, the bus turns turtle causing the death andinjuries to passengers. Is the bus company liable?Answer: Yes. The bus company is obligated to exercise utmostdiligence in carrying passengers. This liability cannot beeliminated or limited by simply posting notices. The passengercannot be said to have assumed the risk of being injured when heurged the driver to accept the dare. At most, the passengers canonly be said to be guilty of contributory negligence which wouldmitigate the liability of the driver, since the proximate cause of

the accident was the drivers willful and reckless act in runnithe race with the other bus.

B. FREIGHTa. Amount to be Paid

Common carriers are subject to heavy regulations with respectrates that they are charging to the public. The regulation of ratis founded upon the valid exercise of the Police Power of the stain order to protect the public from arbitrary and excessive ratwhile maintaining the efficiency and quality of services rendereThe fixing of just and reasonable rates involves a balancing investor and the consumer interest.Although the consideration that should be paid to the carrier

still subject to the agreement between parties, what can agreed upon should not be beyond the maximum amount fixed appropriate government agency.

b. Who will pay.Although either of the shipper or the consignor may pay tfreight before or at time the goods are delivered to the carrier fshipment, nonetheless, it is the consignor (whom the contract carriage is made) who is primarily liable for the payment of freigwhether or not he is the owner of the goods. The obligation to pis implied from the mere fact that the consignor has placed tgoods with the carrier for the purpose of transportation.

c. Time to pay.Code of Commerce provides that payment should be made with24-hours from the time of delivery in the absence of aagreement between the parties.

ARTICLE 374. The consignees to whom the shipment was mamay not defer the payment of the expenses and transportaticharges of the goods they receive after the lapse of twenty-fohours following their delivery; and in case of delay in thpayment, the carrier may demand the judicial sale of the gootransported in an amount necessary to cover the cost transportation and the expenses incurred.

(1) Carriage of Passengers by SeaWith respect to carriage of goods by sea, the tickets apurchased in advance. Carriers are not supposed to allopassengers without tickets. The carrier shall collect/ inspect tpassengers ticket within one hour from vessels departure as nto disrupt resting or sleeping passengers.If the vessel is not able to depart on time and the delay unreasonable, the passenger may opt to have his/ her tickrefunded without refund service fee.Delayed voyage means late departure of the vessel from its poof origin and/ or late arrival of the vessel to its port destination. Unreasonable delay means the period of time thhas lapsed without just cause and is solely attributable to tcarrier which has prejudiced the transportation of the passengand/ or cargoes to their port of destination.A passenger who failed ot board the vessel can refund revalidate the ticket subject to surcharges. Revalidation meathe accreditation of the ticket that is not used and intended to used for another voyage.

(2) Carriers LienIf consignor or the consignee fails to pay the consideration for ttransportation of goods, the carrier may exercise his lien accordance with Art. 375 of Code of Commerce:

ARTICLE 375. The goods transported shall be especially bou

to answer for the cost of transportation and for the expenses anfees incurred for them during their conveyance and until tmoment of their deliveThis special right shall prescribe eight days after the delivery hbeen made, and once prescribed, the carrier shall have no othaction than that corresponding to him as an ordinary creditor.

C. DEMURRAGEDemurrage is the compensation provided for the contract affreightment for the detention of the vessel beyond the timagreed on for loading and unloading. It is the claim for damagfor failure to accept delivery. In broad sense, very impropdetention of a vessel may be considered a demurragTechnically, liability for demurrage exists only when expresstipulated in the contract.Using the term in broader sense, damages in the nature demurrage are recoverable for a breach of the implied obligati


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to load or unload the cargo with reasonable dispatch, but only bythe party to whom the duty is owed and only against on who is aparty to the shipping contract. Notice of arrival of vessels orconveyances, or their placement for purposes of unloading isoften a condition precedent to the right to collect demurragecharges.

CHAPTER 3: EXTRAORDINARY DILIGENCE

I. RATIONALEA common carrier is bound to carry the passengers safely as far ahuman care and foresight provide, using the utmost diligence ofvery cautious persons, with due regard for all circumstances.

