TRANSPORTATION – 2ND EXAM high degree of care and extraordinary diligence renders it liable for

any damage that may be sustained by its passengers [Singson v.

Xandredg Sumpt L. Latog Court of Appeals].
From the above legal provisions, we can make the
IV following restatement of the principles gdoverning the liability of a
COMMON CARRIER OF PASSENGERS common carrier:
(1) the liability of a carrier is contractual and arises upon
A. NATURE OF RESPONSIBILITY; DEFINITION breach of its obligation. There is breach if it fails to exert
extraordinary diligence according to all the circumstances of each
Article 1732. Common carriers are persons, corporations, case; 
firms or associations engaged in the business of carrying or (2)  a carrier is obliged to carry its passenger with the
transporting passengers or goods or both, by land, water, or air, for utmost diligence of a very cautious person, having due regard for
compensation, offering their services to the public. all the circumstances;  
(3)  a carrier is presumed to be at fault or to have" acted
Article 1733. Common carriers, from the nature of their negligently in case of death of, or injury to, passengers, it being its
business and for reasons of public policy, are bound to observe duty to prove that it exercised extraordinary diligence;
extraordinary diligence in the vigilance over the goods and for the (4)  the carrier is not an insurer against all risks of travel;
safety of the passengers transported by them, according to all the and
circumstances of each case.
(5) that a carrier shall not be responsible for events which
Such extraordinary diligence in the vigilance over the goods
is further expressed in articles 1734, 1735, and 1745, Nos. 5, 6, and 7, could not be foreseen, or which, though foreseen, were inevitable
while the extraordinary diligence for the safety of the passengers is [Alfaro v. Ayson].
further set forth in articles 1755 and 1756.
Ampang v. Guino-o Transit
Article 1755. A common carrier is bound to carry the Held: It is urged for the appellants that the appellees are liable
passengers safely as far as human care and foresight can provide, using under their contract as transport safely passengers Lambayong and Amsia
the utmost diligence of very cautious persons, with a due regard for all to their destination, regardless of any fault or negligence that cause the
the circumstances. accident, reliance being placed on the case of Lasam vs. Smith, 45 Phil.
657. This authority, however, comes to the aid of the appellees, because the
carrier is thereunder excused from liability if the accident is due to a
In Isaac v. A.L. Ammen, it was held that
fortuitous event, and this was the ruling in the appealed decision. This
a common carrier is bound to carry the passengers safely as far as Court, in interpreting "fortuitous event", stated that "As will be seen, these
human care and foresight can provide, using- the utmost diligence authorities agree that some extraordinary circumstance independent of the
of very cautious persons, with due regard for all circumstances. will of the obligor, or of his employees, is an essential element of a caso
This extraordinary diligence required of common carriers fortuito." From the facts of the case at bar it is clear that the defendants' bus
is calculated to protect the passengers from the tragic which carried Lambayong and Amsia capsized after being bumped on the
mishaps that frequently occur in connection with rapid modern left side by Habacco bus No. 39, which caused the defendants' driver to
transportation.   This high standard of care is imperatively swerve his bus to the left so as to prevent it from falling into the canal and
striking a tree, a maneuver which led the bus to skid and capsize. This, in
demanded by the preciousness of human life and the consideration
our opinion, resulted from the extraordinary circumstance of being resulted
that every person must in every way be safeguarded against all from the extraordinary circumstance of being struck by the Habacco bus,
injury.   independent of the will of, and unforseen by the defendants' driver, in the
In Anunan v. Buno, it was held that it must be absence of any showing to the contrary.
remembered that the obligation of the carrier to transport its
passengers safely is such that the New Civil Code requires "utmost Laguna v. Tiongson
diligence" from the carriers (Act. 1755) who are "presumed to have Held: After a review of the record, the court believes that
been at fault or to have acted negligently, unless they prove that defendant has not successfully discharged its burden. Defendant's driver,
they have observed extraordinary diligence" (Art. 1756). In this Samonte, wanted to impress the court that he was entirely free from fault or
instance, this legal presumption of negligence is confirmed by the negligence in the collision between his bus and the 7-Up truck. This he
Court of Appeals' finding that the driver of the jeepney in ques tion testified that when he first sighted the 7-Up truck, 150 meters away from
was at fault in parking the vehicle improperly. It must follow that his bus, the said truck was then running between 50 and 60 kilometers per
hour, while he, for his part, was then going only at about 30 kilometers per
the driver—and the owners—of the jeepney must answer for
hour. This testimony of Samonte is to be seriously doubted. In the first
injuries to its passengers. The principle about the "last clear place, he and his conductor, Alcantara, must be necessarily biased
chance" would call for application in a suit between the owners witnesses for they are both employed by the defendant. In the second place,
and drivers of the two colliding vehicles. It does not arise where a it is of common knowledge that a delivery truck fully loaded with cases of
passenger demands responsibility from the carrier to enforce its soft drinks is a slower moving vehicle than a passenger bus. A passenger
cont ractual obligation. For it would be inequitable to exempt the bus is necessarily designed for speed because travellers usually want to
negligent driver of the jeepney and its owners on the ground that arrive at their destinations within the shortest possible time, whereas soft
the other driver was likewise guilty of negligence. drinks delivery trucks are built more for the safety of its bottled cargo than
for speed. In the third place, Samonte's claim that when he applied the
A contract of air carriage is a peculiar one. Imbued with
brakes of his bus when it was then about 10 meters away from the 7-Up
public interest, common carriers are required by law to carry truck, the speed of his bus was only about 10 kilometers per hour cannot be
passengers safely as far as human care and foresight can provide, given full credence. He stated that after applying the brakes, his bus still
using the utmost diligence of a very cautious person, with due moved less than 5 meters before being hit by the 7-Up truck. If his speed
regard for all the circumstances. A contract to transport passengers had only been 10 kilometers per hour, upon the application of the brakes, he
is quite different in kind and degree from any other contractual would have stopped the bus within a much shorter distance.
relation. And this because its business is mainly with the traveling "But even assuming that defendant's bus was then running only
public. It invites people to avail of the comforts and advantages it at approximately 10 kilometers per hour when the driver Samonte first
applied the brakes, it would seem that he applied the brakes too late.
offers. The contract of carriage, therefore, generates a relation
Samonte testified that upon sighting the 7-Up truck at a distance of
attended with a public duty. Failure of the carrier to observe this approximately 150 meters, he slackened his speed by first reducing it to 20

Page 1 of 39
and then to 10 kilometers per hour, and brought his bus towards the right the port of origin on only one functioning engine, instead of two. Moreover,
side of the road; and that it was only when the distance between the two even the lone functioning engine was not in perfect condition as sometime
vehicles was only about 10 meters that he first stepped on the brakes. The after it had run its course, it conked out. This caused the vessel to stop and
court feels that it was not enough for Samonte to slacken his speed remain adrift at sea, thus in order to prevent the ship from capsizing, it had
gradually until he came down to 10 kilometers per hour. He should have to drop anchor. Plainly, the vessel was unseaworthy even before the voyage
stopped his bus immediately upon seeing the 7-Up truck veer towards his began. For a vessel to be seaworthy, it must be adequately equipped for the
lane after jumping out of the big depression on the asphalted pavement. He voyage and manned with a sufficient number of competent officers and
was not unaware of such depression, and the location thereof for he had crew. The failure of a common carrier to maintain in seaworthy condition
been travelling on the same route for a considerable length of time prior to its vessel involved in a contract of carriage is a clear breach of is duty
3 June 1958. prescribed in Article 1755 of the Civil Code.
"It will not do for defendants driver to claim that he could not
avoid the 7-Up truck because if he did he would have fallen into the ditch
Baritua v. Mercader
on his side of the highway. If he was placed in the position claimed by him,
Held: We sustain the ruling of the CA that petitioners failed to
it was entirely his fault, for he could have easily avoided the 7-Up truck if
prove that they had observed extraordinary diligence.
he had applied his brakes on time, while the 7-Up truck was still more than
First, petitioners did not present evidence on the skill or
10 meters away from him. Besides, instead of applying the brakes while the
expertise of the driver of Bus No. 142 or the condition of that vehicle at the
7-Up truck was still some distance away from him, he could have veered to
time of the incident.
the left side of the road, going north, where there was sufficient space for
Second, the bus was overloaded at the time. In fact, several
him, taking into account that the asphalted pavement of the road was 5½
individuals were standing when the incident occurred.
meters wide with a shoulder of 65 cm. wide. In such posture, he could have
Third, the bus was overspeeding. Its conductor testified that it
avoided collision with the 7-Up truck which, on the other hand, would have
had overtaken several buses before it reached the Bugko Bailey
also been free to right its direction after it came out from the big depression.
Bridge. Moreover, prior to crossing the bridge, it had accelerated and
"An examination of the sketch prepared by the chief of police of
maintained its speed towards the bridge.
Bay, Laguna (Exhibit 1) shows that the collision between defendant's bus
We therefore believe that there is no reason to overturn the
and the 7-Up truck occurred only 8 meters away from the big depression.
assailed CA Decision, which affirmed that of the RTC. It is a well-settled
This short distance would seem to indicate that defendant's driver, Samonte,
rule that the trial court's factual findings, when affirmed by the appellate
knowing exactly the location of the depression, and anticipating that the 7-
court, are conclusive and binding, if they are not tainted with arbitrariness
Up truck coming the opposite direction would veer to the left of the said
or oversight of some fact or circumstance of significance and influence. As
depression in order to avoid the same, raced with the 7-Up truck in order
clearly discussed above, petitioners have not presented sufficient ground to
that he could first pass through the space between the depression and what
warrant a deviation from this rule.
was left of the asphalted pavement of the lane on which he was then
travelling, obviously for the purpose of avoiding delay. Because of this, the
7-Up truck driver who must have intended to pass on the said space in order Sulpicio v. Sesante
to avoid going through the depression, was suddenly forced into the Held: Is notification required before the common carrier
depression, in order to avoid a head-on collision with defendant's bus. But becomes liable for lost belongings that remained in the custody of the
unfortunately, after bumping out of the depression, the truck veered to the passenger?
left and hit defendant's bus on the left front side, thereby causing the bus to We answer in the negative.
overturn on its right side." The rule that the common carrier is always responsible for the
The Court of Appeals agreed with the above being of the passenger's baggage during the voyage needs to be emphasized. Article
opinion that the testimony of Rufo Reaño, a barrio lieutenant and a 1754 of the Civil Code does not exempt the common carrier from liability
disinterested eye-witness of the accident, was credible; that, to the contrary, in case of loss, but only highlights the degree of care required of it
the testimony of Claro Samonte and Ernesto Alcantara, driver and depending on who has the custody of the belongings. Hence, the law
conductor respectively of petitioner's bus, was improbable and biased; that requires the common carrier to observe the same diligence as the hotel
Samonte actually applied the brakes on his bus too late to avoid the keepers in case the baggage remains with the passenger; otherwise,
accident because at that time the distance between the two vehicles was extraordinary diligence must be exercised. [41] Furthermore, the liability of
only ten meters; that Samonte was well aware of the condition of the road, the common carrier attaches even if the loss or damage to the belongings
particularly of the existence of a depression near the place where the two resulted from the acts of the common carrier's employees, the only
vehicles collided, because he had been driving through and along the same exception being where such loss or damages is due to force majeure.
route for a considerable period of time prior to the accident; that on May In YHT Realty Corporation v. Court of Appeals, we declared the
16, 1958 or only two weeks before the fatal collision, Samonte had been actual delivery of the goods to the innkeepers or their employees as
apprehended for overspeeding, and finally, that certain admissions made on unnecessary before liability could attach to the hotelkeepers in the event of
the witness stand by Teotimo de Mesa, petitioner's chief clerk since 1948, loss of personal belongings of their guests considering that the personal
sufficiently showed that the company had not exercised due care and effects were inside the hotel or inn because the hotelkeeper shall remain
diligence in connection with the hiring of Samonte. The Court of Appeals accountable.[44] Accordingly, actual notification was not necessary to render
therefore expressly found that petitioner not only failed to disprove the the petitioner as the common carrier liable for the lost personal belongings
presumption of negligence arising against it (Articles 1733, 1755, and 1756 of Sesante. By allowing him to board the vessel with his belongings without
of the New Civil Code) but that, on the contrary, its negligence had been any protest, the petitioner became sufficiently notified of such belongings.
established by more than mere preponderance of evidence. So long as the belongings were brought inside the premises of the vessel,
A thorough review of the record by Us has not disclosed any the petitioner was thereby effectively notified and consequently duty-bound
material fact or circumstance showing that the trial court and the Court of to observe the required diligence in ensuring the safety of the belongings
Appeals erred in the respects covered by the issue under consideration. during the voyage. Applying Article 2000 of the Civil Code, the petitioner
assumed the liability for loss of the belongings caused by the negligence of
its officers or crew. In view of our finding that the negligence of the
Trans-Asia v. Court of Appeals
officers and crew of the petitioner was the immediate and proximate cause
Held; Under Article 1733 of the Civil Code, the petitioner was
of the sinking of the M/V Princess of the Orient, its liability for Sesante's
bound to observe extraordinary diligence in ensuring the safety of the
lost personal belongings was beyond question.’
private respondent. That meant that the petitioner was, pursuant to Article
1755 of the said Code, bound to carry the private respondent safely as far as
human care and foresight could provide, using the utmost diligence of very The law does not require to make the carrier an insurer
cautious persons, with due regard for all the circumstances. In this case, we of the absolute safety of its passengers
are in full accord with the Court of Appeals that the petitioner failed to While the law requires the highest degree of diligence
discharge this obligation. from common carriers in the safe transport of their passengers and
Before commencing the contracted voyage, the petitioner
creates a presumption of negligence against them, it does not,
undertook some repairs on the cylinder head of one of the vessel’s engines.
But even before it could finish these repairs, it allowed the vessel to leave
however, make the carrier an insurer of the absolute safety of its

Page 2 of 39
passengers. Article 1755 of the Civil Code qualifies the duty of flight and on that date, and it becomes the airline's obligation to
extraordinary care, vigilance and precaution in the carriage of carry him and his luggage safely to the agreed destination without
passengers by common carriers to only such as human care and delay. If the passenger is not so transported or if in the process of
foresight can provide. What constitutes compliance with said duty transporting, he dies or is injured, the carrier may be held liable for
is adjudged with due regard to all the circumstances. a breach of contract of carriage.
Article 1756 of the Civil Code, in creating a presumption
of fault or negligence on the part of the common carrier when its Cathay Pacific v. Vazquez
passenger is injured, merely relieves the latter, for the time being, Held: In this case, what happened was the reverse. The contract
from introducing evidence to fasten the negligence on the former, between the parties was for Cathay to transport the Vazquezes to Manila on
because the presumption stands in the place of evidence. Being a a Business Class accommodation in Flight CX-905. After checking-in their
mere presumption, however, the same is rebuttable by proof that luggage at the Kai Tak Airport in Hong Kong, the Vazquezes were given
boarding cards indicating their seat assignments in the Business Class
the common carrier had exercised extraordinary diligence as
Section. However, during the boarding time, when the Vazquezes presented
required by law in the performance of its contractual obligation, or their boarding passes, they were informed that they had a seat change from
that the injury suffered by the passenger was solely due to a Business Class to First Class. It turned out that the Business Class was
fortuitous event [Pilapil v. Court of Appeals]. overbooked in that there were more passengers than the number of seats.
It is clear that the carrier is not an insurer of the Thus, the seat assignments of the Vazquezes were given to waitlisted
passengers' safety. His liability rests upon negligence, his failure to passengers, and the Vazquezes, being members of the Marco Polo Club,
exercise the "utmost" degree of diligence that the law requires, and were upgraded from Business Class to First Class.
by Art. 1756, in case of a passenger's death or injury the carrier We note that in all their pleadings, the Vazquezes never denied
that they were members of Cathay’s Marco Polo Club. They knew that as
bears the burden of satisfying the court that he has duly discharged
members of the Club, they had priority for upgrading of their seat
the duty of prudence required. In the American law, where the accommodation at no extra cost when an opportunity arises. But, just like
carrier is held to the same degree of diligence as under the new other privileges, such priority could be waived. The Vazquezes should have
Civil Code, the rule on the liability of carriers for defects of been consulted first whether they wanted to avail themselves of the
equipment is thus expressed: "The preponderance of authority is in privilege or would consent to a change of seat accommodation before their
favor of the doctrine that a passenger is entitled to recover damages seat assignments were given to other passengers. Normally, one would
from a carrier for an injury resulting from a defect in an appliance appreciate and accept an upgrading, for it would mean a better
purchased from a manufacturer, whenever it appears that the defect accommodation. But, whatever their reason was and however odd it might
be, the Vazquezes had every right to decline the upgrade and insist on the
would have been discovered by the carrier if it had exercised the
Business Class accommodation they had booked for and which was
degree of care which under the circumstances was incumbent upon designated in their boarding passes. They clearly waived their priority or
it, with regard to inspection and application of the necessary tests. preference when they asked that other passengers be given the upgrade. It
For the purposes of this doctrine, the manufacturer is considered as should not have been imposed on them over their vehement objection. By
being in law the agent or servant of the carrier, as far as regards the insisting on the upgrade, Cathay breached its contract of carriage with the
work of constructing the appliance. According to this theory, the Vazquezes.
good repute of the manufacturer will not relieve the carrier from
liability" [Necessito v. Paras]. Singapore Airlines v. Andion
Furthermore, it has been held that airline passengers must Held: When an airline issues a ticket to a passenger, confirmed
take such risks incident to the mode of travel. In this regard, for a particular flight on a certain date, a contract of carriage arises.  The
adverse weather conditions or extreme climatic changes are some passenger then has every right to expect that he be transported on that flight
of the perils involved in air travel, the consequences of which the and on that date.   If he does not, then the carrier opens itself to a suit for a
breach of contract of carriage.
passenger must assume or expect. After all, common carriers are
In the case at bar, it is undisputed that the respondent carried a
not the insurer of all risks [Japan Airlines v. Court of Appeals]. confirmed ticket for the two-legged trip from Frankfurt to Manila: 1)
Thus, it is clear that neither the law nor the nature of the Frankfurt-Singapore; and 2) Singapore-Manila. In her contract of carriage
business of a transportation company makes it an insurer of the with the petitioner, the respondent certainly expected that she would fly to
passenger's safety, but that its liability for personal injuries Manila on Flight No. SQ 72 on January 28, 1991. Since the petitioner did
sustained by its passenger rests upon its negligence, its failure to not transport the respondent as covenanted by it on said terms, the
exercise the degree of diligence that the law requires [Mariano v. petitioner clearly breached its contract of carriage with the respondent. The
De Borja]. respondent had every right to sue the petitioner for this breach. The
defense that the delay was due to fortuitous events and beyond petitioner's
control is unavailing. In PAL vs. CA, we held that:
B. BREACH OF CONTRACT OF CARRIAGE .... Undisputably, PAL's diversion of its flight due to inclement
Breach of contract is defined as the “failure without legal weather was a fortuitous event. Nonetheless, such occurrence did not
reason to comply with the terms of a contract.” It is also defined as terminate PAL's contract with its passengers. Being in the business of air
the “failure, without legal excuse, to perform any promise which carriage and the sole one to operate in the country, PAL is deemed to be
forms the whole or part of the contract.” In previous cases, the equipped to deal with situations as in the case at bar. What we said in one
breach of contract of carriage consisted in either the bumping off of case once again must be stressed, i.e., the relation of carrier and passenger
a passenger with confirmed reservation or the downgrading of a continues until the latter has been landed at the port of destination and has
left the carrier's premises. Hence, PAL necessarily would still have to
passenger’s seat accommodation from one class to a lower class
exercise extraordinary diligence in safeguarding the comfort, convenience
[Cathay Pacific v. Vazquez]. and safety of its stranded passengers until they have reached their final
In an action for breach of contract of carriage, all that is destination...
required of plaintiff is to prove the existence of such contract and ...
its non-performance by the carrier through the latter's failure to "...If the cause of non-fulfillment of the contract is due to a
carry the passenger safely to his destination [Japan Airlines v. fortuitous event, it has to be the sole and only cause (Art. 1755 C.C., Art.
Simangan]. 1733 C.C.). Since part of the failure to comply with the obligation of
In Philippine Airlines v. Court of Appeals, it was held common carrier to deliver its passengers safely to their destination lay in
the defendant's failure to provide comfort and convenience to its stranded
that when an airline issues a ticket to a passenger, confirmed for a
passengers using extraordinary diligence, the cause of non- fulfillment is
particular flight on a certain date, a contract of carriage arises. The not solely and exclusively due to fortuitous event, but due to something
passenger has every right to expect that he be transported on that

Page 3 of 39
which defendant airline could have prevented, defendant becomes liable to A caso fortuito as "an unexpected event or act of God
plaintiff." which could neither be foreseen nor resisted, such as floods,
Indeed, in the instant case, petitioner was not without recourse torrents, shipwrecks, conflagrations, lightning, compulsion,
to enable it to fulfill its obligation to transport the respondent safely as insurrections, destruction of buildings by unforeseen accidents and
scheduled as far as human care and foresight can provide to her destination.
other occurrences of a similar nature." They are extraordinary
Tagged as a premiere airline as it claims to be and with the complexities of
air travel, it was certainly well-equipped to be able to foresee and deal with
events not forseeable or avoidable, events that could not be
such situation. The petitioner's indifference and negligence by its absence foreseen, or which, though foreseen, are inevitable.  It is, therefore,
and insensitivity was exposed by the trial court, thus: not enough that the event should not have been foreseen or
(a) Under Section 9.1 of its Traffic Manual (Exhibit 4) anticipated, as is commonly believed, but it must be one impossible
"...flights can be delayed to await the uplift of connecting cargo and to foresee or to avoid.  The mere difficulty to foresee the happening
passengers arriving on a late in-bound flight..." As adverted to by the trial is not impossibility to foresee the same [Gacal v. Philippine
court,..."Flight SQ-27/28 maybe delayed for about half an hour to transfer Airlines].
plaintiff to her connecting flight. As pointed out above, delay is normal in
The presumption of fault or negligence against the carrier
commercial air transportation" (RTC Decision, p. 22); or
(b) Petitioner airlines could have carried her on one of its
is only a disputable presumption.  It gives in where contrary facts
flights bound for Hongkong and arranged for a connecting flight from are established proving either that the carrier had exercised the
Hongkong to Manila all on the same date. But then the airline personnel degree of diligence required by law or the injury suffered by the
who informed her of such possibility told her that she has to pay for that passenger was due to a fortuitous event [Pilapil v. Court of
flight. Regrettably, respondent did not have sufficient funds to pay for it. Appeals].
(TSN, 30 March 1992, pp.8-9; RTC Decision, pp. 22-23) Knowing the A caso fortuito presents the following essential
predicament of the respondent, petitioner did not offer to shoulder the cost characteristics: (1) The cause of the unforeseen and unexpected
of the ticket for that flight; or
occurrence, or of the failure of the debtor to comply with his
(c) As noted by the trial court from the account of
petitioner's witness, Bob Khkimyong, that "a passenger such as the plaintiff obligation, must be independent of the human will. (2) It must be
could have been accommodated in another international airline such as impossible to foresee the event which constitutes the caso fortuito,
Lufthansa to bring the plaintiff to Singapore early enough from Frankfurt or if it can be foreseen, it must be impossible to avoid. (3) The
provided that there was prior communication from that station to enable her occurrence must be such as to render it impossible for the debtor to
to catch the connecting flight to Manila because of the urgency of her fulfill his obligation in a nor- mal manner. And (4) the obligor
business in Manila...(RTC Decision, p. 23) (debtor) must be free from any participation in the aggravation of
The petitioner's diligence in communicating to its passengers the the injury resulting to the creditor [Lasam v. Smith].
consequences of the delay in their flights was wanting. As elucidated by
As Article 1174 provides, no person shall be responsible
the trial court:
It maybe that delay in the take off and arrival of commercial for a fortuitous event which could not be foreseen, or which,
aircraft could not be avoided and may be caused by diverse factors such as though foreseen, was inevitable. In other words, there must be an
those testified to by defendant's pilot. However, knowing fully well that entire exclusion of human agency from the cause of injury or loss
even before the plaintiff boarded defendant's Jumbo aircraft in Frankfurt [Yobido v. Court of Appeals].
bound for Singapore, it has already incurred a delay of two hours.
Nevertheless, defendant did not take the trouble of informing plaintiff, Juntilla v. Fontinar
among its other passengers of such a delay and that in such a case, the usual
Held: In the case at bar, the cause of the unforeseen and
practice of defendant airline will be that they have to stay overnight at their
unexpected occurrence was not independent of the human will.  The
connecting airport; and much less did it inquire from the plaintiff and the
accident was caused either through the negligence of the driver or because
other 25 passengers bound for Manila whether they are amenable to stay
of mechanical defects in the tire.  Common carriers should teach their
overnight in Singapore and to take the connecting flight to Manila the next
drivers not to overload their vehicles, not to exceed safe and legal speed
day. Such information should have been given and inquiries made in
limits, and to know the correct measures to take when a tire blows up thus
Frankfurt because even the defendant airline's manual provides that in case
insuring the safety of passengers at all times. 
of urgency to reach his or her destination on the same date, the head office
of defendant in Singapore must be informed by telephone or telefax so as
the latter may make certain arrangements with other airlines in Frankfurt to Yobido v. Court of Appeals
bring such a passenger with urgent business to Singapore in such a manner Held: Under the circumstances of this case, the explosion of the
that the latter can catch up with her connecting flight such as S-27/28 new tire may not be considered a fortuitous event. There are human factors
without spending the night in Singapore... involved in the situation. The fact that the tire was new did not imply that it
was entirely free from manufacturing defects or that it was properly
mounted on the vehicle. Neither may the fact that the tire bought and used
Japan Airlines v. Asuncion in the vehicle is of a brand name noted for quality, resulting in the
Held: We find that JAL did not breach its contract of carriage
conclusion that it could not explode within five days’ use. Be that as it may,
with respondents.  It may be true that JAL has the duty to inspect whether
it is settled that an accident caused either by defects in the automobile or
its passengers have the necessary travel documents, however, such duty
through the negligence of its driver is not a caso fortuito that would exempt
does not extend to checking the veracity of every entry in these documents. 
the carrier from liability for damages.
JAL could not vouch for the authenticity of a passport and the correctness
Moreover, a common carrier may not be absolved from liability
of the entries therein.  The power to admit or not an alien into the country is
in case of force majeure or fortuitous event alone. The common carrier
a sovereign act which cannot be interfered with even by JAL.  This is not
must still prove that it was not negligent in causing the death or injury
within the ambit of the contract of carriage entered into by JAL and herein
resulting from an accident. This Court has had occasion to state:
respondents.  As such, JAL should not be faulted for the denial of
“While it may be true that the tire that blew-up was still good
respondents’ shore pass applications.
because the grooves of the tire were still visible, this fact alone does not
make the explosion of the tire a fortuitous event. No evidence was
Prior to their departure, respondents were aware that upon arrival in Narita,
presented to show that the accident was due to adverse road conditions or
they must secure shore pass entries for their overnight stay.  Respondents’
that precautions were taken by the jeepney driver to compensate for any
mother, Mrs. Imelda Asuncion, insisted though that Ms. Linda
conditions liable to cause accidents. The sudden blowing-up, therefore,
Villavicencio of JAL assured her that her children would be granted the
could have been caused by too much air pressure injected into the tire
passes.
coupled by the fact that the jeepney was overloaded and speeding at the
time of the accident.”
C. FORTUITOUS EVENT AS A DEFENSE It is interesting to note that petitioners proved through the bus
conductor, Salce, that the bus was running at “60-50” kilometers per hour

