TRANSPORTATION LAW

TITLE XVIII -- DAMAGES Kinds of Damages: (MENTAL) MORAL EXEMPLARY NOMINAL TEMPERATE ACTUAL LIQUIDATED

1.ACTUAL/COMPENSATORY - adequate compensation for a)the value of loss suffered b)profits which obligee failed to obtain **Exception: a.provided by law b.by stipulation WHAT MUST BE DONE TO COLLECT ACTUAL DAMAGES: 1.)Plead or allege the loss GENERAL DAMAGE - natural, necessary and logical consequences of a particular wrongful act which result in injury; need not be specifically pleaded because the law itself implies or presumes that they resulted from the wrongful act SPECIAL DAMAGES - damages which are the natural, but not the necessary and inevitable result of the wrongful act; need to be pleaded

Page 1

TRANSPORTATION LAW

2.)Pray for the relief that claim for loss be granted 3.)Prove the loss

WHEN LOSS NEED NOT BE PROVED: 1.)Liquidated damages previously agreed upon; liquidated damages take the place of actual damages except when additional damages incurred 2.)If damages other than actual are sought 3.)Loss is presumed (ex: loss if a child or spouse) 4.)Forfeiture of bonds in favor of the government for the purpose of promoting public interest or policy (ex: bond for temporary stay of alien) CONTRACTS & QUASI CONTRACTS 1.Damages in case of Good faith a.Natural and probable consequence of breach of obligation, and b.Parties have forseen or could have reasonably forseen at time obligation was constituted 2.Damages in case of bad faith a.it is sufficient that damages may be reasonably attributed to the non-performance of the obligation CRIMES & QUASI-CRIMES defendant is liable for all damages that are natural and probable consequence of the act/omission complained of not necessary that damages have been foreseen or could have been reasonably foreseen

Page 2

TRANSPORTATION LAW

a)VALUE OF LOSS SUFFERED - Destruction of things, fines or penalties, medical & hospital bills, attorney's fees, interests, cost of litigation Damages recoverable: 1.Medical & Hospital Bills 2.Loss or impairment of earning capacity (in case of physical disability) 3.Damages for death a)Minimum amount: P50,000 b)Loss of earning capacity unless deceased had permanent physical disability not caused by defendant so that deceased had no earning capacity at time of death c)Support, if deceased was obliged to give support (for period not more than 5 years) d)Moral damages 4.Attorney's fees - as a general rule, attorney's fees (other than judicial costs) are not recoverable, except: a)stipulation between parties b)when exemplary damages are awarded c)when defendant's act/omission compelled plaintiff to litigate with 3rd persons or incur expenses to protect his interest d)malicious prosecution e)clearly unfounded civil action or proceeding against plaintiff

Page 3

TRANSPORTATION LAW

f)defendant acted in gross & evident bad faith in refusing to satisfy plaintiff's just & demandable claim g)legal support actions h)recovery of wages of household helpers, laborers & skilled workers i)actions for indemnity under workmen's compensation and employer liability laws j)separate civil action to recover civil liability arising from crime k)when double judicial costs are awarded 5.Judicial costs 6.interest - discretionary on part of the court b) UNREALIZED PROFITS - future earnings

WHEN IS DAMAGES MITIGATED: 1.Contributory negligence 2.In contracts. Quasi-contracts and quasi-delict a.plaintiff has contravened the terms of contract b.plaintiff derived some benefit as result of contract c.in case where exemplary damages are to be awarded, that the defendant acted upon the advise of counsel d.that the loss would have resulted in any event e.that since the filing of the action, the defendant has done his best to lessen the plaintiff's loss or injury

Page 4

TRANSPORTATION LAW

2.MORAL DAMAGES - (PBMF-MWSS) a.Physical suffering b.Besmirched reputation c.Mental anguish d.Fright e.Moral shock f.Wounded feelings g.Social humiliation h.Serious anxiety Notes: Sentimental value of real or personal property may be considered in adjudicating moral damages The social and economic/financial standing of the offender and the offended party should be taken into consideration in the computation of moral damages Moral damages is awarded only to enable the injured party to obtain means, diversions or amusements that will serve to alleviate the moral suffering he has undergone, by reason of defendant's culpable action and not intended to enrich a complainant at the expense of defendant IN WHAT CASES MAY MORAL DAMAGES BE RECOVERED (enumeration not exclusive): a.Criminal offense resulting in physical injuries b.Quasi-delicts causing physical injuries c.Seduction, abduction, rape or other acts of lasciviousness d.Adultery and concubinage