Extraordinary diligence: Calculated to protect the passengersfrom the tragic mishaps that frequently occur in connection withrapid modern transportation.

II. HOW DUTY IS COMPLIED WITHCommon carrier binds itself to carry the passengers safely as faras human care and foresight can provide, using the utmostdiligence of a very cautious person, with due regard for all thecircumstances.

- The duty even extends to the members of the crewor complement operating the carrier.

A reasonable man or a good father of a family in the position ofthe carrier must exercise extraordinary diligence in the

performance of his contractual obligation.- Whether or not a reasonable man, exercisingextraordinary diligence, could have foreseen andprevented the damage or loss that occurred.

III. EFFECT OF STIPULATIONA. GOODSThe law allows a stipulation whereby the carrier will exercise adegree of diligence which is less than extraordinary with respectto goods.

Art. 1744. A stipulation between the common carrier andthe shipper owner limiting the liability of the former forthe loss, destruction, or deterioration of the goods to adegree less than extraordinary diligence shall be valid,

provided it be:

1. In writing, signed by the shipper/owner;2. Supported by a valuable consideration other than theservice rendered by the common carrier (Note: Typicallyfare/freight); and3. Reasonable, just and contrary to public policy.

B. PASSENGERSThere can be no stipulation lessening the utmost diligence that isowed to passengers.

Art. 1757. The responsibility of a common carrier for thesafety of passengers as required in Arts. 1733 and 1755cannot be dispensed with or lessened by stipulation, bythe posting of notices, by statements on tickets, orotherwise. (Note: Absolute; extraordinary at all times.)

Gratuitous passenger A stipulation limiting the common carriersliability for negligence is valid, but not for willful acts of grossnegligence. The reduction of fare does not justify any limitation.

IV. EXTRAORDINARY DILIGENCE IN CARRIAGE BY SEAA. SEAWORTHINESS

a.) Warranty of Seaworthiness of Ship Extraordinarydiligence requires that the ship which will transport thepassengers and goods is seaworthy. Seaworthiness ofthe vessel is impliedly warranted.

The carrier shall be bound before and at the beginning ofthe voyage to exercise due diligence to make the shipseaworthy.

b.) No duty to inquire Because of the implied warranof seaworthiness, shippers of goods, when transactiwith common carriers, are not expected to inquire inthe vessels seaworthiness, genuineness of its licensand compliance with all maritime laws. Passengecannot be expected to inquire everytime they boardcommon carrier, whether the carrier possesses tnecessary papers or that all the carriers employees aqualified.

It is the carrier that carries such burden of proving ththe ship is seaworthy. Presentation of certificates

seaworthiness is not sufficient to overcome tpresumption of negligence.

c.) Meaning of Seaworthiness A vessel must have sudegree of fitness which an owner who is exercisiextraordinary diligence would require his vessel to haat the commencement of the voyage, having regard all the probable circumstances of it. This includes fitneof the vessel itself to withstand the rigors of voyagfitness of the vessel to store the cargoes aaccommodate passengers to be transported and that itadequately equipped and properly manned.

General Test of Seaworthiness: Whether the ship and appurtenances are reasonably fit to perform the serviundertaken.

Example: The carrier was able to establish ththe ship itself was seaworthy because trecords reveal that the vessel was drydockand inspected by the Phil. Coast Guard befoits first destination.

A warranty of seaworthiness requires that it be propeladen, and provided with a competent master, sufficient number of competent officers and seamen, athe requisite appurtenances and equipment.

The carrier shall be bound before and at the beginningthe voyage to exercise due diligence to:

1. Make the ship seaworthy;2. Properly man, equip, and supply the ship;3. Make all parts of the ship in which goods acarried, fit and safe for their reception, carriagand preservation.

The carrier shall properly and carefully load, handstow, carry, keep, care for, and discharge the goocarried.

The ship must be cargoworthy. The ship must efficiently strong and equipped to carry the particukind of cargo which she has contracted to carry and hcargo must be so loaded that it is safe for her to proceon her voyage.

