Transportation Law | Atty.

Palacios

Post-midterm recits/lecture

If testimonial evidence insufficient, is carrier liable?

Yes

08 February 2010
Is a fishing vessel commercial?
In order to be a commercial/merchant vessel, a vessel must:
1. not be an accessory to another vessel
2. licensed to engage in the transportation of passengers and/or freight
3. by sea (not merely rivers, inlets, lakes, coves or bays), wither in foreign or coastwise
trade
If it is supposed to traverse the rivers, bays, is it required to have a license?
There are vessels which are not required to be registered. What are they?
1. Vessels of three tons net or less
2. Yachts, launches
3. Ships boats and launches bearing the name and home port of the vessel plainly marked
4. Vessels owned by the government
Is there a difference between contract of carriage and contract of towage?
Purpose of contract of towage is for service of towing a barge. Only two boats involved, the tow
and the tugboat.
In a contract of carriage, there is only one vessel, the carrier for goods or passengers.
How many kinds of bills of lading do we recognize?
2. Negotiable and non-negotiable.
Negotiable b/l in which it is stated that the goods referred to therein will be delivered to the bearer
or to the order of any person named in such bill
Non-negotiable delivered to a specified person in the bill
If bill drawn to the order of shipper, what should carrier do?
Carrier is under a duty not to deliver the merchandise mentioned, except upon presentation of the
b/l duly indorsed by the shipper. Considering that the b/l is made to order, it means that the goods
cannot be delivered without previous payment of the value thereof, it is evident that goods having
been delivered without payment of the price constitute misdelivery.
If no bill issued, how will parties resolve their respective rights and obligations in the contract of
carriage?
Documentary and testimonial evidence
Carrier reaches port of destination, refuses to deliver unless consignee presents bill of lading.
Consignee says bill lost. How will delivery be justified?
Carrier can issue a receipt which takes the place of b/l.
If carrier does not issue a receipt and there is no b/l, shipper files claim against carrier for
misdelivery, can carrier avoid liability?
Carrier may present other legal proofs, testimonial evidence.
K Suarez | 3A 2009-2010

If carrier pays shipper for value of goods misdelivered, can carrier recover the amount?
Yes from person goods were delivered to
What evidence for reimbursement?
Proof of payment to carrier
Can parties stipulate limitation of liability?
Yes. The following are the kinds of stipulation:
1. exempting carrier from liability for loss or damage occasioned by its own negligence
2. unqualified limitation of such liability to an agreed valuation
3. limiting liability to an agreed valuation unless shipper declares higher value and pays a
higher rate of freight
First two are invalid, third is valid.
For the third, not necessarily have to appear in b/l, may be established by other evidence
ARTICLE 356. Carriers may refuse to accept packages which appear unfit for transportation; and if
said transportation is to be made over a railroad, and the shipment is insisted on, the company
shall carry it, being exempt from all liability if its objections are so stated in the bill of lading
In addition to objection, carrier may require posting of a bond for shipper. If carrier
refuses outright, shipper has no other recourse but to post the bond and charge to
consignee as part of value of goods
If goods delivered to carrier for shipment and carrier entertained well-founded fear that there was a
false declaration of goods, what can carrier do to protect itself?
ARTICLE 360. The shipper may, without changing the place where the delivery is to be made,
change the consignment of the goods delivered to the carrier, and the latter shall comply with his
orders, provided that at the time of making the change of the consignee the bill of lading
subscribed by the carrier be returned to him, if one were issued, exchanging it for another
containing the novation of the contract.
The expenses arising from the change of consignment shall be defrayed by the shipper
Still involves EOD
360, contract not terminated, only novated.
What if change in destination?
Not allowed. Only consignee can be changed. Place of delivery must remain the same, else vessel
will deviate and will breach contract.
If change of destination (such as when vessel has two destinations), ok and in which case, original
b/l terminated, new one issued represents new contract.
When can consignee refuse acceptance?
1. goods damaged to the point no longer fit for consumption and sale
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Transportation Law | Atty. Palacios

2.
3.

delay in the delivery due to fault of carrier must be made before delivery
if some damaged, others not damaged may be rejected

Sirs example. Ship from NY, damaged condition. When should notice be made?
Use COGSA. Foreign trade. 3 days from delivery. If no notice, presumed received in good
condition
-

What if CEB to MNL?

Code of Commerce applies, Art 366. Notice immediate if damage apparent. If not apparent, 24h
from receipt of goods. If no notice, deemed condonation of carriers acts.
What if you file notice but pay transportation charges?
Payment is waiver. But if prepaid, not waiver. Fact of viewing before payment is material.

Must deliver even if transpo charges not paid. What is carriers recourse now?
Carrier can exercise lien over goods w/in 30d from date of delivery

What kind of action should he file?

Action for Writ of replevin to recover the goods. Then ask court to authorize public auction then
apply proceeds
What if consignee insolvent, can you exercise lien?
Yes, shall not be affected by insolvency provided brought within 30d mentioned.
-

What if you dont file within 30d, can you still exercise right of lien?
Yes, by ordinary action only as ordinary creditor. No more preference, no longer as carrier. As
ordinary creditor, action within 10y (based on written contract)
When can carrier retain goods?
Art 704. When passenger does not pay fare or sustenance expenses. The only instance when he
can retain. No more 30 d period because goods already with carrier.
ARTICLE 704. The captain, in order to collect the price of the passage and expenses of
maintenance, may retain the goods belonging to the passenger, and in case of the sale of the
same he shall be given preference over the other creditors, acting in the same way as in the
collection of freight.
15 February 2010
PD 1521: Ship Mortgage Decree of 1978
action in rem in admiralty filed against the vessel itself only, not against the owner or
ship agent.
o Under 586 (?) of Code of Commerce, when there is loss or damage as a
result of actions of captain, repairs, provisioning and equipping of vessel,
there is joint liability on part of ship owner and ship agent. Not in 1521!
Purpose: enhance maritime business in the Philippines so that shipping is helped
tremendously in the building, construction, management and operation of vessels
Who can avail of this?
K Suarez | 3A 2009-2010

Filipino citizens only

Corporate entities, 60%1 of the capital owned by Filipinos
But if vessel covered by preferred mortgage in another country, if that pref
mort violated and action filed against foreign vessel, it may be arrested under
1521 if vessel enters Phil. Jurisdiction and proof that it violated terms of
mortgage and non-payment of maritime necessaries under Sec 21
Legal grounds under which vessel may be subject of an action under 1521 and may be
arrested under the same:
o Violation of the terms and conditions of the preferred mortgage (Secs 10 and
11)
o Non-payment of maritime liens and necessaries (Sec 21)
Arrest of vessel only on these two grounds! No other ground can be used to arrest a
vessel.
o If other ground, file personal action against ship owner/agent under 586 Code
of Commerce or attach the vessel under R68, ROC.
What is a preferred mortgage?
o When a mortgage is executed on the vessel (personal property, thus Chattel
Mortgage), the chattel mortgage is a valid mortgage only between the parties
mortgagor and mortgagee and their heirs. Cannot affect third parties.
o To affect third parties, mortgage must be registered with the Coast Guard, but
now with the Maritime Industry Authority or if Coast guard designated with
auth, ok with coast guard. Once registered, becomes preferred mortgage
under Sec 17 (preference of credit) and binding on third parties
Non-payment of liens and necessaries
o Contained fuel, etc and vessel does not pay costs of maritime liens, the
maritime supplies given to the vessel become maritime liens on the vessel
itself and they are attached to the vessel special ___ of a maritime lien.
Wherever vessel goes, liens go. So if vessel sinks, lien goes with it. If you use
abandonment to limit liability under 587 (co-extensive with interest on vessel),
that limitation applies and will limit liability of carrier to his interest on the
vessel as well as freight ___ on vessel when vessel lost at sea
Violation of terms and conditions and non-payment of liens, what action can one file
against the vessel under the decree?
o Action to arrest the vessel and recover damages resulting from violation of
terms and conditions of preferred mortgage or recovery of maritime liens
supplied
The RTC of place where vessel is found has original jurisdiction over case obtain order
of arrest there.
Is there a need to prove before the court that there has been violation or non-payment
before order of arrest is issued?
o Yes, once verified complaint has been filed, claimant (plaintiff) should file exparte motion under oath to attest to fact that cause of action in complaint is
correct or true because of the violation of the terms or non-payment of
maritime necessaries. In the motion, there should be a prayer that order of
o
o
o

65% in maritime world (I duno)

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Transportation Law | Atty. Palacios

arrest be issued immediately to hold vessel as entity responsible for payment

of claim.
o Once ex parte motion is filed, Court determines bond that plaintiff should pay.
Bond is based on discretion of court but not beyond value of claim. Ex: claim
500k, bond must be 500k or less. Court then approves bond and issues order
of arrest. Sheriff arrests vessel and stays in his possession until such time
court sets vessel for sale or court orders release of vessel or discharges order
of arrest
Order discharging order of arrest
o Mortgagor may file motion to discharge order of arrest based on two grounds
Improper issuance or
Irregular issuance of order of arrest
o Here, movant has to file a counterbond double the amount of the claim. Once
approved by court, court releases vessel and counterbond stands as
guarantee of payment of claim in the event of final garnishment (?) because in
which case, vessel would have left Philippine jurisdiction and may have been
sold multiple times, difficult to re-attach vessel
o What if mortgagor does not post a counterbond? (bec difficult to post this,
since it must be in cash or from a reputable insurance company)
Vessel remains in possession of arresting sheriff, awaits decision of
court if there has been violation of terms or non-payment
o If found that terms violated or non-payment, vessel set for sale for the
purpose of recovering claims of plaintiff.
o At public auction sale, there is a possibility that there are pre-existing claims
on the vessel, ex: prior mortgage in favor of other creditors
All pre-existing claims deemed removed from vessel at public
auction sale and transferred and attached to the proceeds of the
sale
Vessel is apparently sold free from all liens and encumbrances at
public auction sale, purchase acquires it clean
Creditors are protected because claims are transferred and
attached to proceeds (Sec 17)
Under Code of Commerce, when sold at public auction, pre-existing
claims extinguished. Exception is Ship Mortgage Decree of 1978,
which only authorizes removal from vessel and move to proceeds.2
If you are the claimant who had vessel foreclosed, you have
preferred claim subject to Sec 17
1. Payment of taxes
2. Payment of crew
3. Claims on general average
4. Claims on salvage incl contract salvage
5. Claims on maritime liens occurring prior in time (Sec 21)
6. Claims from damages resulting from maritime tort such
as collision

There will be an exam question on this.