Page 5

TRANSPORTATION LAW

e.Illegal or arbitrary detention or arrest f.Illegal search g.Libel, slander or other form of defamation h.Malicious prosecution i.Acts mentioned in art 309 of the RPC relating to disrespect of the dead and interference with funeral j.Acts and actions referred to in arts 21, 26, 27, 28, 29, 30, 32, 34 and 35 k.The parents of the female seduced, abducted, raped, or abused l.Spouse, descendants, ascendants and brother and sisters for acts mentioned in art 309 m.Art 2220 - in cases of willful injury to property or breaches of contract where defendant acted fraudulently or in bad faith 3.NOMINAL DAMAGES - adjudicated in order that a right of the plaintiff, which has been violated or invaded by the defendant, may be vindicated or recognized, and not for the purpose of indemnifying the plaintiff for any loss suffered by him ELEMENTS: a.Plaintiff has a right b.Right of plaintiff is violated c.Purpose is not to identify but vindicate or recognize right violated

Page 6

TRANSPORTATION LAW

4.TEMPERATE OR MODERATE DAMAGES - more than nominal but less than compensatory where some pecuniary loss has been suffered but its amount can't be proved with certainty due to the nature of the case

REQUISITES: a.Some pecuniary loss b.Loss is incapable of pecuniary estimation c.Must be reasonable

5.LIQUIDATED DAMAGES - those agreed upon by the parties to a contract, to be paid in case of breach thereof WHEN LIQUIDATED DAMAGES MAY BE EQUITABLY REDUCED: a.iniquitous or unconscionable b.partial or irregular performance

6.EXEMPLARY OR CORRECTIVE DAMAGE - imposed by way example or correction for the public good, in addition to the moral, temperate, liquidated to compensatory damages SOURCE: http://www.pinoylawyer.org/t609-kinds-of-damages

Page 7

TRANSPORTATION LAW

======================================================= CIVIL CODE OF THE PHILIPPINES

Title XVIII. - DAMAGES

CHAPTER 1 GENERAL PROVISIONS

Art. 2195. The provisions of this Title shall be respectively applicable to all obligations mentioned in Article 1157.

Art. 2196. The rules under this Title are without prejudice to special provisions on damages formulated elsewhere in this Code. Compensation for workmen and other employees in case of death, injury or illness is regulated by special laws. Rules governing damages laid down in other laws shall be observed insofar as they are not in conflict with this Code. Art. 2197. Damages may be: (1) Actual or compensatory; (2) Moral; (3) Nominal; (4) Temperate or moderate; (5) Liquidated; or (6) Exemplary or corrective.

Page 8

TRANSPORTATION LAW

Art. 2198. The principles of the general law on damages are hereby adopted insofar as they are not inconsistent with this Code.

CHAPTER 2 ACTUAL OR COMPENSATORY DAMAGES

Art. 2199. Except as provided by law or by stipulation, one is entitled to an adequate compensation only for such pecuniary loss suffered by him as he has duly proved. Such compensation is referred to as actual or compensatory damages.

Art. 2200. Indemnification for damages shall comprehend not only the value of the loss suffered, but also that of the profits which the obligee failed to obtain. (1106)

Art. 2201. In contracts and quasi-contracts, the damages for which the obligor who acted in good faith is liable shall be those that are the natural and probable consequences of the breach of the obligation, and which the parties have foreseen or could have reasonably foreseen at the time the obligation was constituted. In case of fraud, bad faith, malice or wanton attitude, the obligor shall be responsible for all damages which may be reasonably attributed to the non-performance of the obligation. (1107a)

Art. 2202. In crimes and quasi-delicts, the defendant shall be liable for all damages which are the natural and probable consequences of the act or omission complained of. It is not necessary that such

Page 9

TRANSPORTATION LAW

10

damages have been foreseen or could have reasonably been foreseen by the defendant.

Art. 2203. The party suffering loss or injury must exercise the diligence of a good father of a family to minimize the damages resulting from the act or omission in question.

Art. 2204. In crimes, the damages to be adjudicated may be respectively increased or lessened according to the aggravating or mitigating circumstances. Art. 2205. Damages may be recovered: (1) For loss or impairment of earning capacity in cases of temporary or permanent personal injury; (2) For injury to the plaintiff's business standing or commercial credit. Art. 2206. The amount of damages for death caused by a crime or quasi-delict shall be at least three thousand pesos, even though there may have been mitigating circumstances. In addition: (1) The defendant shall be liable for the loss of the earning capacity of the deceased, and the indemnity shall be paid to the heirs of the latter; such indemnity shall in every case be assessed and awarded by the court, unless the deceased on account of permanent physical disability not caused by the defendant, had no earning capacity at the time of his death; (2) If the deceased was obliged to give support according to the provisions of Article 291, the recipient who is not an heir called to the decedent's inheritance by the law of testate or intestate succession, may demand support from the person causing the

Page 10

TRANSPORTATION LAW

11

death, for a period not exceeding five years, the exact duration to be fixed by the court; (3) The spouse, legitimate and illegitimate descendants and ascendants of the deceased may demand moral damages for mental anguish by reason of the death of the deceased.

Art. 2207. If the plaintiff's property has been insured, and he has received indemnity from the insurance company for the injury or loss arising out of the wrong or breach of contract complained of, the insurance company shall be subrogated to the rights of the insured against the wrongdoer or the person who has violated the contract. If the amount paid by the insurance company does not fully cover the injury or loss, the aggrieved party shall be entitled to recover the deficiency from the person causing the loss or injury.