The vessel must be adequately equipped and propemanned. On top of regular maintenance and inspectioCaptains, masters or patrons of vessels must prove t

skill, capacity, and qualifications necessary to commaand direct the vessel. If the owner of a vessel desires be the captain without having the legal qualifications, shall limit himself to the financial administration of tvessel and shall entrust the navigation to a qualifiperson.

It is not an excuse that the carrier cannot afford tsalaries of competent and licensed crew or that latterunavailable.

B. OVERLOADINGDuty to exercise due diligence likewise includes the duty to tapassengers or cargoes that are within the carrying capacity of tvessel.


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C. PROPER STORAGEThe vessel itself may be suitable for the cargo but this is notenough because the cargo must also be properly stored.

Cargo must generally not be placed on deck. The carrying of deckcargo raises the presumption of unseaworthiness unless it can beshown that the deck cargo will not interfere with the propermanagement of the ship.

D. NEGLIGENCE OF CAPTAIN AND CREWFailure on the part of the carrier to provide competent captain andcrew should be distinguished from the negligence of the said

captain and crew, because the latter is covered by the LimitedLiability Rule (liability of the shipowner may be limited to thevalue of the vessel). If the negligence of the captain and crew canbe traced to the fact that they are really incompetent, the LimitedLiability Rule cannot be invoked because the shipowner may bedeemed negligent.

a.) Rules on passenger safety (Read MemorandumCircular No. 114: p. 204)

E. DEVIATION AND TRANSSHIPMENT

a.) Deviation If there is an agreement between theshipper and the carrier as to the road over which theconveyance is to be made (subject to the approval by theMaritime Industry Authority), the carrier may not change

the route, unless it be by reason of force majeure.Without this cause, he shall be liable for all the losseswhich the goods may suffer, aside from paying the sumstipulated for that case. When on account of the forcemajeure, the carrier had to take another route whichresulted to an increase in transportation charges, heshall be reimbursed upon formal proof.

b.) Transshipment The act of taking cargo out of oneship and loading it into another; to transfer goods fromthe vessel stipulated in the contract of affreightment toanother vessel before the place of destination named inthe contract has been reached. Transshipment of freight without legal excuse is aviolation of the contract and subjects the carrier toliability if the freight is lost even by a cause otherwiseexcepted.

V. EXTRAORDINARY DILIGENCE IN CARRIAGE BY LANDA. CONDITION OF VEHICLECommon carriers that offer transportation by land are similarlyrequired to make sure that the vehicles that they are using are ingood order and condition.

Rule on Mechanical Defects If the carriers will replace certainparts of the motor vehicle, they are duty bound to make sure thatthe parts that they are purchasing are not defective. Hence, it is along-standing rule that a carrier cannot escape liability byclaiming that the accident that resulted because of a defectivebreak or tire is due to a fortuitous event. This is true even if it canbe established that the tire that was subject of a blow-out is brandnew. The duty to exercise extraordinary diligence requires thecarrier to purchase and use vehicle parts that are not defective.

B. TRAFFIC RULESThe carrier fails to exercise extraordinary diligence if it will notcomply with basic traffic rules. The Civil Code provides for apresumption of negligence in case the accident occurs while theoperator of the motor vehicle is violating traffic rules.

In cases involving breach of contract of carriage, proof of violationof traffic rules confirms that the carrier failed to exerciseextraordinary diligence.

C. DUTY TO INSPECTThere is no unbending duty to inspect each and every package orbaggage that is being brought inside the bus or jeepney. Thecarrier is duty bound to conduct such inspection depending on thecircumstances.

VI. EXTRAORDINARY DILIGENCE IN CARRIAGE BY AIRThe aircraft must be in such a condition that it must be able withstand the rigors of flight.

Airworthiness An aircraft, its engines propellers, and othcomponents and accessories, are of proper design aconstruction, and are safe for air navigation purposes, such desiand construction being consistent with accepted engineeripractice and in accordance with aerodynamic laws and aircrscience.

Proof of airworthiness is not by itself sufficient to prove exercise extraordinary diligence.

The fact that the flight was cancelled due to fortuitous event donot mean that the carriers duty already ended. The carrier is stobligated to look after the convenience and comfort of tpassenger.