K Suarez | 3A 2009-2010

7. Claims from preferred mortgages occurring prior in time

True also in case of non-payment of maritime liens have vessel
arrested and prosecute asap so court will hold vessel liable for your
claims then will have vessel sold at public auction.
Who can participate in public auction?
o Filipino citizens
o Foreigners, as long as his country has diplomatic relations with Philippines or
grants reciprocal rights to Filipinos
o Mortgagee
Implementation of claim for non-payment
o Supplies, provisions, fuel given to vessel under valid claim of authority
owner, managing owner, master of vessel, husbanding agent (agent who
works for earning of freight) all authorized to claim liens and necessaries
they are given legitimate authority to order for provision. No one else apart
from them

Code of Commerce, recits:

May carrier delay delivery to consignee if no payment of transportation charges?
As a rule, must deliver. He can retain but may be liable for damages.
So how does he recover transportation charges?
368 lien over goods. But how does carrier exercise lien? Action for writ of replevin w/in 30d bec
recovery of personal property. Why necessary to recover? So it can be sold at public auction
Suppose you file 40d after delivery? What happens to your action, has it prescribed?
Yes, 30d dapat. You lose preferred status. Your claim now only as ordinary creditor, file w/in 10y
based on written contract
When carrier arrives at port of destination, cannot find consignee or consignee refuses to accept
goods or pay transportation charges, if you are carrier, what do you do?
369 notice to consignor/shipper that delivery made but consignee refuses to receive or pay.
What is the purpose of notice?
Contract is to deliver for shipper. Notify shipper that you attempted to fulfill. You are now asking for
instructions from shipper what to do with goods.
If shipper gives you instruction to deposit, will you deposit? Remember your vessel cannot wait for
so many days. What is the consequence of the deposit?
Delivery to consignee
What if unable to contact shipper despite due dil?
Ask from court if you can deposit to warehouse. Upon order of court, it serves as delivery of goods
not only to consignee but also shipper.
When is liability of carrier extinguished?
Delivery to warehouse upon instruction of court.
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Transportation Law | Atty. Palacios

Is there a difference between simple delay in delivery and delay in conversion?

In conversion, there is no delivery because if after demand and notice but carrier refuses to deliver
because of there is claim of ownership over goods.
What are your causes of action when there is conversion?
1. Breach of contract to deliver despite failure to pay etc, must still deliver
2. Criminal case of estafa claim of ownership over thing not belonging to you
In an ordinary delay of delivery?
1. Breach of contract of carriage failure to deliver within time prescribed
No arrival, can you abandon?
Yes.
Action of consignee re abandonment?
Consignee can recover value of goods ask carrier for value of goods as if lost or mislaid
Suppose carrier arrived, although delayed due to his own fault. Can you still abandon?
Yes, provided informed carrier after delay but before arrival.
If no notice of abandonment then carrier arrives?
Consignee must accept goods despite delay. Consignee now to file action because of delay. So he
receives goods + damages.
What is the consequence of arrival on right to abandon?
No more right to abandon. Right to abandon may only be exercised when the vessel has not yet
arrived at port of destination. At moment vessel arrives at port, no more right to abandon. Option is
to receive goods and file action for damages. Failure to send notice of abandonment and presence
at port during arrival of vessel is abandonment of right to abandon. Foreclosed his right to
abandon.
Some goods found in shipment considered prohibited goods. What is the liability of carrier? Who is
considered to have violated?
Authorities can confiscate prohibited materials. Carrier is liable, it is his duty to inspect goods
before loading.
Any exception where liability can be passed on to shipper/consignee? What is carriers defense?
False declaration by consignee/shipper of contents of shipment.
What document should carrier utilize in establishing false declaration?
Bill of lading.
If shipments of prohibited goods are shipped on board Phil registered vessel which has entered
Phil waters, is there a right on part of Phil authorities to confiscate or chase vessel to make them
responsible for carrying prohibited goods?
Yes, covered by Phil. Laws once enter Phil jurisdiction.
K Suarez | 3A 2009-2010

What if vessel leaves Phil waters when chased, caught in intl waters?
Only in the high seas. And Art 2, RPC extension of Phil. jurisdiction
What if chased in waters of other jurisdiction and arrested there?
Since registered in Phils, still Philippine territory. Arrest valid on grounds of territoriality in
connection of doctrine of hot pursuit.
Transportation agent trying to sell shipment to parties importing goods. Freight agent entered into
contract with transportation agent (common carrier) to transport goods to this country. If goods
delivered in damaged condition, what is the liability of freight agent or transportation agent who
effected contract?
378 and 379. Solidary liability. Can be sued as carrier.
Why is 349 et seq equally applicable to transportation and freight agent?
Subrogation of rights and obligations of carrier, therefore all 3 are considered common carriers.
If yacht is being used as commercial vessel to transport passengers within Manila Bay area, and
yacht owner transfers it to you orally, is the transfer valid?
Yes, but valid between you two only. To be valid against third parties, must be in written instrument
recorded in the registry of vessels.
Now you have the yacht (oral transfer lang), you possess for four years, but the certificate of
ownership was not transferred to you, is the yacht yours? Is your ownership confirmed?
Yes, possession in good faith for three years with a good title duly recorded (the tissue where it
was assigned) even if certificate of ownership still with previous owner certificate of ownership
need not be held by transferee.
Requisites in order to be a maritime or merchant vessel:
1. not an accessory to another vessel
2. licensed to engage in the transportation of passengers and/or freight
3. by sea (not merely rivers, inlets, lakes, coves or bays) whether in foreign or coastwise
trade.
If you sell a merchant vessel to a third party but you only co-own, what is your co-owners right?
Right of redemption/pre-emption.
If you are to exercise right of redemption, when do you exercise it, before sale or after?
Pre-emption before sale
Redemption after sale
How is right of pre-emption exercised?
Pay share of other co-owner.
How about right of redemption?
Within 9 days following registration of sale
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Transportation Law | Atty. Palacios

Requisites:
1. he is a co-owner
2. vessel sold to a third person
3. within 9 days of recording of sale
4. by delivering price to buyer
On the first voyage of vessel, you thought of selling and you sold it during the voyage. What are
the rights of the buyer?
Freight belongs to buyer and buyer shall pay the crew and other persons who make up her
complement for the voyage

What if sold after arrival at port of destination?

Freight belongs to seller and seller shall pay the crew and other persons who make up her
complement for the voyage
Sale must be written
If vessel arrives in port of SG and master says vessel unseaworthy during trip from MNL to SG and
he feels no longer seaworthy to go on, can master petition court to sell vessel?
Yes.
If vessel has to be sold in foreign land bec of unseaworthiness, what is the reqt before valid sale
can be effected?
Bill of sale executed before Phil consul, register in consulate, there must be finding of
unseaworthiness after inspection
What if after investigation, see that vessel can still be repaired despite testimony of master?
It will not be sold. Have it repaired.
But what if it is not the master but the owner who wants to vessel sold, will he be subjected to
these requirements?
No, he has full rights of ownership. Master only an agent, merely a depositary of the vessel.

01 March 2010
Act No. 2616: Salvage Law
-

Governs act of saving a ship at sea that has been considered as a derelict or one that
has suffered injuries causing her to be unable to complete her navigation and voyage
Salvage embraces two particular descriptions
o An act that saves the vessel from a maritime peril existing at the time when
that vessel was left a derelict or left at sea as consequence of that maritime
peril. Under the law, a vessel subjected to injuries (destruction of parts, hull,
equipment, engine making it unable to complete its voyage determines w/n
subject to salvage)

K Suarez | 3A 2009-2010

When theres salvage presumptions

Vessel left unattended and there is no intention to save
the vessel from the maritime peril that sunk her
o If go back to save, presupposes presence of
master and crew salvage not proper
o Salvage only proper if with consent of master
o If master still on board despite fact vessel
declared unable to navigate, does not mean
vessel can be subject of salvage
Requisites:
Existence of maritime peril that threatens the safety of
the vessel making vessel unable to navigate success
Voluntary service given to vessel by salvor without
objection from owner, master, crew
Complete or partial success of particular salvage
operation
Impt element: presence of maritime peril. If vessel not
threatened by maritime vessel, any service done on the
vessel falls under a service known as towage, not
salvage.
What are maritime perils? Typhoons, collisions, tsunami,
anything that endangers the vessel and makes it subject
to sinking or destruction at sea.
Result if vessel is salved? Salvage services creates a
property in that vessel and that salvage service created
as property becomes a maritime lien attached to the
vessel. If vessel is lost after salvage operation
performed, that particular salvage service considered lost
as well because considered as maritime liens attached to
vessel. If vessel survives, salvage services survive as
well. Salvage not an ordinary service detached from the
thing worked on.
Diff bet salvage op and towage op?
Salvage services to save vessel from maritime peril;
there is a salvor; purpose is to save the chattel from
maritime peril
Towage service to transfer location or venue of vessel
from one place to another; salvor does not exist, what
exists is operator of tugboat that tows from one place to
other; only purpose is to transfer vessel from one place
to other by request of owner
During salvage operation when vessel subject to saving, three
things involved in operation things thrown out of vessel
undergoing salvage operation