Art. 2208. In the absence of stipulation, attorney's fees and expenses of litigation, other than judicial costs, cannot be recovered, except: (1) When exemplary damages are awarded; (2) When the defendant's act or omission has compelled the plaintiff to litigate with third persons or to incur expenses to protect his interest; (3) In criminal cases of malicious prosecution against the plaintiff; (4) In case of a clearly unfounded civil action or proceeding against the plaintiff; (5) Where the defendant acted in gross and evident bad faith in refusing to satisfy the plaintiff's plainly valid, just and demandable claim;

Page 11

TRANSPORTATION LAW

12

(6) In actions for legal support; (7) In actions for the recovery of wages of household helpers, laborers and skilled workers; (8) In actions for indemnity under workmen's compensation and employer's liability laws; (9) In a separate civil action to recover civil liability arising from a crime; (10) When at least double judicial costs are awarded; (11) In any other case where the court deems it just and equitable that attorney's fees and expenses of litigation should be recovered. In all cases, the attorney's fees and expenses of litigation must be reasonable.

Art. 2209. If the obligation consists in the payment of a sum of money, and the debtor incurs in delay, the indemnity for damages, there being no stipulation to the contrary, shall be the payment of the interest agreed upon, and in the absence of stipulation, the legal interest, which is six per cent per annum. (1108) Art. 2210. Interest may, in the discretion of the court, be allowed upon damages awarded for breach of contract. Art. 2211. In crimes and quasi-delicts, interest as a part of the damages may, in a proper case, be adjudicated in the discretion of the court.

Art. 2212. Interest due shall earn legal interest from the time it is judicially demanded, although the obligation may be silent upon this point. (1109a)

Page 12

TRANSPORTATION LAW

13

Art. 2213. Interest cannot be recovered upon unliquidated claims or damages, except when the demand can be established with reasonably certainty.

Art. 2214. In quasi-delicts, the contributory negligence of the plaintiff shall reduce the damages that he may recover.

Art. 2215. In contracts, quasi-contracts, and quasi-delicts, the court may equitably mitigate the damages under circumstances other than the case referred to in the preceding article, as in the following instances: (1) That the plaintiff himself has contravened the terms of the contract; (2) That the plaintiff has derived some benefit as a result of the contract; (3) In cases where exemplary damages are to be awarded, that the defendant acted upon the advice of counsel; (4) That the loss would have resulted in any event; (5) That since the filing of the action, the defendant has done his best to lessen the plaintiff's loss or injury.

Page 13

TRANSPORTATION LAW

14

CHAPTER 3 OTHER KINDS OF DAMAGES

Art. 2216. No proof of pecuniary loss is necessary in order that moral, nominal, temperate, liquidated or exemplary damages, may be adjudicated. The assessment of such damages, except liquidated ones, is left to the discretion of the court, according to the circumstances of each case.

SECTION 1. - Moral Damages

Art. 2217. Moral damages include physical suffering, mental anguish, fright, serious anxiety, besmirched reputation, wounded feelings, moral shock, social humiliation, and similar injury. Though incapable of pecuniary computation, moral damages may be recovered if they are the proximate result of the defendant's wrongful act for omission.

Art. 2218. In the adjudication of moral damages, the sentimental value of property, real or personal, may be considered.

Art. 2219. Moral damages may be recovered in the following and analogous cases: (1) A criminal offense resulting in physical injuries; (2) Quasi-delicts causing physical injuries; (3) Seduction, abduction, rape, or other lascivious acts;

Page 14

TRANSPORTATION LAW

15

(4) Adultery or concubinage; (5) Illegal or arbitrary detention or arrest; (6) Illegal search; (7) Libel, slander or any other form of defamation; (8) Malicious prosecution; (9) Acts mentioned in Article 309; (10) Acts and actions referred to in Articles 21, 26, 27, 28, 29, 30, 32, 34, and 35. The parents of the female seduced, abducted, raped, or abused, referred to in No. 3 of this article, may also recover moral damages. The spouse, descendants, ascendants, and brothers and sisters may bring the action mentioned in No. 9 of this article, in the order named.

Art. 2220. Willful injury to property may be a legal ground for awarding moral damages if the court should find that, under the circumstances, such damages are justly due. The same rule applies to breaches of contract where the defendant acted fraudulently or in bad faith.

SECTION 2. - Nominal Damages

Art. 2221. Nominal damages are adjudicated in order that a right of the plaintiff, which has been violated or invaded by the defendant, may be vindicated or recognized, and not for the purpose of indemnifying the plaintiff for any loss suffered by him.

Page 15

TRANSPORTATION LAW

16

Art. 2222. The court may award nominal damages in every obligation arising from any source enumerated in Article 1157, or in every case where any property right has been invaded.

Art. 2223. The adjudication of nominal damages shall preclude further contest upon the right involved and all accessory questions, as between the parties to the suit, or their respective heirs and assigns.