A. INSPECTIONIs the duty of the carrier to make inquiry as to the general natuof the articles shipped and of their value before it consents carry them; and its failure to do so cannot defeat the shipperight to recovery of full value of the package if lost, in the absenof showing of fraud or deceit on the part of the shipper.

Where a common carrier has reasonable ground to suspect th

the offered goods are of a dangerous character, the carrier hthe right to know the character of such goods and to insinspection, if reasonable and practical under the circumstanceas a condition of receiving and transporting such goods. To subjected to unusual search, other than the routinary inspectiprocedure customarily undertaken, there must exist proof thwould justify cause for apprehension that the baggage dangerous as to warrant exhaustive inspection, or even refusal accept carriage of the same.

CHAPTER 4BILL OF LADING

I. CONCEPTS, DEFINITION AND KINDS

Bill of Lading (BOL)- a written acknowledgement, signed by tmaster of a vessel or other authorized agent of the carrier, that hhas received the described goods from the shipper, to transported on the expressed terms to be described the place destination, and to be delivered to the designated consignees the parties. It operates as a (1) RECEIPT (2) as a CONTRACT (3) a DOCUMENT OF TITLE.

A BOL is not necessary for the perfection of a contract of carriagThus, the obligation to exercise extraordinary diligence by tcarrier is still required even if there is no bill of lading. In tabsence of the bill of lading, disputes shall be determined on thbasis of the provisions in the New Civil Code and suppletorily the Code of Commerce.

KINDS of BILL of LADING

1. Clean Bill of

Lading

Does not contain any notation indicating

any defect in the goods.2. Foul Bill ofLading

One that contains the abovementionednotation.

3. Spent Bill ofLading

The goods are already delivered but thebill of lading was not yet returned (upondelivery, the carrier is supposed toretrieve the covering bill of the goods)

4. Through Billof Lading

Issued by a carrier who is obliged to usethe facilities of other carriers as well as hisown facilities for the purpose oftransporting the goods from the city of theseller to the city of the buyer, which BOLis honored by the second and otherinterested carriers who dont issue theirown BOL.


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5. On Board Bill -states that the goods have been receivedon board the vessel which is to carry thegoods.-apparently guarantees the certainty ofshipping as well as the seaworthiness ofthe vessel to carry the goods.

6. Received forShipment Bill

-states that the goods have been receivedfor shipment with or without specifyingthe vessel by which the goods are to beshipped.-issued when conditions are not normaland there is insufficiency of shippingspace.

7. Custody Billof Lading

The goods are already receied by thecarrier but the vessel indicated thereinhas not yet arrived in the port.

8. Port Bill ofLading

The vessel indicated in the BOL that willtransport the goods is already in the port.

EFFECTIVITY of BOL- upon its delivery to and acceptance by theshipper. The acceptance of the bill without dissent raises thepresumption that all the terms therein were brought to theknowledge of the shipper and agreed to by him, and in theabsence of fraud or mistake, he is stopped thereafter fromdenying that he assented to such claims.

THE 3-FOLD NATURE OF THE BILL OF LADING

I. RECEIPT- as comprehending all methods of transportation, aBOL may be defined as a written acknowledgement of the receiptof goods and an agreement to transport an to deliver them at aspecified place to a person named or on his order. Other terms,shipping receipts, forwarders receipts, and receipts fortransportation. (SC) the designation however is not material, andneither is the form of the instrument. If it contains anacknowledgement by the carrier of the receipt of goods fortransportation it is, in legal effect a BOL.

II. CONTRACT - it expresses the terms and conditions of theagreement between the parties; names the parties; includesconsignees etc. It is the law between the parties bound by itsterms and conditions.

It is to be construed liberally in favor of the shipper who adheredto such bill as it is a contract of adhesion. The only participationof the party is the signing of his signature or his adhesion thereto.

ART. 24 (NCC). In all contractual property or other relations, whenone of the parties is at a disadvanatge on account of his moraldependence, ignorance indigence, mental weakness, tender ageand other handicap, the court must be vigilant for his protection.

