Transpo Part I - Chapter Ii.docx

TRANSPO NOTES (based on Atty. Padilla’s Syllabus)

PART I - COMMON CARRIERS

CHAPTER II – CONTRACT OF COMMON CARRIAGE A.

VIGILANCE OVER GOODS

1.

Extraordinary Diligence Required of Common Carriers (Art 1733, NCC)

1.1 Definition and Reason for the Policy 1.1.1.1 Republic v Lorenzo 1.1.1.2 Doctrine of Non-delegable Duty as applied to Common Carriers 1.2 Carriage by Sea 1.2.1 Seaworthiness; Meaning 1.2.1.1 Case Law (Standard Vacuum Oil Co v Luzon Stevedoring) ; (Loadstar v CA) 1.2.1.2 Statutes in Pari Materia (Sec. 3(1)(a)(b), COGSA; Secs. 116-119, Insurance Code) 1.2.2 When Should a Ship be Seaworthy 1.2.2.1 COGSA 1.2.2.2 Common Law; Doctrine of Stages 1.2.2.3 Domestic Shipping Act (RA 9295) 1.2.3 Does Presumption of Fault Translate to Presumption of Unseaworthiness? 1.2.4 Presumption of Unseaworthiness in Certain Cases 1.2.5 Cargoworthiness 1.2.5.1 Case Law (Santiago Lighterage v CA) 1.2.5.2 Sec. 3(1)(c), COGSA 1.2.6 Sufficient Freeboard (See 1.1.1.1 Int’l Convention on Load Lines 1966) 1.2.6.1.1 Compulsory Marking of Int’l Load Lines (Plimsoll Line) 1.2.6.1.2 Plimsoll Line must not be submerged 1.2.7 Warranty against Improper Deviation 1.2.8 Survey or Inspection of Caargo on Reasonable Grounds 1.3 Carriage by Land 1.3.1 Road Worthiness and Railworthiness 1.3.2 Motor Vehicle Must be in Good Condition 1.3.3 Warranty against Defective Vehicles Parts 1.3.4 Compliance with Traffic Regulations (See Doctrine of Negligence per se)

1.3.5 Prohibition against Improper Deviation (Art. 359, Code of Commerce) 1.3.6 Inspection of Cargo on Reasonable Grounds 1.4 Carriage by Air 1.4.1 Airworthiness (Sec. 3(z), Civil Aviation Authority Act) 1.4.2 Competence and Fitness of the Crew 1.4.3 Warranty against Improper Deviation 1.4.4 Duty to Inspect Cargo and Baggage (Sec. 8, RA 6235) 1.5 Carriage of Dangerous Goods (DG) 1.5.1 Safe Carriage of DG 1.5.2 Duty to Discharge or Destroy DG (Sec. 4(6), COGSA) 1.5.3 Acceptance, Shipping and Hadling of DG in accordance with the 2012 Int’l Maritime Dangerous Goods code (IMDG) and MARINA Memo. Circular No.1, Series of 2008 1.5.4 Duty to Secure DG from Unauthorized Access 1.5.5 Proper Training in Handling DG 1.5.6 Survey or Inspection of Cargo to Enforce Compliance with IMDG and other Regulations 2.

Liability of Carriers for Loss, Destruction, and Deterioration of Goods (Arts 1734-1735; 1739-1743, NCC)

2.1 Presumption of Negligence (Regional Container Lines of SG v Netherlands Insurance) 2.2 Common Carrier Defenses; Exclusive 2.2.1 Acts of God (Arts. 1734(1), 1739, and 1740) 2.2.1.1 2013 Heavy Weather Guidelines (PCG Memo Circular 02-2013) 2.2.1.2 Eastern Shipping Lines v IAC 2.2.1.3 Eastern Shipping Lines v CA 2.2.1.4 Schmitz Transport & Brokerage Corp v Transport Venture 2.2.1.5 PH American General Insurance Co v PKS Shipping Co 2.2.1.6 Transimex Co v. Mafre Asian Insurance Co 2.2.2 Acts of Public Enemy (Arts. 1734(3) and 1739) 2.2.2.1 Existence of War; Prize Cases 2.2.2.2 Piracy 2.2.2.3 Rebels as Public Enemy 2.2.3 Shipper/Owner’s Fault (Arts. 1734(3) and 1741) 2.2.3.1 Who are Considered Shipper and/or Owner 2.2.3.2 Sole and Proximate vs Contributory only 2.2.3.3 Compania Maritima v CA 2.2.3.4 Delsan Trans Lines v American Home Assurance 2.2.3.5 “Shipper’s Load and Count” Arrangement (Marina Port Services, Inc v American Assurnce) 2.2.4 Inherent Vice (Arts. 1734(4) and 1742) 2.2.4.1 Belgian Overseas Chartering and Shipping v Ph First Insurance 2.2.4.2 Asian Terminals v Simon Enterprises