SECTION 3. - Temperate or Moderate Damages

Art. 2224. Temperate or moderate damages, which are more than nominal but less than compensatory damages, may be recovered when the court finds that some pecuniary loss has been suffered but its amount can not, from the nature of the case, be provided with certainty.

Art. 2225. Temperate damages must be reasonable under the circumstances.

SECTION 4. - Liquidated Damages Art. 2226. Liquidated damages are those agreed upon by the parties to a contract, to be paid in case of breach thereof.

Page 16

TRANSPORTATION LAW

17

Art. 2227. Liquidated damages, whether intended as an indemnity or a penalty, shall be equitably reduced if they are iniquitous or unconscionable.

Art. 2228. When the breach of the contract committed by the defendant is not the one contemplated by the parties in agreeing upon the liquidated damages, the law shall determine the measure of damages, and not the stipulation.

SECTION 5. - Exemplary or Corrective Damages

Art. 2229. Exemplary or corrective damages are imposed, by way of example or correction for the public good, in addition to the moral, temperate, liquidated or compensatory damages.

Art. 2230. In criminal offenses, exemplary damages as a part of the civil liability may be imposed when the crime was committed with one or more aggravating circumstances. Such damages are separate and distinct from fines and shall be paid to the offended party.

Art. 2231. In quasi-delicts, exemplary damages may be granted if the defendant acted with gross negligence.

Art. 2232. In contracts and quasi-contracts, the court may award exemplary damages if the defendant acted in a wanton, fraudulent, reckless, oppressive, or malevolent manner.

Page 17

TRANSPORTATION LAW

18

Art. 2233. Exemplary damages cannot be recovered as a matter of right; the court will decide whether or not they should be adjudicated.

Art. 2234. While the amount of the exemplary damages need not be proved, the plaintiff must show that he is entitled to moral, temperate or compensatory damages before the court may consider the question of whether or not exemplary damages should be awarded. In case liquidated damages have been agreed upon, although no proof of loss is necessary in order that such liquidated damages may be recovered, nevertheless, before the court may consider the question of granting exemplary in addition to the liquidated damages, the plaintiff must show that he would be entitled to moral, temperate or compensatory damages were it not for the stipulation for liquidated damages.

Art. 2235. A stipulation whereby exemplary damages are renounced in advance shall be null and void. MARITIME COMMERCE Simple or particular averages - Damages or expenses caused to the vessel or cargo that did not incur to the common benefit, and borne by respective owners (Art. 809). -A Marine insurance term to refer to partial loss on an individual shipment from one of the perils insured against, regardless of the balance of the cargo. Particular-average insurance can usually be obtained, but the loss must be in excess of a certain percentage of the insured value of the shipment, usually three to five percent, before a claim will be allowed by the company.

Page 18

TRANSPORTATION LAW

19

General or gross averages- Damages or expenses deliberately caused in order to save the vessel, its cargo or both from real and known risk. (Art.811) - that kind of average which falls upon the gross or entire amount of ship, cargo, and freight; - commonly called general average SIMPLE/PARTICULAR The owner of the goods which gave rise to the expenses or suffered damage shall bear this average.(art.810) Only one interest is involved 100 % share GENERAL/GROSS

All the persons having an interest in the vessel and the cargo therein at the time of the average shall contribute to satisfy this average. (art.812) Several interests involved In proportion to the value of the owners property saved No reimbursement There may be reimbursement Refer to partial loss on an Falls upon the gross or entire amount individual shipment from one of of ship, cargo, and freight the perils insured against, regardless of the balance of the cargo In case of simple or particular averages/general or gross averages who will answer for expenses : For simple/particular averages- the owner of the goods which gave rise to the expense or suffered the damage shall bear this average. For General/Gross averages- all the persons having an interest in the vessel and the cargo therein at the time of the occurrence of the average shall contribute.

Page 19

TRANSPORTATION LAW

20

The person whose property has been saved must contribute to reimburse the damage caused or expense incurred if the situation constitutes general average. ELEMENTS OF GROSS AVERAGE: 1. Common danger 2. Sea arising from accidents of sea, disposition of authority 3. Peril imminent and ascertained 4. Part of vessel or cargos deliberately sacrificed. 5. Successful saving of vessel or cargo 6. Proper legal steps and authority taken PROPER LEGAL STEP AND AUTHORITY: To incur expenses and cause damage of general average, there must be resolution of the captain after deliberation with other officers and after deliberation with other officers and after hearing of person present interested in cargo (art.813)

CHARTER PARTY o A contract by virtue of which the owner or agent binds himself to transport merchandise or persons for a fixed price. o A contract by which an entire ship, or some principal part thereof is let/leased by the owner to another person for a specified time or use. (Planters Products, Inc. vs. CA, 226 SCRA 476) GROUNDS FOR RESCISSION OF CHARTER PARTY: 1. At the charterers request 2. At the shippers request 3. Fortuitous causes
Page 20