It is covered by the parol evidence rule, that the terms of thecontract are conclusive upon the parties and evidence aliunde isnot admissible to vary or contradict a complete enforceableagreement. If mistake was alleged, it must be timely raised in thepleadings and it must be a mistake of fact mutual to the parties.

The BOL is the legal evidence of the contract and the entriesthereof constitutes prima facie evidence of the contract. All theessential elements of a valid contract (cause, consent, object) arepresent when such bill are issued.

BASIC STIPULATIONS (for overland transpo, maritime commerceand airline transpo of passengers, please refer to the textbook forthe codal pp. 267-275)

PROHIBITED AND LIMITING STIPULATION

1. Exempting the carrier from any and all liability for loss ordamage occasioned by its own negligence - INVALID as it iscontrary to public policy.2. Parties may stipulate that the diligence to be exercised by thecarrier for the carriage of goods be less than extraordinarydiligence if it is (a) in writing and signed by both parties (b)supported by a valuable consideration other than the service

rendered by the common carrier ( c ) the stipulation is jureasonable and not contrary to law.3. Providing an unqualified limitation of such liability to an agrevaluation - INVALID4. Limiting the liability of the carrier to an agreed valuation unlethe shipper declares a higher value and pays a higher rate freight- VALID and ENFORCEABLE.

III. AS A DOCUMENT OF TITLE

ART 1507 (NCC). A document of title in which it is stated that thgoods referred to therein will be delivered to the bearer or to thorder of any person named in such document is a negotiab

document of title.

If the document of title contains the required words negotiability to make the instrument negotiable under Artic1507 of the NCC, the document remains to be negotiable eventhe words not negotiable or non negotiable are places thereon

a. Bearer document- negotiated by deliveryb. Order document- negotiated by indorsement of the specifiperson so named

Effects of negotiation. Negotiation of the document has the effeof manual delivery so as to constitute the transferee the ownerthe goods.

RECOVERY OF DAMAGES FROM CARRIER FOR CARRIAGE O

GOODS:1. Inter-island - if goods arrived in damaged condition (A366):a. If damage is apparent, the shipper must file a cla

immediately (it may be oral or written);b. If damage is not apparent, he should file a claim within

hours from delivery. The filing of claim under either (1) or (2) is a condit

precedent for recovery.If the claim is filed, but the carrier refuses to pay: enfor

carriers liability in court by filing a case:a. within 6 year, if no bill of lading has been issued; orb. within 10 years, if a bill of lading has been issued.

2. Overseas where goods arrived in a damaged condition fromforeign port to a Philippine port of entry: (COGSA)a. upon discharge of goods, if the damage is apparent, cla

should be filled immediately;b. if damage is not apparent, claim should be filled within 3 da

from delivery.

Filing of claim is not a condition precedent, but an action must filed against the carrier within a period of 1 year from dischargethere is no delivery, the one-year period starts to run from the dathe vessel left port (in case of undelivered or lost cargo), or frodelivery to the arrastre (in case of damaged cargo).Where there was delivery to the wrong person, the prescriptiperiod is 10 years because there is a violation of contract, and tcarriage of goods by sea act does not apply to misdelivery. (Anv. American SS Agencies (19 SCRA 631)

CARRIAGE OF GOODS BY SEA ACT (C.A. No. 65)

F COGSA is applicable in international maritime commerce. It cbe applied in domestic sea transportation if agreed upon by tparties. (paramount clause)F COGSA is suppletory to the Civil Code and the Code Commerce in the Carriage of goods from foreign ports to tPhilippines.F Under the Sec. 4 (5), the liability limit is set at $500 per packaunless the nature and value of such goods is declared by tshipper. This is deemed incorporated in the bill of lading evennot mentioned in it (Eastern Shipping v. IAC, 150 SCRA 463Note that Art. 1749 of the NCC applies to inter-island trade.