Page 4 of 39
only or within the prescribed lawful speed limit. However, they failed to It is clear that the cases of Pilapil and De Guzman do not apply
rebut the testimony of Leny Tumboy that the bus was running so fast that to the present case. Art. 1755 of the Civil Code provides that "a common
she cautioned the driver to slow down. These contradictory facts must, carrier is bound to carry the passengers as far as human care and foresight
therefore, be resolved in favor of liability in view of the presumption of can provide, using the utmost diligence of very cautious person, with due
negligence of the carrier in the law. Coupled with this is the established regard for all the circumstances." Thus, we held in Pilapil and De
condition of the road – rough, winding and wet due to the rain. It was Guzman that the respondents therein were not negligent in failing to take
incumbent upon the defense to establish that it took precautionary measures special precautions against threats to the safety of passengers which could
considering partially dangerous condition of the road. As stated above, not be foreseen, such as tortious or criminal acts of third persons. In the
proof that the tire was new and of good quality is not sufficient proof that it present case, this factor of unforeseeablility (the second requisite for an
was not negligent. Petitioners should have shown that it undertook event to be considered force majeure) is lacking. As already stated, despite
extraordinary diligence in the care of its carrier, such as conducting daily the report of PC agent Generalao that the Maranaos were planning to burn
routinary check-ups of the vehicle’s parts. some of petitioner's buses and the assurance of petitioner's operations
manager (Diosdado Bravo) that the necessary precautions would be taken,
nothing was really done by petitioner to protect the safety of passengers.
Gacal v. Court of Appeals
Held: Applying the above guidelines to the case at bar, the
failure to transport petitioners safely from Davao to Manila was due to the Japan Airlines v. Court of Appeals
skyjacking incident staged by six (6) passengers of the same plane, all Held: Paradoxically, the Court of Appeals, despite the presence
members of the Moro National Liberation Front (MNLF), without any of "force majeure," still ruled against JAL relying in our decision in PAL v.
connection with private respondent, hence, independent of the will of either Court of Appeals, thus:
the PAL or of its passengers. "The position taken by PAL in this case clearly illustrates its
Under normal circumstances, PAL might have foreseen the failure to grasp the exacting standard required by law. Undisputably, PAL’s
skyjacking incident which could have been avoided had there been a more diversion of its flight due to inclement weather was a fortuitous event.
thorough frisking of passengers and inspection of baggages as authorized Nonetheless, such occurrence did not terminate PAL’s contract with its
by R.A. No. 6235.  But the incident in question occurred during Martial passengers. Being in the business of air carriage and the sole one to operate
Law where there was a military take-over of airport security including the in the country, PAL is deemed equipped to deal with situations as in the
frisking of passengers and the inspection of their luggage preparatory to case at bar. What we said in one case once again must be stressed, i.e., the
boarding domestic and international flights.  In fact the military take-over relation of carrier and passenger continues until the latter has been landed at
was specifically announced on October 20, 1973 by General Jose L. the port of destination and has left the carrier’s premises. Hence, PAL
Rancudo, Commanding General of the Philippine Air Force in a letter to necessarily would still have to exercise extraordinary diligence in
Brig. Gen. Jesus Singson, then Director of the Civil Aeronautics safeguarding the comfort, convenience and safety of its stranded passengers
Administration (Rollo, pp. 71-72) later confirmed shortly before the until they have reached their final destination. On this score, PAL grossly
hijacking incident of May 21, 1976 by Letter of Instruction No. 399 issued failed considering the then ongoing battle between government forces and
on April 28, 1976. Muslim rebels in Cotabato City and the fact that the private respondent was
Otherwise stated, these event rendered it impossible for PAL to a stranger to the place."
perform its obligations in a normal manner and obviously it cannot be The reliance is misplaced. The factual background of the PAL
faulted with negligence in the performance of duty taken over by the Armed case is different from the instant petition. In that case there was indeed a
Forces of the Philippines to the exclusion of the former. fortuitous event resulting in the diversion of the PAL flight. However, the
Finally, there is no dispute that the fourth element has also been unforeseen diversion was worsened when "private respondents (passenger)
satisfied.  Consequently the existence of force majeure has been established was left at the airport and could not even hitch a ride in a Ford Fiera loaded
exempting respondent PA1 from the payment of damages to its passengers with PAL personnel,"[10] not to mention the apparent apathy of the PAL
who suffered death or injuries in their persons and for loss of their station manager as to the predicament of the stranded passengers. In light of
baggages. these circumstances, we held that if the fortuitous event was accompanied
by neglect and malfeasance by the carrier’s employees, an action for
damages against the carrier is permissible. Unfortunately, for private
Fortune Express v. Court of Appeals
respondents, none of these conditions are present in the instant petition.
Held: Art. 1174 of the Civil Code defines a fortuitous even as an
We are not prepared, however, to completely absolve petitioner
occurrence which could not be foreseen or which though foreseen, is
JAL from any liability. It must be noted that private respondents bought
inevitable. In Yobido v. Court of Appeals, we held that to be considered as
tickets from the United States with Manila as their final destination. While
force majeure, it is necessary that: (1) the cause of the breach of the
JAL was no longer required to defray private respondents’ living expenses
obligation must be independent of the human will; (2) the event must be
during their stay in Narita on account of the fortuitous event, JAL had the
either unforeseeable or unavoidable; (3) the occurrence must be such as to
duty to make the necessary arrangements to transport private respondents
render it impossible for the debtor to fulfill the obligation in a normal
on the first available connecting flight to Manila. Petitioner JAL reneged on
manner; and (4) the obligor must be free of participation in, or aggravation
its obligation to look after the comfort and convenience of its passengers
of, the injury to the creditor. The absence of any of the requisites mentioned
when it declassified private respondents from "transit passengers" to "new
above would prevent the obligor from being excused from liability.
passengers" as a result of which private respondents were obliged to make
Thus, in Vasquez v. Court of Appeals, it was held that the
the necessary arrangements themselves for the next flight to Manila. Private
common carrier was liable for its failure to take the necessary precautions
respondents were placed on the waiting list from June 20 to June 24. To
against an approaching typhoon, of which it was warned, resulting in the
assure themselves of a seat on an available flight, they were compelled to
loss of the lives of several passengers. The event was foreseeable, and, thus,
stay in the airport the whole day of June 22, 1991 and it was only at 8:00
the second requisite mentioned above was not fulfilled. This ruling applies
p.m. of the aforesaid date that they were advised that they could be
by analogy to the present case. Despite the report of PC agent Generalao
accommodated in said flight which flew at about 9:00 a.m. the next day.
that the Maranaos were going to attack its buses, petitioner took no steps to
We are not oblivious to the fact that the cancellation of JAL
safeguard the lives and properties of its passengers. The seizure of the bus
flights to Manila from June 15 to June 21, 1991 caused considerable
of the petitioner was foreseeable and, therefore, was not a fortuitous event
disruption in passenger booking and reservation. In fact, it would be
which would exempt petitioner from liability.
unreasonable to expect, considering NAIA’s closure, that JAL flight
Petitioner invokes the ruling in Pilapil v. Court of
operations would be normal on the days affected. Nevertheless, this does
Appeals and De Guzman v. Court of Appeals in support of its contention
not excuse JAL from its obligation to make the necessary arrangements to
that the seizure of its bus by the assailants constitutes force majeure.
transport private respondents on its first available flight to Manila. After all,
In Pilapil v. Court of Appeals, it was held that a common carrier is not
it had a contract to transport private respondents from the United States to
liable for failing to install window grills on its buses to protect passengers
Manila as their final destination.
from injuries caused by rocks hurled at the bus by lawless elements. On the
other hand, in De Guzman v. Court of Appeals, it was ruled that a common
carrier is not responsible for goods lost as a result of a robbery which is D. DURATION OF RESPONSIBILITY
attended by grave or irresistible threat, violence, or force.

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 It has been recognized as a rule that the relation of carrier
and passenger does not cease at the moment the passenger alights The test by which to determine the existence of
from the carrier's vehicle at a place selected by the carrier at the negligence in a particular case may be stated as follows: Did the
point of destination, but continues until the passenger has had a defendant in doing the alleged negligent act use that
reasonable care and caution which an ordinary prudent
reasonable time or a reasonable opportunity to leave the carrier's
person would have used in the same situation? If not, then
premises. And, what is a reasonable time or a reasonable delay he is guilty of negligence. The law here in effect adopts the
within this rule is to be determined from all the circumstances. standard supposed to be supplied by the imaginary conduct of
Thus, a person who, after alighting from a train, walks along the the discreet paterfamilias  of the Roman law. The existence of
station platform is considered still a passenger. So also, where a negligence in a given case is not determined by reference to the
passenger has alighted at his destination and is proceeding by the personal judgment of the actor in the situation before him. The
usual way to leave the company's premises, but before actually law considers what would be reckless, blameworthy, or
doing so is halted by the report that his brother, a fellow passenger, negligent in the man of ordinary intelligence and prudence and
determines liability by that.
has been shot, and he in good faith and without intent of engaging
The question as to what would constitute the
in the difficulty, returns to relieve his brother, he is deemed conduct of a prudent man in a given situation must of course
reasonably and necessarily delayed and thus continues to be a be always determined in the light of human experience and
passenger entitled as such to the protection of the railroad and in view of the facts involved in the particular case. Abstract
company and its agents [La Mallorca v. Court of Appeals]. speculations cannot here be of much value but this much can be
profitably said: Reasonable men govern their conduct by the
Philippine Airlines v. Court of Appeals circumstances which are before them or known to them.
They are not, and are not supposed to be, omniscient of the
Held; The position taken by PAL in this case clearly
future. Hence they can be expected to take care only when
illustrates its failure to grasp the exacting standard required by law.
there is something before them to suggest or warn of
Undisputably, PAL'S diversion of its flight due to inclement weather was a
danger. Could a prudent man, in the case under consideration,
fortuitous event. Nonetheless, such occurrence did not terminate PAL's
foresee harm as a result of the course actually pursued? If so, it
contract with its passengers. Being in the business of air carriage and the
was the duty of the actor to take precautions to guard against
sole one to operate in the country, PAL is deemed equipped to deal with
that harm. Reasonable foresight of harm, followed by the
situations as in the case at bar. What we said in one case once again must be
ignoring of the suggestion born of this prevision, is always
stressed, i.e., the relation of carrier and passenger continues until the latter
necessary before negligence can be held to exist. Stated in
has been landed at the port of destination and has left the carrier's
these terms, the proper criterion for determining the existence of
premises. Hence, PAL necessarily would still have to exercise
negligence in a given case is this: Conduct is said to be
extraordinary diligence in safeguarding the comfort, convenience and safety
negligent when a prudent man in the position of the
of its stranded passengers until they have reached their final destination. On
tortfeasor would have foreseen that an effect harmful to
this score, PAL grossly failed considering the then ongoing battle between
another was sufficiently probable to warrant his foregoing
government forces and Muslim rebels in Cotabato City and the fact that the
conduct or guarding against its consequences.
private respondent was a stranger to the place. As the appellate court
correctly ruled -
"While the failure of plaintiff in the first instance to reach his Cacho v. Manahan
destination at Ozamis City in accordance with the contract of carriage Held: Using this test, Manahan was clearly negligent when he
was due to the closure of the airport on account of rain and inclement was relatively driving fast on a narrow highway and approaching a
weather which was radioed to defendant 15 minutes before landing, it has similarly narrow bridge. We must bear in mind that a bus is a significantly
not been disputed by defendant airline that Ozamis City has no all-weather large vehicle which would be difficult to maneuver and stop if it were
airport and has to cancel its flight to Ozamis City or by-pass it in the event travelling at a high speed. On top of this, the time of the accident was on or
of inclement weather. Knowing this fact, it becomes the duty of defendant about sunrise when visibility on the road was compromised. Manahan
to provide all means of comfort and convenience to its passengers when should have been more prudent and careful in his driving the bus especially
they would have to be left in a strange place in case of such by-passing. The considering that Dagupan Bus is a common carrier. Given the nature of the
steps taken by defendant airline company towards this end has not been put business and for reasons of public policy, the common carrier is bound "to
in evidence, especially for those 7 others who were not accommodated in observe extraordinary diligence in the vigilance over the goods and for the
the return trip to Cebu, only 6 of the 21 having been so accommodated. It safety of the passengers transported by them, according to all the
appears that plaintiff had to leave on the next flight 2 days later. If the cause circumstances of each case."
of non-fulfillment of the contract is due to a fortuitous event, it has to be the
sole and only cause (Art. 1755 C.C., Art. 1733 C.C.) Since part of the Evidently,   under  these  provisions  of  law,   the  court
failure to comply with the obligation of common carrier to deliver its
need not make an express finding of fault or negligence on the part
passengers safely to their destination lay in the defendant’s failure to
provide comfort and convenience to its stranded passengers using extra- of the defendant-appellant in order to hold it  responsible  to  pay 
ordinary diligence, the cause of non-fulfillment is not solely and the  damages   sought  for  by  the plaintiff, for the action initiated
exclusively due to fortuitous event, but due to something which defendant therefor is based on a contract of carriage and not on tort. This is an
airline could have prevented, defendant becomes liable to plaintiff." exception to the general rule that negligence must be proved, and it
While we find PAL remiss in its duty of extending utmost care was therefore incumbent upon the carrier to prove that it has
to private respondent while being stranded in Cotabato City, there exercised extraordinary diligence as prescribed in Articles 1733
is no sufficient basis to conclude that PAL failed to inform him about his and 1755 of the new Civil Code [Sy v. Malate Taxi].   
non-accommodation on Flight 560, or that it was inattentive to his queries
In an action based on a contract of carriage, the court
relative thereto.
need not make an express finding of fault or negligence on the part
of the carrier in order to hold it responsible to pay the damages
E. PRESUMPTION OF NEGLIGENCE
sought for by the passenger. By the contract of carriage, the carrier
assumes the express obligation to transport the passenger to his
Article 1756. In case of death of or injuries to passengers,
destination safely and to observe extra-ordinary diligence with a
common carriers are presumed to have been at fault or to have acted
negligently, unless they prove that they observed extraordinary
due regard for all the circumstances, and any injury that might be
diligence as prescribed in articles 1733 and 1755. suffered by the passenger is right away attributable to the fault or
negligence of the carrier (Art. 1756, new Civil Code). This is an
In Picart v. Smith, the Supreme Court laid down the test exception to the general rule that negligence must be proved
by which it determines the existence of negligence, viz: [Abeto v. Philippine Airlines].

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 foresee or avoid through the exercise of the degree of care and
Bachelor Express v. Court of Appeals diligence required of it [De Gillaco v. MRR].
Held: Considering the factual findings of the Court of Appeals - The basis of the carrier's liability for assaults on
the bus driver did not immediately stop the bus at the height of the passengers committed by its drivers rests either on (1) the doctrine
commotion; the bus was speeding from a full stop; the victims fell from the of respondent superior or (2) the principle that it is the
bus door when it was opened or gave way while the bus was still running; carrier's implied duty to transport the passenger safely.
the conductor panicked and blew his whistle after people had already fallen
Under the first, which is the minority view, the carrier is
off the bus; and the bus was not properly equipped with doors in
accordance with law - it is clear that the petitioners have failed to overcome
liable only when the act of the employee is within the scope of his
the presumption of fault and negligence found in the law governing authority and duty.  It is not sufficient that the act be within the
common carriers. course of employment only.
Under the second view, upheld by the majority and also
F. LIMITATIONS OF LIABILITY; VALIDITY OF by the later cases, it is enough that the assault happens within the
STIPULATIONS course of the employee's duty.  It is no defense for the carrier that
the act was done in excess of authority or in disobedience of the
Article 1757. The responsibility of a common carrier for the carrier's orders. The carrier's liability here is absolute in the sense
safety of passengers as required in articles 1733 and 1755 cannot be that it practically secures the passengers from assaults committed
dispensed with or lessened by stipulation, by the posting of notices, by by its own employees.
statements on tickets, or otherwise. As can be gleaned from Art. 1759, the Civil Code of the
Philippines evidently follows the rule based on the second
Article 1758. When a passenger is carried gratuitously, a view.  At least three very cogent reasons underlie this rule.  As
stipulation limiting the common carrier's liability for negligence is explained in Texas Midland R.R. v. Monroe, 110 Tex. 97, 216
valid, but not for wilful acts or gross negligence. S.W. 388, 389-390, and Haver v. Central Railroad Co., 43 LRA 84,
The reduction of fare does not justify any limitation of the 85: (1) the special undertaking of the carrier requires that it furnish
common carrier's liability.
its passenger that full measure of protection afforded by the
exercise of the high degree of care prescribed by the
Lara v. Valencia law, inter alia from violence and insults at the hands of
Held: It therefore appears that the deceased, as well as his strangers and other passengers, but above all, from the acts of the
companions who rode in the pick-up of defendant, were merely
carrier's own servants charged with the passenger's safety; (2) said
accommodation passengers who paid nothing for the service and so they
can be considered as invited guests within the meaning of the law. As
liability of the carrier for the servant's violation of duty to
accommodation passengers or invited guests, defendant as owner and driver passengers, is the result of the former's confiding in the servant's
of the pick-up owes to them merely the duty to exercise reasonable care so hands the performance of his contract to safely transport the
that they may be transported safely to their destination. Thus, "The rule is passenger, delegating therewith the duty of protecting the
established by the weight of authority that the owner or operator of an passenger with the utmost care prescribed by law; and (3) as
automobile owes the duty to an invited guest to exercise reasonable care in between the carrier and the passenger, the former must bear the risk
its operation, and not unreasonably to expose him to danger and injury by of wrongful acts or negligence of the carrier's employees against
increasing the hazard of travel. This rule, as frequently stated by the courts,
passengers, since it, and not the passengers, has power to select and
is that an owner of an automobile owes a guest the duty to exercise ordinary
or reasonable care to avoid injuring him. Since one riding in an automobile
remove them [Maranan v. Perez].
is no less a guest because he asked for the privilege of doing so, the same
obligation of care is imposed upon the driver as in the case of one expressly De Gillaco v. MRR
invited to ride" (5 Am. Jur., 626-627). Defendant, therefore, is only Held: The act of guard Devesa in shooting passenger Gillaco
required to observe ordinary care, and is not in duty bound to exercise (because of a personal grudge nurtured against the latter since the Japanese
extraordinary diligence as required of a common carrier by our law occupation) was entirely unforseeable by the Manila Railroad Co. The latter
(Articles 1755 and 1756, new Civil Code). had no means to ascertain or anticipate that the two would meet, nor could
it reasonably foresee every personal rancor that might exist between each
G. RESPONSIBILITY FOR ACTS OF EMPLOYEES, one of its many employees and any one of the thousands of eventual
passengers riding in its trains. The shooting in question was therefore "caso
STRANGERS AND CO-PASSENGERS
fortuito" within the definition of article 1105 of the old Civil Code, being
both unforeseeable and inevitable under the given circumstances; and
Article 1759. Common carriers are liable for the death of or pursuant to established doctrine, the resulting breach of appellant's contract
injuries to passengers through the negligence or wilful acts of the of safe carriage with the late Tomas Gillaco was excused thereby.
former's employees, although such employees may have acted beyond
the scope of their authority or in violation of the orders of the common
carriers. Baliwag Transit v. Court of Appeals
This liability of the common carriers does not cease upon Held: Baliwag cannot evade its liability by insisting that the
proof that they exercised all the diligence of a good father of a family in accident was caused solely by the negligence of A & J Trading and Julio
the selection and supervision of their employees. Recontique. It harps on their alleged non use of an early warning device as
testified to by Col. Demetrio dela Cruz, the station commander of Gapan,
Nueva Ecija who investigated the incident, and Francisco Romano, the bus
Article 1760. The common carrier's responsibility conductor.
prescribed in the preceding article cannot be eliminated or limited by The records do not bear out Baliwag's contention. Col. dela Cruz
stipulation, by the posting of notices, by statements on the tickets or and Romano testified that they did not see any early warning device at the
otherwise. scene of the accident. They were referring to the triangular reflectorized
plates in red and yellow issued by the Land Transportation Office.
A passenger is entitled to protection from personal However, the evidence shows that Recontique and Ecala placed a kerosene
violence by the carrier or its agents or employees, since the lamp or torch at the edge of the road, near the rear portion of the truck to
contract of transportation obligates the carrier to transport a serve as an early warning device.
passenger safely to his destination. But under the law of the case,
this responsibility extends only to those that the carrier could Article 1763. A common carrier is responsible for injuries
suffered by a passenger on account of the wilful acts or negligence of

Page 7 of 39
other passengers or of strangers, if the common carrier's employees a lesser degree of diligence, i.e., diligence of a good father of a family, in
through the exercise of the diligence of a good father of a family could assessing the existence of any culpability on the common carrier's part.
have prevented or stopped the act or omission. In ruling on this case, the CA cited Fortune Express, Inc. v.
Court of Appeals (Fortune) in ascribing negligence on the part of petitioner,
Case law states that the concept of diligence of a good ratiocinating that it failed to implement measures to detect if its passengers
were carrying firearms or deadly weapons which would pose a danger to
father of a family connotes reasonable care consistent with that
the other passengers. However, the CA's reliance was plainly misplaced in
which an ordinarily prudent person would have observed when view of Fortune's factual variance with the case at bar.
confronted with a similar situation. The test to determine whether In Fortune, the common carrier had already received
negligence attended the performance of an obligation is: did the intelligence reports from law enforcement agents that certain lawless
defendant in doing the alleged negligent act use that reasonable elements were planning to hijack and burn some of its buses; and yet, it
care and caution which an ordinarily prudent person would have failed to implement the necessary precautions to ensure the safety of its
used in the same situation? If not, then he is guilty of negligence buses and its passengers. A few days later, one of the company's buses was
[GV Florida v. Heirs of Battung]. indeed hijacked and burned by the lawless elements pretending as mere
passengers, resulting in the death of one of the bus passengers.
The law requires common carriers to carry passengers
Accordingly, the Court held that the common carrier's failure to take
safely using the utmost diligence of very cautious persons with due precautionary measures to protect the safety of its passengers despite
regard for all circumstances. Such duty of a common carrier to warnings from law enforcement agents showed that it failed to exercise the
provide safety to its passengers so obligates it not only during the diligence of a good father of a family in preventing the attack against one of
course of the trip but for so long as the passengers are within its its buses; thus, the common carrier was rightfully held liable for the death
premises and where they ought to be in pursuance to the contract of of the aforementioned passenger.
carriage.[6] The statutory provisions render a common carrier liable In contrast, no similar danger was shown to exist in this case so
for death of or injury to passengers (a) through the negligence or as to impel petitioner or its employees to implement heightened security
measures to ensure the safety of its passengers. There was also no showing
wilful acts of its employees or b) on account of wilful acts or
that during the course of the trip, Battung's killer made suspicious actions
negligence of other passengers or of strangers if the common which would have forewarned petitioner's employees of the need to conduct
carrier’s employees through the exercise of due diligence could thorough checks on him or any of the passengers. Relevantly, the Court,
have prevented or stopped the act or omission. In case of such in Nocum v. Laguna Tayabas Bus Company, has held that common carriers
death or injury, a carrier is presumed to have been at fault or been should be given sufficient leeway in assuming that the passengers they take
negligent, and by simple proof of injury, the passenger is relieved in will not bring anything that would prove dangerous to himself, as well as
of the duty to still establish the fault or negligence of the carrier or his co-passengers, unless there is something that will indicate that a more
stringent inspection should be made, viz.:
of its employees and the burden shifts upon the carrier to prove that
In this particular case before Us, it must be considered that
the injury is due to an unforeseen event or to force majeure. [9] In the
while it is true the passengers of appellant's bus should not be made to
absence of satisfactory explanation by the carrier on how the suffer for something over which they had no control, as enunciated in the
accident occurred, which petitioners, according to the appellate decision of this Court cited by His Honor, fairness demands that in
court, have failed to show, the presumption would be that it has measuring a common carrier's duty towards its passengers, allowance
been at fault, an exception from the general rule that negligence must be given to the reliance that should be reposed on the sense of
must be proved [Light Railway Transit v. Natividad]. responsibility of all the passengers in regard to their common safety. It
In Pilapil v. CA, the Court clarified that where the injury is to be presumed that a passenger will not take with him anything
dangerous to the lives and limbs of his co-passengers, not to speak of
sustained by the passenger was in no way due (1) to any defect in
his own. Not to be lightly considered must be the right to privacy to which
the means of transport or in the method of transporting, or (2) to
each passenger is entitled. He cannot be subjected to any unusual search,
the negligent or willful acts of the common carrier's employees when he protests the innocuousness of his baggage and nothing appears
with respect to the foregoing - such as when the injury arises to indicate the contrary, as in the case at bar. In other words, inquiry
wholly from causes created by strangers which the carrier had no may be verbally made as to the nature of a passenger's baggage when
control of or prior knowledge to prevent — there would be no issue such is not outwardly perceptible, but beyond this, constitutional
regarding the common carrier's negligence in its duty to provide boundaries are already in danger of being transgressed. Calling a
safe and suitable care, as well as competent employees in relation policeman to his aid, as suggested by the service manual invoked by the
trial judge, in compelling the passenger to submit to more rigid inspection,
to its transport business; as such, the presumption of
after the passenger had already declared that the box contained mere clothes
fault/negligence foisted under Article 1756 of the Civil Code and other miscellaneous, could not have justified invasion of a
should not apply. constitutionally protected domain. Police officers acting without judicial
authority secured in the manner provided by law are not beyond the pale of
GV Florida v. Heirs of Battung constitutional inhibitions designed to protect individual human rights and
Held: In this case, Battung's death was neither caused by any liberties. Withal, what must be importantly considered here is not so much
defect in the means of transport or in the method of transporting, or to the the infringement of the fundamental sacred rights of the particular
negligent or willful acts of petitioner's employees, namely, that of Duplio passenger herein involved, but the constant threat any contrary ruling would
and Daraoay, in their capacities as driver and conductor, respectively. pose on the right of privacy of all passengers of all common carriers,
Instead, the case involves the death of Battung wholly caused by the considering how easily the duty to inspect can be made an excuse for
surreptitious act of a co-passenger who, after consummating such crime, mischief and abuse. Of course, when there are sufficient indications that
hurriedly alighted from the vehicle. Thus, there is no proper issue on the representations of the passenger regarding the nature of his
petitioner's duty to observe extraordinary diligence in ensuring the safety of baggage may not be true, in the interest of the common safety of all, the
the passengers transported by it, and the presumption of fault/negligence assistance of the police authorities may be solicited, not necessarily to
against petitioner under Article 1756 in relation to Articles 1733 and 1755 force the passenger to open his baggage, but to conduct the needed
of the Civil Code should not apply. investigation consistent with the rules of propriety and, above all, the
On the other hand, since Battung's death was caused by a co- constitutional rights of the passenger. It is in this sense that the
passenger, the applicable provision is Article 1763 of the Civil Code, mentioned service manual issued by appellant to its conductors must be
which states that "a common carrier is responsible for injuries suffered by a understood. (Emphases and underscoring supplied)
passenger on account of the willful acts or negligence of other passengers In this case, records reveal that when the bus stopped at San Jose
or of strangers, if the common carrier's employees through the exercise City to let four (4) men ride petitioner's bus (two [2] of which turned out to
of the diligence of a good father of a family could have prevented or be Battung's murderers), the bus driver, Duplio, saw them get on the bus
stopped the act or omission." Notably, for this obligation, the law provides and even took note of what they were wearing. Moreover, Duplio made the
bus conductor, Daraoay, approach these men and have them pay the

