II. OBLIGATIONS OF THE PARTIESA. Obligation of Carrier

1. Duty to AcceptFisher v. Yangco - CC cannot lawfully decline to accept a particular class of goods for

carriage unless reasonable and necessary. Mere prejudice or whim will not suffice. The grounds of the discrimination must be substantial ones.

The mere fact that violent and destructive explosions can be obtained by the use of dynamite under certain conditions = NOT sufficient to justify the refusal of a vessel

If by the exercise of due diligence, taking all reasonable precautions, the danger of explosions can be eliminated, the carrier would not be justified in subjecting the traffic in this commodity to prejudice or discrimination

2. Duty to Deliveri. Time of Delivery

Maersk v. CA - In the absence of an undertaking by a common carrier to deliver at a given date or time, delivery of shipment or cargo should at least be made within a reasonable time. (expected date of arrival reflected in the bill of lading may be considered)

A delay in delivery of gelatin capsules for use in pharmaceutical products for a period of two (2) months and seven (7) days considered beyond the realm of reasonableness

.ii. Consequences of Delay

a. AbandonmentMagellan Manufacturing v. CA - In overland transportation, an unreasonable delay in the

delivery of transported goods is sufficient ground for the abandonment of goods. By analogy, this can also apply to maritime transportation.

b. Right of Passengers In Case of DelayTrans-Asia Shipping Line v. CA - Where the delay in a contracted voyage is incurred after

the commencement of such voyage, Article 698 of the Code of Commerce, not Article 1169 of the Civil Code, applies. The carrier is liable for any loss or damage , including any pecuniary loss or loss of profit which the passenger may have suffered by reason thereof.

Art. 698 of CC: voyage already begun, interrupted –--1. PASSENGERS obliged to PAY the fare in proportion to the distance covered2. NO RIGHT to recover loss or damages – if FE3. Right to indemnity – interruption caused by CAPTAIN exclusively4. IF caused by DISABILITY of vessel, passenger agree to await the repairs – NOT required

to pay any increased price of passage; living expenses for his own account

3. Duty to Exercise Extraordinary Diligencei. Presumption of Negligence

a. Carriage of GoodsBelgian Overseas Chartering v. Phil First Insurance Co - Mere proof of delivery of the goods

in good order to a common carrier and of their arrival in bad order at their destination constitutes a prima facie case of fault or negligence against the carrier.

Tabacalera Insurance Co v. North Front Shipping Inc - Common carrier is presumed negligent in case of loss, destruction, or deterioration of goods

FGU Insurance v. G.P Sarmiento - Res ipsa loquitur (“the thing speaks for itself”; one is presumed to be negligent if he/she/it had exclusive control of whatever caused the injury even though there is no specific evidence of an act of negligence, and without negligence the accident would not have happened) generally finds relevance whether or not a contractual relationship exists between the plaintiff and the defendant, for the inference of negligence arises from the circumstances and nature of the occurrence and not from the nature of the relation of the parties.

b. Carriage of PassengersAbeto v. PAL - By the contract of carriage, the carrier assumes the express obligation to

transport the passenger to his destination safely and to observe extraordinary diligence with a due regard for all the circumstances, and any injury that might be suffered by the passenger is right away attributable to the fault or negligence of the carrier.

BLTB v. IAC - A driver of a motor vehicle is presumed negligent if he was violating any traffic regulation at the time of the mishap, unless there is proof to the contrary. The common carrier's liability for death or injury to its passengers is based on its contractual obligation to carry its passengers safely to their destination; Utmost diligence of very cautious persons is required of them.

ii. Duration of Dutya. Carriage of Goods

Saludo, Jr. v. CA – The goods are deemed delivered 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. When such delivery has thus been accepted by the carrier, the liability of the common carrier commences eo instanti.

Macam v. CA - DURATION OF EXTRAORDINARY RESPONSIBILITY; Article 1736 of the Civil Code provides -Art. 1736. The extraordinary responsibility of the common carriers lasts from the time the goods are unconditionally placed in the possession of and received by the carrier for 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.

Samar Mining v. Nordeutscher Lloyd - The carrier may be relieved of 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 a right to receive them

Lu do v. Binamira - While the goods are in its possession, it is but fair that it exercise extraordinary diligence in protecting them from damage, and if loss occurs, the law presumes that it was due to its fault or negligence. This is necessary to protect the interest the interest of the owner who is at its mercy. The situation changes after the goods are delivered to the consignee.

Republic v. Lorenzo Shipping Corp. - The surrender of the original bill of lading is not a condition precedent for a common carrier to be discharged of its contractual obligation. If surrender of the original bill of lading is not possible, acknowledgment of the delivery by signing the delivery receipt suffices.

b. Carriage of PassengersLRTA v. Navidad - The duty of a common carrier to provide safety to its passengers so

obligates it not only during the course of the trip but for so long as the passengers are within its premises and where they ought to be in pursuance to the contract of carriage.