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Jetsam things heavy and thrown out and because of

their weight, they sink to the bottom of the sea. Ex:
engine removed from vessel and if thrown out, sinks to
bottom of sea
Flotsam light object placed ex: empty box placed in a
container insulated from water and floats
Ligan/lagan (?) Anything thrown out of vessel
undergoing salvage and thing thrown out is attached to a
buoy (marker at sea, ex: flag)
If a vessel is salved by a third party because considered derelict
(vessel left at sea w/o intention of going back to it bec of injuries
received during voyage) salvor may go and salve vessel w/ things
found on board
Obligation of salvor: soon as thing is salved, there is an
obligation on part of salvor to tow vessel w/ things on
board to nearest shore and report matter to coast guard,
mayor or municipal treasurer and surrender things
salved. Cannot bring it home. He is obligated to
surrender items to people mentioned. Soon as items
received, coast guard/mayor conducts complete
inventory of things salved and put them under guard to
ensure safety. Thereafter, if no claimant of things, there
must be publication of what has been salved in a
newspaper of general circulation in area where salvage
conducted, indicating owner must come forward and
claim for the items. If owner claims, owner obligated to
pay for services conducted by salvor and pay reward
(50% of items salved, after deducting expenses). No
claimant w/in 30d from publication, salved property may
be sold after a lapse of 3y. Entire proceeds of sale first
deposited to natl govt. after lapse of 3y from date of sale
and still no claimant, proceeds divided 50%-50% for govt
and salvor.
Who can claim to be a salvor?
Anyone can come forward and act as salvor of thing left
as derelict as long as no opposition, except:
o Master of vessel and crew because
considered technical agents of owner
No one can salve if there is an objection from captain,
ship owner or ship agent
If salvor did not at all observe first requirement of
surrendering property salved to port authorities as
required by 3 of salvage law, he cannot claim
No pure no pay contract (?) Contract acceptable in cases of
salvage operation. Salvor services accepted, if he is able to salve,
he will be given reward. If he is not able to salve, not even

K Suarez | 3A 2009-2010

expenses will be reimbursed. There must be a successful salvage

of property.
Terms and conditions must be followed as long as they
do not contravene provisions of salvage law
If during salvage operation, owner forced to enter into contract w/
salvor because of anxiety that property needs to be salved, and
reward in k entered into at time vessel needed salvage services is
excessive from that which might be regularly required, the particular
salvage service stipulated in the k entered into may be questioned
in court and impugned on basis of excessive salvage reward or
services
Who must bring action? Vessel owner and ship agent.
If proven excessive, new salvage amount will be
stipulated on and forced on the parties to observe
Bases of impugning charges by salvor during operation?
Skill of salvor not everyone has the expertise to salve.
Equipment used
Value of equipment sometimes equipment is in form of
other vessel and with aid of other floating equipment
value of other equipment, difficulty encountered by
salvor, length of operation, expenses incurred, expertise
put in by salvor determining factor to determine w/n
amount stipulated excessive
It is the RTC that has jurisdiction to determine the
reasonableness of the contract using guidelines in
litigation
Suppose there is a salvage operation that used another vessel, w/
a master and crew on board, operation successful, salvage claim
filed. What should be the division of the salvage reward? What is
the computation to determine salvage reward?
If vessel salved by another vessel, value of vessel salved
has to be determined. Out of that value, resale value or
market value of vessel, expenses incurred deducted
(incl. salaries of crew and master prior to salvage
operation). After deductions from value of vessel,
whatever balance is split into 2, 1 part for owner of
vessel, other part considered reward for salvor.
Ex: is reward to be given to salvor (2M). out of the 2M,
if a vessel was used in salvage, of 2M (1M) should be
given to owner of vessel salved. other half, haaaaa wait
check this. Other half (500k) is for master, other half
(500k) for members of crew.
Existence of maritime peril must be real/actual/proven

Comm. Act No. 146: Public Service Act

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Transportation Law | Atty. Palacios

The law that dictates issuance of certificate of public convenience to operate a sea
carrier/land carrier/air carrier.
If sea carrier, Maritime Industry Authority issues certificate of public convenience
If land carrier, Land Transportation Franchising and Regulatory Board issues certificate
of public convenience
If air carrier, Civil Aeronautics Board issues certificate
What is a certificate
o Cert issued to applicant to operate unit that he would like to use to conduct
public service
o Lifetime of cert is 50y renewable for another 50y
Jurisdiction of Regulatory Boards
o Require board to issue cert of pub convenience. It is w/in its jurisdiction to
issue the cert upon application of
o Prescribe definite route or line or territory of operation
o Prescribe schedule of trips or operation
o Prescribe rates to be charged
o To do other acts provided for in the Public Service Act
Entities exempted from applicability of PSA (no need for cert of pub conv.)
o Warehouses
o Vehicles drawn by animals, bancas moved by oars/sail, tugboats, lighters
(tugboats and lighters w/ no engines)
o Airship w/in Phils wrt fixing of rates on freight and passengers
o Radio companies, except wrt fixing of rates
o Public service owned/operated by govt
How is a cert issued to an applicant to operate a public unit to serve
o Application
Filed by a Filipino citizen/corporate entity 60% owned by Filipinos
[citizenship essential in granting cert]. if dummy is discovered, cert
is null and void
Route applied for must need public service to be served by
applicant
Ex: if route is for MNL to Baguio and app seeks 10 units,
the particular route must need at least 10 units applied
for. If area is saturated by present operators, present
operators may oppose on ground no need for addtl units
There must be public need established by testimonial
and documentary evidence. Passengers actually using
line must testify that they need addtl units on the line.
Financial capacity of applicant
To operate the # of units applied for in the line
Established through bank deposits. In some cases,
applicant brings cash to board to exhibit financial
capacity. Some cases, bank guarantees necessary.
Amounts required amounts necessary to maintain

K Suarez | 3A 2009-2010

management and operation of units if granted. (salary,

operational needs)
Capacity to acquire brand new units (# applied for) ready
to be operated on the line applied for
Preparedness of units, preparedness of finances for
operations
Evidence that grant of units applied for will not result in ruinous
competition
In our jurisdiction, any area subjected to issuance of cert
is deemed to be operated on by a present operator.
Ex: if you seek franchise for 10 units for MNL to BGO,
expect that there will be opposition by current operators.
Law does not authorize grant if grant results in ruinous
comp. between current op and applicant
Burden of proof of ruinous competition: oppositor. He
must prove that he has capacity to satisfy current need in
the line and that to grant another franchise as
competition results in ruinous competition precisely to his
prejudice. If this is proven, application denied. If not,
provisional cert is granted for a certain period to
determine w/n operator can operate and this does not
result in ruinous comp. if there is normal operation, no
ruinous comp., Permanent certificate of public
convenience issued for 50y, renewable for another 50y. if
ruinous, provisional cert cancelled
Application must be served on all present operators operating in the
line
Expect: elements that have to be specified in an application for
issuance of cert of pub conv. And explain each. (6 reqts)
Must be published
Publication is notice binding against whole world if
operator served with notice and he did not oppose w/in
period specified
The rest of provs procedural.

Code of Commerce, contd.

Art. 576. What are not included in sale of vessels?
Fuel, ammunitions, anything detachable from vessel
If vessel sold during voyage, all freight goes to buyer, but buyer compelled to pay all salaries of
crew
If vessel sold after reaching port of destination, all freight goes to seller, but seller answers for
salary of crew and complement unless diff arrangement between buyer and seller

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If vessel discovered unseaworthy upon reaching intermediate port and master feels vessel cannot
complete intended voyage, what is the duty of the master?
If Phil flag vessel, master who discovers unseaworthiness bec of physical condition of vessel,
cannot advertise vessel for sale. Master/capt must notify consul where vessel is found and advise
that he does not intend to continue w/ voyage bec of condition and possibly have vessel sold if
vessel found unseaworthy.
Duty of consul: have vessel examined by expert. If vessel found repairable, vessel must be
repaired and will be asked to continue voyage. If cannot be repaired bec damage or
unseaworthiness costs owner more than value of particular vessel, vessel may be permitted to be
sold but value of vessel w/c should be paid by buyer should not be less than of value of vessel.
If less than , vessel cannot be sold at that instance. It must be repaired and allowed to continue
voyage.
If vessel sold at public auction as consequence of unseaworthiness, what is the consequence of
claims of creditors against vessel?
All claims of creditors against vessel deemed extinguished under Art. 581.
Compare w/ Sec 17 of Ship Mortgage Decree. Under Ship Mortgage Decree, vessel sold at public
auction does not extinguish pre-existing claims against vessel. But there, sale is by reason of court
order that owner violated terms of mortgage or did not pay maritime liens. Thus, pref of claims incl.
claims of creditors
Code of Comm does not contradict Sec 17, bec in Code of Comm, reason for sale is
unseaworthiness. If unseaworthy, can be sold and notice sent to pre-existing creditors and they are
allowed to participate in auction sale. Thats why if sold despite their participation (did not win),
claim deemed extinguished. Sale is not due to elements of Sec 17 of Ship Mortgage Decree. In
Sec 17, claims removed from vessel (sold free from liens) and transferred to proceeds and they
are allowed to participate in distribution of proceeds.
If vessel sold voluntarily, creditors claim against vessel continues until vessel continues to port, or
time 3m period has expired from registration. Creditors still have the right to attach vessel until
vessel returns to port or 3m after registration of sale because they still have pre-existing claims.
586 and 618!
Under 586, ship owner and ship agent solidarily liable for two acts of master and crew: (1) act wrt
care and custody of cargo and care and custody of passengers on board. Any negligence in care
of cargo/passengers resulting in injury to passengers/loss/damage to cargo, ship owner and agent
solidarily liable. (2) obligations entered into by master of vessel for repair, equiping, provisioning of
vessel obligation of owner and agent solidary.
If act commited by master/crew resulting in loss/damage/injury, action is not against master/crew
but against owner and agent because of 618. Liability for acts of master/crew is with ship agent
and vessel owner. Ship agent and owner of vessel are persons liable to third parties. Only ship
owner and ship agent or any one of them is included as indispensable parties. Master/crew are not
to be included as parties. If they are included, MTD, no cause of action against him under 618.
618 is the basis of action against ship owner/agent. Under 618, first ground for solidary liability is
loss/damage/injury w/c may arise from robbery or theft committed on board, even if committed by
K Suarez | 3A 2009-2010