Page 8 of 39
corresponding fare, which Daraoay did.[31] During the foregoing, both could not have occurred. Defendant contends, and cites many authorities in
Duplio and Daraoay observed nothing which would rouse their suspicion support of the contention, that it is negligence per se for a passenger to
that the men were armed or were to carry out an unlawful activity. With no alight from a moving train. We are not disposed to subscribe to this
such indication, there was no need for them to conduct a more stringent doctrine in its absolute form. We are of the opinion that this proposition is
search (i.e., bodily search) on the aforesaid men. By all accounts, therefore, too broadly stated and is at variance with the experience of every-day life.
it cannot be concluded that petitioner or any of its employees failed to In this particular instance, that the train was barely moving when plaintiff
employ the diligence of a good father of a family in relation to its alighted is shown conclusively by the fact that it came to stop within six
responsibility under Article 1763 of the Civil Code. As such, petitioner meters from the place where he stepped from it. Thousands of persons
cannotz altogether be held civilly liable. alight from trains under these conditions every day of the year,) and sustain
no injury where the company has kept its platform free from dangerous
obstructions. There is no reason to believe that plaintiff would have
Fortune Express v. Court of Appeals
suffered any injury whatever in alighting as he did had it not been for
Held: In the present case, it is clear that because of the
defendant's negligent failure to perform its duty to provide a safe alighting
negligence of petitioner's employees, the seizure of the bus by Mananggolo
place.
and his men was made possible.
As the case now before us presents itself, the only fact from
Despite warning by the Philippine Constabulary at Cagayan de
which a conclusion can be drawn to the effect that the plaintiff was guilty
Oro that the Maranaos were planning to take revenge on the petitioner by
of contributory negligence is that he stepped off the car without being able
burning some of its buses and the assurance of petitioner's operation
to discern clearly the condition of the platform and while the train was yet
manager, Diosdado Bravo, that the necessary precautions would be taken,
slowly moving. In considering the situation thus presented, it should not be
petitioner did nothing to protect the safety of its passengers.
overlooked that the plaintiff was, as we find, ignorant of the fact that the
Had petitioner and its employees been vigilant they would not
obstruction which was caused by the sacks of melons piled on the platform
have failed to see that the malefactors had a large quantity of gasoline with
existed; and as the defendant was bound by reason of its duty as a public
them. Under the circumstances, simple precautionary measures to protect
carrier to afford to its passengers facilities for safe egress from its trains, the
the safety of passengers, such as frisking passengers and inspecting their
plaintiff had a right to assume, in the absence of some circumstance to warn
baggages, preferably with non-intrusive gadgets such as metal detectors,
him to the contrary, that the platform was clear. The place, as we have
before allowing them on board could have been employed without violating
already stated, was dark, or dimly lighted, and this also is proof of a failure
the passenger's constitutional rights. As this Court intimated in Gacal v.
upon the part of the defendant in the performance of a duty owing by it to
Philippine Air Lines, Inc. a common carrier can be held liable for failing to
the plaintiff; for if it were by any possibility conceded that it had a right to
prevent a hijacking by frisking passengers and inspecting their baggages.
pile these sacks in the path of alighting passengers, the placing of them in
From the foregoing, it is evident that petitioner's employees
that position gave rise to the duty to light the premises adequately so that
failed to prevent the attack on one of petitioner's buses because they did not
their presence would be revealed.
exercise the diligence of a good father of a family. Hence, petitioner should
As pertinent to the question of contributory negligence on the
be held liable for the death of Atty. Caorong.
part of the plaintiff in this case the following circumstances are to be noted:
The company's platform was constructed upon a level higher than that of
H. DUTY OF PASSENGER; EFFECT OF the roadbed and the surrounding ground. The distance from the steps of the
CONTRIBUTORY NEGLIGENCE car to the spot where the alighting passenger would place his feet on the
platform was thus reduced, thereby decreasing the risk incident to stepping
Article 1761. The passenger must observe the diligence of a off. The nature of the platform, constructed as it was of cement material,
good father of a family to avoid injury to himself. also assured to the passenger a stable and even surface on which to alight.
Furthermore, the plaintiff was possessed of the vigor and agility of young
manhood, and it was by no means so risky for him to get off while the train
Article 1762. The contributory negligence of the passenger
was yet moving as the same act would have been in an aged or feeble
does not bar recovery of damages for his death or injuries, if the
person. In determining the question of contributory negligence in
proximate cause thereof is the negligence of the common carrier, but
performing such act—that is to say, whether the passenger acted prudently
the amount of damages shall be equitably reduced.
or recklessly—the age, sex, and physical condition of the passenger are
circumstances necessarily affecting the safety of the passenger, and should
The test by which to determine whether the passenger be considered. Women, it has been observed, as a general rule, are less
has been guilty of negligence in attempting to alight from a moving capable than men of alighting with safety under such conditions, as the
railway train, is that of ordinary or reasonable care. It is to be nature of their wearing apparel obstructs the free movement of the limbs.
considered whether an ordinarily prudent person, of the age, sex Again, it may be noted that the place was perfectly familiar to the plaintiff,
as it was his daily custom to get on and off the train at this station. There
and condition of the passenger, would have acted as the passenger
could, therefore, be no uncertainty in his mind with regard either to the
acted under the circumstances disclosed by the evidence. This care length of the step which he was required to take or the character of the
has been defined to be, not the care which may or should be used platform where he was alighting. Our conclusion is that the conduct of the
by the prudent man generally, but the care which a man of ordinary plaintiff in undertaking to alight while the train was yet slightly under way
prudence would use under similar circumstances, to avoid injury was not characterized by imprudence and that therefore he was not guilty of
[Cangco v. MRR]. contributory negligence.
The evidence shows that the plaintiff, at the time of the accident,
was earning P25 a month as a copyist clerk, and that the injuries he has
Cangco v. MRR
suffered have permanently disabled him from continuing that employment.
Held: The railroad company's defense involves the assumption
Defendant has not shown that any other gainful occupation is open to
that even granting that the negligent conduct of its servants in placing an
plaintiff. His expectancy of life, according to the standard mortality tables,
obstruction upon the platform was a .breach of its contractual obligation to
is approximately thirty-three years. We are of the opinion that a fair
maintain safe means of approaching and leaving its trains, the direct and
compensation for the damage suffered by him for his permanent disability
proximate cause of the injury suffered by plaintiff was his own contributory
is the sum of P2,500, and that he is also entitled to recover of defendant the
negligence in failing to wait until the train had come to a complete stop
additional sum of P790.25 for medical attention, hospital services, and
before alighting. Under the doctrine of comparative negligence announced
other incidental expenditures connected with the treatment of his injuries.
in the Rakes case (supra), if the accident was caused by plaintiff's own
negligence, no liability is imposed upon defendant, whereas if the accident
was caused by defendant's negligence and plaintiff's negligence merely Del Prado v. MRR
contributed to his injury, the damages should be apportioned. It is, Held: As to the contributory negligence of the plaintiff, we are
therefore, important to ascertain if defendant was in fact guilty of of the opinion that it should be treated, as in Rakes vs. Atlantic, Gulf and
negligence. Pacific Co. (7 Phil., 359), as a mitigating circumstance under article 1103
It may be admitted that had plaintiff waited until the train had of the Civil Code. It is obvious that the plaintiff's negligence in attempting
come to a full stop before alighting, the particular injury suffered by him to board the moving car was not the proximate cause of the injury. The
Page 9 of 39
direct and proximate cause of the injury was the act of appellant's moving conveyance under the same or similar circumstances. The fact that
motorman in putting on the power prematurely. A person boarding a passengers board and alight from a slowly moving vehicle is a matter of
moving car must be taken to assume the risk of injury from boarding the car common experience and both the driver and conductor in this case could
under the conditions open to his view, but he cannot fairly be held to not have been unaware of such an ordinary practice.
assume the risk that the motorman, having the situation in view, will The victim herein, by stepping and standing on the platform of
increase his peril by accelerating the speed of the car before he is planted the bus, is already considered a passenger and is entitled to all the rights
safely on the platform. Again, the situation before us is one where the and protection pertaining to such a contractual relation. Hence, it has been
negligent act of the company's servant succeeded the negligent act of the held that the duty which the carrier of passengers owes to its patrons
plaintiff, and the negligence of the company must be considered the extends to persons boarding the cars as well as to those alighting therefrom.
proximate cause of the injury. The rule here applicable seems to be Common carriers, from the nature of their business and for
analogous to, if not identical with that which is sometimes referred to as the reasons of public policy, are bound to observe extraordinary diligence for
doctrine of "the last clear chance" In accordance with this doctrine, the the safety of the passengers transported by them, according to all the
contributory negligence of the party injured will not defeat the action if it circumstances of each case. A common carrier is bound to carry the
be shown that the defendant might, by the exercise of reasonable care and passengers safely as far as human care and foresight can provide, using the
prudence, have avoided the consequences of the negligence of the injured utmost diligence of very cautious persons, with a due regard for all the
party (20 R. C. L., p. 139; Carr vs. Interurban Ry. Co., 185 Iowa, 872; 171 circumstances.
N. W., 167). The negligence of the plaintiff was, however, contributory to
Fortune Express v. Court of Appeals
the accident and must be considered as a mitigating circumstance.
Held: The petitioner contends that Atty. Caorong was guilty of
contributory negligence in returning to the bus to retrieve something. But
Brinas v. People Atty. Caorong did not act recklessly. It should be pointed out that the
Held: It is a matter of common knowledge and experience about intended targets of the violence were petitioner and its employees, not its
common carriers like trains and buses that before reaching a station or passengers. The assailant's motive was to retaliate for the loss of life of two
flagstop they slow down and the conductor announces the name of the Maranaos as a result of the collision between petitioner's bus and the
place. It is also a matter of common experience that as the train or bus jeepney in which the two Maranaos were riding. Mananggolo, the leader of
slackens its speed, some passengers usually stand and proceed to the the group which had hijacked the bus, ordered the passengers to get off the
nearest exit, ready to disembark as the train or bus comes to a full stop. This bus as they intended to burn it and its driver. The armed men actually
is especially true of a train because passengers feel that if the train resumes allowed Atty. Caorong to retrieve something from the bus. What apparently
its run before they are able to disembark, there is no way to stop it as a bus angered them was his attempt to help the driver of the bus by pleading for
may be stopped. his life. He was playing the role of the good Samaritan. Certainly, this act
It was negligence on the conductor's part to announce the next cannot be considered an act of negligence, let alone recklessness.
flag stop when said stop was still a full three minutes ahead. As the
respondent Court of Appeals correctly observed, "the appellant's
Isaac v. A.L. Ammen
announcement was premature and erroneous."
Held: A circumstance  which  militates against the  stand of
That the announcement was premature and erroneous is shown
appellant is  the fact  borne out by the evidence that  when he  boarded  the 
by the fact that immediately after the train slowed down, it unexpectedly
bus in question, he  seated  himself  on the left side thereof resting his left
accelerated to full speed. Petitioner-appellant failed to show any reason
arm on the window sill  but with  his  left  elbow outside  the  window,  this
why the train suddenly resumed its regular speed. The announcement was
being his position in  the bus when the collision took  place. It is for  this 
made while the train was still at Barrio Lagalag.
reason that the collision  resulted in  the severance  of said  left  arm from
The proximate cause of the death of the victims was the
the  body of  appellant thus doing him a great  damage. It is therefore
premature and erroneous announcement of petitioner-appellant Briñas. This
apparent that appellant  is guilty of contributory negligence.   Had he  not
announcement prompted the two victims to stand and proceed to the nearest
placed  his left  arm on the window  sill with  a portion  thereof  protruding
exit. Without said announcement, the victims would have been safely
outside, perhaps  the injury would have  been avoided as  is the case with
seated in their respective seats when the train jerked as it picked up speed.
the  other passengers.  It is to  be  noted that appellant was  the only victim
The connection between the premature and erroneous announcement of
of  the collision.
petitioner-appellant and the deaths of the victims is direct and natural,
It is true that such contributory  negligence cannot relieve
unbroken by any intervening efficient causes.
appellee of  its liability  but will  only  entitle  it  to  a reduction of the
Petitioner-appellant also argues that it was negligence per se for
amount  of damage caused  (Article  1762, new Civil  Code), but this  is a
Martina Bool to go to the door of the coach while the train was still in
circumstance which further militates  against the position  taken by
motion and that it was this negligence that was the proximate cause of their
appellant in this case.
deaths.
"It is the  prevailing rule  that  it is negligence  per  se  for  a
We have carefully examined the records and we agree with the
passenger on  a railroad voluntarily or inadvertently to protrude his  arm,
respondent court that the negligence of petitioner-appellant in prematurely
hand,  elbow,  or  any other,  part  of  his  body through the  window of a 
and erroneously announcing the next flag stop was the proximate cause of
moving car beyond the outer edge of the window or outer surface  of the 
the deaths of Martina Bool and Emelita Gesmundo. Any negligence of the
ear, so  as to come in contact with object? or obstacles near the track,  and 
victims was at most contributory and does not exculpate the accused from
that no  recovery can be had for  an  injury which  but  for  such negligence
criminal liability.
would  not have been sustained. * * *"  (10 C. J. 1139)
"Plaintiff, (passenger) while riding  on  an interurban car, to
Dangwa v. Court of Appeals flick the ashes  from  his cigar, thrust his  hand  over  the  guard rail a
Held: It is the duty of common carriers of passengers, including sufficient  distance beyond the side line of the car to  bring" it in contact
common carriers by railroad train, streetcar, or motorbus, to stop their with the trunk of a tree standing beside  the  track; the  force  of  the blow
conveyances a reasonable length of time in order to afford passengers an breaking  his   wrist. Held,   that he  was guilty of contributory negligence
opportunity to board and enter, and they are liable for injuries suffered by as a matter of law."  (Malakia  vs. Khode, Island Co., 89 A., 837.)
boarding passengers resulting from the sudden starting up or jerking of their
conveyances while they are doing so.
Further, even assuming that the bus was moving, the act of the
victim in boarding the same cannot be considered negligent under the
circumstances. As clearly explained in the testimony of the aforestated
witness for petitioners, Virginia Abalos, the bus had "just started" and "was
still in slow motion" at the point where the victim had boarded and was on
its platform.
It is not negligence per se, or as a matter of law, for one to
attempt to board a train or streetcar which is moving slowly. [14] An
ordinarily prudent person would have made the attempt to board the

Page 10 of 39
 Real and hypothecary nature is that which distinguishes
the maritime from the civil law and even from the mercantile law
in general. This simply means that the liability of the carrier (vessel
owner and agent) in connection with losses related to maritime
contracts (or arising from operation of such vessel) is confined (or
limited) to the vessel (as well as its equipment, freight, insurance, if
any).
It has its origin by reason of the conditions and risks
attending maritime trade in its earliest years when such trade was
replete with innumerable and unknown hazards since vessels had to
go through largely unchartered waters to ply their trade; it was
designed to offset such adverse conditions and to encourage parties
to venture into maritime commerce despite the risks and
prohibitive costs.
As evidence of this "real" nature of the maritime law we
have (1) the limitation of the liability of the agents to the actual
value of the vessel and the freight money, and (2) the right to retain
the cargo and the embargo and detention of the vessel even in cases
where the ordinary civil law would not allow more than a personal
action against the debtor or person liable. It will be observed that
these rights are correlative, and naturally so, because if the agent
can exempt himself from liability by abandoning the vessel and
freight money, thus avoiding the possibility of risking his whole
fortune in the business, it is also just that his maritime creditor may
for any reason attach the vessel itself to secure his claim without
waiting for a settlement of his rights by a final judgment, even to
the prejudice of a third person [Luzon Stevedoring v. Court of
Appeals].
There are two reasons why it is impossible to do away
with these privileges, to wit: (1) The risk to which the thing is
exposed, and (2) the "real" nature of the maritime law, exclusively
"real", according to which the liability of the parties is limited to a
thing which is at the mercy of the waves.  If the agent is
only liable with the vessel and freight money and both may be lost
through the accidents of navigation it is only just that the maritime
creditor have some means of obviating this precarious nature of his
rights by detaining the ship, his only security, before it is lost
[Ibid].

I
VESSELS IN GENERAL

A. P.D. 474

1. Definition of Vessel
Section 3(b) of P.D. 474 provides for the definition of a
vessel:

b. "Vessels" or "Watercraft" Any barge, lighter, bulk

carrier, passenger ship freighter, tanker, container ship, fishing
boats or other artificial contrivance utilizing any source of
motive power, designed, used or capable of being used as a
means of water transportation operating either as common
contract carrier, including fishing vessels covered under
Presidential Decree No. 43, except (1) those owned and/or
operated by the Armed Forces of the Philippines and by foreign
governments for military purposes, and (ii) bancas, sailboats and
other waterborne contrivance of less than three gross tons
capacity and not motorized.

In Lopez v. Duruelo, the Supreme Court held that only

MARITIME LAW AND ADMIRALTY vessels engaged in what is ordinarily known as maritime commerce
are within the provisions of law conferring limited liability on the
Maritime law is the system of laws which particularly owner in case maritime disaster. xxx the word ‘vessel’ in these
relates to the affairs of the sea, to ships, their crews and navigation, codes is limited to ships and other sea-going vessels. It is therefore
and to marine conveyance of persons and property. clear that a passenger on a boat like the Jison, in the case before us,
is not required to make protest as a condition precedent to his right

Page 11 of 39
of action for the injury suffered by him in the collision described in b. Repurchase and Redemption by Co-Owners
the complaint. In other words, article 835 of the Code of
Commerce does not apply. Article 575. Co-owners of vessels shall have the right of
repurchase and redemption in sales made to strangers, but they may
2. Registration exercise the same only within the nine days following the inscription of
Section 12(a) provides: the sale in the registry, and by depositing the price at the same time.

Section 12. Specific Powers and Functions of the c. Inclusions

Administrator. In addition to his general powers and functions,
the Administrator shall; Article 576. In the sale of a vessel it shall always be
a. Issue Certificate of Philippine Registry for all understood as included the rigging, masts, stores and engine of a
vessels being used in Philippine waters, including fishing streamer appurtenant thereto, which at the time belongs to the vendor.
vessels covered by Presidential Decree No. 43 except transient The arms, munitions of war, provisions and fuel shall not be considered
civilian vessels of foreign registry, vessels owned and/or as included in the sale.
operated by the Armed Forces of the Philippines or by foreign
governments for military purposes, and bancas, sailboats and
other watercraft which are not motorized, of less than three
d. Rule on Freightage, etc.
gross tons;
Article 577. If the alienation of the vessel should take place
As amended by E.O. 125-A, it now provides: while said vessel is on a voyage, the purchaser shall receive all the
freights it earns from the time it received its last cargo, and the
"Sec. 12. Maritime Industry Authority. The Maritime payment of the crew and other persons which go to make up its
Industry Authority is hereby retained and shall have the following complement shall be paid by the purchaser for the said voyage.
functions: If the sale takes place after the arrival of the vessel at the
a. Develop and formulate plans, policies, programs, projects, port of its destination, the freights shall belong to the vendors and he
standards, specifications and guidelines geared toward the shall pay the crew and other persons which go to make up its
promotion and development of the maritime industry, the complement, unless there is an agreement to the contrary in either
growth and effective regulation of shipping enterprises, case.
and for the national security objectives of the country;
b. Establish, prescribe and regulate routes, zones and/or areas e. Judicial and Voluntary Sale
of operation of particular operators of public water
services;
Article 578. If the vessel being on a voyage or in a foreign
c. Issue Certificates of Public Convenience for the operation
port, its owner or owners should voluntarily alienate it, either to
of domestic and overseas water carriers;
Filipinos or to foreigners domiciled in the capital or in a port of
d. Register vessels as well as issue certificates, licenses or
another country, the bill of sale shall be executed before the consul of
documents necessary or incident thereto;
the Republic of the Philippines at the port where it terminates its
voyage and said instrument shall produce no effect with respect to
B. CODE OF COMMERCE third persons if it is not inscribed in the registry of the consulate. The
consul shall immediately forward a true copy of the instrument of
1. Construction, Equipment, Manning purchase and sale of the vessel to the registry of vessels of the port
where said vessel is inscribed and registered.
Article 574. Builders of vessels may employ the materials In every case the alienation of the vessel must be made to
and follow, with respect to their construction and rigging, the systems appear with a statement of whether the vendor receives its price in
most suitable to their interests. Ship owners and seamen shall be whole or in part, or whether he preserves in whole or in part any claim
subject to what the laws and regulations of the public administration on said vessel. In case the sale is made to a Filipino, this fact shall be
on navigation, customs, health, safety of vessels, and other similar stated in the certificate of navigation.
matters. When a vessel, being on a voyage, shall be rendered useless
for navigation, the captain shall apply to the competent judge on court
of the port of arrival, should it be in the Philippines; and should it be in
2. Considered as Personal Property a foreign country, to the consul of the Republic of the Philippines,
should there be one, or, where there is none, to the judge or court or to
Article 585. For all purposes of law not modified or the local authority; and the consul, or the judge or court, shall order an
restricted by the provisions of this Code, vessels shall continue to be examination of the vessel to be made.
considered as personal property. If the consignee or the insurer should reside at said port, or
should have representatives there, they must be cited in order that they
3. Ownership; How Acquired may take part in the proceedings on behalf of whoever may be
concerned.

a. Acquisition/Prescription
Article 579. After the damage to the vessel and the
impossibility of her being repaired, in order to continue the voyage had
Article 573. Merchant vessels constitute property which may
been shown, its sale at public auction shall be ordered, subject to the
be acquired and transferred by any of the means recognized by law.
following rules:
The acquisition of a vessel must appear in a written instrument, which
1. The hull of the vessel, its rigging, engines, stores, and
shall not produce any effect with respect to third persons if not
other articles shall be appraised, after making an inventory, said
inscribed in the registry of vessels.
proceedings to be brought to the notice of the persons who may wish to
The ownership of a vessel shall likewise be acquired by
take part in the auction.
possession in good faith, continued for three years, with a just title duly
2. The order or decree ordering the auction to be held shall
recorded. In the absence of any of these requisites, continuous
be posted in the usual places, an announcement thereof to be inserted
possession for ten years shall be necessary in order to acquire
in the Official Gazette and in two of the newspapers of the largest
ownership.
circulation of the port where the auction is to be held, should there be
A captain may not acquire by prescription the vessel of
any. The period which may be fixed for the auction shall not be less
which he is in command.
than twenty days.

Page 12 of 39
 3. These announcements shall be repeated every ten days, express provision of the Code, the owner of the vessel is civilly liable for
and their publication shall be made to appear in the records. the acts of the captain; and he can only escape from this civil liability by
4. The auction shall be held on the day fixed, with the abandoning his property in the ship and any freight that he may have earned
formalities prescribed in the common law for judicial sales. If the sale on the voyage (arts. 587, 588, Code of Comm.).
should take place while the vessel is in a foreign country, the special
provisions governing such cases shall be observed. A ship agent, on the other hand, is the person: (a)
entrusted with provisioning of the vessel, or (b) who represents the
4. Registration vessel in the port in which it may be found (Art. 586). He is also
Article 573 of the Code of Commerce provides, in its liable for acts of the captain and for damages in the operation of the
first paragraph: vessel (Art. 586). In Standard Oil v. Castelo, it was held that the
ship agent is civilly liable for indemnities in favor of third persons
"Merchant vessels constitute property which may be which arise from the conduct of the captain in the care of the goods
acquired and transferred by any of the means recognized by law.
which the vessel carried (Art. 587); The term "ship agent" as used
The acquisition of a vessel must be included in a written
instrument, which shall not produce any effect with regard to in Art. 587 is broad enough to include the ship owner.
third persons if not recorded in the commercial registry."
Macondray v. Provident
However, since the enactment of Act No. 1900, on May Held: Indeed, although it is not an agent of Trade and Transport,
18, 1909, said article of the Code of Commerce was amended, as petitioner can still be the ship agent of the vessel M/V Trade Carrier.
Article 586 of the Code of Commerce states that a ship agent is
appears by section 2 of that Act, herebelow transcribed.
“the person entrusted with provisioning or representing the vessel in the
port in which it may be found.”
"The documenting, registering, enrolling, and Hence, whether acting as agent of the owner of the vessel or as
licensing of vessels in accordance with the Customs agent of the charterer, petitioner will be considered as the ship agent and
Administrative Act and customs rules and regulations shall be may be held liable as such, as long as the latter is the one that provisions or
deemed to be a registry of vessels within the meaning of title represents the vessel.
two of the Code of Commerce, unless otherwise provided in said The trial court found that petitioner “was appointed as local
Customs Administrative Act or in said customs rules and agent of the vessel, which duty includes arrangement for the entrance and
regulations, and the Insular Collector of Customs shall perform
clearance of the vessel.” Further, the CA found and the evidence shows that
the duties of commercial register concerning the registering of petitioner represented the vessel. The latter prepared the Notice of
vessels, as defined in title two of the Code of Commerce. Readiness, the Statement of Facts, the Completion Notice, the Sailing
Notice and Custom’s Clearance. Petitioner’s employees were present at
The requisite of registration in the registry, of the Sangi, Toledo City, one day before the arrival of the vessel, where they
purchase of a vessel, is necessary and indispensable in order that stayed until it departed. They were also present during the actual
the purchaser's rights may be maintained against a claim filed by a discharging of the cargo. Moreover, Mr. de la Cruz, the representative of
third person [Rubiso v. Rivera]. petitioner, also prepared for the needs of the vessel, like money, provision,
water and fuel.
These acts all point to the conclusion that it was the entity that
II
represented the vessel in the Port of Manila and was the ship agent within
PERSONS PARTICIPATING IN MARITIME the meaning and context of Article 586 of the Code of Commerce.
COMMERCE As ship agent, it may be held civilly liable in certain instances.
The Code of Commerce provides:
A. SHIPOWNERS AND SHIP AGENTS “Article 586. The shipowner and the ship agent shall be civilly
A shipowner is the owner of the vessel. He is the person liable for the acts of the captain and for the obligations contracted by the
liable for acts of the captain and for damages in the operation of the latter to repair, equip, and provision the vessel, provided the creditor proves
that the amount claimed was invested for the benefit of the same.”
vessel (Art. 586).
“Article 587. The ship agent shall also be civilly liable for the
indemnities in favor of third persons which may arise from the conduct of
Standard Oil v. Castelo the captain in the care of the goods which he loaded on the vessel; but he
Held: From what has been said it is evident that the loss of this may exempt himself therefrom by abandoning the vessel with all her
petroleum is a general and not a special average, with the result that the equipments and the freight it may have earned during the voyage.”
plaintiff is entitled to recover in some way and from somebody an amount Petitioner does not dispute the liabilities of the ship agent for the
bearing such proportion to its total loss as the value of both the ship and the loss/shortage of 476.140 metric tons of standard-grade Muriate of Potash
saved cargo bears to the value of the ship and entire cargo before the valued at P1,657,700.95. Hence, we find no reason to delve further into the
jettison was effected. Who is the person, or persons, who are liable to make matter or to disturb the finding of the CA holding petitioner, as ship agent,
good this loss, and what are the conditions under which the action can be liable to respondent for the losses sustained by the subject shipment.
maintained?
That the owner of the ship is a person to whom the plaintiff in
However, the shipowner and ship agent are not liable for
this case may immediately look for reimbursement to the extent above
the obligations contracted by the captain if the latter exceeds his
stated is deducible not only from the general doctrines of admiralty
jurisprudence but from the provisions of the Code of Commerce applicable powers and privileges pertaining to him by reason of his position or
to the case. It is universally recognized that the captain is primarily the conferred upon him by the former, except if the amounts claimed
representative of the owner; and article 586 of the Code of Commerce were made use of for the benefit of the vessel (Art. 587).
expressly declares that both the owner of the vessel and the naviero, or
charterer, shall be civily liable for the acts of the master. In this connection, 1. Qualifications
it may be noted that there is a discrepancy between the meaning of naviero,
in article 586 of the Code of Commerce, where the word is used in
Article 595. The agent, be he at the same time an owner of a
contradistinction to the term "owner of the vessel" (propietario), and in
vessel or a manager for an owner or for an association of co-owners,
article 587 where it is used alone, and apparently in a sense broad enough to
must be qualified to trade and must be recorded in the merchant's
include the owner. Fundamentally the word "naviero" must be understood
registry of the province.
to refer to the person undertaking the voyage, who in one case may be the
The agent shall represent the ownership of the vessel, and
owner and in another the charterer. But this is not vital to the present
may in his own name and in such capacity take judicial and
discussion. The real point to which we direct attention is that, by the
extrajudicial steps in all that relates to commerce.

Page 13 of 39
 case abandonment is not required because there is no vessel to
2. Ship Agent: Powers and Duties abandon, the liability of the shipowner or agent for damages is
a. Represent ownership of vessel, and may, in his own extinguished. Nonetheless, the limited liability rule is not absolute
name and in such capacity take judicial/extrajudicial and is without exceptions. It does not apply in cases: (1) where the
steps in all that relates to commerce (Art. 595) injury or death to a passenger is due either to the fault of the
b. Discharge the duties of the captain, if qualified (Art. shipowner, or to the concurring negligence of the shipowner and
596) the captain; (2) where the vessel is insured; (3) in workmen's
c. Select the captain; enter into an agreement with the compensation claims [Phil-Nippon v. Gudelosao]; and for liability
captain; contract in the name of the owners (Art. of owner for repairs of the vessel completed before its loss
597) [Government v. Insular Maritime].
d. If so authorized, order a new voyage, make Thus, Articles 837, 587, and 590 cover only: (1) Liability
contracts for a new charter, insure the vessel (Art. to third persons; (2) Acts of the Captain; (3) Collisions.
598)
e. Render an account of the results of the voyage (Art. Yangco v. Lasema
Art. 599) Held: In the light of all the foregoing, we therefore hold that if
f. Give the profits due the co-owners (Art. 601) the shipowner or agent may in any way be held civilly liable at all for injury
g. Indemnify the captain for all the expenses incurred to or death of passengers arising from the negligence of the captain in cases
from his own funds or from other persons, for the of collisions or shipwrecks, his liability is merely co-extensive with his
interest in the vessel such that a total loss thereof results in its extinction. In
benefit of the vessel (Art. 602)
arriving at this conclusion, we have not been unmindful of the fact that the
h. Discharge, at his discretion, the captain and illfated steamship Negros, as a vessel engaged in interisland trade, is a
members of the crew (Art. 603-607) common carrier (De Villata v. Stanely, 32 Phil., 541), and that the as a
vessel engaged in interisland trade, is a common carrier (De Villata v.
3. Other Salient Provisions Stanely, 32 Phil., 541), and that the relationship between the petitioner and
the passengers who died in the mishap rests on a contract of carriage. But
Article 596. The ship agent may discharge the duties of assuming that petitioner is liable for a breach of contract of carriage, the
captain of the vessel, subject in every case to the provision of Art 609.If exclusively "real and hypotheeary nature" of maritime law operates to limit
two or more co-owners apply for the provision of captain, the such liability to the value of the vessel, or to the insurance thereon, if any.
disagreement shall be decided by a vote of the members; and if the vote In the instant case it does not appear that the vessel was insured.
should result in a tie, it shall be decided in favor of the co-owner having Whether the abandonment of the vessel sought by the petitioner
the larger interest in the vessel. If the interests of the applicants should in the instant case was in accordance with law or not, is immaterial. The
be equal, and there should be a tie, the matter shall be decided by lot. vessel having totally perished, any act of abandonment would be an idle
ceremony.