Dangwa Transportation Co v. CA - It is the duty of common carriers of passengers, including common carriers by railroad train, streetcar, or motorbus, to stop their conveyances a reasonable length of time in order to afford passengers an opportunity to board and enter, and they are liable for injuries suffered by boarding passengers resulting from the sudden starting up or jerking of their conveyances while they are doing so.

La Mallorca v. CA - The relation of carrier and passenger does not cease at the moment the passenger alights from the carrier’s vehicle at a place selected by the carrier at the point of destination, but continues until the passenger has had a reasonable time or reasonable opportunity to leave the current premises

Aboitiz Shipping v. CA - Relationshp of carrier and passenger continues until the passenger has been landed at the port of destination and has left the vessel owner's dock or premises.

4. Defenses of Common Carriersi. Fortuitous Event

a. RequisitesSchmitz Transport v. Transport Ventures - In order, to be considered a fortuitous event,

however, (1) the cause of the unforeseen and unexpected occurrence, or the failure of the debtor to comply with his obligation, must be independent of human will; (2) it must be impossible to foresee the event which constitute the caso fortuito, or if it can be foreseen it must be impossible to avoid; (3) the occurrence must be such as to render it impossible for the debtor to fulfill his obligation in any manner; and (4) the obligor must be free from any participation in the aggravation of the injury resulting to the creditor.

Yobido v. CA - The explosion of the new tire may not be considered a fortuitous event.

b. FireEastern Shipping v. IAC - Fire may not be considered a natural disaster or calamity. It does

not fall within the category of an act of God unless caused by lightning or by other natural disaster or calamity.

c. HijackingGacal v. PAL – Hijacking of the carrier does not fall among the five categories of exempting

causes. The carrier’s vehicle must be dealt with under 1735 of the New Civil Code. In other words, the common carrier is presumed be at fault or to have acted negligently unless there is a proof of extraordinary diligence on its part of the common carrier.

d. Mechanical DefectsNecesito v. Paras - A carrier is liable to its passengers for damages caused by mechanical

defects of the conveyance. While the carrier is not an insurer of the safety of the passengers, it should nevertheless be

held to answer for the laws its equipment if such flaws were at all discoverable. In this connection, the manufacturer of the defective appliance is considered in law the agent of the carrier, and the good repute of the manufacturer will not relieve the carrier from liability. The rationale of the carrier’s liability is the fact that the passenger has no privity with the manufacturer of the defective equipment; hence, he has no remedy against him, while the carrier usually has.

ii. Order of Public Authority

Ganzon v. CA - Before a common carrier could be absolved from responsibility on the ground that he was ordered by competent public authority, it must be shown that same public authority had the power to issue the disputed order, or that it was lawful, or that it was issued under legal process of authority.

iii. Defenses in Carriage of Passengera. Employees

Maranan v. Perez - Liability for intentional assaults committed by its employees on passengers; Difference between old and New Civil Code provisions.—Unlike the old Civil Code, the New Civil Code expressly makes the common carrier liable for intentional assaults committed by its employees upon its passengers (Art. 1759). Carrier is liable to the heir of a passenger killed by its driver

Gillaco v. Manila Railroad - The shooting in question was therefore "caso fortuito" within the definition of Art. 1105 of the old Civil Code (which is the law applicable), being both unforeseeable and inevitable under the given circumstances; and pursuant to established doctrine, the resulting breach of the company's contract of safe carriage with the deceased was excused thereby.

b. Other Passengers and Third PersonsBachelor Express v. CA - The sudden act of the passenger who stabbed another passenger

in the bus is within the context of force majeure. To be absolved from liability in case of force majeure, it is not enough that the accident was caused by force majeure; Common carrier must still prove that it was not negligent in causing the injuries resulting from such accident.

Pilapil v. CA – A tort committed by a stranger which causes injury to a passenger does not accord the latter a cause of action against the carrier. The negligence for which a common carrier is held responsible is the negligent omission by the carrier’s employees to prevent the tort from being committed when the same could have been foreseen and prevented by them. Further, under the same provision, it is to be noted that when the violation of the contract is due to the wilful acts of strangers, as in the instant case, the degree of care essential to be exercised by the common carrier for the protection of its passenger is only that of a good father of a family.

Fortune Express v. CA - A common carrier can be held liable for failing to prevent a hijacking by frisking passengers and inspecting their baggages. Had petitioner and its employees been vigilant they would not have failed to see that the malefactors had a large quantity of gasoline with them.

iv. Passenger’s BaggagesQuisumbing Sr v. CA - Failure to take certain steps that a passenger in hindsight believes

should have been taken is not the negligence or misconduct which mingles with force majeure as an active and cooperative cause

Pan-Am v. Rapadas - The reason behind the limitation of liability for arise from the difficulty, if not the impossibility, of establishing with clear preponderance of evidence of evidence the contents of a lost suitcase. The limitation is binding on the passenger who fails to declare a higher value and failed to exercise proper prudence.