Prescriptive periodsF Suit for loss or damage to the cargo should be brought withone year after:a. delivery of the goods; or


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b. the date when the goods should be delivered. (Sec. 3[6])

The one-year prescriptive period is suspended by:1. express agreement of the parties (Universal Shipping Lines,Inc. v. IAC, 188 SCRA 170)2. when an action is filed in court until it is dismissed. (Stevens &Co. v. Nordeutscher Lloyd, 6 SCRA 180)

WARSAW CONVENTION of 1929

WHEN APPLICABLE:Applies to all international transportation of person, baggage or

goods performed by aircraft for hire. Internationaltransportation means any transportation in which the place ofdeparture and the place of destination are situated either:1. within the territories of two High Contracting Parties regardlessof whether or not there be a break in the transportation ortransshipment, or

2. within the territory of a single High Contracting Party, if there isan agreed stopping place within a territory subject to thesovereignty, mandate or authority of another power, even thoughthat power is not a party to the Convention.

Transportation to be performed by several successive air carriersshall be deemed to be one undivided transportation, if it has beenregarded by the parties as a single operation, whether it has beenagreed upon under the form of a single contract or of a series ofcontracts, and it shall not lose its international character merely

because one contract or a series of contracts is to be performedentirely within a territory subject to the sovereignty, suzerainty,mandate, or authority of the same High Contracting Party. (Art.1)

NOTE: Warsaw prevails over the Civil Code, Rules of Courtand all laws in the Philippines since an international lawprevails over general law.

WHEN NOT APPLICABLE:1. If there is willful misconduct on the part of the carriersemployees. The Convention does not regulate, much lessexempt, carrier from liability for damages for violating the rightsof its passengers under the contract of carriage (PAL v. CA, 257SCRA 33).

2. when it contradicts public policy;

3. if the requirements under the Convention are not compliedwith.

LIABILITY OF CARRIER FOR DAMAGES:1. Death or injury of a passenger if the accident causing it tookplace on board the aircraft or in the course of its operations; (Art.17)2. Destruction, loss or damage to any luggage or goods, if it tookplace during the carriage; (Art. 18) and3. Delay in the transportation of passengers, luggage or goods.(Art. 19)

NOTE: The Hague Protocol amended the Warsaw Convention byremoving the provision that if the airline took all necessary stepsto avoid the damage, it could exculpate itself completely (Art.20(1)). (Alitalia v. IAC, 192 SCRA 9)

LIMIT OF LIABILITY1. passengers - limited to 250,000francs

except: agreement to a higher limit

2. Goods and checked-in baggage - 250 francs/kgexcept: consigner declared its value and paid a supplementarysum, carrier liable to not more than the declared sum unless itproves the sum is greater than its actual value.

3. hand-carry baggage - limited to 5,000 francs/passenger

An agreement relieving the carrier from liability or fixing a lowerlimit is null and void. (Art. 23)

Carrier not entitled to the foregoing limit if the damage is causby willful misconduct or default on its part. (Art. 25)

ACTION FOR DAMAGES1. Condition precedentA written complaint must me made within:

- 3 days from receipt of baggage- 7 days from receipt of goods- in case of delay, 14 days from receipt of baggage/goods

F otherwise the action is barred except in case of fraud on tpart of the carrier. (Art. 26)2.Jurisdiction - governed by domestic law3. Venue at the option of the plaintiff:

a. court of domicile of the carrier;b. court of its principal place of business;c. court where it has a place of business through which th

contract has been made;d. court of the place of destination. (Art. 28)

4. Prescriptive period 2 years from:a. date of arrival at the destinationb. date of expected arrivalc. date on which the transportation stopped. (Art. 29)

5. Rule in case of various successive carriers,a. In case of transportation of passengers the action is file

only against the carrier in which the accident or deloccurred unless there is an agreement whereby the fircarrier assumed liability for the whole journey.

b. In case of transportation of baggage or goodsi. the consignor can file an action against the first carr

and the carrier in which the damage occurredii. the consignee can file an action against the last carriand the carrier in which the damage occurred. Thecarriers are jointly and severally liable. (Art. 30)

Nota Bene: COGSA/WARSAW applies to foreign vessels or airplaor international travel

Code of Commerce applies to inter-island or domestravel.

Bill of Lading as Document of Title (page 341)

Bill of lading is a document of title under the Civil Code.can be a negotiable document of title.