Article 597 The ship agent shall designate and come to terms
with the captain, and shall contract in the name of the owners, who Aboitiz v. GAFLAC
shall be bound in all that refer to repairs, details of equipment, Held: The rights of a vessel owner or agent under the Limited
armament, provisions of food and fuel, and freight of the vessel, and, in Liability Rule are akin to those of the rights of shareholders to limited
general, in all that relate to the requirements of navigation. liability under our corporation law. Both are privileges granted by statute,
and while not absolute, must be swept aside only in the established
existence of the most compelling of reasons. In the absence of such reasons,
Article 598 The ship agent may not order a new voyage, or
this Court chooses to exercise prudence and shall not sweep such rights
make contract for a new charter, or insure the vessel, without the
aside on mere whim or surmise, for even in the existence of cause to do so,
authorization of its owner or resolution of the majority of the co-
such incursion is definitely punitive in nature and must never be taken
owners, unless these powers were granted him in the certificate of his
lightly.
appointment. If he insures the vessel without authorization therefore,
More to the point, the rights of parties to claim against an agent
he shall be subsidiarily liable for the solvency of the insurer.
or owner of a vessel may be compared to those of creditors against an
insolvent corporation whose assets are not enough to satisfy the totality of
Article 599. The ship agent managing for an association shall claims as against it. While each individual creditor may, and in fact shall,
render to his associates an account of the results of each voyage of the be allowed to prove the actual amounts of their respective claims, this does
vessel, without prejudice to always having the books and not mean that they shall all be allowed to recover fully thus favoring those
correspondence relating to the vessel and to its voyages at their who filed and proved their claims sooner to the prejudice of those who
disposal. come later. In such an instance, such creditors too would not also be able to
gain access to the assets of the individual shareholders, but must limit their
recovery to what is left in the name of the corporation. Thus, in the case
Article 602. The ship agent shall indemnify the captain for
of Lipana v. Development Bank of Rizal earlier cited, We held that:
all the expenses he may have incurred with funds of his own or of
"In the instant case, the stay of execution of judgment is
others, for the benefit of the vessel.
warranted by the fact that respondent bank was placed under receivership.
To execute the judgment would unduly deplete the assets of respondent
bank to the obvious prejudice of other depositors and creditors, since, as
B. DOCTRINE OF LIMITED LIABILITY aptly stated in Central Bank v. Morfe (63 SCRA 114), after the Monetary
In this jurisdiction, the limited liability rule is embodied Board has declared that a bank is insolvent and has ordered it to cease
in Articles 587, 590 and 837 under Book III of the Code of operations, the Board becomes the trustee of its assets for the equal benefit
Commerce. of all creditors, and after its insolvency, one cannot obtain an advantage or
preference over another by an attachment, execution or otherwise." (at p.
Article 837 applies the limited liability rule in cases of
261)
collision. Meanwhile, Articles 587 and 590 embody the universal In both insolvency of a corporation and the sinking of a vessel,
principle of limited liability in all cases wherein the shipowner or the claimants or creditors are limited in their recovery to the remaining
agent may be properly held liable for the negligent or illicit acts of value of accessible assets. In the case of an insolvent corporation, these are
the captain. These articles precisely intend to limit the liability of the residual assets of the corporation left over from its operations. In the
the shipowner or agent to the value of the vessel, its appurtenances case of a lost vessel, these are the insurance proceeds and pending
and freightage earned in the voyage, provided that the owner or freightage for the particular voyage.
agent abandons the vessel. When the vessel is totally lost, in which
Page 14 of 39
 In the instant case, there is, therefore, a need to collate all third persons, which may arise from the conduct of the captain in
claims preparatory to their satisfaction from the insurance proceeds on the the care of goods transported, as well as for the safety of
vessel M/V P. Aboitiz and its pending freightage at the time of its loss. No passengers transported [Yangco v. Laserna].
claimant can be given precedence over the others by the simple expedience However, under the same Article, this direct liability is
of having filed or completed its action earlier than the rest. Thus, execution
moderated and limited by the ship agent's or shipowner's right of
of judgment in earlier completed cases, even those already final and
executory, must be stayed pending completion of all cases occasioned by
abandonment of the vessel and earned freight. This expresses the
the subject sinking. Then and only then can all such claims be universal principle of limited liability under maritime law. The
simultaneously settled, either completely or pro-rata should the insurance most fundamental effect of abandonment is the cessation of the
proceeds and freightage be not enough to satisfy all claims. responsibility of the ship agent/owner [Switzerland General
Finally, the Court notes that petitioner has provided this Court Insurance Co., Ltd. vs. Ramirez]. It has thus been held that by
with a list of all pending cases (pp. 175 to 183, Rollo), together with the necessary implication, the shipagent's or shipowner's liability is
corresponding claims and the pro-rated share of each. We likewise note that confined to that which he is entitled as of right to abandon - "the
some of these cases are still with the Court of Appeals, and some still with
vessel with all her equipment and the freight it may have earned
the trial courts and which probably are still undergoing trial. It would not,
therefore, be entirely correct to preclude the trial courts from making their
during the voyage," and "to the insurance thereof if any" [Yangco
own findings of fact in those cases and deciding the same by allotting vs. Laserna]. In other words, the shipowner's or agent's liability is
shares for these claims, some of which, after all, might not prevail, merely co-extensive with his interest in the vessel such that a total
depending on the evidence presented in each. We, therefore, rule that the loss thereof results in its extinction. "No vessel, no liability"
pro-rated share of each claim can only be found after all the cases shall expresses in a nutshell the limited liability rule. The total
have been decided. destruction of the vessel extinguishes maritime liens as there is no
In fairness to the claimants, and as a matter of equity, the total longer any res to which it can attach [Govt. Insular Maritime Co.
proceeds of the insurance and pending freightage should now be deposited
vs. The Insular Maritime].
in trust. Moreover, petitioner should institute the necessary limitation and
distribution action before the proper admiralty court within 15 days from Nonetheless, there are exceptional circumstances wherein
the finality of this decision, and thereafter deposit with it the proceeds from the ship agent could still be held answerable despite the
the insurance company and pending freightage in order to safeguard the abandonment, as where the loss or injury was due to the fault of the
same pending final resolution of all incidents, for final pro-rating and shipowner and the captain. The international rule is to the effect
settlement thereof. that the right of abandonment of vessels, as a legal limitation of a
shipowner’s liability, does not apply to cases where the injury or
Abandonment average was occasioned by the shipowner’s own fault. It must be
It is a general principle, well established maritime law stressed at this point that Article 587 speaks only of situations
and custom, that shipowners and ship agents are civilly liable  for where the fault or negligence is committed solely by the captain.
the acts  of the  captain (Code of Commerce, Article 586) and for Where the shipowner is likewise to be blamed, Article 587 will not
the indemnities due the third persons (Article  587); so that injured apply, and such situation will be covered by the provisions of the
parties may. immediately look for reimbursement to the owner of Civil Code on common carrier [Philippine American General v.
the ship, it being universally recognized that the ship master or Court of Appeals].
captain is primarily the representative of the owner [Standard Oil
Co. vs.  Castelo]. This direct liability, moderated and limited by Philippine American General v. Court of Appeals
the owner's right of abandonment of the vessel and earned freight Held: It was already established at the outset that the sinking of
(Article 587), has been declared to exist, not only in case of “MV Asilda” was due to its unseaworthiness even at the time of its
breached contracts, but also in cases of tortious negligence [Yu vs. departure from the port of Zamboanga. It was top-heavy as an excessive
Osorio]. amount of cargo was loaded on deck. Closer supervision on the part of the
shipowner could have prevented this fatal miscalculation. As such,
Abandonment is equivalent to an offer of the value of the
FELMAN was equally negligent. It cannot therefore escape liability
vessel, her equipment and freight earned in return for an exemption through the expedient of filing a notice of abandonment of the vessel by
from liability. It is an indispensable requirement before the virtue of Art. 587 of the Code of Commerce.
shipowner or ship agent may enjoy the benefits of the doctrine of Under Art 1733 of the Civil Code, “(c)ommon carriers, from the
limited liability. nature of their business and for reasons of public policy, are bound to
Abandonment can only be made by the shipowner and observe extraordinary diligence in the vigilance over the goods and for the
the ship agent. When abandonment is made in the instances safety of the passengers transported by them, according to all the
provided by law, it cannot be refused. circumstances of each case x x x x" In the event of loss of goods, common
carriers are presumed to have acted negligently. FELMAN, the shipowner,
was not able to rebut this presumption.
1. Liability to Third Persons and Acts of The
Captain
Aboitiz Shipping v. New India
Held: From the nature of their business and for reasons of public
Article 587. The ship agent shall also be civilly liable for the
policy, common carriers are bound to observe extraordinary diligence over
indemnities in favor of third persons which arise from the conduct of
the goods they transport according to all the circumstances of each case. In
the captain in the care of the goods which the vessel carried; but he
the event of loss, destruction or deterioration of the insured goods, common
may exempt himself therefrom by abandoning the vessel with all her
carriers are responsible, unless they can prove that the loss, destruction or
equipment and the freightage he may have earned during the voyage.
deterioration was brought about by the causes specified in Article 1734 of
the Civil Code. In all other cases, common carriers are presumed to have
Article 590. The co-owners of a vessel shall be civilly liable, been at fault or to have acted negligently, unless they prove that they
in the proportion of their contribution to the common fund, for the observed extraordinary diligence. Moreover, where the vessel is found
results of the acts of the captain, referred to in Art. 587. unseaworthy, the shipowner is also presumed to be negligent since it is
Each part-owner may exempt himself from this liability by tasked with the maintenance of its vessel. Though this duty can be
the abandonment before a notary of the part of the vessel belonging to delegated, still, the shipowner must exercise close supervision over its men.
him. In the present case, petitioner has the burden of showing that it
exercised extraordinary diligence in the transport of the goods it had on
Pursuant to said provisions, both the shipowner and ship board in order to invoke the limited liability doctrine. Differently put, to
limit its liability to the amount of the insurance proceeds, petitioner has the
agent are civilly and directly liable for the indemnities in favor of
Page 15 of 39
burden of proving that the unseaworthiness of its vessel was not due to its the agent shall not be permitted to employ any member against the
fault or negligence. Considering the evidence presented and the captain's express refusal.
circumstances obtaining in this case, we find that petitioner failed to 2. To command the crew and direct the vessel to the port of
discharge this burden. It initially attributed the sinking to the typhoon and its destination, in accordance with the instructions he may have
relied on the BMI findings that it was not at fault. However, both the trial received from the agent.
and the appellate courts, in this case, found that the sinking was not due to 3. To impose, in accordance with the agreements and the
the typhoon but to its unseaworthiness. Evidence on record showed that the laws and regulations of the merchants marine, on board the vessel,
weather was moderate when the vessel sank. These factual findings of the correctional punishment upon those who do not comply with his orders
Court of Appeals, affirming those of the trial court are not to be disturbed or who conduct themselves against discipline, holding a preliminary
on appeal, but must be accorded great weight. These findings are investigation on the crimes committed on board the vessel on the high
conclusive not only on the parties but on this Court as well. seas, which shall be turned over to the authorities, who are to take
cognizance thereof, at the first port touched.
2. Collisions 4. To make contracts for the charter of the vessel in the
absence of the agent or of her consignee, acting in accordance with the
instructions received and protecting the interests of the owner most
Article 837. The civil liability incurred by the shipowners in carefully.
the cases prescribed in this section, shall be understood as limited to 5. To adopt all the measures which may be necessary to keep
the value of the vessel with all its appurtenances and freightage earned the vessel well supplied and equipped, purchasing for the purpose all
during the voyage. that may be necessary, provided there is no time to request instructions
of the agent.
C. CAPTAINS AND MASTERS OF VESSELS 6. To make, in similar urgent cases and on a voyage, the
A Captain is one who governs vessels: (a) that navigate repairs to the hull and engines of the vessel and to her rigging and
the high seas, or (b) of large dimensions and importance (although equipment which are absolutely necessary in order for her to be able to
continue and conclude her voyage; but if she should arrive at a point
engaged in coastwise trade).
where there is a consignee of the vessel, he shall act in concurrence
A Master is one who commands smaller ships engaged with the latter.
exclusively in the coastwise trade.
For purposes of Maritime Commerce, “captain” and
Article 611. In order to comply with the obligations
“master” have the same meaning, both being the chiefs and
mentioned in the foregoing article, the captain, when he has no funds
commanders of vessels. and does not expect to receive any from the agent, shall procure the
same in the successive order stated below:
1. Qualifications 1. By requesting said funds of the consignees or
a. Filipinos; correspondents of a vessel.
b. Have the legal capacity to contract in accordance with 2. By applying to the consignees of the cargo or to the
the law; persons interested therein.
c. Must prove the skill, capacity, and qualifications 3. By drawing on the agent.
4. By borrowing the amount required by means of a
necessary to command and direct the vessel, as established by
bottomry bond.
marine or navigation laws, ordinances or regulations 5. By selling a sufficient amount of the cargo to cover the
d. Must not be disqualified according to the same, for the amount absolutely necessary to repair the vessel, and to equip her to
discharge of the duties of the position. (Art. 609, Code of pursue the voyage.
Commerce) In the two latter cases he must apply to the judicial authority
of the port, if in Spain * and to the Spanish * consul, if in a foreign
country; and where there should be none, to the local authority,
Coastwise Lighterage v. Court of Appeals
proceeding in accordance with the prescriptions of Article 583, and
Held: Jesus R. Constantino, the patron of the vessel "Coastwise
with the provisions of the law of civil procedure.
9" admitted that he was not licensed. The Code of Commerce, which
subsidiarily governs common carriers (which are primarily governed by the
provisions of the Civil Code) provides: Article 612 The following obligations are inherent in the
"Article 609. - Captains, masters, or patrons of vessels must be office of captain:
Filipinos, have legal capacity to contract in accordance with this code, and 1. To have on board before starting on a voyage a detailed
prove the skill capacity and qualifications necessary to command and direct inventory of the hull, engines, rigging, tackle, stores, and other
the vessel, as established by marine and navigation laws, ordinances or equipments of the vessel; the navigation certificate; the roll of the
regulations, and must not be disqualified according to the same for the persons who make up the crew of the vessel, and the contracts entered
discharge of the duties of the position.  x x x" into with the crew; the list of passengers; the health certificate; the
Clearly, petitioner Coastwise Lighterage's embarking on a certificate of the registry proving the ownership of the vessel, and all
voyage with an unlicensed patron violates this rule. It cannot safely claim to the obligations which encumber the same up to that date; the charters
have exercised extraordinary diligence, by placing a person whose or authenticated copies thereof; the invoices or manifest of the cargo,
navigational skills are questionable, at the helm of the vessel which and the instrument of the expert visit or inspection, should it have been
eventually met the fateful accident.  It may also logically, follow that a made at the port of departure.
person without license to navigate, lacks not just the skill to do so, but also 2. To have a copy of this Code on board.
the utmost familiarity with the usual and safe routes taken by seasoned and 3. To have three folioed and stamped books, placing at the
legally authorized ones.  Had the patron been licensed, he could be beginning of each one a note of the number of folios it contains, signed
presumed to have both the skill and the knowledge that would have by the maritime official, and in his absence by the competent authority.
prevented the vessel's hitting the sunken derelict ship that lay on their way In the first book, which shall be called "log book," he shall
to Pier 18. enter every day the condition of the atmosphere, the prevailing winds,
the course sailed, the rigging carried, the horsepower of the engines,
the distance covered, the maneuvers executed, and other incidents of
2. Powers, Functions, and Duties
navigation. He shall also enter the damage suffered by the vessel in her
hull, engines, rigging, and tackle, no matter what is its cause, as well as
Article 610. The following powers are inherent in the the imperfections and averages of the cargo, and the effects and
position of captain or master of a vessel: consequence of the jettison, should there be any; and in cases of grave
1. To appoint or make contracts with the crew in the absence resolutions which require the advice or a meeting of the officers of the
of the agent and propose said crew, should said agent be present; but vessel, or even of the passengers and crew, he shall record the decision

Page 16 of 39
adopted. For the informations indicated he shall make use of the freight he may have received, stating the name and domicile of the
binnacle book, and of the steam or engine book kept by the engineer. shippers, freight earned, and amounts borrowed on bottomry bond,
In the second book, called the "accounting book," he shall advise him of his departure, and give him any information and data
enter all the amounts collected and paid for the account of the vessel, which may be of interest.
entering specifically article by article, the sources of the collection, and 9. To observe the rules on the situation of lights and
the amounts invested in provisions, repairs, acquisition of rigging or evolutions to prevent collisions.
goods, fuel, outfits, wages, and all other expenses. He shall furthermore 10. To remain on board in case of danger to the vessel, until
enter therein a list of all the members of the crew, stating their all hope to save her is lost, and before abandoning her to hear the
domiciles, their wages and salaries, and the amounts they may have officers of the crew, abiding by the decision of the majority; and if he
received on account, either directly or by delivery to their families. should have to take a boat he shall take with him, before anything else,
In the third book, called "freight book," he shall record the the books and papers, and then the articles of most value, being obliged
entry and exit of all the goods, stating their marks and packages, to prove in case of the loss of the books and papers that he did all he
names of the shippers and of the consignees, ports of loading and could to save them.
unloading, and the freight earned. In the same book he shall record the 11. In case of wreck he shall make the proper protest in due
names and places of sailingof the passengers and the number of form at the first port reached, before the competent authority or the
packages of which their baggage consists, and the price of the passage. Spanish * consul, within twenty-four hours, stating therein all the
1. To make, before receiving the freight, with the officers of incidents of the wreck, in accordance with case 8 of this article. To
the crew, and the two experts, if required by the shippers and comply with the obligations imposed by the laws and rules of
passengers, an examination of the vessel, in order to ascertain whether navigation, customs, health, and others.
she is watertight, and whether the rigging and engines are in good
condition; and if she has the equipment required for good navigation,
Article 622. If when on a voyage the captain should receive
preserving a certificate of the memorandum of this inspection, signed
news of the appearance of privateers or men of war against his flag, he
by all the persons who may have taken part therein, under their
shall be obliged to make the nearest neutral port, inform his agent or
liability.
shippers, and await an occasion to sail under convoy or until the
The experts shall be appointed one by the captain of the
danger is over or to receive final orders from the agent or shippers.
vessel and the other one by the persons who request the examination,
and in case of disagreement a third shall be appointed by the marine
authority of the port. Article 623. If he should find himself being attacked by a
1. To remain constantly on board the vessel with the crew privateer and after having done all that was possible to avoid the
during the time the freight is taken on board and carefully watch the encounter and have resisted the delivery of the equipment of the vessel
stowage thereof; not to consent to any merchandise or goods of a or of its cargo, they should be forcibly taken away from him, or he
dangerous character to be taken on, such as inflammable or explosive should be obliged to deliver them, he shall make an entry in his freight
substances, without the precautions which are recommended for their book and shall prove the fact before the competent authority at the
packing, management and isolation; not to permit that any freight be first port he touches.
carried on deck which by reason of its disposition, volume, or weight After the force majeure has been proven, he shall be
makes the work of the sailors difficult, and which might endanger the exempted from liability.
safety of the vessel; and if, on account of the nature of the merchandise,
the special character of the shipment, and principally the favorable Article 625 The captain, under his personal liability, as soon
season it takes place, he allows merchandise to be carried on deck, he as he arrives at the port of destination, obtains the necessary
must hear the opinion of the officers of the vessel, and have the consent permission from the health and customs officers and fulfills the other
of the shippers and of the agent. formalities required by the regulations of the administration, shall turn
2. To demand a pilot at the expense of the vessel whenever over the cargo, without any defalcation, to the consignees, and, in a
required by navigation, and principally when a port, canal, or river, or proper case, the vessel, rigging, and freights to the agent.
a roadstead or anchoring place is to be entered with which neither he, If, by reason of the absence of the consignee or on account of
the officers nor the crew are acquainted. the nonappearance of a legal holder of the invoices, the captain does
3. To be on deck at the time of sighting land and to take not know to whom he is to make the legal delivery of the cargo, he shall
command on entering and leaving ports, canals, roadsteads, and rivers, place it at the disposal of the proper judge or court or authority, in
unless there is a pilot on board discharging his duties. He shall not order that he may decide with regard to its deposit, preservation, and
spend the night away from the vessel except for serious causes or by custody.
reason of official business.
4. To present himself, when making a port in distress, to the
maritime authority if in Spain * and to the Spanish * consul if in a The captain of a vessel is a confidential and managerial
foreign country, before twenty-four hours have elapsed, and make a employee within the meaning of the above doctrine. A master or
statement of the name, registry, and port of departure of the vessel, of captain, for purposes of maritime commerce, is one who has
its cargo, and reason of arrival, which declaration shall be vised by the command of a vessel. A captain commonly performs three (3)
authority or by the consul if after examining the same it is found to be distinct roles:
acceptable, giving the captain the proper certificate in order to show (1) he is a general agent of the shipowner;
his arrival under stress and the reasons therefor. In the absence of
(2) he is also commander and technical director of the
marine officials or of the consul, the declaration must be made before
vessel; and
the local authority.
5. To take the steps necessary before the competent (3) he is a representative of the country under whose flag
authority in order to enter in the certificate of the Commercial he navigates.
Registry of the vessel the obligations which he may contract in Of these roles, by far the most important is the role
accordance with Article 583. performed by the captain as commander of the vessel; for such role
6. To put in a safe place and keep all the papers and (which, to our mind, is analogous to that of "Chief Executive
belongings of any members of the crew who might die on the vessel, Officer" [CEO] of a present-day corporate enterprise) has to do
drawing up a detailed inventory, in the presence of passengers as
with the operation and preservation of the vessel during its voyage
witnesses, and, in their absence, of members of the crew.
7. To conduct himself according to the rules and precepts
and the protection of the passengers (if any) and crew and cargo. In
contained in the instructions of the agent, being liable for all that he his role as general agent of the shipowner, the captain has authority
may do in violation thereof. to sign bills of lading, carry goods aboard and deal with the freight
8. To give an account to the agent from the port where the earned, agree upon rates and decide whether to take cargo. The
vessel arrives, of the reason thereof, taking advantage of the ship captain, as agent of the shipowner, has legal authority to enter
semaphore, telegraph, mail, etc., according to the cases; notify him the into contracts with respect to the vessel and the trading of the

Page 17 of 39
vessel, subject to applicable limitations established by statute, The statement of the captain shall be believed if it is in
contract or instructions and regulations of the shipowner. To the accordance with those of the crew and passengers; if they disagree, the
captain is committed the governance, care and management of the latter shall be accepted, unless there is proof to the contrary.
vessel. Clearly, the captain is vested with both management and
fiduciary functions” [Inter-Orient v. NLRC]. A maritime protest is a written statement under oath,
Under our laws the ship's captain is obligated to keep a made by the captain or master of the vessel, after the occurrence of
"log book" where, among others, he records the decisions he has an accident or disaster, in which the vessel or cargo is lost or
adopted. Even according to the law of the vessel's registry, that injured, with respect to circumstances attending such occurrence.
book is also "required by law" as disclosed by the entry itself. The It is usually intended to show that the loss or damage
vessel's log book is an official record and entries made by a person resulted from: (a) a peril of the sea, or (b) some other cause for
in the performance of a duty required by law are prima which neither the master or owner was responsible.
facie evidence of the facts stated therein [Haverton v. Shipping v. It concludes with the protestation against any liability of
NLRC]. the owner for such loss or damage.

Centennial v. Dela Cruz a. When is a protest required?

Held: Petitioners' basis for dismissing respondent was the i. Arrival under stress; (Art. 612 [8]);
alleged entry by Captain Kowalewski in the ship's logbook regarding ii. Shipwreck (Arts. 612 [15], 843);
respondent's inexperience and inefficiency.  A ship's log/logbook is the iii. If the vessel has gone through a hurricane or where
official record of a ship's voyage which its captain is obligated by law to the captain believes that the cargo has suffered damages or
keep wherein he records the decisions he has adopted, a summary of the averages (Art. 624); and
performance of the vessel, and other daily events.  A logbook is a
iv. Maritime collision (Art. 835).
respectable record that can be relied upon when the entries therein are
presented in evidence.
In the instant case, however, respondent correctly pointed out b. Procedure
that the issue is not whether an official logbook entry is acceptable in Duties of the Captain whose Vessel has gone through a
evidence, but whether a document purporting to be a copy of a logbook hurricane or whose cargo has suffered damages or averages:
entry has been duly established to be authentic and not spurious. i. He shall make a PROTEST thereon before a competent
In Wallem Maritime Services, Inc. v. National Labor Relations authority at the first port he touches within 24 hours following his
Commission, citing Haverton Shipping Ltd. v. National Labor Relations arrival;
Commission, the Court ruled that a copy of an official entry in the logbook
ii. He must RATIFY it within 24 hours when he arrives
is legally binding and serves as an exception to the hearsay rule.  In the said
case, however, there was no controversy as to the genuineness of the said at the place of destination where he must proceed immediately with
entry and the authenticity of the copy presented in evidence. the proof of the facts;
In the instant case, respondent has consistently assailed the iii. He must not open the hatches until all of the above is
genuineness of the purported entry and the authenticity of such copy.  He done.
alleged that before his repatriation, there was no entry in the ship's official
logbook regarding any incident that might have caused his relief; that 4. Prohibited Acts
Captain Kowalewski's signature in such purported entry was forged.  In
support of his allegations, respondent submitted three official
Article 613. A captain who navigates for freight in common
documents bearing the signature of Capt. Sczepan Kowalewski which is
or on shares cannot make any transaction for his own account, and
different from the one appearing in Annex E.  Thus, it was incumbent upon
should he do so, the profit shall belong to the other persons in interest,
petitioners to prove the authenticity of Annex E, which they failed to do. 
and the losses shall be for his own exclusive account.
Likewise, the purported report of Capt. Kowalewski dated September 1,
2000 (Annex D), and the statements of Safety Officer Khaldun Nacem
Faridi and Chief Officer Josip Milin (Annexes G and H) also cannot be Article 615. Without the consent of the ship agent, the
given weight for lack of authentication. captain cannot have himself substituted by another person; and should
he do so, besides being liable for all the acts of the substitute and bound
3. Maritime Protest to the indemnities mentioned in the foregoing article, the substitute as
well as the captain may be discharged by the ship agent.

Article 624. A captain whose vessel has gone through a

hurricane or who believes that the cargo has suffered damages or Article 617. The captain may not contract loans on
averages, shall make a protest thereon before the competent authority respondentia secured by the cargo; and should he do so the contracts
at the first port he touches within the twenty-four hours following his shall be void.
arrival, and shall ratify it within the same period when he arrives at Neither can he borrow money on bottomry for his own
the place of his destination, immediately proceeding with the proof of transactions, except on the portion of the vessel he owns, provided no
the facts, it not being permitted to open the hatches until this has been money has been previously borrowed on the whole vessel, and provided
done. there does not exist any other kind of lien or obligation chargeable
The captain shall proceed in the same manner if, the vessel against the vessel. When he is permitted to do so, he must necessarily
having been wrecked, he is saved alone or with part of his crew, in state what interest he has in the vessel.
which case he shall appear before the nearest authority, and make a In case of violation of this article the principal, interest, and
sworn statement of the facts. costs, shall be charged to the private account of the captain, and the
The authority or the consul abroad shall verify the said ship agent may furthermore have the right to discharge him.
facts, receiving a sworn statement of the members of the crew and
passengers who may have been saved, and taking the other steps which Article 621. A captain who borrows money on the hull,
may assist in arriving at the facts, drafting a certificate of the result of engines, rigging, or tackle, or who pledges or sells merchandise or
the proceedings in the log book and in that of the sailing mate, and provisions outside of the cases and without the formalities prescribed
shall deliver the original records of the proceedings to the captain, in this Code, shall be liable for the principal, interest, and costs, and
stamped and folioed, with a memorandum of the folios, which he must shall indemnify for the damages he may cause.
rubricate, for their presentation to the judge or court of the port of He who commits fraud in his accounts shall reimburse the
destination. amount defrauded, and shall be subject to the provisions contained in
the Penal Code.