crew. But in 618, master/crew liable to ship owner/agent. Can be sued for purposes of
reimbursement for whatever amount owner/agent is made liable to third parties.
Ex: A and B (owner/agent) sued by X for damage to cargo by acts of master/crew. Once action
filed, A and B examine evidence, what is cause of action. If there is illicit act or negligence of
master, A and B may file third party complaint against master for recovery of whatever A and B may
be held liable by court to X. Direct action of X is against A and B.
Ship agent party that actually represents vessel where vessel is found .party that supplies
provisions to vessel.
Code of Comm, ship agent stands for owner. Has legal capacity to act in behalf of owner. If ship
agent sued on behalf of owner X, as if owner X was sued. Agent solidarily liable with owner X.
As consequence, what acts are covered by liability of ship owner and agent?
Culpa aquiliana and culpa contractual [both in NCC], including maritime tort [in Code of Comm,
falling under law on tort]
Art 618, 8 grounds basis of action against owner and agent.
1. Capt. Civilly liable to ship agent and latter to third person who may have made contracts
with master of vessel. For damage suffered by cargo/vessel etc etc.
losses/fines/confiscations at port of departure/destination where master/crew
responsible for such. Damage caused by mutiny/misuse of powers/non-fulfillment of
duties under 610 and 612. Acts committed by master/crew reflects upon agent/owner.
Liability caused by deviation. Entering a port which is not the port of entry.
Can ship agent be sued alone?
Yes. Ship agent has his own legal personality representing ship owner and vessel.
Can he sue on behalf of ship owner?
Yes. He maintains separate personality from ship owner.
When can there be an action filed against ship agent?
Agent enters into contract with shipper/consignee/third party and third party believes he only
transacted with ship agent. Does this bind ship owner? Yes, as long as there is proof that subject of
action arose from operation of vessel for which agent represents owner. If usage in accord w/
transaction, agent can be sued w/o owner. If circumstances prove that liab is with agent.
If vessel sued by cargo owner/passenger and action filed against agent/owner on basis of
actions/obligations incurred by master/crew. What protection does law provide for agent/owner?
587 liability of owner/agent can be limited to his interest in the vessel. So limitation of liability in
587 exempts owner/limits liab of owner wrt his interest in the vessel by abandoning vessel and
surrendering it to claimant.
Ex: Vessel X causes loss/damage to cargo. Owner/agent both sued for acts of master. Both
owner/agent may limit liab to extent of their interest in vessel. This is the real and hypothecary
nature of maritime law. Liability is co-extensive with their interest in the vessel. But they must
abandon and surrender vessel to claimant for 587 to operate.
Can that be done by owner/agent as soon as there is claim for loss/damage to cargo or
injury/death at the time there is claim for recovery of damages suffered?
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Transportation Law | Atty. Palacios

Once there is a claim, agent/owner may immediately seek refuge in 587 by notifying claimant that
he is limiting his co-extensive liab over vessel. w/n abandonment is accepted, liab is limited. In fact,
acceptance of abandonment not even necessary.
If nothing to abandon bec vessel sunk, is there a ground for abandonment under 587?
Depends. What is the ground for loss?
If loss due to collision from which there is loss/damage/injury, under 837 (rule on collision), owner
may limit based on collision
What happens if prior to loss of vessel/maritime peril, repairs, provisioning, equipping had been
done and after peril, abandoned/lost? Does the limitation include repairs?
As a rule, no. If repairs prior to voyage where vessel subsequently lost, abandonment limited to
claims of cargo owners. Repairs not included because repairs are based on contractual obligation.
They survive loss of vessel.
If during voyage, vessel malfunctions or needs repairs/provisioning, goes to intermediate port and
repaired there. Leaving port, meets maritime peril. What is consequence? Can owner limit liability
under 587, including repairs?
Yes. The repairs are now considered maritime liens attached to vessel. Loss of vessel means loss
of repairs, provisioning, equipping.
Occurrence of loss wrt repair is important. Must know when loss occurred. Before repair or after
repair? Before voyage or after start of voyage?
What is the extent of the limitation of liability of owner/agent in limiting liability to co-extensive
interest? Will it include all claimants against vessel so that even if vessel abandoned to one
claimant, would other claimants be affected?
Depends on circumstances.
Ex:
X ------------------------ Vessel V-1 ---------------------- Port of Destination
(owner)
5M value
Shipper/Consignee/Passengers
X1
8M claim
(agent)
X and X1 solidarily liable for acts of master that caused loss or damage or for obligations entered
into for repair etc.
When V-1 arrives at port of destination, cargo owners/passengers complain. SPC file complaint
against X and X1. X and X1, standing as one or either one wants to limit their liability to SPC. What
can they do? Invoke 587. 587 limits liability to extent of interest of X and X1 to V-1 (value 5M).
claim 8M. so X and X1 want to limit so they wont be liable for the addtl 3M.
X and X1 to notify SPC that they are abandoning V-1 and surrendering vessel to them. SPC did
nothing, no rejection, no acceptance. Does 587 work against SPC? Yes. As long as there is
abandonment and surrender. When there is abandonment and surrender under 587, X and X1
K Suarez | 3A 2009-2010

limited their liability to 5M. SPC initially could have claimed 8M, but since X and X1 limited, can
only claim 5M.
What if theres SPC2, filing a claim after abandonment. What is the effect of abandonment wrt
SPC1 and SPC2?
Abandonment binds both SPC1 and SPC2 because abandonment is wrt operation of V-1. This is
how real and hypothecary nature operates. If SPC2 files after, X and X1 can MTD against SPC2
because the abandonment by X and X1 was for operation of V-1, they no longer have interest over
V-1 so no more.
If value of V-1 10M instead of 5M and claim SPC1 is still 8M. V-1 abandoned and surrendered to
SPC1. V-1 will be assessed as to actual value. If established 10M, excess of 2M can go to SPC2
because 10M is the extent of X and X1. It is up to SPC1 and SPC2 to litigate if SPC2 entitled to the
2M. SPC1 and SPC2 can interplead (yata kinda spaced out) possibly a ground to claim preference
of credit based on Sec 17 of Ship Mortgage Decree (idk idk he might ask this in exam)
Suppose SPC3 files but wrt operation of V-2, another vessel. Can X and X1 make use of
abandonment of V-1?
No, transaction with SPC3 is wrt V-2. Real and hypothecary nature does not apply because basis
of action is not based on the vessel which was abandoned and surrendered.
Instances under which owner/agent may NOT abandon vessel
1. if carrier is not a common carrier (private carrier)
2. if loss or damage occurred not at sea but at rivers or bays (not a maritime claim)
3. if claim wrt repairs provisioning equipping occurring before the vessel began voyage
(basis of claim is contractual)
4. if loss/damage due to actual fault or privity of owner of vessel (actual fault of
owner/agent not fault of master/crew)
Who can avail abandonment/surrender/Cases where there CAN be abandonment
1. ship owner/ship agent not in actual fault
2. co-owners of vessel (Art. 590)
3. ship owners in cases of maritime collision (Art. 837)
Suppose after loss due to maritime peril, owner files an action for insolvency, thus trying to avoid
liability to claimant, while agent is solvent. Can claimant claim against agent?
Yes, owner/agent has one personality. Agent responsible by acts of owner.
Meaning of husbanding agent?
An agent that exercises functions of agent to create more freight earnings for vessel to sustain its
operations. Why husband? Because obligation of husband to provide for family.
Is liability of owner/agent under 586 limited only to acts of master wrt care of cargo/passengers and
obligations created by him wrt repairs etc?
No. Refers further to any illicit or negligent acts of master wrt his carriage of cargo/passengers.

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Transportation Law | Atty. Palacios

Ex: master careful in care of cargo on board and of passengers but not careful in navigation of
vessel. Consequently, collision with other vessel. Owner/agent solidarily liable for the collision
because they are liable for acts of master regardless of involvement of care over cargo.

Next meeting: Warsaw convention and Code of Comm.

08 March 2010
Warsaw Convention
Transport by air
Unification of rules relating to international transport by air
Our jurisdiction: Feb 9, 1951
Application:
o All international transportation of persons, baggage or goods performed by
aircraft for hire.
o If transport is gratuitous, still covered by Warsaw Convention
Speaks of international carriage
o But note ticket issued in domestic carriage governed by International Rules
on Transport of Passengers by Air of Warsaw Convention paramount
clause!
o If no paramount clause, Warsaw Convention will only apply to international
transport.
o Similar to COGSA (Chua Kuy case) applies only to foreign trade unless
paramount clause
When is there an international transport
o Where the port of departure and port of destination are found in two high
contracting states in the convention
Ex: Trip from MNL to BKK, where Thailand also a contracting state
o Where the port of departure and the port of destination are found in one high
contracting state but there is a break during the trip to another port found in
another sovereign state, regardless of whether that sovereign state is a
contracting state or not
Ex: Trip from MNL to DVO but break before reaching DVO, to
Brunei regardless of Brunei being a contracting state or not. As
long as particular area where break is found is a sovereign state.
Qualification is must be sovereign state
What documents are covered by an international transport by air?
o Passenger ticket contract of carriage between carrier and passenger
o Baggage check
o Airway bill contract of carriage between carrier and owner of goods/baggage
o Whereas in COGSA, (1) ticket issued by carrier to passenger and (2) bill of
lading for the goods.
Who are parties involved in a transport by air
o Carrier
o Shipper/consignor
o Consignee
K Suarez | 3A 2009-2010

o Whereas COGSA, (1) passenger, shipper, carrier, consignee

Is issuance of airway bill necessary to establish a contract of carriage between carrier
and shipper/consignee?
o Yes, airway bill is a document that establishes a k of carriage between carrier
and owner of goods.
o Document establishes carriers receipt of goods and the condition of goods
loaded on board aircraft.
Can carrier accept goods without issuing airway bill?
o Yes it may, but it will be liable to shipper/consignor if it accepts without issuing.
Can it deliver to consignee w/o asking to surrender airway bill?
o Yes, but carrier liable to shipper for misdelivery. Liable also to real person who
has lawful right to goods by virtue of fact he holds airway bill.
Therefore, carrier must always issue an airway bill and in delivering goods to consignee,
it must ask consignee to surrender his copy of airway bill. If delivery w/o surrender, real
owner may appear later on, making carrier liable to shipper and real owner
Significance of airway bill?
o Evidence of conclusive contract between parties. Receipt of goods and
condition of goods as described.
o Similar to B/L in sea carriage
Rights of shipper/consignor
o Consignor has right to dispose goods by withdrawing them from port of
departure or destination
o Right to stop them in course of journey
o Right to require carrier to return the goods to the port of departure
Liability of carrier if it does not demand for surrender of airway bill
o If it obeys order of shipper/consignor to dispose of goods w/o requiring
production of airway bill, he will be liable, w/o prejudice to right of recovery
from consignor, to any party in lawful possession of the airway bill
Here shipper endorses airway bill to a holder in good faith and for
value
When does right of shipper/consignor to dispose of goods cease?
o From time when right of consignee begins from the time goods are delivered
to the consignee
If consignee refuses to exercise his rights as consignee, consignor resumes his right
over the goods. Thereafter, consignor has right to exercise his rights and obligations as
such under the Warsaw convention
What are the rights of the consignee when goods have arrived at port of destination?
o On arrival of goods, consignee shall have the right to demand of carrier to
deliver the airway bill and the goods to him
What airway bill is this? The one in the possession of the carrier.
Consignee wants to compare description of goods in the airway bill
in possession of carrier and that in the bill in his possession
o If required, must pay transportation charges and expenses to the carrier upon
surrender of airway bill and goods
Is there a duty on the part of the carrier to notify the consignee of the arrival of goods
under the convention?
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Transportation Law | Atty. Palacios