A. Negotiability- It is negotiable if it is deliverable to the bearer, or to the ordof any person named in such document. (Art. 1507, Civil Code)

a) Effect of Stamp or Notation Non-Negotiable the document remains to be negotiable even if the wor

not-negotiable or non-negotiable are placed thereo- Art. 1510 (Civil Code)

B. How Negotiateda) Bearer document (Art. 1508 and 1511)- may be negotiated be delivery

b) Order document(Sec. 38, NIL and Art. 1509, NCC)- can only be negotiated through the indorsement of the specifi

person so named.- such indorsement may be in blank, to bearer or to a specifiperson.

Where a negotiable document of title is transferred fvalue by delivery, and the endorsement of the transferis essential for negotiation, the transferee acquiresright against the transferor to compel him to endorse tdocument. xxx (Art. 1515, Civil Code)

C. Effects of Negotiation- has the effect of manual delivery so as to constitute ttransferee the owner of the goods- results in the transfer of ownership because transfer document likewise transfers control over the goods- refer to Art. 1513


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Chapter 5Actions and Damages in Case of Breach

Cause of action of a passenger and shipper:a) against common carrier based on culpa contractual or culpaaquilianab) on the part of the driver based on either culpa delictual orculpa aquiliana

If the negligence of third persons concurs with the breach,the liability of the third person who was driving the vehicle

and/or his employer may be based on quasi delict.

Solidary liability- In case the negligence of the carriers driver and a third

person concurs, the liability of the parties carrier andhis driver, third person is joint and several.

I. Notice of Claim and Prescriptive PeriodA. Overland Transportation of Goods and CoastwiseShipping

a) When to file a claim with carrier- Art. 366 constitutes a condition precedent to the accrual of aright of action against a carrier for damage caused to themerchandise.

Under Art. 366 of the Code of Commerce, an action for

damages is barred if the goods arrived in damagedcondition and no claim is filed by the shipper within thefollowing period:

1) immediately if damage is apparent;2) within twenty four (24) hours from delivery if damage is notapparent

- the period does not begin to run until the consignee hasreceived possession of the merchandise that he mayexercise over it the ordinary control pertinent toownership.

- This provision applies even to transportation by seawithin the Phils. or coastwise shipping.

- does not apply to misdelivery of goods.

But the period prescribed in Art. 366 may be

subject to modification by agreement of the parties.

b) Extinctive Prescription- six (6) years if there is no written contract- ten (10) years if there is written contract

This rule likewise applies to carriage of passengers fordomestic transportation.

B. International Carriage of Goods by Sea

A claim must be filed with the carrier within the followingperiod:

1) if the damage is apparent the claim should be filedimmediately upon discharge of the goods; or2) within 3 days from delivery if damage is not apparent

Filing of claim is not condition precedent. Thus, regardlessof whether the notice of loss or damage has been given, theshipper can still bring an action to recover said loss ordamage within one year after the delivery of the goods.

a) Prescription

Action for damages must be filed within a period of one (1)year from discharge of the goods.

The period is not suspended by an extra-judicial demand.

Does not apply to conversion or misdelivery.

The one (1) year period refers to loss of goods and not tomisdelivery.

- Damages arising from delay or late delivery id not tdamage or loss contemplated under the COGSA. Tgoods are not actually lost or damaged. The applicabperiod is ten (10) years.

This rule applies in collision cases. The one (1) year peristarts not from the date of the collision but when the gooshould have been delivered, had the cargoes been saved.

Insurance

The insurer who is exercising its right of subrogation is albound by the one (1) year prescriptive period.

However, it does not apply to the claim against the insurfor the insurance proceeds. The claim against the insurerbased on contract that expires in ten (10) years.

II. Recoverable Damages

Damages is the pecuniary compensation, recompenor satisfaction for an injury sustained, or as otherwexpressed, the pecuniary consequences which the laimposes for the breach of some duty or violation of somrights.

A. Extent of Recovery (Art. 220, NCC)

Carrier in good faith is liable only to pay for tdamages that are the natural and probable consequenc

of the breach of the obligation and which the parties haforeseen or could have reasonably foreseen at the timthe obligation was constituted.