Page 18 of 39
 indemnity whatsoever, unless there is an express and specific
5. Liabilities agreement in respect thereto.

Article 614. A captain who, having agreed to make a voyage, Article 604. If the captain or any other member of the crew
fails to fulfill his obligation, without being prevented by fortuitous should be discharged during the voyage, they shall receive their salary
accident case or by force majeure, shall indemnify for all the losses his until the return to the place where the contract was made, unless there
action may cause, without prejudice to criminal penalties which may be are good reasons for the discharge, all in accordance with Articles 636
promulgated. et seq. of this Code.

Article 615. Without the consent of the ship agent, the Article 605. If the contracts of the captain and members of
captain cannot have himself substituted by another person; and should the crew with the agent should be for a definite period or voyage, they
he do so, besides being liable for all the acts of the substitute and bound can not be discharged until the fulfillment of their contracts, except for
to the indemnities mentioned in the foregoing article, the substitute as reasons of insubordination in serious matters, robbery, theft, habitual
well as the captain may be discharged by the ship agent. drunkenness, and damage caused to the vessel or to its cargo by malice
or manifest or proven negligence.
Article 618. The captain shall be civilly liable to the ship
agent, and the latter to the third persons who may have made contracts Article 606. If the captain should be a part owner in the
with the former — vessel, he can not be discharged without the agent returning him the
1. For all the damages suffered by the vessel and its cargo by amount of his interest therein, which, in the absence of an agreement
reason of want of skill or negligence on his part. If a misdemeanor or between the parties, shall be appraised by experts appointed in the
crime has been committed, he shall be liable in accordance with the manner established in the law of civil procedure.
Penal Code.
2. For all the thefts and robberies committed by the crew, Article 607. If the captain who is a part owner should have
reserving his right of action against the guilty parties. obtained the command of the vessel by virtue of a special agreement
3. For the losses, fines, and confiscations imposed an account contained in the articles of co-partnership, he can not be deprived
of violation of the laws and regulations of customs, police, health, and thereof except for the reasons mentioned in Article 605.
navigation.
4. For the losses and damages caused by mutinies on board
the vessel, or by reason of faults committed by the crew in the service The Rules are as follows:
and defense of the same, if he does not prove that he made full use of If their contracts did not state a definite period or a
his authority to prevent or avoid them. definite voyage, captain (and members of the crew) may be
5. For those arising by reason of an undue use of powers and discharged, at the discretion of the shipowner/ship agent, without
non-fulfillment of the obligations which are his in accordance with indemnity whatsoever but:
Articles 610 and 612. a. It must be done before the vessel goes out to sea; and
6. For those arising by reason of his going out of his course
b. They are paid their salaries earned according to their
or taking a course which he should not have taken without sufficient
cause, in the opinion of the officers of the vessel, at a meeting with the contracts.
shippers or supercargoes who may be on board. No exception If their contracts state a definite period or a definite
whatsoever shall exempt him from this obligation. voyage, captain (and members of the crew) cannot be discharged
7. For those arising by reason of his voluntarily entering a until the fulfillment of the contract, except for the following
port other than his destination, with the exception of the cases or reasons:
without the formalities referred to in Article 612. a. Insubordination in serious matters;
8. For those arising by reason of the non-observance of the b. Robbery;
provisions contained in the regulations for lights and evolutions for the
c. Theft; d. Habitual drunkenness; and
purpose of preventing collisions.
e. Damage caused to the vessel or to its cargo, by malice,
or manifest or proven negligence.
Article 620. The captain shall not be liable for the damages
If these reasons are present, then the captain or members
caused to the vessel or to the cargo by reason of force majeure; but he
shall always be so — no agreement to the contrary being valid — for of the crew may be discharged even during the period agreed upon
those arising through his own fault. or even as during the voyage agreed upon.
Neither shall he be personally liable for the obligations he
may have contracted for the repair, equipment, and provisioning of the Madrigal Shipping v. Ogilvie
vessel, which shall be incurred by the ship agent, unless the former has Held: The termination of the services of the seamen as members
expressly bound himself personally or signed a draft or promissory of the crew was not due to their fault. Upon the ship's arrival in Hong Kong
note in his name. it was found that repairs had to be made on her before it could proceed on
its voyage to Manila.
6. Duration of Liability The services of the seamen were engaged by the Madrigal to
man its vessel for a determinate time or voyage, with an express stipulation
that "this contract expires on the arrival of this boat at the port of Manila."
Article 619. The captain shall be liable for the cargo from
Article 605 of the Code of Commerce provides:
the time it is turned over to him at the dock, or afloat alongside the
If the contracts of the captain and members of the crew with the
ship, at the port of loading until he delivers it on the shore or on the
ship agent should be for a definite period or voyage, they may not be
discharging wharf, of the port of unloading unless the contrary has
discharged until after the fulfillment of their contracts except by reason of
been expressly agreed upon.
insubordination in serious matters, robbery, theft, habitual drunkenness, or
damage caused to the vessel or its cargo through malice or manifest or
7. Discharge by Shipowner or Ship Agent proven negligence.
Not having been discharged for any of the causes enumerated in
Article 603. Before the vessel sets out to sea the ship agent the foregoing article, the seamen are entitled to the amounts they
may at his discretion discharge the captain and members of the crew respectively seek to collect from the Madrigal.
whose contracts are not for a definite period or voyage, paying them
the salaries earned according to their contracts, and without any
Wallem v. Minister of Labor

Page 19 of 39
 Held: There is no showing that the seamen conspired with the exercise of reasonable care an vigilance an opportunity for the
ITF in coercing the ship authorities to grant salary increases, and the master to intervene so as to save the ship from danger, the master
Special Agreement was signed only by petitioner and the ITF without any should have acted accordingly. The master of a vessel must
participation from the respondents who, accordingly, may not be charged as exercise a degree of vigilance commensurate with the
they were, by the Secretariat, with violation of their employment contract.
circumstances [Ibid].
The Board likewise stressed that the crew members may not be discharged
until after the expiration of the contract which is for a definite period, and
In general, a pilot is personally liable for damages caused
where the crew members are discharged without just cause before the by his own negligence or default to the owners of the vessel, and to
contract shall have been performed, they shall be entitled to collect from the third parties for damages sustained in a collision. Such negligence
owner or agent of the vessel their unpaid salaries for the period they were of the pilot in the performance of duty constitutes a maritime tort.
engaged to render the services, applying the case of Madrigal Shipping Co., At common law, a shipowner is not liable for injuries inflicted
Inc. vs. Jesus Oglivie, et al exclusively by the negligence of a pilot accepted by a vessel
compulsorily. The exemption from liability for such negligence
8. Discharge by Captain shall apply if the pilot is actually in charge and solely in fault.
Under Article 637 of the Code of Commerce, the Since, a pilot is responsible only for his own personal negligence,
following are the grounds for discharging a sailor or crew member he cannot be held accountable for damages proximately caused by
by the Captain: the default of others, or, if there be anything which concurred with
1. Perpetration of a crime which disturbs order on the the fault of the pilot in producing the accident, the vessel master
vessel; and owners are liable. Since the colliding vessel is prima facie
2. Repeated offenses of insubordination, or want or responsible, the burden of proof is upon the party claiming benefit
discipline, or non-fulfillment of service; of the exemption from liability. It must be shown affirmatively that
3. Incapacity and repeated negligence in the fulfillment the pilot was at fault, and that there was no fault on the part of the
of the service he should render; officers or crew, which might have been conducive to the damage.
4. Habitual drunkenness; The fact that the law compelled the master to take the pilot does
5. Any occurrence which incapacitates the sailor to not exonerate the vessel from liability. The parties who suffer are
perform the work under his charge [except Art. 644]: entitled to have their remedy against the vessel that occasioned the
– when illness of sailor is not due to his own fault, or damage, and are not under necessity to look to the pilot from whom
– when sailor is injured in the service or defense of the redress is not always had for compensation. The owners of the
vessel; vessel are responsible to the injured party for the acts of the pilot,
6. Desertion. and they must be left to recover the amount as well as they can
against him. It cannot be maintained that the circumstance of
D. HARBOR PILOT having a pilot on board, and acting in conformity to his directions
A pilot, in maritime law, is a person duly qualified, and operate as a discharge of responsibility of the owners. Except
licensed, to conduct a vessel into or out of ports, or in certain insofar as their liability is limited or exempted by statute, the vessel
waters. In a broad sense, the term "pilot" includes both (1) those or her owner are liable for all damages caused by the negligence or
whose duty it is to guide vessels into or out of ports, or in particular other wrongs of the owners or those in charge of the vessel. Where
waters and (2) those entrusted with the navigation of vessels on the the pilot of a vessel is not a compulsory one in the sense that the
high seas. However, the term "pilot" is more generally understood owner or master of the vessel are bound to accept him, but is
as a person taken on board at a particular place for the purpose of employed voluntarily, the owners of the vessel are, all the more,
conducting a ship through a river, road or channel, or from a port. liable for his negligent act [Ibid].
It is quite common for states and localities to provide for
compulsory pilotage, and safety laws have been enacted requiring Wildvalley Shipping v. Court of Appeals
vessels approaching their ports, with certain exceptions, to take on Held: "Art. 612. The following obligations shall be inherent in
board pilots duly licensed under local law. The purpose of these the office of captain:
laws is to create a body of seamen thoroughly acquainted with the "x x x
harbor, to pilot vessels seeking to enter or depart, and thus protect "7. To be on deck on reaching land and to take command on
life and property from the dangers of navigation [Far Eastern entering and leaving ports, canals, roadsteads, and rivers, unless there is a
pilot on board discharging his duties. x x x."
Shipping v. Court of Appeals].
The law is very explicit. The master remains the overall
The master is not wholly absolved from his duties while commander of the vessel even when there is a pilot on board. He remains in
a pilot is on board his vessel, and may advise with or offer control of the ship as he can still perform the duties conferred upon him by
suggestions to him. He is still in command of the vessel, except so law despite the presence of a pilot who is temporarily in charge of the
far as her navigation is concerned, and must cause the ordinary vessel. It is not required of him to be on the bridge while the vessel is being
work of the vessel to be properly carried on and the usual navigated by a pilot.
precaution taken. Thus, in particular, he is bound to see that there is However, Section 8 of PPA Administrative Order No. 03-85,
sufficient watch on deck, and that the men are attentive to their provides:
"Sec. 8. Compulsory Pilotage Service - For entering a harbor
duties, also that engines are stopped, towlines cast off, and the
and anchoring thereat, or passing through rivers or straits within a pilotage
anchors clear and ready to go at the pilot's order. In sum, where a district, as well as docking and undocking at any pier/wharf, or shifting
compulsory pilot is in charge of a ship, the master being required to from one berth or another, every vessel engaged in coastwise and foreign
permit him to navigate it, if the master observes that the pilot is trade shall be under compulsory pilotage.
incompetent or physically incapable, then it is the duty of the "xxx."
master to refuse to permit the pilot to act. But if no such reasons The Orinoco River being a compulsory pilotage channel
are present, then the master is justified in relying upon the pilot, but necessitated the engaging of a pilot who was presumed to be
not blindly. Under the circumstances of this case, if a situation knowledgeable of every shoal, bank, deep and shallow ends of the river. In
his deposition, pilot Ezzar Solarzano Vasquez testified that he is an official
arose where the master, exercising that reasonable vigilance which
pilot in the Harbour at Port Ordaz, Venezuela, [44] and that he had been a
the master of a ship should exercise, observed, or should have pilot for twelve (12) years. He also had experience in navigating the waters
observed, that the pilot was so navigating the vessel that she was of the Orinoco River.
going, or was likely to go, into danger, and there was in the

Page 20 of 39
 The law does provide that the master can countermand or needle, the leeway, the direction and force of the wind, the condition of
overrule the order or command of the harbor pilot on board. The master of the atmosphere and of the sea, the rigging set, the latitude and
the Philippine Roxas deemed it best not to order him (the pilot) to stop the longitude observed, the number of furnaces fired, the steam pressure,
vessel, mayhap, because the latter had assured him that they were the number of revolutions, and under the name of "incidents" the
navigating normally before the grounding of the vessel. Moreover, the pilot revolutions made, the meetings with other vessels, and all the
had admitted that on account of his experience he was very familiar with particulars and accidents which may occur during the voyage.
the configuration of the river as well as the course headings, and that he
does not even refer to river charts when navigating the Orinoco River.
Article 630. In order to change the course and to take the
Based on these declarations, it comes as no surprise to us that
one most convenient for a good voyage of the vessel, the sailing mate
the master chose not to regain control of the ship. Admitting his limited
shall come to an agreement with the captain. If the latter should object,
knowledge of the Orinoco River, Captain Colon relied on the knowledge
the sailing mate shall make the remarks he may consider necessary in
and experience of pilot Vasquez to guide the vessel safely.
the presence of the other officers of the vessel. If the captain should still
We find that the grounding of the vessel is attributable to the
insist on his objection, the sailing mate shall make the proper protest,
pilot. When the vibrations were first felt the watch officer asked him what
signed by him and by another one of the officers in the log book, and
was going on, and pilot Vasquez replied that "(they) were in the middle of
shall obey the captain, who shall be the only one liable for the
the channel and that the vibration was as (sic) a result of the shallowness of
consequences of his order.
the channel."
Pilot Ezzar Solarzano Vasquez was assigned to pilot the vessel
Philippine Roxas as well as other vessels on the Orinoco River due to his Article 631. The sailing mate shall be liable for all the
knowledge of the same. In his experience as a pilot, he should have been damages suffered by the vessel and cargo by reason of his negligence or
aware of the portions which are shallow and which are not. His failure to want of skill, without prejudice to the criminal liability which may
determine the depth of the said river and his decision to plod on his set arise, if a felony or misdemeanour were committed.
course, in all probability, caused damage to the vessel. Thus, we hold him
as negligent and liable for its grounding. Article 627 of the Code of Commerce defines the Chief
In the case of Homer Ramsdell Transportation Company vs. Mate, also called Chief Officer or Sailing Mate, as "the second
La Compagnie Generale Transatlantique, 182 U.S. 406, it was held that:
chief of the vessel, and unless the agent orders otherwise, shall take
"x x x The master of a ship, and the owner also, is liable for any
injury done by the negligence of the crew employed in the ship. The same the place of the captain in cases of absence, sickness, or death, and
doctrine will apply to the case of a pilot employed by the master or owner, shall then assume all his powers, duties, and responsibilities."  A
by whose negligence any injury happens to a third person or his property: Chief Officer, therefore, is second in command, next only to the
as, for example, by a collision with another ship, occasioned by his captain of the vessel [Centennial Transmarine v. Dela Cruz].
negligence. And it will make no difference in the case that the pilot, if any
is employed, is required to be a licensed pilot; provided the master is at 2. Second Mate and Marine Engineers
liberty to take a pilot, or not, at his pleasure, for in such a case the master
acts voluntarily, although he is necessarily required to select from a
Article 632. It shall be the duty of the second mate:
particular class. On the other hand, if it is compulsive upon the master to
1. To watch over the preservation of the hull and rigging of
take a pilot, and, a fortiori, if he is bound to do so under penalty, then,
the vessel, and to take charge of the tackle and equipment which make
and in such case, neither he nor the owner will be liable for injuries
up her outfit, suggesting to the captain the repairs necessary and
occasioned by the negligence of the pilot; for in such a case the pilot
replacement of the goods and implements which are rendered useless
cannot be deemed properly the servant of the master or the owner, but is
and lost.
forced upon them, and the maxim Qui facit per alium facit per se does not
2. To take care that the cargo is well arranged, keeping the
apply."
vessel always ready for maneuvers.
3. To preserve order, discipline, and good service among the
E. OFFICERS AND CREW crew, requesting the necessary orders and instructions of the captain,
The complement of a vessel shall be understood all the and quickly informing him of any occurrence in which the intervention
persons on board, from the captain to the cabin boy, necessary for of his authority may be necessary
the management, maneuvers, and service, and therefore, the 4. To assign to each sailor the work he is to do on board, in
complement shall include the crew, the sailing mates, engineers, accordance with the instructions received, and to see that it is exactly
and carefully carried out.
stokers and other employees on board not having specific
5. To take charge by inventory of the rigging and all the
designations; but it shall not include the passengers or other equipment of the vessel, if it should be paid up, unless the ship agent
persons whom the vessel is transporting”. (Article 648, Code of has ordered otherwise.
Commerce) With regard to engineers the following rules shall govern:
1. In order to be taken on board as a marine engineer
1. Sailing Mate forming part of the complement of a merchant vessel, it shall be
necessary to possess the qualifications which the laws and regulations
Article 627. The sailing mate, as the second chief of the require, and not be disqualified in accordance therewith to hold said
vessel and unless the ship agent orders otherwise, shall take the place of position. Engineers shall be considered as officers of the vessel, but they
the captain in cases of absence, sickness, or death, and shall then shall have no authority or intervention except in matters referring to
assume all his powers, obligations, and liabilities. the motor apparatus.
2. When there are two or more engineers on one vessel, one
of them shall be chief, and the other engineers and all the personnel of
Article 628. The sailing mate must supply himself with the engines shall be under his order; he shall further have the motor
charts of the seas in which he will navigate with the maps and apparatus under his charge, as well as the spare parts, instruments,
quadrants or sextants which are necessary for the discharge of his and implements belonging thereto, the fuel, the lubricating material
duties, being liable for the accidents which may arise by reason of his and, finally all which comes under the jurisdiction of an engineer on
fault in this matter. board a vessel.
3. He shall keep the engines and boilers in good condition
Article 629. The sailing mate shall personally and specially and in state of cleanliness, and shall order what may be proper in order
keep a book folioed and stamped on all its pages, called the "binnacle that they may always be ready for regular use, being liable for the
book", with a memorandum at the beginning stating the number of accidents or damages which may arise by reason of his want of skill or
folios it contains, signed by the competent authority, and shall enter negligence to the motor apparatus, or to the vessel and cargo, without
therein daily: the distance and course travelled, the variations of the prejudice to the criminal liability which may be proper if a felony or
misdemeanor is proven.
Page 21 of 39
 4. He shall make no change in the motor apparatus, nor shall If, without obtaining said permission, the sailor who has
he repair the averages he may have noticed in the same, nor change the signed for one vessel should sign for another one, the second contract
normal speed of its movement without prior authority of the captain, to shall be void, and the captain may choose between forcing him to fulfill
whom, if he should object to their being made, he shall state the the service to which he first bound himself or look for a person to
reasons he may deem proper in the presence of the other engineers or substitute him at his expense.
officers; and if, notwithstanding this, the captain should insist in his Said sailor shall furthermore lose the wages earned on his
objection, the chief engineer shall make the proper protest, entering first contract to the benefit of the vessel for which he may have signed.
the same in the engine book, and shall obey the captain, who shall be A captain who, knowing that a sailor is in the service of
the only one liable for the consequences of his order. another vessel, should have made a new agreement with him, without
5. He shall inform the captain of any average which may having requested the permission referred to in the foregoing
occur to the motor apparatus, and shall inform him when it may be paragraphs, shall be personally liable to the captain of the vessel to
necessary to stop the engines for some time, or when other accident which the sailor first belonged for that part of the indemnity, referred
occurs in his department of which the captain should be immediately to in the third paragraph of this article, which the sailor could not pay.
informed, frequently advising him furthermore of the consumption of
fuel and lubricating material. c. Rights in Case of Sickness, Injury or Death
6. He shall keep a book or registry called the “engine book”
in which there shall be entered all the data that refer to the work of the
engines, such as, for example, the number of furnaces fired, the steam Article 644. A sailor who falls sick shall not lose his right to
pressure in the boilers and cylinders, the vacuum in the condenser, the wages during the voyage, unless the sickness is the result of his own
temperatures, and the degree of saturation of the water, the fault. At any rate, the costs of the attendance and cure shall be
consumption of fuel and lubricating material, and under the heading of defrayed from the common funds, in the form of a loan.
“note worthy occurrences,” the averages and imperfections which If the sickness should be caused by an injury received in the
occur in in the engines and boilers, the causes therefor and the means service or defense of the vessel the sailor shall be attended and cured
employed to repair the same. These shall be also be stated, taking the from the common funds, there being deducted before anything else
information from the binnacle book, force and direction of the wind, from the proceeds of the freight, the cost of the attendance and cure.
the rigging set, and the speed of the vessel.
Article 645. If a sailor should die during the voyage his heir
Article 633. The second mate shall take command of the shall be given the wages earned and not received, according to his
vessel in case of the impossibility or disability of the captain and sailing engagement and the reason for his death, namely —
mate, assuming in such case their powers and responsibility. If he should have died a natural death and should have been
engaged on wages there shall be paid what may have been earned up to
the date of his death.
3. Crew If the engagement had been made for a fixed sum for the
whole voyage there shall be paid half the amount earned if the sailor
a. Formalities of Contract died on the voyage out, and the whole amount if he died on the return
voyage.
Article 634. The captain may make up his crew with the And if the engagement had been made on shares and the
number he may consider advisable, and in the absence of Spanish * death should have occurred after the voyage was begun, the heirs shall
sailors he may ship foreigners residing in the country, the number be paid the entire portion due the sailor; but should the latter have
thereof not to exceed one-fifth of the total crew. If in foreign ports the died before the departure of the vessel from the port, the heirs shall not
captain should not find a sufficient number of Spanish * sailors, he be entitled to claim anything.
may make up the crew with foreigners, with the consent of the consul If the death should have occurred in the defense of the
or marine authorities. vessel, the sailor shall be considered as living, and his heirs shall be
The agreements which the captain may make with the paid, at the end of the voyage, the full amount of wages or the full part
members of the crew and others who go to make up the complement of of the profits due him as to the others of his grade.
the vessels, to which reference is made in Article 612, must be reduced The sailor shall likewise be considered as present in the
to writing in the account book without the intervention of a notary event of his capture when defending the vessel, in order to enjoy the
public or clerk, signed by the parties thereto, and vised by the marine same benefits as the rest; but should he have been captured on account
authority if they are executed in Spanish * territory, or by the consuls of carelessness or other accident not related to the service, he shall only
or consular agents of Spain * if executed abroad, stating therein all the receive the wages due up to the day of his capture.
obligations which each one contracts and all the rights they acquire,
said authorities taking care that these obligations and rights are d. Rights in case of Dismissal; Causes for
recorded in a concise and clear manner, which will not give rise to Discharge
doubts or claims.
The captain shall take care to read to them the articles of
Article 636. Should a fixed period for which a sailor has
this Code, which concern them, stating that they were read in the said
signed not be stated, he can not be discharged until the end of the
document.
return voyage to the port where he enrolled.
If the book includes the requisites prescribed in Article 612,
and there should not appear any signs of alterations in its clauses, it
shall be admitted as evidence in questions which may arise between the Article 637. Neither can the captain discharge a sailor
captain and the crew with regard to the agreements contained therein during the time of his contract except for sufficient cause, the following
and the amounts paid on account of the same. being considered as such:
Every member of the crew may request a copy of the 1. The perpetration of a crime which disturbs order on the
captain, signed by the latter, of the agreement and of the liquidation of vessel.
his wages, as they appear in the book. 2. Repeated offenses of insubordination, against discipline,
or against the fulfillment of the service.
b. Duties and Liabilities 3. Repeated incapacity or negligence in the fulfillment of the
service to be rendered.
4. Habitual drunkenness.
Article 635. A sailor who has been contracted to serve on a 5. Any occurrence which incapacitates the sailor to carry out
vessel can not rescind his contract nor fail to comply therewith except the work under his charge, with the exception of the provisions
by reason of a legitimate impediment which may have occurred. contained in Article 644.
Neither can he pass from the service of one vessel to another 6. Desertion.
without obtaining the written consent of the vessel on which he may be.

Page 22 of 39
 The captain may, however, before setting out on a voyage 5. The inability of the vessel to navigate.
and without giving any reason whatsoever, refuse to permit a sailor he
may have engaged from going on board and may leave him on land, in
Article 641. If, after a voyage has been begun, any of the first
which case he will be obliged to pay him his wages as if he had
three causes mentioned in the foregoing article should occur, the sailors
rendered services.
shall be paid at the port the captain may deem it advisable to make for
This indemnity shall be paid from the funds of the vessel if
the benefit of the vessel and cargo, according to the time they may have
the captain should have acted for reasons of prudence and in the
served thereon; but if the vessel is to continue the voyage, the captain
interest of the safety and good service of the former. Should this not be
and the crew may mutually demand the enforcement of the contract.
the case, it shall be paid by the captain personally.
In case of the occurrence of the fourth cause, the crew shall
After the vessel has sailed, and during the voyage and until
continue to be paid half wages, if the agreement is by month but if the
the conclusion thereof, the captain can not abandon any member of his
detention should exceed three months, the engagement shall be
crew on land or on the sea, unless, by reason of being guilty of some
rescinded and the crew shall be paid what they should have earned,
crime, his imprisonment and delivery to the competent authority is
according to the contract, if the voyage had been made. And if the
proper in the first port touched, which will be obligatory on the
agreement had been made for a fixed sum for the voyage, the contract
captain.
must be complied within the terms agreed upon.
In the fifth case, the crew shall not have any other right than
e. Revocation of Voyage be entitled to recover the wages earned; but if the disability of the
vessel should have been caused by the negligence or lack of skill of the
Article 638. If, the crew having been engaged, the voyage is captain, engineer, or sailing mate, they shall indemnify the crew for the
revoked by the will of the agent or of the charterers before or after the loss suffered, always reserving the criminal liability which may be
vessel has put to sea or if the vessel is in the same manner given a proper.
different destination than that fixed in the agreement with the crew,
the latter shall be indemnified because of the rescission of the contract f. Change of Destination
according to the case, viz:
1. If the revocation of the voyage should be decided before
Article 638. x x x
the departure of the vessel from the port, each sailor engaged shall be
4. If the agent or the charterers of the vessel should give said
given one month's salary, besides what may be due him in accordance
vessel a destination other than that fixed in the agreement, and the
with his contract, for the services rendered to the vessel up to the date
members of the crew should not agree thereto, they shall be given by
of the revocation.
way of indemnity half the amount fixed in case No. 1, besides what may
2. If the agreement should have been for a fixed amount for
be owed them for the part of the monthly wages corresponding to the
the whole voyage, there shall be graduated what may be due for said
days which have elapsed from the date of their agreements.
month and days, calculating the same in proportion to the estimated
If they accept the change, and the voyage, on account of the
duration of the voyage, in the judgment of experts, in the manner
greater distance or for other reasons, should give rise to an increase of
established in the law of civil procedure; and if the proposed voyage
wages, the latter shall be privately regulated, or through amicable
should be of such short duration that it is calculated at one month more
arbitrators in case of disagreement. Even though the voyage may be to
or less, the indemnity shall be fixed for fifteen days, discounting in all
a nearer point, this shall not give rise to a reduction in the wages
cases the sums advanced.
agreed upon.
3. If the revocation should take place after the vessel has put
If the revocation or change of the voyage should originate
to sea, the sailors engaged for a fixed amount for the voyage shall
from the shippers or charterers, the agent shall have a right to demand
receive the salary which may have been offered them in full as if the
of them the indemnity which is justly due.
voyage had terminated, and those engaged by the month shall receive
the amount corresponding to the time they might have been on board
and to the time they may require to arrive at the port of destination, g. Loss of vessel
the captain being obliged, furthermore, to pay said sailors the passage
to the said port or to the port of sailing of the vessel, as may be Article 643. If the vessel and her freight should be totally
convenient for them. lost, by reason of capture or wreck, all rights of the crew to demand
4. If the agent or the charterers of the vessel should give said any wages whatsoever shall be extinguished, as well as that of the agent
vessel a destination other than that fixed in the agreement, and the for the recovery of the advances made.
members of the crew should not agree thereto, they shall be given by If a portion of the vessel or freight should be saved, or part
way of indemnity half the amount fixed in case No. 1, besides what may of either, the crew engaged on wages, including the captain, shall retain
be owed them for the part of the monthly wages corresponding to the their rights on the salvage, so far as they go, on the remainder of the
days which have elapsed from the date of their agreements. vessel as well as value of the freightage or the cargo saved; but sailors
If they accept the change, and the voyage, on account of the who are engaged on shares shall not have any right whatsoever to the
greater distance or for other reasons, should give rise to an increase of salvage of the hull, but only on the portion of the freightage saved. If
wages, the latter shall be privately regulated, or through amicable they should have worked to collect the remainder of the ship-wrecked
arbitrators in case of disagreement. Even though the voyage may be to vessel, they shall be given an award in proportion to the efforts made
a nearer point, this shall not give rise to a reduction in the wages and to the risks encountered in order to accomplish the salvage.
agreed upon.
If the revocation or change of the voyage should originate
h. Rescission of Contract
from the shippers or charterers, the agent shall have a right to demand
of them the indemnity which is justly due.
Article 647. The officers and the crew of the vessel shall be
exempted from all obligations contracted, if they deem it proper, in the
Article 640. The following shall be just causes for the following cases:
revocation of the voyage: 1. If, before the beginning of the voyage, the captain
1. A declaration of war or interdiction of commerce with the attempts to change it, or there occurs a naval war with the power to
power to whose territory the vessel was bound. which the vessel was destined.
2. The blockade of the port of destination or the breaking 2. If a disease should break out and be officially declared
out of an epidemic after the agreement. epidemic in the port of destination.
3. The prohibition to receive in said port the goods which 3. If the vessel should change owner or captain.
make up the cargo of the vessel.
4. The detention or embargo of the same by order of the
Government, or for any other reason independent of the will of the 4. Supercargoes
agent.