Unless otherwise agreed upon, carrier is obligated to give notice to consignee

upon arrival of goods that the latter has arrived.
o Whereas in COGSA, no obligation to notify consignee this is why if you ship
goods from US by sea to MNL, all you have to do is watch for publication of
the arrival of the vessel from NY. It is the newspaper which gives notice of
arrival of goods, not the carrier.
When is the consignee given the right to enforce the conditions of the contract (airway
bill)?
o If carrier admits loss of goods, or if goods not delivered before expiry of 7
days from date when goods are supposed to arrive, consignee shall be
entitled to put into force against carrier, his rights under the k of carriage
After expiry of 7d, consignee must give notice to carrier if goods
arrived in damaged condition or not received at all
In this respect, period of notice is
in case of damage, consignee must complain to carrier
upon discovery (after lapse of 7d when goods are
supposed to arrive) within 3d of receipt of baggage,
where baggage not in good order condition. Where
nothing has been delivered, same period applies if
subject is baggage.
If subject is goods, he has 7d from date of receipt or nondelivery of goods.
If there is delay in delivery of goods and baggage and
such delay causes loss, then he has 14d from date
goods should have been delivered.
Consequence if no notice given by consignee to carrier?
o Consignees right of action against carrier is barred for his failure to comply
with strict enforcement of notice requirement.
o This is similar to prov of Art 366, Code of Comm on domestic trade failure to
file notice of loss or non-delivery bars action. If notice filed under 366 but pay
transpo charges, deemed barred as well. domestic trade
o If there is a paramount clause in the k of carriage, this notice requirement
applies both to international and domestic trade. If no paramount clause, only
international trade.
What is the liability of the carrier to passengers?
o Carrier liable in damages for death or injury to passengers only if caused on
board, in the course of embarkation, or disembarkation. (When passenger on
board carrier; at time passenger is boarding carrier; or at time when
passenger is disembarking)
o if carrier no longer there, carrier not
o Under COGSA, no similar thing bec only applies to carriage of goods, not
passengers
With respect to cargo, liability of carrier wrt baggage and goods begins from time during
which baggage or goods are in the charge of the carrier, at the airport when goods are in
the charge, or on board the carrier, or in case of landing, outside an airport, or in any
other place whatsoever as long as carrier has possession and custody of the cargo
o

K Suarez | 3A 2009-2010

Distinguishing factor/vital element is carrier in possession and custody of

goods when they were damaged or lost? If so, it is liable from the start of the
possession up to the time that the goods have reached/been delivered to the
consignee
o Under COGSA, tackle to tackle rule liability of carrier begins from time when
goods cross one side of vessel during loading, and crossed other side of
vessel at port of destination. Anything that happens after crossing one side is
liability of carrier. Anything before crossing, not liable. Anything on board,
liable. So under COGSA, possession and custody also important.
Suppose goods are discharged from air carrier at port of MNL, goods covered by airway
bill issued by Air France w/c says Air France has obligation to transfer goods to CEB by
transshipment by air, land or sea. After goods leave Air France at NAIA and goods
delivered to domestic carrier, goods damaged. Is Air France liable under Warsaw
Convention?
o In cases of transshipment of goods, there is liability on part of carrier if carrier
assumes obligation to transport the goods to its ultimate destination.
Obligation to transship presumes custody and possession of goods. Whoever
actually transships is considered an agent of the principal carrier so that in
cases of loss or damage, action is against the principal carrier. If principal
pays, such principal can file against transshipping agent right of recourse
o Under COGSA, no such provision re transshipment, nor any provision that
principal carrier has right of recourse. But same principle, transshipping
carrier becomes an agent of the principal carrier so that in cases of
transshipment, bill of lading w/ transshipment clause is the principal k of
carriage, and the b/l issued by the interisland vessel is not a k of carriage but
only evidence of receipt of goods and evidence that goods belong to party
who shipped goods (receipt and title over goods, not k of carriage. Principal k
of carriage is the transshipment b/l)
What are the defenses available to carrier under Warsaw convention?
o Proves that he or his agents have taken all necessary measures to avoid the
damage or it was impossible for him or his agent to take such measures
So if carrier introduces evidence that he or his agents took all
necessary measures to avoid loss or damage, although impossible
for him to have taken such measures, it is a defense to avoid
liability.
This is a general defense. Under COGSA, equivalent defense is
taking extraordinary diligence to properly equip, man or supply the
vessel.
o Error in piloting
Ex: pilot of Korean Air made a mistake in identifying the airports, he
went to another airport
o Error in the handling of the aircraft
Ex: mistake in handling such as when he uses take-off equipment
instead of landing equipment
o Error in navigation
o

Page 11 of 20

Ex: instead of landing in MNL, landed in CEB mistakenly causing

loss or damage or injury
o All of these errors should be accompanied by separate evidence that the
carrier or his agents had taken all necessary measures to avoid the
accident/incident or that taking of such measures was absolutely impossible
Is there liability on the part of the carrier if there was contributory negligence on the part
of the passenger?
o Yes, there is liability but it is reduced appropriately by the degree of
negligence contributed by the shipper/consignee in the transport of goods
o Under NCC or Code of Comm, there is a reduction of liability as well if
contributory negligence.
Is there limitation of liability?
o Yes, for transportation of passengers, liability of carrier for each passenger is
limited to 125k francs if paid in installments not to exceed 125 francs.
If passenger simply injured, amount recoverable is 125k francs
But this prov amended to increased
o By special contract, carrier and passenger may agree to a higher liability. May
stipulate an increase in terms of freight if goods
o For checked-in baggage, 250 francs/kilogram. Weight of cargo is determining
factor. Unless upon delivery of goods, consignor has declared a special value
of goods and paid additional amount if required
o If passenger carries valuables w/o informing/surrendering to carrier and
something happens resulting in loss/damage, liability of carrier per passenger
w/ undeclared valuables 5k francs (amended now)
o Franc = French francs of 65.5 mg of gold at standard finest 500 francs of
standard currencies (ha?)
o Under COGSA, 500 US$ per package per unit unless higher valuation
declared in b/l
o Under NCC, Code of Comm, theres limitation also but it may not be exercised
by carrier when
Actual fault on part of carrier in carriage and disposition of goods
Higher value of goods declared by shipper to carrier upon issuance
of b/l, in w/c case declared amount is the liability
Carrier violated agreed route deviation. And during deviation
there was loss or damage
Carrier due to his own fault willfully delivered goods in delay
Can they be used to attack limitation of liability in Warsaw
Convention or COGSA?
Hierarchy of application of laws in our jurisdiction. (1)
NCC, (2) Code of Comm, (3) Special laws. Since the
grounds are not found in the conventions, and if the
conventions are in force in our jurisdiction, the NCC
provisions may be used to attack the limitation of liability
under the conventions!

K Suarez | 3A 2009-2010

Transportation Law | Atty. Palacios

Ex: if goods carried from foreign port to MNL by a foreign

aircraft and it did not follow route agreed upon. In the
process, it was shot down w/ passengers, he cannot
enjoy limitation of liability because he breached agreed
route and under NCC, limitation of liability cannot be
availed of when there is breach of agreed route.
Is there a bar to limitation of liability under Warsaw Convention? [when limitation cannot
be availed of]
o If damage caused by willful act or misconduct of carrier or default on carriers
part which in law is considered willful misconduct
If done by carriers agents, as long as they are agents and done in
the course of their employment, the bar may be used as well
Notice of damage under Warsaw
o 3d
o 7d
o 14d
Notices under COGSA
o Immediately upon delivery
o w/in 3d when goods delivered or should have been delivered
Differences in notice under Warsaw, failure to give notice is a bar from any claim.
Under COGSA, not a bar but prima facie presumption arises of delivery in the condition
described in the b/l.
Venue of action
o The plaintiff has the option of filing an action against the first carrier and even
against the last carrier
Court of the domicile of the carrier as long as found in the territory
of one of the high contracting states
Court existing in a court of a contracting state if such is the place of
business of the carrier, or where a carrier has a place of business in
the particular territory where the k of carriage is issued, court at
place of destination
Procedure
o Lex fori
Period of action
o 2y from the date of arrival at destination or from date on which carrier would
have arrived or date on which transportation stopped (such as when carrier
crashes)
o Under COGSA, 1y from delivery or when goods should have been delivered.
o Under NCC, 10y written contract, 4y quasi-delict/tort, 6y oral contract
If action filed against carrier, action to be filed by shipper is against first carrier who
carried the goods for him
o Ex: Shipper hands over to Phil Airlines, even if there is a change of carrier
later on, shipper must file against Phil Airlines regardless of changes
If action filed by consignee, action against carrier who delivered to goods to him, the last
carrier if there has been a change of plane
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Transportation Law | Atty. Palacios

Ex: Air France receives it in MNL, but consignee receives it from Iberian Air.
Then consignee files against Iberian Air.