TRANSPORTATION LAW

21

CHARTERERS REQUEST a. By abandoning the charter and paying half of the freightage b. Error in tonnage or flag c. Failure to place the vessel at the charterers disposal; d. Return of the vessel due to pirates, enemies or bad weather; e. Arrival at the port for repairs SHIPOWNERS REQUEST a. If the extra lay days terminate without the cargo being placed alongside the vessel; b. Sale by the owner of the vessel before loading by the charterer FORTUITOUS CAUSES a. War or interdiction of commerce; b. Blockade c. Prohibition to receive cargo d. Embargo and; e. Inability of the vessel to navigate KINDS OF CHARTER PARTY: 1. CONTRACT OF AFFREIGNMENT the ship owner retains the possession, command and navigation of the vessel, while the charterer merely uses the vessel or a space therein for a fixed price, at a fixed time or for a single or consecutive voyage. Liable for damages: Ship owner. 2. BAREBOAT OR DEMISE CHARTER the charterer mans the vessel with his own people and becomes, in effect, the owner of the vessel for the voyage or service stipulated. Liable for damages: charterer.

Page 21

TRANSPORTATION LAW

22

LAY DAYS stipulated period for the loading or unloading of a vessel. EXTRA LAY DAYS days of delay beyond the lay days. CUSTOMARY QUICK DISPATCH reasonable period for the loading or unloading according to the custom or usage of the port. DEMURRAGE fixed remuneration to the owner of the vessel for its detention beyond the lay days or the extra lay days. DEAD WEIGHT cargo which the charterer fails to load in the vessel or payment made by the charterer to the ship owner for the portion of the vessel chartered but not occupied. LOAN ON BOTTOMRY/RESPONDENTIA A real, unilateral, aleatory contract, by virtue of which one person lends to another a certain amount of money or goods on things exposed to maritime risks, which amount, with its earnings, is to be returned if the things are safely transported, and which is lost if the latter are lost. RESPONDENTIA A loan of money on maritime interest, on goods laden on board of a ship, which, in the course of the voyage must, from their nature, be sold or exchanged, upon this condition, that if the goods should be lost in the course of the voyage, by any of the perils enumerated in the contract, the lender shall lose his money; if not, that the borrower shall pay him the sum borrowed, with the interest agreed upon. The contract is called respondentia, because the money is lent on the personal responsibility of the borrower.

Page 22

TRANSPORTATION LAW

23

BOTTOMRY Loan made by the ship owner or ship agent guaranteed by vessel itself and repayable upon arrival of the vessel at destination. NOTE: Bottomry is a loan on the ship; Respondentia is a loan upon the goods. The money is to be repaid to the lender, with maritime interest, upon the arrival of the ship, in the one case and of the goods, in the other. In all other respects the contracts are nearly the same, and are governed by the same principles. In the former, the ship and tackle, being hypothecated, are liable, as well as the person of the borrower; in the latter, the lender has, in general, only the personal security of the borrower. BOTTOMRY/ RESPONDENTIA VS. ORDINARY LOAN (MUTUUM) BOTTOMRY/RESPONDENTIA Not subject to usury law Liability of the borrower is contingent on the safe arrival of the vessel or cargo at destination The last lender is a preferred creditor ORDINARY LOAN (MUTUUM) Subject to usury law Not subject to any contingency (absolute liability) The first lender is a preferred creditor

QUESTION: In case of loss of the goods w/c are the subject of loan on Respondentia/bottomry is the borrower liable to pay the loan? Explain the answer. - As a general rule the obligation of the borrower to pay the loan is extinguished if the goods given as security are absolutely lost by reason of an accident of the sea, during the voyage designated and if it is proven that the goods were on board.

Page 23

TRANSPORTATION LAW

24

EXCEPTIONS: 1. Loss due to inherent defect 2. Loss due to the barratry on the part of the captain 3. Loss due to the fault or malice of the borrower 4. The vessel was engaged in contraband; and 5. The cargo loaded on the vessel be different from that agreed upon Concurrence of Marine Insurance and Loan on Bottomry/Respondentia 1. The insurable interest of the owner of a ship hypothecated by bottomry is only the excess of the value over the amount secured by bottomry. (Sec. 101, Insurance Code). 2. The value of what may be saved in case of shipwreck shall be divided between the lender and the insurer in proportion to the interest of each one. (Art. 735) Note: If a vessel is hypothecated by bottomry only the excess is insurable, since a loan on bottomry partakes of the nature likewise of an insurance coverage to the extent of the loan accommodation. The same rule would apply to the hypothecation of the cargo by respondentia. (Pandect of Commercial Law and Jurisprudence, Justice Jose Vitug, 1997 ed.) CODE OF COMMERCE: Transportation over land (ARTS 358,370-371) TIME TO DELIVER: 1. When no period fixed; carrier must forward goods in the first shipment of same similar good. 2. When period fixed: carrier must deliver goods within time fixed.