Page 23 of 39
 Article 649. Supercargoes shall discharge on board the vessel Held: In a charter party of the second kind, not only the entire
the administrative duties which the agent or shippers may have capacity of the ship is let but the ship itself, and the possession is passed to
assigned them; they shall keep an account and record of their the charterer. The entire control and management of it is given up to him.
transactions in a book which shall have the same conditions and The general owner loses his lien for freight, but the lien itself is not
requisites as required for the accounting book of the captain, and shall destroyed; the charterer is substituted in his place, in whose favor the lien
respect the latter in his duties as chief of the vessel. continues to exist when goods are taken on freight. The general owner,
The powers and liabilities of the captain shall cease, when however, has no remedy for the charter of his vessel but his personal action
there is a supercargo, with regard to that part of the administration on the covenants of the charter party. It is a contract in which he trusts in
legitimately conferred upon the latter, but shall continue in force for all the personal credit of the charterer.
acts which are inseparable from his authority and office. Therefore, where the charter constitutes a demise of the ship and
the charterer is the owner for the voyage, and that is the kind of charter
Article 650. All the provisions contained in the second party involved in the instant case, the general owner has no lien on the
section of Title III, Book II, with regard to qualifications, manner of cargo for the hire of the vessel, in the absence of an express provision
making contracts, and liabilities of factors shall be applicable to therefor as in the case at bar.
supercargoes. Moreover, even on the assumption that petitioner had a lien on
the cargo for unpaid freight, the same was deemed waived when the goods
were unconditionally released to the consignee at the port of destination. A
Article 651. Supercargoes can not, without special carrier has such a lien only while it retains possession of the goods, so that
authorization or agreement, make any transaction for their own delivery of the goods to the consignee or a third person terminates, or
account during the voyage, with the exception of the ventures which, in constitutes a waiver of, the lien. the lien of a carrier for the payment of
accordance with the custom of the port of destination, they are freight charges is nothing more than the right to withhold the goods, and is
permitted to do. inseparably associated with its possession and dependent upon it.
Neither shall they be permitted to invest in the return trip The shipowner's lien for freight is not in the nature of a
more than the profits from the ventures, unless there is a special hypothecation which will remain a charge upon the goods after he has
authorization thereto from the principals. parted with possession, but is simply the right to retain them until the
freight is paid, and is therefore lost by an unconditional delivery of the
A supercargo is a person specially employed by the goods to the consignee.
owner of the cargo to take charge of and to sell, to the best Furthermore, under Article 667 of the Code of Commerce, the
advantage, merchandise which have been shipped, to purchase period during which the lien shall subsist is twenty (20) days.
returning cargoes, and to receive freight. Parenthetically, this has been modified by the Civil Code, Article 2241
whereof provides that credits for transportation of the goods carried, for the
price of the contract and incidental expenses shall constitute a preferred
III claim or lien on the goods carried until their delivery and for thirty (30)
CHARTER PARTIES days thereafter. During this period, the sale of the goods may be requested,
even though there are other creditors and even if the shipper or consignee is
A "charter-party" is defined as a contract by which insolvent. But, this right may not be made use of where the goods have
been delivered and were turned over to a third person without malice on the
an entire ship, or some principal part thereof, is let by the owner to
part of the third person and for a valuable consideration. In the present case,
another person for a specified time or use; a contract of the cargo of cement was unloaded from the vessel and delivered to the
affreightment by which the owner of a ship or other vessel lets the consignee on October 23, 1980, without any oral or written notice or
whole or a part of her to a merchant or other person for the demand having been made on SMCSI for unpaid freight on the cargo.
conveyance of goods, on a particular voyage, in consideration of Consequently, after the lapse of thirty (30) days from the date of delivery,
the payment of freight; Charter parties are of two types: (a) the cargo of cement had been released from any maritime lien for unpaid
contract of affreightment which involves the use of shipping space freight.
on vessels leased by the owner in part or as a whole, to carry goods
for others; and, (b) charter by demise or bareboat charter, by the A. DEFINITIONS
terms of which the whole vessel is let to the charterer with a
transfer to him of its entire command and possession and 1. Primage – payment for the use of the equipment
consequent control over its navigation, including the master and the belonging to the captain.
crew, who are his servants. Contract of affreightment may either be
time charter, wherein the vessel is leased to the charterer for a fixed 2. Freight – charter price or money; compensation to be
period of time, or voyage charter, wherein the ship is leased for a paid for the utilization of the vessel by the charterer – Article 659,
single voyage. In both cases, the charter-party provides for the hire Code of Commerce, as to when freight shall accrue ---
of the vessel only, either for a determinate period of time or for a General Rule: According to the conditions of the charter
single or consecutive voyage, the shipowner to supply the ship's party. Otherwise: (1) the freight shall begin to run from the day of
stores, pay for the wages of the master and the crew, and defray the the loading on the vessel; (2) in charters with a fixed period, it shall
expenses for the maintenance of the ship [Planters Products v. begin upon that very day; and (3) if the freight is charged according
Court of Appeals]. to weight, payment thereof shall be made according to gross
It is therefore imperative that a public carrier shall weight, including weight of containers.
remain as such, notwithstanding the charter of the whole or portion
of a vessel by one or more persons, provided the charter is limited 3. Laydays – the period or time stipulated for loading
to the ship only, as in the case of a time-charter or voyage-charter. and unloading.
It is only when the charter includes both the vessel and its crew, as
in a bareboat or demise that a common carrier becomes private, at 4. Demurrage – sum of money due by express contract
least insofar as the particular voyage covering the charter-party is for the detention of the vessel in loading or unloading, beyond the
concerned. Indubitably, a shipowner in a time or voyage charter time allowed for that purpose in the charter party; amount
retains possession and control of the ship, although her holds may, stipulated in the charter party to be paid by the charterer or shipper
for the moment, be the property of the charterer [Ibid]. to the shipowner for any delay in the sailing of his ship.

Ouano v. Court of Appeals

Page 24 of 39
 5. Deadfreight – liability of the charterer to the Article 669. The owners or the captain shall observe in
shipowner, where the former failed to occupy the leased portion of charter parties the capacity of the vessel or that expressly designated in
the vessel. the registry of the same, a difference greater than 2 per cent between
that stated and her true capacity not being permissible.
If the owners or the captain should contract to carry a
B. PERSONS WHO MAY MAKE CHARTER
greater amount of cargo than the vessel can hold, in view of her
tonnage, they shall indemnify the freighters whose contracts they do
1. Owner of the vessel, who has legal control and not fulfill for the losses they may have caused them by reason of their
possession of the vessel, may enter into a charter default, according to the cases, viz:
with a charterer. If the vessel has been chartered by one freighter only, and
2. Broker may intervene in the execution of the there should appear to be an error or fraud in her capacity, and the
charter between the principals (Art. 654, Code of charterer should not wish to rescind the contract, when he has a right
Commerce) to do so, the charter should be reduced in proportion to the cargo the
vessel can not receive, the person from whom the vessel is chartered
3. Charterer of an entire vessel, by himself, may
being furthermore obliged to indemnify the charterer for the losses he
subcharter the whole or part thereof (Art. 679, Code may have caused.
of Commerce) If, on the contrary, there should be several charter parties,
4. Part-owners are not precluded from chartering the and by reason of the want of space all the cargo contracted for can not
vessel. Such part-owners shall enjoy preference in be received, and none of the charterers desires to rescind the contract,
the charter of the vessel over other persons who preference shall be given to the person who has already loaded and
offer equal conditions and freight (Art. 593, Code of arranged the freight in the vessel, and the rest shall take the place
Commerce) corresponding to them in the order of the dates of their contracts.
Should there be no priority, the charterers may load, if they
5. Ship agent may make contracts for a new charter, if
wish, pro rata of the amounts of weight or space they may have
authorized (Art. 598, Code of Commerce) engaged, and the person from whom the vessel was chartered shall be
6. Captain or master may enter into valid and obliged to indemnify them for the loss and damage.
binding charter parties, but only in the event of
absence of ship agent or consignee, and only in
Article 670. If the person from whom the vessel is chartered,
accordance with the instructions received and after receiving a part of the freight, should not find sufficient to make
protecting the owner’s interests (Art. 610 [4]) up at least three-fifths of the amount which the vessel can hold, at the
price he may have fixed, he may substitute for the transportation
C. REQUISITES FOR VALIDITY another vessel inspected and declared suitable for the same voyage, the
expenses of transfer being defrayed by him, as well as the increase,
Article 652. A charter party must be drawn in duplicate and should there be any, in the price of the charter. Should he not be able
signed by the contracting parties, and when either does not know how to make this change, the voyage shall be undertaken at the time agreed
or can not do so, by two witnesses at their request. upon; and should no time have been fixed, within fifteen days from the
The charter party shall include, besides the conditions time of beginning to load, should nothing to the contrary have been
unrestrictedly stipulated, the following statements: stipulated.
1. The kind, name, and tonnage of the vessel. If the owner of the part of the freight already loaded should
2. Her flag and port of registry. procure some more at the same price and under similar or
3. The name, surname, and domicile of the captain. proportionate conditions to those accepted for the freight received, the
4.The name, surname, and domicile of the agent, if the latter person from whom the vessel is chartered or the captain can not refuse
should make the charter party. to accept the rest of the cargo; and should he do so, the freighter shall
5. The name, surname, and domicile of the charterer, and if have a right to demand that the vessel put to sea with the cargo she
he states that he is acting by commission, that of the person for whose may have on board.
account he makes the contract.
6. The port of loading and unloading. Article 671. After three-fifths of the vessel is loaded, the
7. The capacity, number of tons or weight, or measure which person from whom she is chartered can not, without the consent of the
they respectively bind themselves to load and transport, or whether it charterers or freighters substitute the vessel designated in the charter
is the total cargo. party by another one, under the penalty of making himself thereby
8. The freightage to be paid, stating whether it is to be a liable for all the losses and damages occurring during the voyage to the
fixed amount for the voyage or so much per month, or for the space to cargo of the person who did not consent to the change.
be occupied, or for the weight or measure of the goods of which the
cargo consists, or in any other manner whatsoever agreed upon.
Article 672. If the vessel has been chartered in whole, the
9. The amount of primage to be paid to the captain.
captain can not, without the consent of the person chartering her,
10. The days agreed upon for loading and unloading.
accept freight from any other person; and should he do so, said
11. The lay days and extra lay days to be allowed and the
charterer may oblige him to unload it and require him to indemnify
rate of demurrage.
him for the losses suffered thereby.

To be valid, a charter party must have:

Article 673. The person from whom the vessel is chartered
a. CONSENT of the contracting parties; shall be liable for all the losses caused the charterer by reason of the
b. An EXISTING VESSEL which should be placed at voluntary delay of the captain in putting to sea, according to the rules
the disposition of the shipper; prescribed, provided he has been requested to put to sea at the proper
c. FREIGHT; time through a notary or judicially.
d. Compliance with the requirements of Art. 652, Code
of Commerce: Article 674. If the charterer should carry to the vessel more
freight than that contracted for, the excess may be admitted in
D. RIGHTS AND OBLIGATIONS accordance with the price stipulated in the contract, if it can be well
stowed without injuring the other freighters, but if in order to stow
1. Shipowner or Captain said freight it should be necessary to stow it in such manner as to throw
the vessel out of trim the captain must refuse it or unload it at the
expense of its owner.

Page 25 of 39
 The captain may likewise, before leaving the port, unload on board the freight delivered by the second charterers, provided the
the merchandise placed on board clandestinely, or transport it, if he conditions of the first charter are not changed, and that the person
can do so and keep the vessel in trim, demanding by way of freightage from whom the vessel is chartered be paid the full price agreed upon
the highest price which may have been stipulated for said voyage. even though the full cargo is not embarked, with the limitation
established in the next article.
Article 675. If the vessel has been chartered to receive the
cargo in another port, the captain shall appear before the consignee Article 680. A charterer who does not make up the full cargo
designated in the charter party, and, should the latter not deliver the he bound himself to ship shall pay the freightage of the amount he fails
cargo to him, he shall inform the charterer and await his instructions, to ship, if the captain did not take other freight to make up the cargo of
and in the meantime the lay days agreed upon shall begin to run, or the vessel, in which case he shall pay the first charterer the difference
those allowed by custom in the port, unless there is a special agreement should there be any.
to the contrary.
Should the captain not receive an answer within the time
Article 681. If the charterer should ship goods different from
necessary therefor, he shall make efforts to find freight; and should he
those indicated at the time of executing the charter party, without the
not find any after the lay days and extra lay days have elapsed, he shall
knowledge of the person from whom the vessel was chartered or of the
make a protest and return to the port where the charter was made.
captain, and should thereby give rise to losses, by reason of
The charterer shall pay the freightage in full, discounting
confiscation, embargo, detention, or other causes, to the person from
that which may have been earned on the merchandise which may have
whom the vessel was chartered or to the shippers, the person giving
been carried on the voyage out or on the return trip, if carried for the
rise thereto shall be liable with the value of his shipment and
account of third persons.
furthermore with his property, for the full indemnity to all those
The same shall be done if a vessel, having been chartered for
injured through his fault.
the round trip, should not be given any cargo for her return.

Article 682. If the merchandise shipped should have been for

Article 676. The captain shall lose the freightage and shall
the purpose of illicit commerce, and was taken on board with the
indemnify the charterers if the latter should prove, even against the
knowledge of the person from whom the vessel was chartered or of the
certificate of inspection, should one have taken place at the port of
captain, the latter, jointly with the owner of the same, shall be liable for
departure, that the vessel was not in a condition to navigate at the time
all the losses which may be caused the other shippers, and even though
of receiving the cargo.
it may have been agreed, they can not demand any indemnity
whatsoever of the charterer for the damage caused the vessel.
Article 677. The charter party shall be enforced if the
captain should not have any instructions from the charterer, and a
Article 683. In case of making a port to repair the hull,
declaration of war or a blockade should take place during the voyage.
machinery, or equipment of the vessel, the freighters must wait until
In such case the captain shall be obliged to make the nearest
the vessel is repaired, being permitted to unload her at their own
safe and neutral port, and request and await orders from the freighter;
expense should they deem it advisable.
and the expenses incurred and salaries earned during the detention
If, for the benefit of the cargo subject to deterioration, the
shall be paid as general average.
freighters or the court, or the consul, or the competent authority in a
If, by orders of the freighter, the cargo should be discharged
foreign land should order the merchandise to be unloaded, the
at the port of arrival, the freight for the voyage out shall be paid in full.
expenses of loading and unloading shall be for the account of the
former.
Article 678. If the time necessary, in the opinion of the judge
or court, in which to receive orders from the freighters should have
Article 684. If the charterer, without the occurrence of any
elapsed without the captain having received any instructions, the cargo
of the cases of force majeure mentioned in the foregoing article, should
shall be deposited, and it shall be liable for the payment of the freight
wish to unload his merchandise before arriving at the port of
and expenses incurred by reason of the delay which shall be paid from
destination, he shall pay the full freight, the expenses of the stop made
the proceeds of the part first sold.
at his request, and the losses and damages caused the other freighters,
should there be any.
A contract of affreightment may be either time charter,
wherein the leased vessel is leased to the charterer for a fixed Article 685. In charters for transportation of general freight
period of time, or voyage charter, wherein the ship is leased for a any of the freighters may unload the merchandise before the beginning
single voyage. In both cases, the charter-party provides for the hire of the voyage, by paying one-half the freight, the expense of stowing
of the vessel only, either for a determinate period of time or for a and restowing the cargo, and any other damage which may be caused
single or consecutive voyage, the ship owner to supply the ship’s the other shippers.
store, pay for the wages of the master of the crew, and defray the
expenses for the maintenance of the ship [Caltex v. Sulpicio]. Article 686. After the vessel has been unloaded and the cargo
Under a demise or bareboat charter on the other hand, placed at the disposal of the consignee, the latter must immediately pay
the charterer mans the vessel with his own people and becomes, in the captain the freight due and the other expenses to which he may be
effect, the owner for the voyage or service stipulated, subject to liable for said cargo.
The primage must be paid in the same proportion and at the
liability for damages caused by negligence [Ibid].
same time as the freight, all the changes and modifications to which the
If the charter is a contract of affreightment, which leaves latter should be subject also governing the former.
the general owner in possession of the ship as owner for the
voyage, the rights and the responsibilities of ownership rest on the
Article 687. The charters and freighters can not abandon
owner. The charterer is free from liability to third persons in merchandise damaged on account of the inherent vice of the goods or
respect of the ship [Ibid]. by reason of an accidental case, for the payment of the freight and
other expenses.
2. Charterer The abandonment shall be proper, however, if the cargo
should consist of liquids and should they have leaked out, there not
Article 679. The charterer of an entire vessel may remaining in the containers more than one-quarter of their contents.
subcharter the whole or part thereof for the amounts he may consider
most convenient, without the captain being allowed to refuse to receive E. RESCISSION

Page 26 of 39
 2. A condition of blockade of the port of destination of said
1. The Charterer vessel, or the breaking out of an epidemic after the contract was
executed.
Article 688. A charter party may be annulled at the request 3. The prohibition to receive the merchandise of the vessel at
of the charterer: the said port.
1. If before loading the vessel he should abandon the charter, 4. An indefinite detention, by reason of an embargo of the
paying half of the freightage agreed upon. vessel by order of the government or for any other reason independent
2. If the capacity of the vessel should not agree with that of the will of the agent.
stated in the certificate of the tonnage, or if there is an error in the 5. The impossibility of the vessel to navigate, without fault of
statement of the flag under which she sails. the captain or agent.
3. If the vessel should not be placed at the disposal of the The unloading shall be made for the account of the
charterer within the period and in the manner agreed upon. charterer.
4. If, after the vessel has put to sea, she should return to the
port of departure, on account of risk of pirates, enemies, or bad IV
weather, and the freighters should agree to unload her. BILL OF LADING
In the second and third cases the person from whom the
vessel was chartered shall indemnify the charterer for the losses he
may suffer. A Bill of Lading is a written acknowledgment, signed by
In the fourth case the person from whom the vessel was the master of a vessel or other authorized agent of the carrier, that
chartered shall have a right to the freightage in full for the voyage out. he has received the described goods from the shipper, to be
If the charter should have been made by the months, the transported on the expressed terms to the described place of
charterers shall pay the full freightage for one month, if the voyage destination, and to be delivered there to the designated consignee
were to a port in the same waters, and two months, if the voyage were or parties.
to a port in different waters.
It operates as a (a) RECEIPT, (b) CONTRACT, (c)
From one port to another of the Peninsula and adjacent
islands, the freightage for one month only shall be paid.
DOCUMENT OF TITLE.
5. If a vessel should make a port during the voyage in order It is a receipt of the goods shipped and a contract to
to make urgent repairs and the freighters should prefer to dispose of transport and deliver the same as therein stipulated. As a contract,
the merchandise. it stipulates the rights and obligations assume by the parties. Being
When the delay does not exceed thirty days, the freighters a contract, it is the law between the parties who are bound by its
shall pay the full freight for the voyage out. terms and conditions, provided they are not contrary to law,
Should the delay exceed thirty days, they shall only pay the morals, good customs, public order and public policy.
freight in proportion to the distance covered by the vessel.
It constitutes a class of contracts of adhesion. Thus, it is
normally construed liberally in favor of the shipper.
2. The Shipowner Three kinds of stipulations are often made in a bill of
lading. The first is one exempting the carrier from any and all
Article 689. At the request of the person from whom the liability for loss or damage occasioned by its own negligence.
vessel is chartered the charter party may be rescinded: The second is one providing for an unqualified limitation of such
1. If the charterer at the termination of the extra lay days
liability to an agreed valuation. And the third is one limiting the
does not place the cargo alongside the vessel.
In such case the charterer must pay half the freight liability of the carrier to an agreed valuation unless the shipper
stipulated besides the demurrage for the lay days and extra lay days declares a higher value and pays a higher rate of freight. According
elapsed. to an almost uniform weight of authority, the first and second kinds
2. If the person from whom the vessel was chartered should of stipulations are invalid as being contrary to public policy, but the
sell her before the charterer has begun to load her and the purchaser third is valid and enforceable [H.E. Heacock v. Macondray].
should load her for his own account. In the case of Hart vs. Pennsylvania R. R. Co., it was
In such case the vendor shall indemnify the charterer for the held that "where a contract of carriage, signed by the shipper, is
losses he may suffer.
fairly made with a railroad company, agreeing on a valuation of the
If the new owner of the vessel should not load her for his
own account the charter party shall be respected, and the vendor shall property carried, with the rate of freight based on the condition that
indemnify the purchaser if the former did not inform him of the the carrier assumes liability only to the extent of the agreed
charter pending at the time of making the sale. valuation, even in case of loss or damage by the negligence of the
carrier, the contract will be upheld as proper and lawful mode of
The answer to the question of whether or not the default securing a due proportion between the amount for which the carrier
of charterer in the payment of the charter hire within the time may be responsible and the freight he receives, and protecting
agreed upon gives the shipowner a right to rescind the charter party himself against extravagant and fanciful valuations.
extrajudicially, is undoubtedly in the affirmative. Also, a judicial In the absence of a prohibitory statute, the validity of a
action for the rescission of a contract is not necessary where the limitation of the amount of liability is generally upheld, where with
contract provides that it may be revoked and cancelled for violation a view to obtaining a compensation commensurate to the risk
of any of its terms and conditions [Marimperio Compania v. Court assumed, the warehouseman stipulates that unless the valuation of
of Appeals]. the property committed to his care is disclosed, his responsibility
for, loss or damage shall not exceed a certain amount or that in case
3. Other Grounds of loss or damages the valuation fixed in the receipt shall be
controlling [J. Ysmael v. Barreto].
Article 690. The charter party shall be rescinded and all
action arising therefrom shall be extinguished if, before the vessel puts A. KINDS OF BILL OF LADING
to sea from the port of departure, any of the following cases should
occur: 1. Negotiable, or non-negotiable
1. A declaration of war or interdiction of commerce with the
power to whose ports the vessel was going to sail. 2. Clean, and foul

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 Clean bill of lading – one which does not contain any 1. Legal Evidence of the Contract
notation indicating any defect in the goods;
Foul bill of lading – one that contains such notation. Article 353. The legal basis of the contract between the
shipper and the carrier shall be the bills of lading, by the contents of
Iron Bulk v. Remington Industrial which all disputes which may arise with regard to their execution and
Held: We find no error in the findings of the appellate court that fulfillment shall be decided without admission of other exceptions than
the questioned bill of lading is a clean bill of lading, i.e., it does not indicate forgery or material errors in the drafting thereof.
any defect in the goods covered by it, as shown by the notation, "CLEAN After the contract has been complied with the bill of lading
ON BOARD" and "Shipped at the Port of Loading in apparent good issued by the carrier shall be returned to him, and by virtue of the
condition on board the vessel for carriage to Port of Discharge". exchange of this certificate for the article transported, the respective
Petitioner presented evidence to prove that, contrary to the obligations and actions shall be considered as canceled, unless in the
recitals contained in the subject bill of lading, the cargo therein described as same act the claims which the contracting parties desired to reserve are
clean on board is actually wet and covered with rust.  Indeed, having the reduced to writing, exception being made of the provisions of Article
nature of a receipt, or an acknowledgement of the quantity and condition of 366.
the goods delivered, the bill of lading, like any other receipts, may be If in case of loss or for any other reason whatsoever, the
explained, varied or even contradicted.  However, we agree with the Court consignee can not return upon receiving the merchandise the bill of
of Appeals that far from contradicting the recitals contained in the said bill, lading subscribed by the carrier, he shall give said carrier a receipt for
petitioner's own evidence shows that the cargo covered by the subject bill the goods delivered, this receipt producing the same effects as the
of lading, although it was partially wet and covered with rust was, return of the bill of lading.
nevertheless, found to be in a "fair, usually accepted condition" when it was
accepted for shipment. Conformably with the aforecited provision, the surrender
The fact that the issued bill of lading is pro forma is of no of the original bill of lading is not a condition precedent for a
moment.  If the bill of lading is not truly reflective of the true condition of common carrier to be discharged of its contractual obligation. If
the cargo at the time of loading to the effect that the said cargo was indeed surrender of the original bill of lading is not possible,
in a damaged state, the carrier could have refused to accept it, or at the
acknowledgment of the delivery by signing the delivery receipt
least, made a marginal note in the bill of lading indicating the true condition
of the merchandise.  But it did not.  On the contrary, it accepted the subject suffices [Malayan v. Jardine].
cargo and even agreed to the issuance of a clean bill of lading without
taking any exceptions with respect to the recitals contained therein.  Since Malayan v. Jardine
the carrier failed to annotate in the bill of lading the alleged damaged Held: We also note that some delivery receipts were signed by
condition of the cargo when it was loaded, said carrier and the petitioner, as Abdurahman’s subordinates and not by Abdurahman himself as consignee.
its representative, are bound by the description appearing therein and they Further, delivery checkers Rogelio and Ismael testified that Abdurahman
are now estopped from denying the contents of the said bill. was always present at the initial phase of each delivery, although on the few
Petitioner presented in evidence the Mate's Receipts and a occasions when Abdurahman could not stay to witness the complete
Survey Report to prove the damaged condition of the cargo. However, delivery of the shipment, he authorized his subordinates to sign the delivery
contrary to the asseveration of petitioner, the Mate's Receipts and the receipts for him. This, to our mind, is sufficient and substantial compliance
Survey Report which were both dated November 6, 1991, are unreliable with the requirements.
evidence of the true condition of the shipment at the time of loading since We further note that, strangely, petitioner made no effort to
said receipts and report were issued twenty days prior to loading and before disapprove Abdurahman’s resignation until after the investigation and after
the issuance of the clean bill of lading covering the subject cargo on he was cleared of any responsibility for the loss of the goods. With
November 26, 1991.  Moreover, while the surveyor, commissioned by the Abdurahman outside of its reach, petitioner cannot now pass to respondent
carrier to inspect the subject cargo, found the inspected steel goods to be what could be Abdurahman’s negligence, if indeed he were responsible.
contaminated with rust he, nonetheless, estimated the merchandise to be in
a fair and usually accepted condition.
Article 709. A bill of lading drawn up in accordance with the
provisions of this title shall be proof as between all those interested in
3. “On Board Bill” or “Received for Shipment Bill” the cargo and between the latter and the underwriters, proof to the
▪ “On Board” – one in which it is stated that the goods contrary being reserved by the latter.
have been received on board the vessel which is to carry the goods.
▪ “Received for Shipment” – one in which it is stated that Article 354. In the absence of a bill of lading the respective
the goods have been received for shipment with or without claims of the parties shall be decided by the legal proofs that each one
specifying the vessel by which the goods are to be shipped. may submit in support of his claims, in accordance with the general
provisions established in this Code for commercial contracts.
4. Spent – the goods were already delivered but the bill
of lading was not returned. 2. It is an Actionable Document
In Philippine American General Insurance v. Sweet
5. Through – one issued by a carrier who is obliged to Lines, it was held:
use the facilities of other carriers as well as his own facilities for
the purpose of transporting the goods from the city of the seller to “As petitioners are suing upon SLI's contractual
the city of the buyer, which bill of lading is honored by the second obligation under the contract of carriage as contained in the bills
of lading, such bills of lading can be categorized as actionable
and other interested carriers who do not issue their own lading.
documents which under the Rules must be properly pleaded
either as causes of action or defenses, and the genuineness and
6. Custody – the goods are already received by the due execution of which are deemed admitted unless specifically
carrier but the vessel indicated therein has not yet arrived in the denied under oath by the adverse party. The rules on actionable
port. documents cover and apply to both a cause of action or defense
based on said documents.”
7. Port – the vessel indicated in the bill of lading that
will transport the goods is already in the port. 3. Covered by Parol Evidence Rule
Under the parol evidence rule, the terms of a contract are
B. BILL OF LADING AS EVIDENCE rendered conclusive upon the parties, and evidence aliunde is not
admissible to vary or contradict a complete and enforceable