Exam: possibly starting with air carrier, then ends with sea carrier. So two conventions will apply,
Warsaw and COGSA.
Code of Commerce:
Distinction in abandonment in maritime commerce v. insurance
Done by whom
In maritime commerce done by owner of carrier under Art 587
Marine insurance done by insured
Purpose of abandonment
Commerce limit liability of carrier to consignee/owner of goods because his liability is coextensive with his interest in the vessel
Insurance to surrender the carrier to the insureR if there is a total constructive loss or if loss
exceeds of the value of the carrier. As soon as done, insureD is given right to recover insured
value from insurer
Subject matter
Commerce vessel
Insurance may cover not only a vessel but also goods covered by the insurance, can be a
shipment that is abandoned, not necessarily the carrier
Art 588.
If captain or master performs his job on board carrier, in excess of his powers and privileges under
Art 610, 611 and 612, there is no liability on the part of the carrier act done beyond powers given
by principal to agent. Subject to one exception if act redounds to benefit of owner, act must be
acknowledged as for owner and owner liable
If there are two owners of a vessel, A and B, and action is filed against one of them. Can the action
include attachment of vessel owned by A and B?
As a rule, vessel may only be attached in respect to interest of a particular owner but it cannot
affect navigation of vessel. Common carrier cannot be attached. Such action will not affect
navigation of the carrier. It may be a lien on the carrier but it will not prevent carrier from navigating
because character of carrier is for public carriage, serving public interest.

Legal capacity to engage in commerce, registered with the Dept. of Trade and Marina as a ship
agent. Under 586, liab of ship agent is solidary with vessel owner wrt acts of captain, goods carried
on board and vigilance over passengers, extending to repairs, equipping and provisioning entered
into by ship agent.
What are the functions of a ship agent?
Administers vessel, takes care of chartering vessel and attends to voyages done
Where does the ship agent exercise these functions?
At his office. Not on board vessel. When vessel leaves port, ship owner/agent loses control over
vessel. Therefore they can only communicate wrt administration, chartering and voyages
undertaken by vessel. They do not necessarily have to be on board.
Ship agent represents ownership of vessel and may, under his own name and personal capacity as
agent, file an action for and on behalf of the ship owner. He can be sued in representation of the
ship owner and his liability is solidary with ship owner.
Arts 597-598.
Who has the obligation to appoint and select crew members?
Ship agent must select and come to agreement with crew along with captain. Agent contracts in
name of owner who shall be bound in matters re repairs, equipping, provisioning and navigation of
vessel.
Is there an exception to powers of ship agent?
Yes, he cannot charter a vessel unless he has been authorized. He cannot order a new voyage
unless he has been authorized. He cannot insure the vessel, unless he has been authorized.
Consequence if he does the three acts?
If act redounds to benefit of owner, act binds owner despite fact it was done w/o authority. So
determining factor is did it redound to the benefit of the owner? if it did, owner is liable because
agent acts for and on behalf of owner.
Art 603.
Once voyage has begun, as a general rule, captain of vessel/ship agent cannot dispose of the
employment of the captain or crew on board for any reason whatsoever, most especially if the
contract is for a fixed period or for voyage. In that case, there is liability on part of carrier wrt
payment of salary of members of crew and captain up to point where they have been contracted to
travel.

Liability of co-owners to a vessel owned jointly by them may give co-owner a right to abandon his
interest in the vessel so as to abandon under 590 as long as he abandons before a notary public
abandonment and surrender of interest must be done in writing in a public instrument executed
before a notary public

Exceptions when they may be dispensed with even during voyage

1. insubordination in serious matters
2. theft or robbery on board
3. habitual drunkenness
4. due to malice or negligence, they have caused damage to cargo

Art 595.
What are the qualifications of a ship agent?

Art 608.
In the event of voluntary sale of vessel, what is consequence?

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Transportation Law | Atty. Palacios

Contract between ship owner and master automatically deemed terminated. However, assurance
to pay unpaid claim of captain is given preference that it should be respected in the sale of the
vessel. Hence, the assurance is in form of a maritime lien attached to the vessel principally to
secure liability of ship owner to master and crew of vessel.
When can master and crew in this case avail of the particular security of indemnity?
Where action is filed by them against owenr who failed to pay emoluments and owner becomes
insolvent at time of filing of action, then right of action of master and crew extends to a right of
attachment against the vessel to enforce their maritime lien to protect their unpaid emoluments.
Requirements wrt masters and crew who are to man vessels flying Phil. Flag
1. All Filipino citizens
2. With legal capacity to perform work, skill, qualification
Peculiar characteristics of ship captain of Phil registry
1. general agent of vessel owner
2. technical director of vessel
3. represents country of the flag of the vessel of which it flies
Art 610. Powers inherent in captain/master
1. appoint and make contract for engagement of crew in absence of ship agent
2. command vessel and direct her to her destination
3. impose correctional discipline on board and punishment wrt those who violate rules on
board
4. enter into contracts for charter of vessels
5. provide and equip vessel and to make repairs of vessel, its equipment at ___ to make it
seaworthy
6. something
If a Phil registered vessel is at a foreign port and captain unable to secure funds from owner, what
is the order captain may secure funds?
Art 611.
1. from consignee of vessel or correspondent of ship agent
2. from consignee of cargo or persons interested in cargo
3. promissory note on ship agent
4. borrow money on loan on bottomry
a. where hull of vessel is offered as security
5. sell sufficient qty of cargo to satisfy needs of vessel
Art 612. Inherent duties in office of captain
At least 11 obligations
1. have on board a detailed inventory of the hull, engines, rigging, tackle, stores and other
equipment
2. have on board navigation certificate certificate of ownership and navigation
3. manifest of people who make up the crew
4. manifest of passengers
5. health certificate (of members of crew and passengers)
K Suarez | 3A 2009-2010

a.
b.

necessary bec when vessel enters port, this is the first cert he presents
w/o this, crew and passengers not allowed to disembark considered
menace to people of port
6. certificate of registry of vessel
a. each vessel flying a diff flag has diff ways of protection. Vessels owned by US
companies flying US flag have diff protective measures wrt vessels flying Phil
flag because of power of country that owns the vessel
7. complete list of obligations incurred at the time
8. complete list and copies of charter parties, invoices and manifest entered into by ship
owner
9. report of vessel surveyor at port of departure
a. that vessel seaworthy and cargo-worthy
10. copy of code of commerce
a. if no code of commerce, heavy penalty, vessel may even be petitioned to be
stripped of license to operate for failure to carry code of comm.
11. Three books:
a. Log book most impt. Records everything that happens on board. If event not
found in log book, it is good evidence to disprove claim of plaintiff against
carrier.
b. Accounting book
c. Freight book
Master must always remain on board
1. ?
2. loads passengers/cargo
When may not be on board?
Serious causes such as when someone is ill, or cases of official business
Captain must be last person to leave vessel and determine whether he and members of crew
should leave/abandon vessel. Abandonment may only be done after conference and majority
decision to abandon. If there is a decision to not abandon, captain obligated to respect. If decide to
abandon bec of maritime peril, captain must be the last to leave. Captain must bring with him
logbook, and all other goods which may be of value to owner
What is a maritime protest?
Declaration given by master after occurrence of loss/damage at sea that damage to goods or
carrier or injury to passengers due to fortuitous event and not by reason of his negligence.
Disclaimer to disclaim liability for loss or damage
When is a protest a condition sine qua non in order to achieve a particular purpose?
Maritime protest absolutely necessary as condition sine qua non in event of collision of vessels and
there is a claim for damages arising from collision under Art 835. If no protest, no claim for
damages may be sustained.
10 March 2010
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Transportation Law | Atty. Palacios

Marine protest a declaration by the master of the vessel that the loss or damage to the cargo or
vessel was due to a fortuitous event and not due to his own fault.
The declaration is a disclaimer. Without it, presumption is damage to cargo was due to
fault of carrier.
Most important under Art 835, cases of collision. When action filed for collision damages,
action cannot be filed in court without protest
Protest must be filed within 24h from collision
Protest is a condition sine qua non for collection of collision damage
Master
-

In charge of administration and navigation of vessel despite vessel

Pilot directs vessel in entering/leaving port. Government regulation that any vessel that
enters port to discharge cargo and passengers must be led to the port by a pilot
Under Code of Commerce, what is the liability of the owner when it is under the charge
of a pilot when the vessel collides with another causing damage?
o If theres a pilot, liability of owner continues despite fact that vessel is
navigated by a pilot at the time of occurrence of maritime disaster because
master of vessel who stands behind pilot has full control over pilots actions
master can still take control over pilot.
o Reprieve of ship owner: Owner has a right of action against the pilot and
pilots association for recovery of damages owing to error in navigation by the
pilot
o In the event of damage as consequence of pilots error, under Art 618, right of
action of claimant is not against the pilot, but against owner of vessel and
owner has a right of action against pilot. Owner is always left with
responsibility because if pilots association or pilot not financially able to
respond to losses incurred, owner is left holding an empty bag.

Art 614
If captain accepts that he should navigate or administer a vessel but fails to do so, captain liable for
failure to fulfill undertaking. Liability continues except when he is able to justify inaction owing to
occurrence of fortuitous event (only exception)
Art 615
Can the captain have himself substituted by another in the navigation and administration of vessel?
Unless with the consent of agent or owner, master cannot have himself substituted by another
person even if that person is more qualified. Engagement of the particular master to navigate a
vessel due to his contract is based on trust and confidence. For him to have himself substituted
without prior consent is a breach of trust. He will be liable for all damages that will accrue as a
result.
Consequence: substitution void, master liable if there is loss or damage to cargo/vessel as
consequence of substitution.
Art 616.