Page 24

TRANSPORTATION LAW

25

DELAY IN DELIVERY: In case of delay, the carrier is liable for: 1. Indemnity stipulated in the bill of lading. 2. If no stipulation, damages due to delay which may not exceed the current price of the goods on the day and place of destination. 3. Special damages, like unrealized profit, if carrier foresaw or had notice of circumstances leading to the probable occurence of such damage. 4. Full value of goods, if consignee should exercise abandonment of the goods by advising carrier accordingly prior to arrival at destination. (ART 359) JURISPRUDENCE ROUTE: 1. If route agreed upon, carrier may not change it unless by reason of force majeure; otherwise, carrier is liable for losses suffered by goods, and for indemnity stipulated. 2. If no agreed route, carrier must select shortest, least expensive and practically passable route (art 1747) (ART 363-365) DELIVERY PARTIAL/ DEFECTIVE: The carrier must deliver the goods in the same condition and quantifying which they were received, according to the bill of lading. 1. In case of partial delivery, consignee may refuse to receive those delivered if they cannot be used independently of those not delivered.

Page 25

TRANSPORTATION LAW

26

2. If the goods delivered were rendered useless for sale or consumption, consignee may refuse to receive. 3. If the goods delivered are damaged to such an extent that their value is diminished, carrier must pay the difference in value as judged by experts. **In the first two cases, consignee may exercise abandonment and be entitled to full value of goods. (ART 366) JURISPRUDENCE CLAIM/SUIT Pursuit of following requirements: so carrier can check validity of claims while facts are still fresh and documents still available. 1. When the damage is ascertainable from the outside part of the package, the claim must be made at the time of receipt. 2. When the damage is ascertainable only by the opening of package, the claim against carrier must be made within 24 hours following receipt (longer period may be stipulated) 3. In both cases, the claim must be made before payment of transportation charge. 4. A provisional claim need not state in detail list of goods lost or damaged, so long as carrier can make reasonable verification. 5. Claim is condition precedent to right of action, which must be filed within 1 year from delivery of goods or denial claim. 6. Sufficient and reasonable shorter period maybe stipulated in the bill of lading.

Page 26

TRANSPORTATION LAW

27

(ARTS 368,369) MISDELIVERY/ NON-DELIVERY The carrier must deliver the goods to the consignee or the legitimate holder of the bill of lading. 1. The shipper may order the return or the retention of the goods by the carrier, prior to appearance of consignee or legitimate holder of bill of lading 2. The carrier is liable for damages if it delivers to the wrong person (misdelivery) 3. If the carrier makes no delivery or refuses to deliver (non-delivery), the consignee may sue for conversion and damages. 4. If the consignee cannot be found in the place indicated in the bill of lading, or refuses to pay transportation charge or to receive goods, the carrier may deposit goods in its warehouse or the court; such deposit has the legal effect of delivery. **Claim is not a condition precedent to action, which must be filed within 4 years if no written contract or 10 years if written contract. (ART 373) MULTI-CARRIERS This refers to an arrangement where several carriers successively transport the goods, or by a single through bill of lading issued by a carrier and honored by the other carriers. 1. In transportation of goods by successive carriers, the last carrier assumes the obligation of the previous carriers. 2. But the last carrier, if not directly responsible for the loss or damage, may proceed against the previous carriers.

Page 27

TRANSPORTATION LAW

28

3. shipper/consignee has the right of action against carrier who executed transportation contract, or the other carriers who received goods without reservation. 4. Carriers with reservation are not relieved of responsibilities for their own acts. VESSELS/PERSONS IN MARITIME COMMERCE Vessels: Definition: - Those with motive power -means of water transportation (P.D. 474) Excluded: 1. Local and foreign military vessels 2. Bancas and other watercrafts of less than 3 tons gross capacity (P.D. 474) 3. Small watercrafts engaged in registry of vessels. WARRANTY OF SEAWORTHINESS: 1. Equipped for the voyage and manned with sufficient number of competent officers and crew. 2. Shipper/passenger not required to inquire into vessels seaworthiness, genuineness of its licenses, and compliance with maritime laws 3. Vessel must be seaworthy at start of voyage; carrier not liable if unseaworthiness occurs later due to fault of shipper or passenger. SHIPOWNERS/AGENTS A. SHIP AGENT (may be shipowner ; not a civil agent): a) Entrusted with provisioning vessel

Page 28

TRANSPORTATION LAW

29

b) Represents vessel in port where she is (art.586) c) Represents shipowner in judicial/extrajudicial acts (art.595) B. CIVILLY LIABLE FOR: a) Acts and obligations of captain contracted to repair, equip, and provision vessels (art.586) b) Indemnities arising from conduct of captain in the care of goods and passengers carried by vessel (art. 587) c) Obligation contracted by captain even exceeding his powers and privileges, provided made for the benefit of vessel (art.588) d) Damages in case of collision by reason of the fault, negligence, or lack of skill of captain or any member of the complement. C. DOCTRINE OF LIMITED LIABILITY AND RIGHT OF