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TRANSPO NOTES (based on Atty. Padilla’s Syllabus)

2.2.4.3 Planters Products v CA

3.2 Bill of Lading as Evidence of Delivery to the Carrier

2.2.5 Defects in the Packing or in the Container (Arts. 1734(4) and 1742) 2.2.5.1 Regional Container Lines of SG v Netherlands Insurance Co PH 2.2.5.2 Ph Charter Insurance Co v Unknown Owner of M/V “National Honor” 2.2.5.3 Southern Lines v CA 2.2.5.4 Calvo v UCPB

A bill of lading is a written acknowledgment of the receipt of the goods and an agreement to transport and deliver them at a specified place to a person named or on his order. Such instrument may be called a shipping receipt, forwarder's receipt and receipt for transportation. The designation, however, is immaterial. It has been held that freight tickets for bus companies as well as receipts for cargo transported by all forms of transportation, whether by sea or land, fall within the definition. Under the Tariff and Customs Code, a bill of lading includes airway bills of lading.

2.2.6 Acts of Public Authority (Arts. 1734(5) and 1743) 2.2.6.1 Ganzon v CA 2.2.6.2 Examples 2.2.7 Extraordinary Diligence 2.2.7.1 Republic v Lorenzo Shipping Corp 2.2.7.2 De Guzman v CA (Emergency Rule) 2.2.8 Fortuitous Events 2.2.8.1 Casus Fortuitous Nemo Prestat; Impossibilum Nulla Obligation Est 2.2.8.2 De Guzman v CA 2.2.8.3 Ganzon v CA 2.2.8.4 Barcos v CA 2.2.8.5 Loadmasters Customs Services v Glodel Brokerage Corp 2.2.8.6 Torres-Madrid Brokerage v FEB Mitsui Marine Insurance Co 2.2.8.7 Servando v Ph Steam Navigation 2.2.9 Partial Defense: Shipper/Consignee’s Contributory Fault or Negligence 2.2.9.1 Tabacalera Insurance Co v North Front Shipping Services 2.2.9.2 Compania Maritima v CA 3

Commencement, Duration, and Termination of Carrier’s Responsibility over the Goods (Arts 1736-1738, NCC)

3.1 Unconditionally Placed in the Possession of and Received by the Carrier Art 1736. The extraordinary responsibility of the common carrier lasts from the time the goods are unconditionally placed in the possession of, and received by the carrier for the transportation until the same are delivered, actually or constructively, by the carrier to the consignee, or to the person who has a right to receive them, without prejudice to the provisions of Article 1738. - if actually no goods are received there can be no contract. The liability and responsibility of the carrier under a contract for the carriage of goods commence on their actual delivery to, or receipt by, the carrier or an authorized agent. -The test as to whether the relation of shipper and carrier had been established is, had the control and possession of the goods been completely surrendered by the shipper to the carrier? Whenever the control and possession of goods passes to the carrier and nothing remains to be done by the shipper, then it can be said with certainty that the relation of shipper and carrier has been established. (Compania Maritima v Insurance Co. Of North America) (Ganzon v CA)

TWO FOLD CHARACTER OF A BILL OF LADING (1) it is a receipt as to the quantity and description of the goods shipped; and (2) a contract to transport the goods to the consignee or other person therein designated, on the terms specified in such instrument. (Saludo v CA) 3.3 Temporary Unloading and Storage in Transit 3.3.1 Effect of Stoppage in Transitu -Explicit is the rule under Article 1736 of the Civil Code that the extraordinary responsibility of the common carrier begins from the time the goods are delivered to the carrier. This responsibility remains in full force and effect even when they are temporarily unloaded or stored in transit, unless the shipper or owner exercises the right of stoppage in transitu, and terminates only after the lapse of a reasonable time for the acceptance of the goods by the consignee or such other person entitled to receive them. And, there is delivery to the carrier when the goods are ready for and have been placed in the exclusive possession, custody and control of the carrier for the purpose of their immediate transportation and the carrier has accepted them. Where such a delivery has thus been accepted by the carrier, the liability of the common carrier commences eo instanti. (Saludo v CA) 3.4 Actual or Constructive Delivery Carrier may be relieved from the responsibility for loss or damage to the goods upon actual or constructive delivery of the same by the carrier to the consignee or to the person who has the right to receive them. (a) ACTUAL DELIVERY -There is actual delivery in contracts for the transport of goods when possession has been turned over to the consignee or to his duly authorized agent and a reasonable time is given him to remove the goods. (b) CONSTRUCTIVE DELIVERY (c) When are the goods deemed delivered? -When the goods are ready for and have been placed in the exclusive possession, custody and control of the carrier for the purpose of their immediate transportation and the carrier has accepted them. When such delivery has thus been accepted by the carrier, the liability of the carrier commences eo instanti. 3.4.1 To the Consignee