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If during voyage, master discovers that provisions of vessel wrt food is running out, master, owing
to his position as technical director of vessel, has right to direct vessel to nearest port to get
provisions to sustain the crew as needed to direct voyage.
Exception: If captain discovers, before directing to nearest port, that there are commercial people
on board who have the provisions necessary, he can direct that provisions on board be
surrendered to the vessel at carriers cost. Cost is market value of goods at port of destination.
Fuel: if master unable to direct vessel to destination because running out of fuel, same discretion is
given direct to nearest port to obtain necessary fuel to complete voyage.
Consequence if vessel returns to port/goes to nearest port because of lack of food/fuel or vessel
turns out to be unseaworthy during voyage?
Arrival of vessel is considered an arrival under stress.
What does arrival under stress mean?
1. When a vessel, during voyage, is discovered unseaworthy to complete voyage, needing
repair. Thus vessel needs to go to nearest port for repairs to complete.
2. If the vessel as a consequence of failure to provide necessary food/fuel at start of
voyage
3. If there is a well-founded fear at mind of master that vessel may be apprehended by
men of war or pirates, then vessel at order of master can be directed to nearest port to
avoid apprehension.
If there is loss or damage to cargo as consequence of arrival under stress, this is not fault of carrier
as long as it establishes that it arrives under stress. Expenses incurred as consequence of arrival
under stress are to be borne by owner
Can captain during voyage contract loan using hull of vessel as security or cargo as security?
If security is the hull of vessel itself and its appurtenances, this is a loan on bottomry (bottom of
vessel is used as security)
If it is the cargo belonging to different owners, it is a loan on respondentia.
Purpose must be to complete vessel
Art 617
What is the consequence of incurring loan on bottomry/respondentia by captain?
Invalid, unless with prior consent of owner of vessel or owner of cargo
Loans on bottomry and respondentia
Art 719
What is a loan on bottomry?
Loan that is secured by owner of vessel from third party to obtain funds for use in repair of vessel,
provisions to make vessel complete voyage, subject to conditions:
1. Loan secured by hull of vessel including appurtenances, on condition that if voyage
stipulated in contract of bottomry is completed w/o anything happening (arrives safely) to
vessel itself, obligation subsists and owner/borrower is liable to pay principal of
obligation and all accrued interest, without limit (not subject to usury!) so can be up to
100% of loan
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2.

If vessel lost at sea during voyage stipulated to maritime perils also stipulated in the k,
whole obligation deemed extinguished and lender has no right to recover amount loaned
to owner. Loss of vessel should be during voyage stipulated due to occurrence of perils
stipulated, if not due to stipulations, obligation not extinguished.

What is a loan on respondentia?

Loan of sum of money to owner to be used for repair vessel for completion of voyage using goods
on board belonging to diff owners as collateral/security of loan even without consent of cargo
owner, subject to conditions
1. if voyage successful and goods delivered in condition stated to consignee, obligation
subsists and owner liable to pay
2. if voyage successful but goods lost at sea due to perils at sea stipulated in the contract,
obligation extinguished.
Distinguishing the two:
1. object of loan
a. bottomry vessel
b. respondentia cargo on board
2. same conditions
Why is the word respondentia used?
Respondentia Obligation to respond. Obligation does not belong to cargo owners, but to ship
owner. It is ship owner that responds to the obligation.
Marine insurance v. loan on bottomry/respondentia
Insurance consensual contract
Bottomry/respondentia real contract (requires delivery of amount sought as a loan by lender to
borrower, if no delivery, no k)
Art 720
How is loan on respondentia executed?
As well as bottomry, has to be executed in writing. If entered into orally, it is not subject to judicial
action.
1. in writing
2. written k may be private or k supported by a policy (k executed by ship broker who
executes loan. Called a policy but actually k of bottomry)
3. may be public document
k of loan on bottomry/respondentia are negotiable contracts. Can be drawn to bearer or on order of
owner of vessel.
Security is based on effects goods or vessel itself.
Art 724
Loan on bottomry can be done separately. Can be a loan on bottomry based simply on riggings or
parts of equipment of vessel. These are the items that may secure payment of loan. But if it is the
hull used as security, that particular security based on hull includes everything, riggings,
K Suarez | 3A 2009-2010

equipment, provisions, fuel, even goods on board. Mere mention of fact that loan is secured by
hull of vessel, includes everything on board.
If what is mentioned in the k of respondentia is entire goods on board, then that means entire
cargo on board belonging to diff owners is constituted as one cargo to respond to loan of
respondentia
Can salaries of crew and expected profits of vessel be subject of loan of respondentia?
No, salaries and expected profits do not form part of vessel at time of k.
Art 726
What is the consequence if loan extended by lender is an amount that represents a higher amount
than value of object offered as security? Ex: loan 500k, security is hull appraised at 300k.
If vessel lost due to perils, amount lost or obligation deemed extinguished by loss of vessel is not
entire amount of 500k, what is extinguished is only 300k the value of the vessel lost. Difference
of 200k considered a simple loan and must still be paid by owner despite loss of vessel w/
corresponding interest. In this case, there is fraud on part of owner by representing that value of
vessel more than actual value.
Art 727
If full amount of loan contracted to load vessel should not be used for cargo, balance shall be
returned before starting the voyage. Ex: 500k loan to be used for goods to be loaded on board, but
was not used to buy the goods.
The amount should be returned by owner to lender not as loan on bottomry/respondentia. Return
before start of voyage + interest agreed upon.
Same procedure if loan taken for goods actually purchased but not completed wrt entire amount
granted. Ex: loan 500k, use 200k, return 300k as simple loan and this earns interest
Art 729
If loan granted based on loan on bottomry/respondentia but object of loan have not been exposed
to risk mentioned in contract (maritime perils). Ex: goods not loaded on board, vessel does not
leave port there is no loan. Amount should be returned as simple loan + interest. There is no loan
on bottomry/respondentia because objects covered by loan not exposed to risk mentioned in k.
What are the cases where loan taken on bottomry/respondentia considered simple loan?
1. if value of loan much higher than value of object for which loan given. Difference
considered simple loan and must be returned regardless of result of voyage + interest
2. if objects of loan not exposed at all to risk mentioned in contract, amount loaned is
simple loan + interest
3. if amount loaned not used to purchase goods to be loaded on board, amount is simple
loan + interest
Art 730
Where vessel covered by loan had already obtained several loans before vessel leaves port,
amount used for vessel operation. During voyage, obtain another loan also based on
bottomry/respondentia for use during navigation up to port of destination but vessel lost at sea.
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Which of the loans should be considered affected by loss? First loan before leaving port or loan
during voyage?
Last loan is given preference in consideration thereof over loan first given. Considered in inverse
order of date of grant. LIFO.
Art 731
When is the action of lender supposed to be extinguished?
If object on which loan obtained shall have been lost due to peril stipulated in contract during
voyage agreed upon. In this case, there must be evidence to prove that cargo (if respondentia)
was loaded on board.
How do you determine cargo was loaded at time of loss?
Best evidence is b/l because it stipulates that goods are loaded in a certain condition.
How do you determine if vessel used as collateral contained riggings, equipment, provisions, fuel
(if bottomry)?
Best evidence is manifest of vessel covering entire inventory of vessel
When is the arrangement on k of loan of bottomry/respondentia not qualify as such k?
Exceptions:
1. loss of cargo not due to perils agreed upon but due to inherent defect of goods.
a. Burden of proof lender (that k valid, due to inherent vice)
2. Loss due to fault or malice of borrower, or through barratry of captain
a. Lender
3. Damage caused to vessel because vessel engaged in business of contraband
4. Goods alleged to have been lost not loaded in vessel specified in the k but on a different
vessel

3 kinds of average
1. All extraordinary or accidental expenses incurred to preserve the vessel and cargo from
any injury, damages or loss
2. All damages for depreciation suffered by vessel or cargo during voyage starting from
port of departure to port of destination and where goods actually discharged
3. Petty and ordinary expenses incurred at port of destination wrt pilotage, lighterage,
towage, anchorage, inspection, health guarantee
What are the kinds of averages recognized under code of comm.?
1. Simple or particular average
2. General or gross average
Simple or particular average
Damage or loss incurred during voyage which did not inure to benefit or gain of ship owner/cargo
owner
Ex: if vessel accidentally collides w/ another causing damage, the damage is an average but it is
simple because the loss occurred not to the benefit of the vessel that suffered loss.
Impt! Art 809 enumerates. To distinguish w/n loss simple or particular or general or gross. Exam q.
Gross or general average
Requisites
1. Damage or loss occurring as a consequence of avoidance of maritime peril
2. Loss or damage deliberately done by ship/cargo owner for common benefit of ship/cargo
owner to save both from maritime peril
3. As consequence of deliberate sacrifice of part of vessel/cargo to avoid occurrence of
maritime peril, there is success in saving vessel/cargo from the common peril
-- went out, what happened? --

Art 732
Loss subject to general average
Art 733
What is the period of risk?
Vessel from start of voyage when vessel lifts anchor up to time vessel drops anchor at port of
destination
Goods from time goods loaded on board up to time discharged at port of destination
Exam q: what are the conditions loan of bottomry/respondentia not apply (3 instances value
higher than thing lost, thing granted not used for buying of goods, items used as collateral not
exposed to risk)
Average
What is an average?
Damage suffered by vessel or cargo during voyage. Average is responsibility to be assumed by
owner of goods or vessel depending on when damage occurs

Obligation to restore part of vessel/cargo deliberately damaged

Art 809. Simple or particular averages
1. The damages suffered by the cargo from the time of its embarkation until it is unloaded,
either on account of the nature of the goods or by reason of an accident at sea or force
majeure, and the expenses incurred to avoid and repair the same.
2. The damages suffered by the vessel in her hull, rigging, arms, and equipment, for the
same causes and reasons, from the time she puts to sea from the port of departure until
she anchored in the port of destination.
3. The damages suffered by the merchandise loaded on deck, except in coastwise
navigation, if the marine ordinances allow it.
4. The wages and victuals of the crew when the vessel should be detained or embargoed
by a legitimate order or force majeure, if the charter should have been for a fixed sum for
the voyage.
Determining factor is whether charter contracted for fixed sum or not. If contracted,
particular.

Art 806
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5.
6.
7.
8.
9.

The necessary expenses on arrival at a port, in order to make repairs or secure

provisions.
The lowest value of the goods sold by the captain in arrivals under stress for the
payment of provisions and in order to save the crew, or to cover any other requirement
of the vessel against which the proper amount shall be charged.
The victuals and wages of the crew during the time the vessel is in quarantine.
The damage suffered by the vessel or cargo by reason of an impact or collision with
another, if it were accidental and unavoidable. If the accident should occur through the
fault or negligence of the captain, the latter shall be liable for all the damage caused.
Any damage suffered by the cargo through the faults, negligence, or barratry of the
captain or of the crew, without prejudice to the right of the owner to recover the
corresponding indemnity from the captain, the vessel, and the freight.