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agreement embodied in a document, subject to well defined Article 706. The captain and the freighter of the vessel are
exceptions which do not obtain in this case. The parol evidence obliged to draft the bill of lading, in which there shall be stated:
rule is based on the consideration that when the parties have 1. The name, registry, and tonnage of the vessel.
reduced their agreement on a particular matter into writing, all their 2. The name of the captain and his domicile.
3. The port of loading and that of unloading.
previous and contemporaneous agreements on the matter are
4.The name of the shipper.
merged therein. Accordingly, evidence of a prior or 5.The name of the consignee, if the bill of lading is issued to
contemporaneous verbal agreement is generally not admissible to order.
vary, contradict or defeat the operation of a valid instrument. The 6. The quantity, quality, number of packages, and marks of
mistake contemplated as an exception to the parol evidence rule is the merchandise.
one which is a mistake of fact mutual to the parties. Furthermore, 7. The freight and the primage stipulated.
the rules on evidence, as amended, require that in order that parol The bill of lading may be issued to bearer, to order, or in the
evidence may be admitted, said mistake must be put in issue by the name of a specific person, and must be signed within twenty-four hours
after the cargo has been received on board, the freighter being able to
pleadings, such that if not raised inceptively in the complaint or in
request the unloading thereof at the expense of the captain should he
the answer, as the case may be, a party can not later on be not sign it, and in every case indemnity for the losses and damages
permitted to introduce parol evidence thereon. Needless to say, the suffered thereby.
mistake adverted to by herein petitioner, and by its own admission,
was supposedly committed by private respondents only and was
Article 707. Four true copies of the original bill of lading
raised by the former rather belatedly only in this instant petition. shall be made, all of which shall be signed by the captain and by the
Clearly then, and for failure to comply even only with the freighter. Of these copies the freighter shall keep one and send another
procedural requirements thereon, we cannot admit evidence to to the consignee; the captain shall take two, one for himself and
prove or explain the alleged mistake in documentation imputed to another for the agent.
private respondents by petitioner [Magellan v. Court of Appeals]. There may, furthermore, be made as many copies of the bill
of lading as may be considered necessary by the persons interested; but
when they are issued to order or to the bearer there shall be stated in
C. FORMALITIES OR STIPULATIONS FOR OVERLAND
all the copies, be they either of the first four or of the subsequent ones,
TRANSPORATION
the destination of each one, stating whether it is for the agent, for the
captain, for the freighter, or for the consignee. If the copy sent to the
Article 350. The shipper as well as the carrier of latter should be duplicated there must be stated in said duplicate this
merchandise and goods may mutually demand of each other the issue fact, and that it is not valid except in case of the loss of the first one.
of a bill of lading in which there shall be stated:
1. The name, surname, and domicile of the shipper.
Article 708. The bills of lading issued to the bearer sent to
2. The name, surname, and domicile of the carrier.
the consignee shall be transferable by the actual delivery of the
3. The name, surname and domicile of the person to whom
instrument; and by virtue of an indorsement, those issued to order.
or to whose order the goods are addressed, or whether they are to be
In either case, the person to whom the bill of lading is
delivered to the bearer of the said bill.
transferred shall acquire all the rights and actions of the assignor or
4. A description of the goods, stating their generic character,
indorser with regard to the merchandise mentioned in the same.
their weight, and the external marks or signs of the packages
containing the same.
5. The cost of the transportation. Article 709. A bill of lading drawn up in accordance with the
6. The date on which the shipment is made. provisions of this title shall be proof as between all those interested in
7. The place of the delivery to the carrier. the cargo and between the latter and the underwriters, proof to the
8. The place and time at which the delivery is to be made to contrary being reserved by the latter.
the consignee.
9. The damages to be paid by the carrier in case of delay, if
Article 710. Should the bills of lading not agree, and there
any agreement is made on this point.
should not be observed any correction or erasure in any of them, those
possessed by the freighter or consignee signed by the captain shall be
Article 351. In shipments made over railroads or by other proof against the captain or agent in favor of the consignee or
enterprises which are subject to schedules or the time fixed by freighter; and those possessed by the captain or agent signed by the
regulations, it shall be sufficient that the bills of lading or declarations freighter shall be proof against the freighter or consignee in favor of
of shipment furnished by the shipper refer, with regard to the rate, the captain or agent.
terms, and special conditions of the transportation, to the schedules
and regulations, the application of which is requested; and should no
Article 711. The legitimate holder of a bill of lading who
schedule be determined the carrier must apply the rate of the
does not present it to the captain of the vessel before her unloading,
merchandise paying the lowest, with the condition inherent thereto,
obliging the latter thereby to unload it and place it in deposit, shall be
always including such statement or reference in the bill of lading
liable for the cost of warehousing and other expenses arising
delivered to the shipper.
therefrom.

Article 352. Bills of lading or tickets in the case of

Article 712. The captain can not himself change the
transportation of passengers may be different, one for persons and
destination of merchandise. In admitting this change at the instance of
another for baggage, but all of them shall contain the name of the
the freighter, he must first take up the bills of lading he may have
carrier, the date of shipment, the points of departure and arrival, the
issued, under the penalty of being liable for the cargo to the legitimate
price, and with regard to baggage, the number and weight of the
holder of the same.
packages, with any other indications which may be considered
necessary in order to easily identify them.
Article 713. If before delivering the cargo a new bill of
lading should be demanded of the captain, it being alleged that the
D. FORMALITIES, STIPULATIONS, AND OTHER
previous ones are not presented on account of their loss or for any
RULES THAT APPLY TO BILLS OF LADING FOR other sufficient cause, he shall be obliged to issue it, provided security
MARITIME COMMERCE for the value of the cargo is given to his satisfaction; but without
changing the consignment and stating therein the circumstances
prescribed in the last paragraph of Article 707, when the bills of lading

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referred to therein are in question, under the penalty otherwise to be
liable for said cargo if not properly delivered through his fault. Philippine Charter v. ChemOil Lighterage
Held: In this case, there is no question that the transportation
Article 714. If before the vessel puts to sea the captain charges have been paid, as admitted by the petitioner, and the
should die or should discontinue in his position through any accident, corresponding official receipt duly issued. But the petitioner is of the view
the freighters shall have a right to demand of the new captain the that the payment for services does not invalidate its claim.  It contends that
ratification of the first bills of lading, and the latter must do so, under the second paragraph of Article 366 of the Code of Commerce, it is
provided all the copies previously issued be presented or returned to clear that if notice or protest has been made prior to payment of services,
him, and it should appear from an examination of the cargo that they claim against the bad order condition of the cargo is allowed.
are correct. We do not believe so.  As discussed at length above, there is no
The expenses arising from the examination of the cargo shall evidence to confirm that the notice of claim was filed within the period
be defrayed by the agent, without prejudice to the right of action of the provided for under Article 366 of the Code of Commerce.  Petitioner’s
latter against the first captain, if he ceased to be such through his own contention proceeds from a false presupposition that the notice of claim was
fault. Should said examination not be made, it shall be understood that timely filed.
the new captain accepts the cargo as it appears from the bills of lading
issued. It has long been held that Article 366 of the Code of
Commerce applies not only to overland and river transportation but
Article 715. Bills of lading will give rise to a most summary also to maritime transportation. Moreover, we agree that in this
action or to judicial compulsion, according to the case, for the delivery jurisdiction, as viewed from another angle, it is more accurate to
of the cargo and the payment of the freightage and proper expenses. state that the filing of a claim with the carrier within the time
limitation therefor under Article 366 actually constitutes a
Article 716. If several persons should present bills of lading condition precedent to the accrual of a right of action against a
issued to bearer or to order, indorsed in their favor, demanding the carrier for damages caused to the merchandise. The shipper or the
same merchandise, the captain shall prefer in delivering the same, the consignee must allege and prove the fulfillment of the condition
person presenting the copy first issued, with the exception of the case
and if he omits such allegations and proof, no right of action
when the latter one was issued on account of the loss of the first one,
and if they are held by different persons. against the carrier can accrue in his favor. As the requirements in
In such case, as well as when only second or subsequent Article 366, restated with a slight modification in the assailed
copies issued without this proof are presented, the captain shall apply paragraph 5 of the bills of lading, are reasonable conditions
to the judge or court, so that he may order the deposit of the precedent, they are not limitations of action. Being conditions
merchandise, and that through him it may be delivered to the proper precedent, their performance must precede a suit for enforcement
person. and the vesting of the right to file spit does not take place until the
happening of these conditions... Performance or fulfillment of all
Article 717. The delivery of the bill of lading shall effect the conditions precedent upon which a right of action depends must be
cancellation of all the provisional receipts of prior date given by the sufficiently alleged, considering that the burden of proof to show
captain or his subalterns for partial deliveries of the cargo which may that a party has a right of action is upon the person initiating the
have been made.
suit. More particularly, where the contract of shipment contains a
reasonable requirement of giving notice of loss of or injury to the
Article 718. After the cargo has been delivered, the bills of goods, the giving of such notice is a condition precedent to the
lading which the captain signed shall be returned to him, or at least the action for loss or injury or the right to enforce the carrier's liability.
copy by reason of which the delivery is made, with the receipt for the
Such requirement is not an empty formalism. The fundamental
merchandise mentioned therein.
The delay on the part of the consignee shall make him liable reason or purpose of such a stipulation is not to relieve the carrier
for the damages which may be caused the captain thereby. from just liability, but reasonably to inform it that the shipment has
been damaged and that it is charged with liability therefor, and to
E. WHEN TO FILE A CLAIM AGAINST THE CARRIER give it an opportunity to examine the nature and extent of the
injury. This protects the carrier by affording it an opportunity to
Article 366. Within the twenty-four hours following the
make an investigation of a claim while the matter is fresh and
receipt of the merchandise a claim may be brought against the carrier easily investigated so as to safeguard itself from false and
on account of damage or average found therein on opening the fraudulent claims [Philippine American General Insurance v.
packages, provided that the indications of the damage or average Sweet Lines].
giving rise to the claim can not be ascertained from the exterior of said Stipulations in bills of lading or other contracts of
packages, in which case said claim would only be admitted on the shipment which require notice of claim for loss of or damage to
receipt of the packages. goods shipped in order to impose liability on the carrier operate to
After the periods mentioned have elapsed, or after the
prevent the enforcement of the contract when not complied with,
transportation charges have been paid, no claim whatsoever shall be
admitted against the carrier with regard to the condition in which the that is, notice is a condition precedent and the carrier is not liable if
goods transported were delivered. notice is not given in accordance with the stipulation, as the failure
to comply with such a stipulation in a contract of carriage with
A claim must be filed: respect to notice of loss or claim for damage bars recovery for the
1. IMMEDIATELY UPON RECEIPT of the package – if loss or damage suffered. On the other hand, the validity of a
damage is APPARENT (for such purpose, a VERBAL CLAIM contractual limitation of time for filing the suit itself against a
made immediately is SUFFICIENT compliance with the law) carrier shorter than the statutory period therefor has generally been
2. WITHIN 24 HOURS following RECEIPT of package upheld as such stipulation merely affects the shipper's remedy and
– if the damage CANNOT BE ASCERTAINED from the outside does not affect the liability of the carrier. In the absence of any
part of package statutory limitation and subject only to the requirement on the
reasonableness of the stipulated limitation period, the parties to a
NOTE: All Claims are EXTINGUISHED – if consignee contract of carriage may fix by agreement a shorter time for the
RECEIVES the merchandise, and PAYS the freight charges bringing of suit on a claim for the loss of or damage to the
WITHOUT PROTEST shipment than that provided by the statute of limitations. Such

Page 30 of 39
limitation is not contrary to public policy for it does not in any way delivered by the carrier and received by the consignee under and in
defeat the complete vestiture of the right to recover, but merely pursuance of the terms of the contract, this claim for damages would be
requires the assertion of that right by action at an earlier period defeated by the plaintiff's failure to make claim therefor in accordance with
than would be necessary to defeat it through the operation of the the terms of article 366 of the Code.
We are of opinion, however, that the necessity for making the
ordinary statute of limitations. In the case at bar, there is neither
claim in accordance with that article did not arise if, as it is alleged, these
any showing of compliance by petitioners with the requirement for 1,022 packages of sugar were recovered from the wreck by the plaintiff,
the filing of a notice of claim within the prescribed period nor any himself, in an effort, by his own activities, to save his property from total
allegation to that effect. It may then be said that while petitioners loss. The measures to be taken under the terms of article 367 of the Code
may possibly have a cause of action, for failure to comply with the when the parties are unable to arrive at an amicable settlement of claims for
above condition precedent they lost whatever right of action they damages set up in accordance with article 366, quite clearly indicate that
may have in their favor or, token in another sense, that remedial the necessity for the presentation of claims under this article arises only in
right or right to relief had prescribed [Ibid]. those cases wherein the carrier makes delivery and the consignee receives
the goods in pursuance of the terms of the contract.
The object sought to be attained by the requirement of
Until the defendant has had an opportunity to submit his
the submission of claims in pursuance of this article is to compel evidence it is impossible to determine under what conditions these 1,022
the consignee of goods entrusted to a carrier to make prompt packages of sugar came into the possession of the plaintiff, or to determine
demand for settlement of alleged damages suffered by the goods whether his claim for damages by the wetting of this sugar, if well founded
while in transport, so that the carrier will be enabled to verify all in every other respect, is or should be defeated by his failure to make claim
such claims at the time of delivery or within twenty-four hours for such damages in the manner and form indicated in article 366 of the
thereafter, and if necessary fix responsibility and secure evidence Commercial Code.
as to the nature and extent of the alleged damages to the goods
while the matter is still fresh in the minds of the parties. To this end New Zealand v. Chua Joy
of provision is made in Article 367 of the Code for the prompt Held: It would appear from the above that in order that the
settlement of disputes as to the nature and extent of the alleged condition therein provided may be demanded there should be a
damages, and for the final disposition of the damaged goods, which consignment of goods, through a common carrier, by a consignor in one
place to a consignee in another place. And said article provides that the
is wholly inconsistent with the contention that these articles are
claim for damages must be made "within twenty-four hours following the
applicable in cases wherein the claim against the carrier is founded receipt of the merchandise" by the consignee from the carrier. In other
upon his failure to make delivery of the goods entrusted to him words, there must be delivery of the merchandise by the carrier to the
[Roldan v. Ponzo] consignee at the place of destination. In the instant case, the consignor is
the branch office of Lee Teh & Co., Inc. at Catarman, Samar, which placed
Aboitiz v. ICNA the cargo on board the ship Jupiter, and the consignee, its main office at
Held: The shipment was delivered on August 11, 1993. Manila. The lower court found that the cargo never reached Manila, its
Although the letter informing the carrier of the damage was dated August destination, nor was1 it ever delivered to the consignee, the office of the
15, 1993, that letter, together with the notice of claim, was received by shipper in Manila, because the ship ran aground upon entering Laoang Bay,
petitioner only on September 21, 1993. But petitioner admits that even Samar on the same day of the shipment. Such being the case, it follows that
before it received the written notice of claim, Mr. Mayo B. Perez, Claims the aforesaid article 366 does not have application because the cargo was
Head of the company, was informed by telephone sometime in August 13, never received by the consignee. Moreover, under the bill of lading issued
1993. Mr. Perez then immediately went to the warehouse and to the by the carrier (Exhibit C), it was the tetter's undertaking to bring the cargo
delivery site to inspect the goods in behalf of petitioner. to its destination—Manila,—and deliver it to consignee, which undertaking
In the case of Philippine Charter Insurance Corporation (PCIC) was never complied with. The carrier, therefore, breached its contract, and,
v. Chemoil Lighterage Corporation, the notice was allegedly made by the as such, it forefeited its right to invoke in its favor the conditions required
consignee through telephone. The claim for damages was denied. This by article 366.
Court ruled that such a notice did not comply with the notice requirement It is true that in the instant case there is some disagreement as to
under the law. There was no evidence presented that the notice was timely whether the salvage of the portion of the cargo that was saved was due to
given. Neither was there evidence presented that the notice was relayed to the efforts of the carrier itself or to the combined efforts of the latter and the
the responsible authority of the carrier. shipper as a result of which the salvaged cargo was placed in possession of
As adverted to earlier, there are peculiar circumstances in the the shipper who sold it and deducted its proceeds from the liability of the
instant case that constrain Us to rule differently from the PCIC case, albeit carrier. But this discrepancy, in our opinion, would seem to be immaterial
this ruling is being made pro hac vice, not to be made a precedent for other because the law as well as the contract contemplates delivery of the cargo
cases. to the consignee at its port of destination in order that the benefit of the law
Stipulations requiring notice of loss or claim for damage as a may be availed of. The liability of the carrier must be determined in the
condition precedent to the right of recovery from a carrier must be given a light of the carriage contract, and since that contract calls for reciprocal
reasonable and practical construction, adapted to the circumstances of the obligations, the carrier cannot demand fulfillment of its part from the
case under adjudication, and their application is limited to cases falling shipper or consignee unless it first complies with its own obligation.
fairly within their object and purpose. (Article 1100, old Civil Code.) The fact that the consignor is but the branch
Bernhard Willig, the representative of consignee who received office of the company that shipped the goods, and the consignee is the main
the shipment, relayed the information that the delivered goods were office at Manila, is of no moment, because the duties of each party under
discovered to have sustained water damage to no less than the Claims Head the law are different. Moreover, even if the consignor and the consignee be
of petitioner, Mayo B. Perez. Immediately, Perez was able to investigate the considered as one and the same party, still the carrier cannot disclaim
claims himself and he confirmed that the goods were, indeed, already responsibility under its contract for the simple reason that it failed to
corroded. comply with its obligation to bring the cargo to its destination. This breach
alone justifies its liability under the carriage contract.

Roldan v. Ponzo
Held: It is very clear, then, that in so far as this action seeks to
When to file a case in court against the carrier
recover damages for defendant's failure to deliver 1,222 packages 1. If there is a bill of lading – 10 years [Art. 1144 – based
or bayones of sugar, the failure to make claim for such damages under the on a written contract]
provisions of article 366 of the Commercial Code in no wise affects the 2. If there is no bill of lading – 6 years [Art. 1145 – based
respective rights of the parties on an oral or quasi-contract]
In so far as this action is founded on a claim for damages 3. If it involves overseas trading – 1 year [COGSA]
resulting from the wetting of the 1,022 packages of sugar which were saved
from the wreck, it seems clear that if these 1,022 packages of sugar were

Page 31 of 39
 Federal Express v. American Home Insurance should be by reason of the disability of the vessel, and the passenger
Held: In this jurisdiction, the filing of a claim with the carrier should agree to await her repair, he can not be required to pay any
within the time limitation therefor actually constitutes a condition precedent increased price of passage, but his living expenses during the delay
to the accrual of a right of action against a carrier for loss of or damage to shall be for his own account.
the goods. The shipper or consignee must allege and prove the fulfillment In case the departure of the vessel is delayed the passengers
of the condition. If it fails to do so, no right of action against the carrier can have a right to remain on board and to be furnished with food for the
accrue in favor of the former. The aforementioned requirement is a account of the vessel, unless the delay is due to an accidental cause or to
reasonable condition precedent; it does not constitute a limitation of action. force majeure. If the delay should exceed ten days, the passengers who
The requirement of giving notice of loss of or injury to the request it shall be entitled to the return of the passage; and if it were
goods is not an empty formalism. The fundamental reasons for such a due exclusively to the captain or agent they may furthermore demand
stipulation are (1) to inform the carrier that the cargo has been damaged, indemnity for losses and damages.
and that it is being charged with liability therefor; and (2) to give it an A vessel which is exclusively destined to the transportation
opportunity to examine the nature and extent of the injury. “This protects of passengers must take them directly to the port or ports of
the carrier by affording it an opportunity to make an investigation of a destination, no matter what the number of passengers may be, making
claim while the matter is fresh and easily investigated so as to safeguard all the stops indicated in her itinerary.
itself from false and fraudulent claims.”
When an airway bill -- or any contract of carriage for that matter Article 699. After the contract has been rescinded, before or
-- has a stipulation that requires a notice of claim for loss of or damage to after the commencement of the voyage, the captain shall have a right to
goods shipped and the stipulation is not complied with, its enforcement can claim payment for what he may have furnished the passengers.
be prevented and the liability cannot be imposed on the carrier. To stress,
notice is a condition precedent, and the carrier is not liable if notice is not
given in accordance with the stipulation. Failure to comply with such a Article 700. In all that relates to the preservation of order
stipulation bars recovery for the loss or damage suffered. and police on board the vessel the passengers shall conform to the
Being a condition precedent, the notice must precede a suit for orders given by the captain, without any distinction whatsoever.
enforcement. In the present case, there is neither an allegation nor a
showing of respondents’ compliance with this requirement within the Article 701. The convenience or the interest of the
prescribed period. While respondents may have had a cause of action then, passengers shall not obligate nor empower the captain to stand in shore
they cannot now enforce it for their failure to comply with the aforesaid or enter places which may take the vessel out of her course, nor to
condition precedent. remain in the ports he must or is under the necessity of touching for a
In view of the foregoing, we find no more necessity to pass upon period longer than that required for the business of the navigation.
the other issues raised by petitioner.
Article 702. In the absence of an agreement to the contrary,
V it shall be understood that the maintenance of the passengers during
PASSENGERS ON SEA VOYAGES the voyage is included in the price of the passage; but should said
maintenance be for the account of the latter, the captain shall be under
the obligation, in case of necessity, to furnish them the victuals at a
Article 693. Should the passage price not have been agreed
reasonable price necessary for their maintenance.
upon, the judge or court shall summarily fix it, after a statement of
experts.
Article 703. A passenger shall be looked upon as a shipper in
so far as the goods he carries on board are concerned, and the captain
Article 694. Should the passenger not arrive on board at the
shall not be liable for what said passenger may preserve under his
time fixed, or should leave the vessel without permission from the
immediate and special custody unless the damage arises from an act of
captain, when the latter is ready to leave the port, the captain may
the captain or of the crew.
continue the voyage and demand the full passage price.

Article 704. The captain, in order to collect the price of the

Article 695. The right to passage, if issued to a specified
passage and expenses of maintenance, may retain the goods belonging
person, can not be transferred without the consent of the captain or of
to the passenger, and in case of the sale of the same he shall be given
the consignee.
preference over the other creditors, acting in the same way as in the
collection of freight.
Article 696. If before beginning the voyage the passenger
should die, his heirs shall only be obliged to pay half of the passage
Article 705. In case of the death of a passenger during the
agreed upon.
voyage the captain is authorized, with regard to the body, to take the
If there should be understood in the price stipulated the
steps required by the circumstances, and shall carefully take care of
expenses of subsistence, the judge, or court, hearing experts if he
the papers and goods there may be on board belonging to the
considers it necessary, shall fix the amount to be paid the vessel.
passenger, observing the provisions of Case No. 10 of Article 612 with
Should another passenger be received in the place of the
regard to members of the crew.
deceased, nothing shall be paid by said heirs.

Article 697. If before beginning the voyage it should be

VI
suspended through the sole fault of the captain or agent, the passengers LOANS ON BOTTOMRY OR RESPONDENTIA
shall be entitled to have their passage refunded and to recover for
losses and damages; but if the suspension was due to an accidental A loan on bottomry or respondentia is a loan in which
cause, or to force majeure, or to any other cause beyond the control of under any condition whatsoever, the repayment of the sum loaned
the captain or agent, the passengers shall only be entitled to the return and of the premium stipulated, depends upon the safe arrival of the
of the passage money.
goods in which it is made, or of the price they may receive in case
of accident.
Article 698. In case a voyage already begun should be
interrupted the passengers shall be obliged only to pay the passage in
A. BOTTOMRY
proportion to the distance covered, and shall not be entitled to recover
for losses and damages if the interruption is due to an accidental cause
A contract whereby the owner of a ship borrows for the
or to force majeure, but have a right to indemnity if the interruption use, equipment, or repair of the vessel, for a definite term, and
should have been caused by the captain exclusively. If the interruption pledges the ship (or the keel or the bottom of the ship) as security,

Page 32 of 39
with the stipulation that if the ship is lost during the voyage or 6. The lowest value of the goods sold by the captain in
during the limited time on account of the perils enumerated, the arrivals under stress for the payment of provisions and in order to save
lender shall lose his money. the crew, or to cover any other requirement of the vessel against which
the proper amount shall be charged.
7. The victuals and wages of the crew during the time the
B. RESPONDENTIA
vessel is in quarantine.
Where the goods, or some part thereof, are hypothecated 8. The damage suffered by the vessel or cargo by reason of
as security for a loan, the repayment of which is dependent upon an impact or collision with another, if it were accidental and
maritime risks. unavoidable. If the accident should occur through the fault or
negligence of the captain, the latter shall be liable for all the damage
caused.
9. Any damage suffered by the cargo through the faults,
negligence, or barratry of the captain or of the crew, without prejudice
to the right of the owner to recover the corresponding indemnity from
the captain, the vessel, and the freight.

Article 810. The owner of the goods which gave rise to the
expense or suffered the damage shall bear the simple or particular
averages.

2. General or Gross Averages

Article 811. General or gross averages shall be, as a general

rule, all the damages and expenses which are deliberately caused in
VII order to save the vessel, her cargo, or both at the same time, from a
real and known risk, and particularly the following:
RISKS, DAMAGES AND ACCIDENTS IN
1. The goods or cash invested in the redemption of the vessel
MARITIME COMMERCE or cargo captured by enemies, privateers, or pirates, and the
provisions, wages, and expenses of the vessel detained during the time
A. AVERAGES the arrangement or redemption is taking place.
2. The goods jettisoned to lighten the vessel, whether they
Article 806. For the purposes of this Code the following shall belong to the vessel, to the cargo, or to the crew, and the damage
be considered averages: suffered through said act by the goods kept.
1. All extraordinary or accidental expenses which may be 3. The cables and masts which are cut or rendered useless,
incurred during the navigation for the preservation of the vessel or the anchors and the chains which are abandoned in order to save the
cargo, or both; cargo, the vessel, or both.
2. All damages or deterioration the vessel may suffer from 4. The expenses of removing or transferring a portion of the
the time she puts to sea from the port of departure until she casts cargo in order to lighten the vessel and place her in condition to enter a
anchor in the port of destination, and those suffered by the port or roadstead, and the damage resulting therefrom to the goods
merchandise from the time it is loaded in the port of shipment until it is removed or transferred.
unloaded in the port of consignment. 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.
Article 807. The petty and ordinary expenses of navigation, 6. The expenses caused through floating a vessel
such as pilotage of coasts and ports, lighterage and towage, anchorage intentionally stranded for the purpose of saving her.
dues, inspection, health, quarantine, lazaretto, and other so-called port 7. The damage caused to the vessel which it is necessary to
expenses, costs of barges, and unloading, until the merchandise is break open, scuttle, or smash in order to save the cargo.
placed on the wharf, and any other expenses common to navigation 8. The expenses of curing and maintaining the members of
shall be considered ordinary expenses to be defrayed by the shipowner, the crew who may have been wounded or crippled in defending or
unless there is a special agreement to the contrary. saving the vessel.
9. The wages of any member of the crew detained as hostage
1. Simple or Particular Averages 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.
Article 809. Simple or particular averages shall be, as a
10. The wages and victuals of the crew of a vessel chartered
general rule, all the expenses and damages caused to the vessel or to
by the month during the time it should be embargoed or detained by
her cargo which have not redounded to the benefit and common profit
force majeure or by order of the Government, or in order to repair the
of all the persons interested in the vessel and her cargo, and especially
damage caused for the common good.
the following:
11. The loss suffered in the value of the goods sold at arrivals
1. The damages suffered by the cargo from the time of its
under stress in order to repair the vessel because of gross average.
embarkation until it is unloaded, either on account of the nature of the
12. The expenses of the liquidation of the average.
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, Article 812. In order to satisfy the amount of the gross or
arms, and equipment, for the same causes and reasons, from the time general averages, all the persons having an interest in the vessel and
she puts to sea from the port of departure until she anchored in the cargo therein at the time of the occurrence of the average shall
port of destination. contribute.
3. The damages suffered by the merchandise loaded on deck,
except in coastwise navigation, if the marine ordinances allow it. Tolentino, in his commentaries on the Code of
4. The wages and victuals of the crew when the vessel should
Commerce, gives the following requisites for general average:
be detained or embargoed by a legitimate order or force majeure, if the
charter should have been for a fixed sum for the voyage.
First, there must be a common danger. This means,
5. The necessary expenses on arrival at a port, in order to
that both the ship and the cargo, after has been loaded, are
make repairs or secure provisions.