ABANDONMENT a) Because of real and hypothecary nature of maritime law, liability of shipowner/agent is limited to value of vessel, equipment and freight earned during the voyage. b) Shipowner/agent may exempt themselves from liability by abandoning vessel, equipment, freight c) Creditor cannot refuse offer of abandonment D. DOCTRINE NOT APPLICABLE: a) Where shipowners/agent are at fault or currently negligent with captain b) Where shipowner/agent allows his vessel to embark in an unseaworthy condition. c) Where vessel is insured d) In workmens compensation act

Page 29

TRANSPORTATION LAW

30

CAPTAIN/MASTER A. CAPTAIN of big vessels for high sea or coastwide trade; master for smaller vessels for coastwide trade; master for smaller vessels for coastwide trade. B. QUALIFICATIONS: a) Filipino citizen b) With skill and capacity to command and direct vessel c) Duly licensed by MARINA (arts. 609,882) C. CIVILLY LIABLE FOR: a) Damage to vessel due to lack of skill/negligence b) Theft, robberies, mutiny by crew c) Abuse of power d) Unjustified deviation e) Losses, fines and confiscation imposed due to violation of laws and regulations (arts. 618-620) D. DEFENSE OF FORCE MAJEURE: a) Proximate and only cause b) Due diligence to prevent or minimize loss c) No delay d) Protest within 24 hours OFFICERS A. Officers must be duly licensed (PRC and MARINA) B. Officers include the ff: a) Sailing mate

Page 30

TRANSPORTATION LAW

31

b) Second mate c) Third mate d) Marine engineer (arts. 627-633) SUPERCARGOES In maritime law, a person specially employed by the owner of cargo to take charge of and sell merchandise which have been shipped, to purchase returning cargoes, and to receive freight, as he may be authorized (arts.649-651) PASSENGERS A. Refund due to voyage suspension or interruption: 1. If due to fault of captain or ship agent, passenger has right to refund of fare and to damages. 2. If due to force majeure or fortuitous event, only return of fare or part thereof in proportion to distance travelled before interruption (art.697) B. Baggage: 1. Passenger is considered a shipper insofar as the goods he carries on board. 2. Insofar as the goods in the immediate custody of the passenger, the captain is not responsible, unless the damage arises from his act or the crews (art. 703)

Page 31

TRANSPORTATION LAW

32

ARRIVAL UNDER STRESS

A. MEANING: o Arrival of the vessel at the nearest and most convenient port, when the captain believe the vessel cannot continue the voyage to the port of destination (art.819) o Once cause of arrival under stress ceases, captain must continue voyage; otherwise, he is liable for damage caused by delay (art.825) B. JUSTIFICATIONS: o Lack of provisions (not due to negligence or failure to take necessary provision). o Well-founded fear of seizure by pirates (manifests and based on positive and justifiable facts). o Accident disabling vessel to navigate o Damage to vessel not caused by malice, negligence, lack of foresight, or lack of skill of captain.(art.820) COLLSION/ALLISION: A. DEFINITION: o COLLISION- is the impact of two moving vessels;

Page 32

TRANSPORTATION LAW

33

o ALLISION- is the striking of a moving vessel against stationary one In case of risk of collision, each vessel must alter course to starboard (right) so as to pass on the portside (left) of the other vessel (rule 18, International Rules of the road). B. LIABILITY : If collision due to force majeure or fortuitous event, each vessel and its cargo liable for its own damage (art. 830) If collision due to fault, negligence or lack of skill of captain or any member of the captain or any member of the vessels complement, owner of at fault should indemnify. If both vessels at fault, each shall suffer its own damage, and be solidarily liable for losses and damage suffered by their cargoes. Owner of a vessel is liable if it caused another vessel to collide with a third vessel Doubtful collision, same as #1 , each vessel and its cargo liable for its own damage (art. 830) C. Condition precedent for recovery of damages/losses: maritime protest under oath by the captain within 24 hours, before competent authority where collision took place or at first port of arrival (art.835) SHIPWRECKS A. MEANING: When a vessel is damaged rendering her unable to navigate, or when the vessel is lost at sea.

Page 33

TRANSPORTATION LAW

34

B. LIABILITY: Generally, each owner, whether of the vessel or cargo, shall bear his own loss. If shipwreck or stranding caused by malice, negligence or lack of skill of captain or vessel was insufficiently repaired and equipped, ships agent and/or shipper may demand indemnity from the captain. BILL OF LADING A. DEFINITION: A written acknowledgement of the receipt of the goods, their quantity and condition, and an agreement to transport and deliver them at a specific place to a person named or on his order. It is signed by the captain and shipper, and furnished to the consignee (art.706) B. FUNCTIONS: 1. A receipt of the goods 2. A contract of carriage 3. A document of title C. KINDS: 1. Negotiable goods to be delivered to the bearer or to the order of the person named; Non-negotiable goods to be delivered to the person named 2. Clean goods received in good condition and/or correct quantity. Foul- goods received in bad condition and/or short quantity
Page 34