Carrier in bad faith or guilty of gross negligence liabfor all damages, whether the same can be foreseen not.

- The carrier who may be compelled to pay has the rightrecourse against the employee who committed tnegligent, willful or fraudulent act.

B. Kinds of Damagesa) Actual or Compensatory Damages only for the pecuniary loss suffered by him as he has duproved2 Kinds:

1. the loss of what a person already possesses (dao emrgente)2. the failure to receive as a benefit that would have pertained him (lucro cesante).

Damages may be recovered: Art. 2205 (Civil Code)1) For loss or impairment of earning capacity in cases temporary or permanent personal injury;2) For injury to the plaintiffs business standing or commerccredit.

Damages cannot be presumed.

In case of goods the plaintiff is entitled to their value the time of destruction.

For personal injury and even death the claimant entitled to all medical expenses as well as other reasonab

expenses that he incurred to treat his or her relativeinjuries.

In case of death the plaintiff is entitled to the amount thhe spent during the wake and funeral of the deceased. Bexpenses after the burial are not compensable.

- Read Art. 2206 (Civil Code)

The amount of fixed damages is now P50,000.00

1) Loss of earning capacityNet Earning Capacity = Life Expectancy x [Gross Annual Incomless Necessary Living Expenses]

Life expectancy (2/3 x 80 age at death)


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Net earnings based on the gross income of the victimminus the necessary incidental living expenses which thevictim would have incurred if he were alive.

Amount of living expenses must be established. In theabsence of proof, it is fixed at fifty (50%) of the grossincome.

Rules on loss of earning applies when the breach of thecarrier resulted in the plaintiffs permanent incapacity.

2) Attorneys fees

- refer to Art. 2208 of the Civil Code- attorneys fees may be awarded in an action for breach ofcontract of carriage under par. 1,2,4,5,10 and 11 of Art. 2208.

3) Interests

12% per annum if it constitutes a loan or forbearance ofmoney

6% per annum if it does not constitute loan orforbearance of money

12% - for final judgment

b) Moral Damages- Includes physical suffering, mental anguish, fright, seriousanxiety, besmirched reputation, wounded feelings, moral shock,social humiliation and similar injury.

- Though incapable of pecuniary computation, moral damagesmay be recovered if they were the proximate result of thedefendants wrongful act or omission.- may be recovered when there is death or there is malice or badfaith. (in transportation of passengers)- Refer to Art. 2219 and 2220- Generally, no moral damages may be awarded where the breachof contract is not malicious.

c) Nominal Damages- Refer to Art. 2221-2223 (Civil Code)- the assessment of nominal damages is left to the discretion ofthe court- the award of nominal damages is also justified in the absence ofcompetent proof of the specific amounts of actual damagessuffered.

- cannot co-exist with actual damages

d) Temperate or Moderate Damages- Art. 2224 provides:

may be recovered when the court finds that somepecuniary loss has been suffered but its amount can not,from the nature of the case, be provided with certainty.

- cannot co-exist with actual damages

e) Liquidated Damages

those agreed by the parties to a contract, to be paid incase of breach thereof.

Ordinarily, the court cannot change the amount ofliquidated damages agreed upon by the parties. However,Art. 2227 of the Civil Code provides that liquidateddamages, whether intended as an indemnity or a penalty,

shall be equitable reduced if they were iniquitous orunconscionable.

f) Exemplary or Corrective DamagesRequisites for the award of exemplary damages:1. They may be imposed by way of example in addition tocompensatory damages, and only after the claimants right tothem has been established.2. They cannot be recovered as a matter of right, theirdetermination depending upon the amount of compensatorydamages that may be awarded to the claimant.3. The act must be accompanied by bad faith or done in wanton,fraudulent, oppressive or malevolent manner.

The award of exemplary damages in breach of contract ofcarriage is subject to the provisions under Art. 2232-2235 ofthe Civil Code.

62315234 42786523 TRANSPO Final Midterm Reviewer

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Transcript of 62315234 42786523 TRANSPO Final Midterm Reviewer