Page 33 of 39
 subject to the same danger, whether during the voyage, or in the Article 817. If in lightening a vessel on account of a storm, in
port of loading or unloading; that the danger arises from the order to facilitate her entry into a port or roadstead, part of her cargo
accidents of the sea, dispositions of the authority, or faults of should be transferred to lighters or barges and be lost, the owner of
men, provided that the circumstances producing the peril should said part shall be entitled to indemnity, as if the loss has originated
be ascertained and imminent or may rationally be said to be from a gross average, the amount thereof being distributed between the
certain and imminent. This last requirement exclude measures entire vessel and cargo which caused the same.
undertaken against a distant peril. If, on the contrary, the merchandise transferred should be
Second, that for the common safety part of the vessel saved and the vessel should be lost, no liability can be demanded of the
or of the cargo or both is sacrificed deliberately. salvage.
Third, that from the expenses or damages caused
follows the successful saving of the vessel and cargo.
Article 818. If, as a necessary measure to extinguish a fire in
Fourth, that the expenses or damages should have
a port; roadstead; creek, or bay, it should be decided to sink any vessel,
been incurred or inflicted after taking proper legal steps and
this loss shall be considered gross average, to which the vessels saved
authority [Magsaysay v. Agan].
shall contribute.

a. Common Danger
Both the ship and the cargo, after being loaded, are Magsaysay v. Agan
Held: As to the second requisite, we need only repeat that the
subject to the same danger, whether during voyage or in the port of
expenses in question were not incurred for the common safety of vessel and
loading/unloading. cargo, since they, or at least the cargo, were not in imminent peril. The
cargo could, without need of expensive salvage operation, have been
Magsaysay v. Agan unloaded by the owners if they had been required to do so.
Held: With respect to the first requisite, the evidence does not
disclose that the expenses sought to be recovered from defendant were c. Sacrifice must be Successful
incurred to save vessel and cargo from a common danger. The vessel ran
aground in fine weather inside the port at the mouth of a river, a place
described as "very shallow". It would thus appear that vessel and cargo Article 860. If, notwithstanding the jettison of the
were at the time in no imminent danger or a danger which might "rationally merchandise, breakage of masts, ropes, and equipment, the vessel
be sought to be certain and imminent ." It is, of course, conceivable that, if should be lost running said risk, no contribution whatsoever by reason
left indefinitely at the mercy of the elements, they would run the risk of of gross average shall be proper.
being destroyed. But as stated in the above quotation, "this last requirement The owners of the goods saved shall not be liable for the
excludes measures undertaken against a distant peril." It is the deliverance indemnity of those jettisoned, lost, or damaged.
from an immediate , impending peril, by a common sacrifice, that
constitutes the essence of general average. (The Columbian Insurance Article 861. If, after the vessel having been saved from the
Company of Alexandria vs. Ashby & Stribling et al., 13 Peters 331; 10 L. risk which gave rise to the jettison, she should be lost through another
Ed., 186). In the present case there is no proof that the vessel had to be put accident taking place during the voyage, the goods saved and existing
afloat to save it from an imminent danger. What does appear from the from the first risk shall continue liable to contribution by reason of the
testimony of plaintiff's manager is that the vessel had to be salvaged in gross average according to their value in their condition at the time,
order to enable it "to proceed to its port of destination." But as was said in deducting the expenses incurred in saving them.
the case just cited, it is the safety of the property, and not of the voyage,
which constitutes the true foundation of general average.
Magsaysay v. Agan
Held: With respect to the third requisite, the salvage operation, it
International Harvesters v. Hamburg-American Line is true, was a success. But as the sacrifice was for the benefit of the vessel
Held: It is clear that the cargo in question is not liable to a —to enable it to proceed to destination —and not for the purpose of saving
general average. It is not claimed that this agricultural machinery was the cargo, the cargo owner3 are not in law bound to contribute to the
contraband of war; and being neutral goods, it was not liable to forfeiture in expenses.
the event of capture by the enemies of the ship's flag. It follows that when
the master of the Suevia decided to take refuge in the port of Manila, he
d. Compliance with Legal Steps
acted exclusively with a view to the protection of his vessel. There was no
common danger to the ship and cargo; and therefore it was not a case for a
general average. The point here in dispute has already been determined by Article 813. In order to incur the expenses and cause the
this court unfavorably to the contention of the appellant. (Compagnie de damages corresponding to gross average, a previous resolution of the
Commerce et de Navigation D'Extreme Orient vs. Hamburg Amerika captain, adopted after deliberation with the sailing mate and other
Packetfacht Actien Gesellschaft, 36 Phil., 550.) The following provision officers of the vessel, and with a hearing of the persons interested in the
contained in the York-Antwerp Rules, as we interpret it, is conclusive cargo who may be present, shall be required.
against the appellant's contention: If the latter shall object, and the captain and officers, or a
"When a ship shall have entered a port of refuge * * * in majority, or the captain, if opposed to the majority, should consider
consequence of accident, sacrifice, or other extraordinary circumstance certain measures necessary, they may be executed under his liability,
which renders that necessary for the common safety, the expense of without prejudice to the freighters exercising their rights against the
entering such port shall be admitted as general average." (York-Antwerp captain before the judge or court of competent jurisdiction, if they can
Rules, section 10.) prove that he acted with malice, lack of skill, or negligence.
If the persons interested in the cargo, being on the vessel,
should not be heard, they shall not contribute to the gross average,
b. Deliberate/Voluntary Sacrifice which contribution shall be paid by the captain, unless the urgency of
the case should be such that the time necessary for previous
Article 816. In order that the goods jettisoned may be deliberation was lacking.
included in the gross average and the owners thereof be entitled to
indemnity, it shall be necessary in so far as the cargo is concerned that
Article 814. The resolution adopted to cause the damages
their existence on board be proven by means of the bill of lading; and
which constitute a general average must necessarily be entered in the
with regard to those belonging to the vessel, by means of the inventory
log book, stating the motives and reasons therefor, the votes against it,
made up before the departure, in accordance with the first paragraph
and the reasons for the disagreement should there be any, and the
of Article 612.
irresistible and urgent causes which moved the captain if he acted of
his own accord.

Page 34 of 39
 In the first case the minutes shall be signed by all the For this purpose, within forty-eight hours following the
persons present who could do so before taking action if possible, and if arrival of the vessel at the port, the captain shall call all the persons
not at the first opportunity; in the second case by the captain and by interested, in order that they may decide as to whether the adjustment
the officers of the vessel. or liquidation of the gross average is to be made by experts and
In the minutes and after the resolution there shall be stated liquidators appointed by themselves, in which case this shall be done
in detail all the goods cast away, and mention shall be made of the should the persons interested agree.
injuries caused to those kept on board. The captain shall be obliged to Should an agreement not be possible, the captain shall apply
deliver one copy of these minutes to the maritime judicial authority of to the judge or court of competent jurisdiction, who shall be the one of
the first port he may make within twenty-four hours after his arrival, the port where these proceedings are to be held in accordance with the
and to ratify it immediately by an oath. provisions of this Code, or to the consul of Spain, * should there be one,
and otherwise to the local authority when they are to be held in a
foreign port.
Article 815. The captain shall supervise the jettison, and
shall order the goods cast overboard in the following order:
1. Those which are on deck, beginning with those which Article 852. If the captain should not comply with the
embarrass the handling of the vessel or damage her, preferring, if provisions contained in the foregoing article, the shipowner or agent or
possible, the heaviest ones and those of least utility and value. the freighters shall demand the liquidation, without prejudice to the
2. Those in the hold, always beginning with those of the action they may bring to demand indemnity from him.
greatest weight and smallest value, to the amount and number
absolutely indispensable. Now, by article 852 of the Code of Commerce the
captain is required to initiate the proceedings for the adjustment,
No jettison of deck cargo shall be made good as general liquidation, and distribution of any gross average to which the
average circumstances of the voyage may have given origin; and it is
This is clearly expressed in Rule I of the YorkAntwerp therefore his duty to take the proper steps to protect any shipper
Rules, as follows: "No jettison of deck cargo shall be made good as whose goods may have been jettisoned for the general safety. In
general average." The reason for this rule is found in the fact that ordinary practice this, we suppose, would be primarily
deck cargo is in an extra-hazardous position and, if on a sailing accomplished by requiring the consignees of other cargo, as a
vessel, its presence is likely to obstruct the free action of the crew condition precedent to the delivery of their goods to them, to give a
in managing the ship. Moreover, especially in the case of small sufficient bond to respond for their proportion of the general
vessels, it renders the boat top-heavy and thus may have to be cast average. But it is not necessary here to inquire into details. It is
overboard sooner than would be necessary if it were in the hold; sufficient to say that the captain is required to take the necessary
and naturally it is always the first cargo to go over in case of steps to effect the adjustment, liquidation, and distribution of the
emergency. Indeed, in subsection 1 of article 815 of the Code of general average. In the case before us the captain of the vessel did
Commerce, it is expressly declared that deck cargo shall be cast not take those steps; and we are of the opinion that the failure of
overboard before cargo stowed in the hold [Standard Oil v. the captain to take those steps gave rise to a liability for which the
Castelo]. owner of the ship must answer [Standard Oil v. Castelo].
It is true that if the captain does not comply with the
3. Negligence article relating to the adjustment, liquidation, and distribution of
Common carriers cannot limit their liability for injury or the general average, the next article (852) gives to those concerned
loss of goods where such injury or loss was caused by its own —whether shipowner (naviero) or shipper—the right to maintain
negligence. Otherwise stated, the law on averages under the Code an action against the captain for indemnification for the loss; but
of Commerce cannot be applied in determining liability where the recognition of this right of action does not by any means
there is negligence. Under the foregoing principle and in line with involve the suppression of the right of action which is elsewhere
the Civil Code's mandatory requirement of extraordinary diligence recognized in the shipper against the ship's owner. The shipper may
on common carriers in the car care of goods placed in their stead, it in our opinion go at once upon the owner and the latter, if so
is but reasonable to conclude that the issue of negligence must first minded, may have his recourse for indemnization against his
be addressed before the proper provisions of the Code of captain [Ibid].
Commerce on the extent of liability may be applied [American
Home v. Court of Appeals]. Standard Oil v. Castelo
Held: In considering the question now before us it is important
4. York-Antwerp Rules to remember that the owner of the ship ordinarily has vastly more capital
Although the Code of Commerce provisions on averages embarked upon a voyage than has any individual shipper of cargo.
are still in force, the parties may, by stipulation in the charter party Moreover, the owner of the ship, in the person of the captain, has complete
and exclusive control of the crew and of the navigation of the ship, as well
or any written agreement, agree that the York-Antwerp Rules shall
as of the disposition of the cargo at the end of the voyage. It is therefore
be applied. proper that any person whose property may have been cast overboard by
“Jason Clause” – The Jason clause derives its name order of the captain should have a right of action directly against the ship's
from The Jason 225 US 32 (1912) decided by the US Supreme owner for the breach of any duty which the law may have imposed on the
Court under the Harter Act. By the Jason clause, a shipowner captain with respect to such cargo. To adopt the interpretation of the law for
(provided he had exercised due diligence to make the ship which the appellant contends would place the shipowner in a position to
seaworthy and properly manned, equipped and supplied) could escape all responsibility for a general average of this character by means of
claim a general average contribution from cargo, even where the the delinquency of his own captain. This cannot be permitted. The evident
intention of the Code, taken in all of its provisions, is to place the primary
damage was caused by faulty navigation of the vessel, provided
liability upon the person who has actual control over the conduct of the
that the bill of lading excluded liability for such faults. voyage and who has most capital embarked in the venture, namely, the
owner of the ship, leaving him to obtain recourse, as it is very easy to do,
5. Liquidation of Gross Averages from other individuals who have been drawn into the venture as shippers.
It results that the plaintiff is entitled to recover in this action;
Article 851. At the instance of the captain, the adjustment, and the only additional point to be inquired into is the amount that should
liquidation, and distribution of gross averages shall be held privately, be awarded. In this connection it appears that the total value of the
with the consent of all the parties in interest. jettisoned cargo, belonging partly to the plaintiff and partly to another

Page 35 of 39
shipper, was P880.35, of which P719.95 represented the value of the 2. Responsibility for Expenses
plaintiff's petroleum. Upon the apportionment of this total loss among the
different interests involved, to wit, value of ship, value of cargo, and the Article 821. The expenses caused by the arrival under stress
earned but lost freight, it appears that the amount of the loss apportionable shall always be for the account of the shipowner or agent, but the latter
to the plaintiff is P11.28. Deducting this from the value of the petroleum, shall not be liable for the damage which may be caused the shippers by
we have as a result, the amount of P708.67, which is the amount for which reason of the arrival under stress, provided the latter is legitimate.
judgment should be given. Otherwise, the shipowner or agent and the captain shall be
jointly liable.
6. Claims not Admissible
3. Formalities
Article 848. Claims for averages shall not be admitted if they
do not exceed 5 per cent of the interest which the claimant may have in Article 822. If in order to make repairs to the vessel or
the vessel or cargo if it is gross average, and 1 per cent of the goods because there should be danger of the cargo suffering damage it should
damaged if particular average, deducting in both cases the expenses of be necessary to unload, the captain must request authorization of the
appraisal, unless there is an agreement to the contrary. judge or court of competent jurisdiction to lighten the vessel, and do so
with the knowledge of the person interested or representative of the
B. ARRIVAL UNDER STRESS cargo, should there be one.
In a foreign port, it shall be the duty of the Spanish * consul,
where there is one, to give the authorization.
Article 819. If the captain during the navigation should
In the first case, the expenses shall be defrayed by the ship
believe that the vessel can not continue the voyage to the port of
agent or owner, and in the second, they shall be for the account of the
destination on account of the lack of provisions, well founded fear of
owners of the merchandise, for whose benefit the act took place.
seizure, privateers or pirates, or by reason of any accident of the sea
If the unloading should take place for both reasons, the
disabling her to navigate, he shall assemble the officers and shall call
expenses shall be defrayed in proportion to the value of the vessel and
the persons interested in the cargo who may be present, and who may
that of the cargo.
attend the meeting without the right to vote; and if, after examining the
circumstances of the case, the reasons should be considered well
founded, it shall be decided to make the nearest and most convenient 4. Custody of Cargo; Responsibility/Liability of
port drafting and entering in the log book the proper minutes, which Captain
shall be signed by all.
The captain shall have the deciding vote and the persons Article 823. The care and preservation of the cargo which
interested in the cargo may make the objections and protests they may has been unloaded shall be in charge of the captain, who shall be
deem proper, which shall be entered in the minutes in order that they responsible for the same, except in cases of force majeure.
may make use thereof in the manner they may consider advisable.

Article 824. If the entire cargo or part thereof should appear

Arrival under stress is the arrival of a vessel at the to be damaged, or there should be imminent danger of its being
nearest and most convenient port, which was decided upon after damaged, the captain may request of the judge or court of competent
determining that there is lack of provisions, or a well-founded fear jurisdiction or the consul, in a proper case, the sale of all or of part of
of seizure, privateers, or pirates, or by reason of any accident of the the former, and the person taking cognizance of the matter shall
sea, disabling it to navigate. authorize it after an examination and declaration of experts,
advertisements, and other formalities required by the case and an
1. Steps entry in the book, in accordance with the provisions of Article 624.
The captain shall, in a proper case, justify the legality of the
a. The captain should determine during the voyage if there is
procedure, under the penalty of answering to the shipper for the price
lack of provisions, or well-founded fear of seizure, privateers the merchandise would have brought if it should have arrived at the
or pirates, or other valid grounds; port of its destination in good condition.
b. The captain shall then assemble the officers;
c. The captain shall summon the persons interested in the cargo
Article 825. The captain shall answer for the damages
who may be present and who may attend but without right to caused by his delay, if the reason for the arrival under stress having
vote; ceased, he should not continue the voyage.
d. The officers shall examine and agree if there is a well-founded If the reason for said arrival should have been the fear of
reason after examining the circumstances. The captain shall enemies, privateers, or pirates, before sailing, a discussion and
have the deciding vote; resolution of a meeting of the officers of the vessel and persons
e. The agreement shall be drafted and the proper minutes shall interested in the cargo who may be present shall take place, in
accordance with the provisions contained in Article 819.
be signed and entered in the log book;
f. Objections and protests shall likewise be entered in the
minutes. C. COLLISIONS
Collision is an impact or sudden contact of a vessel with
another whether both are in motion or one stationary. Strictly
speaking, collision refers to the contact of two moving vessels. If
one vessel is moving while the other is stationary, the same is
called ALLISION.
For purposes of applying the provisions of the Code of
Commerce, collision includes collision per se and allision.

1. Divisions of Time/Zones

a. All the time up to the moment when the risk of

collision may be said to have begun – No rule is
applicable because none is necessary. Each vessel us

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 free to direct its course as it deems best without circumstances surrounding a particular encounter between two (2)
reference to the movement of the other vessel. vessels. In ordinary circumstances, a vessel discharges her duty to another
by a faithful and literal observance of the Rules of Navigation, and she
b. The time between the moment when the risk of cannot be held at fault for so doing even though a different course would
have prevented the collision.  This rule, however, is not to be applied where
collision begins and the moment when it has
it is apparent, as in the instant case, that her captain was guilty of
become a practical certainty. – Here, the burden is negligence or of a want of seamanship in not perceiving the necessity for,
on the vessel required to keep away and avoid the or in so acting as to create such necessity for, a departure from the rule and
danger; the vessel which had the last clear chance to acting accordingly. In other words, "rote observance" of the International
avoid collision but did not do so is liable. Rules of the Road will not relieve a vessel from responsibility if the
collision could have been avoided by proper care and skill on her part or
c. The time between the moment of actual contact. even by a departure from the rules.
– This is the period in which errors in extremis
occur; and the rule is that the vessel which has Sulpicio Lines v. Court of Appeals
forced the privileged vessel into danger is Held: Both the trial court and the respondent court found
responsible even if the privileged vessel has that M/V "Don Sulpicio" was crossing at 15.5 knots per hour while F/B
committed an error within that zone. Aquarius "G" was obeying a speed limit of 7.5 knots per hour. The weather
was clear and visibility was good. M/V "Don Sulpicio" was four (4) miles
away when it first sighted F/B Aquarius "G". All the time up to the
Error in Extremis
collision, M/V "Don Sulpicio" maintained its speed of 16 knots. It was only
Where a navigator, suddenly realizing that a collision is two (2) minutes before the collision when M/V "Don Sulpicio" changed its
imminent by no fault of his own, in confusion and excitement of course.
the moment, does something which contributes to the collision, or Whether or not the collision sued upon occurred in a crossing
omits to do something by which the collision may be avoided. situation is immaterial as the Court of Appeals, relying on Rule 24-C,
Such act or omission is ordinarily considered to be in Regulations for Preventing Collisions at the Sea, rules that the duty to keep
extremis, and the ordinary rules of strict accountability do NOT out of the way remained even if the overtaking vessel cannot determine
with certainty whether she is forward of or abaft more than 2 points from
apply.
the vessel. It is beyond cavil that M/V "Don Sulpicio" must assume
responsibility as it was in a better position to avoid the collision. It should
2. Rule on Liability have blown its horn or give signs to warn the other vessel that it was to
overtake it.
a. One Vessel at Fault Assuming argumenti ex gratia that F/B Aquarius "G" had no
The owner of the vessel at fault shall indemnify the lookout during the collision, the omission does not suffice to exculpate
losses and damages suffered, after an expert appraisal. Sulpicio Lines from Liability. M/V "Don Sulpicio" cannot claim that it was
Article 826 of the Code of Commerce provides that a privileged vessel being in the portside which can maintain its course and
speed during the collision. When it overtook F/B Aquarius" G", it was duty
where collision is imputable to the personnel of a vessel, the owner
bound during the collision. When it overtook F/B Aquarius "G", it was
of the vessel at fault, shall indemnify the losses and damages duty bound to slacken its speed and keep away from other vessel, which it
incurred after an expert appraisal. failed to do. The stance of petitioners that F/B Aquarius "G" is a burdened
vessel which should have kept out of the way of M/V "Don Sulpicio" is not
National Development Company v. Court of Appeals supported by facts.
Held: Significantly, under the provisions of the Code of
Commerce, particularly Articles 826 to 839, the shipowner or carrier, is not Liability of the Charterer
exempt from liability for damages arising from collision due to the fault or Under a demise or bareboat charter, the charterer mans
negligence of the captain. Primary liability is imposed on the shipowner or
the vessel with his own people and becomes, in effect, the owner
carrier in recognition of the universally accepted doctrine that the
shipmaster or captain is merely the representative of the owner who has the for the voyage or service stipulated, subject to liability for damages
actual or constructive control over the conduct of the voyage (Yueng Sheng caused by negligence. If the charter is a contract of affreightment,
Exchange and Trading Co. v. Urrutia & Co., 12 Phil. 751 [1909]) which leaves the general owner in possession of the ship as owner
There is, therefore, no room for NDC's interpretation that the for the voyage, the rights and the responsibilities of ownership rest
Code of Commerce should apply only to domestic trade and not to foreign on the owner. The charterer is free from liability to third persons in
trade. Aside from the fact that the Carriage of Goods by Sea Act (Com. Act respect of the ship [Caltex v. Sulpicio].
No. 65) does not specifically provide for the subject of collision, said Act in
no uncertain terms, restricts its application "to all contracts for the carriage
b. Both Vessels at Fault
of goods by sea to and from Philippine ports in foreign trade." Under Sec-
tion 1 thereof, it is explicitly provided that "nothing in this Act shall be Each one shall suffer its own damages, and both shall be
construed as repealing any existing provision of the Code of Commerce solidarily responsible for the losses and damages occasioned to
which is now in force, or as limiting its application." By such incorporation, their cargoes.
it is obvious that said law not only recognizes the existence of the Code of The characteristic language of the law in making the
Commerce, but more importantly does not repeal nor limit its application. "vessels" solidarity liable for the  damages  due  to the  maritime
collision  emphasizes the direct nature of the responsibilities on
Mecenas v. Court of Appeals account of the collision  incurred  by the shipowner under maritime
Held: It is true that the "Tacloban City" failed to follow Rule 18 law, as distinguished from the civil law and mercantile law in
of the International Rules of the Road which requires two (2) power-driven general.  This direct responsibility is recognized in Article 618  of 
vessels meeting end on or nearly end on each to alter her course to the Code  of  Commerce  under  which  the captain shall be civilly
starboard (right) so that each vessel may pass on the port side (left) of the liable to the ship agent, and the  latter is the one liable to third
other. The "Tacloban City," when the two (2) vessels were only three-tenths
persons, as pointed out in the collision case of Yueng Sheng
(0.3) of a mile apart, turned (for the second time) 15º to port side while the
"Don Juan" veered hard to starboard.  This circumstance, while it may have Exchange & Trading Co vs. Urrutia & Co.
made the collision immediately inevitable, cannot, however, be viewed in
isolation from the rest of the factual circumstances obtaining before and up c. Party at Fault Cannot Be Determined
to the collision.  In any case, Rule 18 like all other International Rules of
the Road, are not to be obeyed and construed without regard to all the

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 Each one shall suffer its own damages, and both shall be D. SHIPWRECKS
solidarily responsible for the losses and damages occasioned to
their cargoes. Article 840. The losses and deteriorations suffered by a
vessel and her cargo by reason of shipwreck or stranding shall be
d. Cause is Fortuitous Event individually for the account of the owners, the part of the wreck which
Each vessel and its cargo shall bear its own damages. may be saved belonging to them in the same proportion.
The injury occasioned shall be considered as particular average.
Article 841. If the wreck or stranding should arise through
e. Third Person at Fault the malice, negligence, or lack of skill of the captain, or because the
The owner of the third vessel shall indemnify the losses vessel put to sea insufficiently repaired and prepared, the owner or the
freighters may demand indemnity of the captain for the damages
and damages caused, the captain thereof being civilly liable to said
caused to the vessel or cargo by the accident, in accordance with the
owner. provisions contained in Articles 610, 612, 614, and 621.

3. Other Rules
Article 842. The goods saved from the wreck shall be
specially liable for the payment of the expenses of the respective
Article 835. The action for the recovery of losses and salvage, and the amount thereof must be paid by the owners of the
damages arising from collisions can not be admitted if a protest or former before they are delivered to them, and with preference to any
declaration is not presented within twenty-four hours to the competent other obligation, if the merchandise should be sold.
authority of the point where the collision took place, or that of the first
port of arrival of the vessel, if in Spain, * and to the consul of Spain * if
it should have occurred in a foreign country. Article 843. If several vessels navigate under convoy, and
any of them should be wrecked, the cargo saved shall be distributed
among the rest in the proportion to the amount each one can receive.
Article 837. The civil liability contracted by the shipowners If any captain should refuse, without sufficient cause, to
in the cases prescribed in this section, shall be understood as limited to receive what may correspond to him, the captain of the wrecked vessel
the value of the vessel with all her appurtenances and all the freight shall enter a protest against him before two sea officials of the losses
earned during the voyage. and damages resulting therefrom, ratifying the complaint within
twenty-four hours after arrival at the first port, and including it in the
The article in question (835, Code of Com.) is found in proceedings he must institute in accordance with the provisions
the section dealing with collisions, and the context shows the contained in Article 612.
Should it not be possible to transfer to the other vessels the
collisions intended are collisions of sea-going vessels. Said article
entire cargo of the one wrecked, the goods of the highest value and
cannot be applied to small boats engaged in river and bay traffic.
smallest volume shall be saved first, the designation thereof being made
The Third Book of the Code of Commerce, dealing with Maritime by the captain, in concurrence with the officers of his vessel.
Commerce, of which the section on Collisions forms a part, was
evidently intended to define the law relative to merchant vessels
Article 844. A captain who may have taken on board the
and marine shipping; and, as appears from said Code, the vessels goods saved from the wreck shall continue his course to the port of
intended in that Book are such as are run by masters having special destination, and on arrival shall deposit the same, with judicial
training, with the elaborate apparatus of crew and equipment intervention, at the disposal of their legitimate owners.
indicated in the Code. The word "vessel" (Spanish, "buque," In case of changing his course, should he be able to unload
"nave"), used in the section referred to was not intended to include them at the port to which they were consigned, the captain may make
all ships, craft or floating structures of every kind without said port if the shippers or supercargoes present consent thereto, as
limitation, and the provisions of that section should not be held to well as the officers and passengers of the vessel; but he can not do so,
even with said consent, in time of war or when the port is difficult to
include minor craft engaged only in river and bay traffic. Vessels
make and dangerous.
which are licensed to engage in maritime commerce, or commerce All the expenses of this arrival shall be defrayed by the
by sea, whether in foreign or coastwise trade, are no" doubt owners of the cargo, as well as the payment of the freight, which,
regulated by Book III of the Code of Commerce. Other vessels of a taking into consideration the circumstances of the case, are fixed by
minor nature not engaged in maritime commerce, such as river agreement or by a judicial decision.
boats and those carrying passengers from ship to shore, must be
governed, as to their liability to passengers, by the provisions of the Article 845. If there should not be on the vessel any person
Civil Code or other appropriate special provisions of law [Lopez v. interested in the cargo to pay the expenses and freight corresponding to
Duruelo]. the salvage, the judge or court of competent jurisdiction may order the
sale of the part necessary to cover the same. This shall also be done
when its preservation is dangerous, or when in the period of one year it
Lopez v. Duruelo
should not have been possible to ascertain who are its legitimate
Held: It is therefore clear that a passenger on a boat like
owners.
the Jison, in the case before us, is not required to make protest as a
In both cases the proceedings regarding publicity and
condition precedent to his right of action for the injury suffered by him in
formalities prescribed in Article 579 shall be observed, and the net
the collision described in the complain. In other words, article 835 of the
proceeds of the sale shall be deposited in a safe place, in the judgment
Code of Commerce does not apply. But even if said provision had been
of the judge or court, in order to be turned over to the legitimate
considered applicable to the case in hand, a fair interpretation of the
owners thereof.
allegations of the complaint indicates, we think, that the injuries suffered by
the plaintiff in this case were of such a nature as to excuse protest; for,
under article 836, it is provided that want of protest cannot prejudice a A shipwreck is the demolition or shattering of a vessel
person not in a condition to make known his wishes. An individual who has caused by her driving ashore or on rocks and shoals in the midseas,
suffered a compound fracture of the femur and received other physical or by the violence of winds and waves in tempests.
injuries sufficient to keep him in a hospital for many months, cannot be
supposed to have been in a condition to make protest within twenty-four REFERENCES:
hours of  such occurrence. It follows that the demurrer in this case was not
well taken and should have been overruled.
 PPT Presentation of Atty. Jessa Wong-Cantano;
 Case Outline of Atty. Jessa Wong-Cantano;
 Golden Notes;
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 De Leon Textbook.

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