Art 811. General or gross average

Determining factor: existence of real or known risk. If no real/known risk, no general average.
1. The goods or cash invested in the redemption of the vessel or cargo captured by
enemies, privateers, or pirates, and the provisions, wages, and expenses of the vessel
detained during the time the arrangement or redemption is taking place.
2. The goods jettisoned to lighten the vessel, whether they belong to the vessel, to the
cargo, or to the crew, and the damage suffered through said act by the goods kept.
3. The cables and masts which are cut or rendered useless, the anchors and the chains
which are abandoned in order to save the cargo, the vessel, or both.
4. The expenses of removing or transferring a portion of the cargo in order to lighten the
vessel and place her in condition to enter a port or roadstead, and the damage resulting
therefrom to the goods removed or transferred.
5. The damage suffered by the goods of the cargo through the opening made in the vessel
in order to drain her and prevent her sinking.
6. The expenses caused through floating a vessel intentionally stranded for the purpose of
saving her.
7. The damage caused to the vessel which it is necessary to break open, scuttle, or smash
in order to save the cargo.
8. The expenses of curing and maintaining the members of the crew who may have been
wounded or crippled in defending or saving the vessel.
9. The wages of any member of the crew detained as hostage by enemies, privateers, or
pirates, and the necessary expenses which he may incur in his imprisonment, until he is
returned to the vessel or to his domicile, should he prefer it.
10. The wages and victuals of the crew of a vessel chartered by the month during the time it
should be embargoed or detained by force majeure or by order of the Government, or in
order to repair the damage caused for the common good.
11. The loss suffered in the value of the goods sold at arrivals under stress in order to repair
the vessel because of gross average.
12. The expenses of the liquidation of the average.
Diff sim
Simple no real known risk; no deliberate attempt to cause damage to save vessel/cargo from
risk; no expected success of any act, except liability of owner
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General real known risk exists; deliberate attempt to cause damage for purpose of saving
vessel/cargo from risk; liability is on part of owner must be assumed as consequence of act of
causing damage to save
Art 813 and 815 procedure
Declaring general average. What is the procedure if gross is to be declared and what is importance
of declaration.
1. Purpose: to assure that vessel/cargo owner participate in restoring value of
goods/vessel deliberately sacrificed to save vessel/cargo from real known risk
2. When there is . officers must concur with decision of master. Owners of vessel/cargo
should be consulted. When there is concurrence of staff to declare general average,
decision must be carried out despite objection of owners.
3. Declaration of general must be in written resolution, containing reasons, parts of
vessel/goods sacrificed, description of peril etc etc. should be submitted to port
authorities in first port of entry, notarized and signed by master. Submission of resolution
should be done w/in 24h from entry in port. Consequence of failure to submit: as if no
average declared.
If goods jettisoned during voyage, goods jettisoned should be specified in declaration of general
average in resolution
Art 817
Can vessel be lightened on account of storm while entering a port or roadstead?
Yes, if by lightening, vessel should be able to enter port. Lightening considered part of exercise of
general average. If portion of cargo unloaded is lost while being transferred from vessel to port,
loss classified as part of general average. Both vessel and cargo shall restore value wrt
corresponding interest
Art 818
If there are vessels at port and fire threatens safety of vessel anchored at port, if vessel on fire
pulled out from port and scuttled to save other vessels from being affected, loss of vessel on fire
considered general average because it redounds to benefit of vessels saved from conflagration.
Vessels benefited should contribute to restore vessel lost
Art 819
When vessel assumed under stress
1. vessel left port and during voyage, vessel runs out of provisions and master has to direct
vessel to return to port to obtain provisions
2. during voyage, master fears possible capture of vessel by pirates or men of war and
there is positive information that fact will occur
3. during voyage, vessel becomes unseaworthy due to lack of repair
Art 820
When not under stress
1. vessel not properly provisioned before departure deliberate attempt to not properly
provision
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2.
3.
4.

fault or negligence on part of carrier in not repairing vessel and as consequence no

longer seaworthy
no positive evidence that there is valid information that vessel might be captured or
apprehended by men of war during voyage
asdf

When vessel returns under stress, liability on owner. But if there are losses suffered by goods on
board, losses resulting from return under stress is a particular average. Liability of owner of
vessel/goods.
Art 822/3
If goods unloaded for repair or danger of loss of goods due to need of repair, unloading must be
done under custody of master. Responsibility of owner/agent. Except when loss due to force
majeure.
Art 824
If cargo appears damage or imminent danger of damage, captain should seek court permission to
have cargo unloaded, deposited in safe place or sold at auction to reduce damage cargo owners
may suffer as consequence
Art 825
After cause for arrival under stress has passed, continue voyage. If any delay, delay is liability of
owner.

But collision embraces alision as well

Basis of recovery of collision damage?
Art 826. Liability to recover collision damage against another vessel involving collision is evidence
of negligence. Liability lies with vessel owing to his negligence in navigating his vessel resulting in
collision. If no negligence, no ground for damages under 826.
Occasions under which collision may happen
1. All periods of time up to occasion when risk of collision arises/begins. Ex: steamship is 2
mi away from a sailing boat, both travelling in the same sea lane and steamship (vessel
obligated to take avoiding action) has all the time to make avoiding action. When is the
risk of collision deemed to occur? If steamship continues to travel in the same sea lane,
risk of collision has begun. They will certainly meet each other. Obligation of steamship
in this case, it must deviate from sea lane to avoid collision. Sailing boat (privileged
vessel) cannot make avoiding action because it is powered by the wind. Steamship
having its own power to move, must take avoiding action.
2. When risk of collision has begun and collision is a practical certainty. If privileged vessel
continues in the sea lane and steamship also continues, risk begins and has become
practical certainty. Continuance sure to result in collision
3. When occurrence of collision has become a practical certainty up to the point of impact
between privileged vessel and vessel supposed to take avoiding action.
Time important to determine which vessel is privileged and which has to take avoiding action to
avert collision.

Exam Qn: when is vessel considered as having arrived under stress?

Collision of vessels
What is a collision?
Contact between two moving vessels.
If there is damage. Collision damage.
Court action for collision damage, under Art 835, primary obligation of plaintiff is to establish in
complaint that claimant had filed corresponding marine protest for recovery of collision damage. If
evidence not presented/pleaded that 835 complied with, particular action will be dismissed. Marine
protest under 835 is a condition sine qua non to recover collision damage.
There are exceptions where action for collision damage without need for marine protest. The
exceptions are:
1. in cases of maritime tort filed under Art 2176 and 2180 NCC. Action may be filed against
vessel causing collision without need for 835.
2. Collision occurred not between two maritime carriers, but between maritime carrier and
fishing boat. Fishing boat damaged not required to comply with 835. Or plaintiff in no
position to be able to file/execute marine protest at time of collision or he was not on
board vessel on collision or at after collision, plaintiff had to be hospitalized
Is there a distinction between collision and allision?
Allision impact between moving vessel and non-moving vessel
K Suarez | 3A 2009-2010

In cases of collision, two principles in law of tort that do not apply in collision of vessels
1. last clear chance both vessels were at fault but one is given last opportunity to avoid
occurrence of collision. NOT APPLICABLE. Each shoulders own damage.
2. Contributory negligence NOT APPLICABLE. When contributory negligence is applied,
it presupposes both vessels at fault. Each shoulders own damage.
Damage considered particular average.
What is applicable in collision cases?
Law on error in extre(whut) one of the vessels involved may not have been at fault. A privileged
vessel . alarm a man of ordinary skill and prudence will make a mistake in navigation. Prohibits one
man from avoiding a vessel haaaaa puta ano this applies in the first soul (ano) of time
Art 827
If collision imputable to both vessels, each suffers his own damage (particular average) but both
solidarily liable to damages occasioned on their cargoes.
There must be evidence that both vessels at fault before damage considered particular.
Art 828
If it cannot be proven which vessel was at fault, presumption is both are at fault and 827 applies.
Art 829
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If there is criminal responsibility for collision, master of vessel may face the liability
Art 830
If cause of collision is fortuitous event, each vessel suffers own damage as well as damage to
cargo on board. Even cargo owner suffers own damage because it is particular average.
Art 831
If vessel collides with another as a consequence of the act of a third vessel, third vessel is liable for
any loss or damage resulting. Ex: 2 vessels moored along port and a vessel passes by creating
waves (excess speed), as a consequence of waves, a vessel properly moored hits the other
vessel, vessel that created wave is liable. Captain may be liable as well
Art 832
If by reason of storm or other force majeure a vessel properly anchored collides with another
vessel, damage caused to vessel still considered particular average. No ground to recover
Art 833
A vessel upon being run into sinks immediately, or that which sinks as a consequence of lack of
repair, occasion for collision damage
Art 834
If vessel collides with pilot on board, presence of pilot does not exempt captain, owner or agent
from liability but they have a right of recourse against pilot if collision due to pilots fault or
negligence
Art 835 IMPORTANT
Filing of marine protest is a condition sine qua non for filing collision damage. Without it, no
collision damage. 4 exceptions mentioned earlier.
Conditions when marine protest required
1. Vessel arrives under stress owner has to establish that arrival of vessel in port is by
reason of 3 mentioned earlier
a. Nature of marine protest Vessel had to return to port not due to fault of
captain but due to 4. Short of that, vessel arrived not in under stress.
2. If vessel shipwreck if there is cargo on board, owners can claim against vessel so
there is need to make disclaimer that wreck is caused not by his negligence
3. Captain feels as consequence of hurricane or storm, damage to cargo on board file
protest based on suspicion of damage. Without it, he assumes responsibility for any loss
or damage discovered upon discharge at port of destination. b/l may have stated that
goods received in good order, so need for disclaimer
4. Maritime collision condition sine qua non under 835
Next meeting: continue collision, then charter parties and bills of lading. Finish with shipwreck. Art
835
15 March 2010 no notes, fishbowl
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