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TRANSPO NOTES (based on Atty. Padilla’s Syllabus)

“The responsibility of common carriers to exercise extraordinary diligence lasts from the time the goods are unconditionally placed in their possession until they are delivered "to the consignee, or to the person who has a right to receive them." Thus, part of the extraordinary responsibility of common carriers is the duty to ensure that shipments are received by none but "the person who has a right to receive them." Common carriers must ascertain the identity of the recipient. Failing to deliver shipment to the designated recipient amounts to a failure to deliver. The shipment shall then be considered lost, and liability for this loss ensues.” (Federal Express v Antonio)

(Phil First Isurance Co, Inc. v Wallen Phils Shipping, Inc)

(Federal Express v Antonio)

(Samar Mining Co, Inc v Nordeutscher Lloyd)

3.7 Duty to Ship vs Duty to Transship "transship" means: "to transfer for further transportation from one ship or conveyance to another"

3.4.2 To the Person who has Right to Receive Cargo “Delivery is valid and it terminates the contract, as a matter of law. The contract is already terminated.” (Macam v CA) (Lu Do & Lu v Binamira) (Nedlloyd Lijnen BV Rotterdam v Glow Laks Enterp) (Macam v CA) (see discussions on p.7, Transpo Lectures file) 3.5 Delivery to the Consignee Without Surrender of Bill of Lading “A common carrier may release the goods to the consignee even without the surrender of the bill of lading. The bill of lading shows no requirement requiring surrender of the bill of lading prior to release and delivery of the goods, despite DBI’s claim. ASTI and ACCLI, therefore, have no obligation to release the goods only upon the surrender of the bill of lading. In any case, Art. 353 of the Code of Commerce provides that in case the consignee cannot return the bill of lading, he must give a receipt producing the same effects as the return of a bill of lading. Generally, upon receipt of the goods, the consignee surrenders the bill of lading to the carrier and their respective obligations are canceled. The law provides for two exceptions: when the bill of lading gets lost or for other case, the consignee must issue a receipt. Clearly, non-surrender of the original bill of lading does not violate the carrier’s duty of extraordinary diligence over the goods.” (Designer Baskets, Inc. v Air Sea Transport, Inc.) “Release of the goods without surrendering the bill of lading was upheld despite the bill of lading providing for the surrender of one of the bills of lading due to the (1) telex instructions to the carrier to deliver the goods without need of presenting said bill of lading; and (2) such was noted usual practice of the shipper to request shipping lines immediately to release perishable cargoes through telephone calls.” (Macam v CA) (Designer Baskets, Inc. v Air Sea Transport, Inc.) 3.6 Custody over Cargo During Unloading It is settled in maritime law jurisprudence that cargoes while being unloaded generally remain under the custody of the carrier (Regional Container Lines v. Netherlands) (Regional Container Lines v Netherlands Insurance Co.)

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TRANSPO NOTES (based on Atty. Padilla’s Syllabus)

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Stipulations Limiting Carrier’s Liability

4.1 Articles 1744-1748; 1751-1752

4.2 Minimum Degree of Diligence Required Due diligence? DOAGFOAF? 4.3 Void Stipulations (Art 1745 NCC) (Sweet Lines v Teves) p.119 4.4. Reasonable Time in Delivery of Goods While it is true that common carriers are not obligated by law to carry and to deliver merchandise, and persons are not vested with the right to prompt delivery, unless such common carriers previously assume the obligation to deliver at a given date or time, delivery of shipment or cargo should at least be made within a reasonable time. (Maersk Lines v CA) p.121 4.5 Articles 1749-1750, Civil Code; Limitation on the Amount of Liability 4.5.1 Ad Valorem B/L -payment in proportion to the estimated value of the goods in the B/L to be transported. (Ysmael v. Barreto) p.122 (Shewaram v PAL) p.124 (Ong Yiu v CA) p.126 (Sea-Land Services v IAC) p.128 (Citadel v CA) p.131 (Everett v Steamship v CA) p.132 (British Airways v CA) p.134 (H.E. Heacock Co. v Macondray) p.136 5

Passenger’s Baggages (Article 1754)

5.1 Checked-in v. Hand-carried Baggages - memaid, p.122 (Quisimbing Sr. v CA) p.138 (Pan American Airlines v Rapadas) p.139 (British Airways v CA) p.134 (Alitalia v IAC) p.141

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