TRANSPORTATION LAW

35

3. Through issued by first carrier and honored by the successive carriers. 4. On Board goods received on board the vessel which will transport the goods Received Shipment goods received for shipment with or without specifying the vessel which will transport the goods. JURISPRUDENCE A Bill of lading, when properly executed and delivered to a shipper, is evidence that the carrier received the goods described therein for shipment. Acceptance of bill of lading without dissent raises the presumption that all terms therein were brought to the knowledge of the shipper and agreed to by him, and in the absence of fraud or mistake, he is estopped from denying that he assented to such terms. ELECTRONIC BILL OF LADING A. Advantages over paper Bill of lading: 1) Avoids delay 2) Prevents fraud: alteration, forgery, counterfeiting B. Necessitated by: 1) Containerization 2) Computerization, electronic data, interchange (EDI) C. Electronic Commerce act provides for the legal recognition and admissibility as evidence of electronic data messages and electronic documents, so long as they can be authenticated by electronic signature. Holder of the Bill of Lading is the holder of the private

Page 35

TRANSPORTATION LAW

36

keys and can claim delivery of the goods, transfer his right to another, and substitute or terminate the nominated consignee. D. E-documents may now be used in furnishing the marks, number and weight of goods; in stating or declaring the nature or value of goods; issuing a receipt for goods; confirming the loading of goods; authorizing release of goods; giving notice of loss of , or damage to goods; undertaking to deliver the goods to a named person or a person authorized to claim delivery; granting, acquiring, renouncing, surrendering, transferring or negotiating rights in goods. (sec. 25, ECA/R.A 8792) MULTI MODAL TRANSPORT A. INTERNATIONAL TRADE Transport of goods is by more than one carrier or mode of transportation. Containerization enhanced transport capabilities in the transfer of goods from ship to truck, train, plane or another ship. B. DEFINITION Multi-modal transport operator (MTO) means any person who concludes a multi-modal contract and assumes responsibility for the performance thereof by a carrier. Multi-modal transport contract means a single contract for the carrier of goods by at least two different modes of transport. Considering the variety of cultures, languages and commercial practices of both ends of the trade, it is reasonable to let one qualified operator organize and be responsible and accountable for the entire transport chain.

Page 36

TRANSPORTATION LAW

37

FREIGHT FORWARDING A. FORWARDING AGENT It receives and arranges to forward or send the goods to their destination by the instrumentality of the actual carrier, without assuming the role and responsibility of the carrier, and is compensated for his services by the shipper, and must exercise the care and diligence of a prudent man. B. FREIGHT FORWARDER A transport intermediary which publishes its own tariff, issues its own bill of lading, and assumes all responsibilities of a common carrier without operating its own vessel. This nonvessel operating common carrier (NVOCC) acts as a shipper in relation to the actual carrier and as a carrier to the shipper. He charges for the entire distance, and assumes responsibility for the transportation of the goods from point of receipt to point of destination. C. CARGO CONSOLIDATOR It consolidates small shipments for various consignors/consignees by procuring vessel/container space from carriers and issuing its own bill of lading. Its destination agents distribute the small shipments to the consignees named in the consolidators manifest. ARRASTRE / STEVEDORING Stevedoring refers to the handling of the cargo in the holds of the vessel or between the ships tackle and the holds of the vessel. Arrastre refers to the handling of cargo on the wharf or between the establishment of the consignee or shipper and the ships tackle.

Page 37

TRANSPORTATION LAW

38

CONTRACT OF TOWAGE A contract for the hire of services by which a vessel is hired to tow another for a consideration. Only the owner of the towing vessel can ask for compensation for the towage. Nor the captain, even if the owner waived the claim for the towage, unless the owner assigned or conveyed his right to the captain. SPECIAL LAWS: 1. SALVAGE LAW (R.A. 2616) Service rendered to preserve the goods or ship which the owner has either abandoned in distress at sea or is unable to protect or secure. Compensation to one by whose assistance a ship or its cargo has been saved from impending danger or recovered from actual loss. Vessel or cargo recovered from abandonment at sea. ELEMENTS OF VALID SALVAGE: 1. Marine peril 2. Voluntary service 3. Success in whole or part

2. SHIP MORTGAGE DECREE (P.D. 1521) The purpose is to finance the construction, acquisition, purchase of vessel, or initial inspection thereof.

Page 38

TRANSPORTATION LAW

39

CONDITIONS FOR PREFERRED MORTGAGE: 1. Registration with PCG 2. Affidavit of good faith 3. No waiver of preferred status Preferred mortgage has priority over all claims against the vessel, except: o Taxes, crews wages, general average, salvage, damages arising out of torts o Preferred mortgages registered prior in time o Maritime lien arising prior to registration of preferred mortgage Maritime lien for necessities: o Any person furnishing repairs, supplies, tonnage, use of dry dock or other necessities to any vessel, upon the order of its owner or the latters authorized representatives, shall have a maritime lien on the vessel which may be enforced by a suit in rem and it shall be necessary to allege or prove that credit was given to the vessel.

Page 39