British Airways v. CA - American jurisprudence provides that an air carrier is not liable for the loss of baggage in an amount in excess of the limits specified in the tariff which was filed with the proper authorities, such tariff being binding on the passenger regardless of the passenger’s lack of knowledge thereof or assent thereto. This doctrine is recognized in this jurisdiction.

Tan v. Northwest - Where in breaching the contract of carriage the defendant airline is not shown to have acted fraudulently or in bad faith, liability for damages is limited to the natural and probable consequences of the breach of obligation which the parties had foreseen or could have reasonably foreseen. In that case, such liability does not include moral and exemplary damages.

Sarkies Tour v. CA - Common carriers, from the nature of their business and for reasons of public policy, are bound to observe extraordinary diligence in the vigilance over the goods transported by them, and this liability “lasts from the time the goods are unconditionally placed in the possession of, and received by the carrier for transportation until the same are delivered, actually or constructively, by the carrier to the person who has a right to receive them.”

Moral damages and exemplary damages are due where the negligence and bad faith of a common carrier has been duly established.

B. Obligations of the Shipper, Consignee and Passenger1. Negligence of Shipper or Passenger

i. Last Clear ChancePhil Rabbit v. IAC - The principle about the ‘last clear chance’ would call for application in a

suit between the owners and drivers of the two colliding vehicles. It does not arise where a passenger demands responsibility from the carrier to enforce its contractual obligations. For it would be inequitable to exempt the negligent driver of the jeepney and its owners on the ground that the other driver was likewise guilty of negligence.

Bustamante v. CA - The doctrine broadly states that the negligence of the plaintiff does not preclude a recovery for the negligence of the defendant where it appears that the defendant, by exercising reasonable care and prudence, might have avoided injurious consequences to the plaintiff notwithstanding the plaintiff’s negligence.

ii. Assumption of RiskJAL v. CA - Airline passengers must take such risks incident to the mode of travel. Adverse

weather conditions or extreme climatic changes are some of the perils involved in air travel, the consequences of which the passenger must assume or expect. After all, common carriers are not the insurer of all risks.

Calalas v. CA - The taking of an “extension seat” is not an implied assumption of risk on the part of the passenger; A caso fortuito is an event which could not be foreseen, or which, though foreseen, was inevitable.

The doctrine of proximate cause is applicable only in actions for quasi- delicts, not in actions involving breach of contract.

Upon the happening of the accident, the presumption of negligence at once arises, and it becomes the duty of a common carrier to prove that he observed extraordinary diligence in the care of his passengers.

PNR v. CA - A passenger is guilty of contributory negligence where he chose to ride on the open platform of a train and failed to hold tightly on the vertical grab bar. Moral and exemplary damages not due in such a case.

Isaac v. Al Ammen Trans. Co - It is the prevailing rule that it is negligence per se for a passenger on a railroad voluntarily or inadvertently to protrude his arm, hand, elbow, or any other part of his body through the window of a moving car beyond the outer edge of the window or outer surface of the car, so as to come in contact with objects or obstacles near the track, and that no recovery can be had for an injury which but for such negligence would not have been sustained.

III. EXTRAORDINARY DILIGENCEA. Effect of Stipulation

1. Gratuitous PassengersLara v. Valencia - Deceased and company are not considered as passengers but merely

accommodation passengers. Carrier is not bound to exercise extraordinary diligence but ordinary diligence only, since they are only accommodation passengers.

B. Extraordinary Diligence in Carriage by Sea1. Seaworthiness

Delsan Transport v. CA - Certificates tending to show that at the time of dry-docking and inspection by the Philippine Coast Guard, the vessel was fit for voyage do not necessarily take into account the actual condition of the vessel at the time of the commencement of the voyage.

Caltex v. Sulpicio Lines - (1) For a vessel to be seaworthy it must be adequately equipped for the voyage and manned with a sufficient number of competent officers and crew; (2) Because of the implied warranty of seaworthiness, shippers of goods, when transacting with common carriers, are not expected to inquire into the vessel’s seaworthiness.

2. OverloadingNegros Navigation v. CA – The duty to exercise due diligence likewise includes the duty to take

passengers or cargoes that are within the carrying capacity of the vessel.

3. Proper StorageBelgian Overseas Chartering v. Phil First Insurance - Common carriers, from the nature of their

business and for reasons of public policy, are bound to observe extraordinary diligence and vigilance with respect to the safety of the goods and the passengers they transport. Equipped with the proper knowledge of the nature of steel sheets in coils and of the proper way of transporting them, the master of the vessel and his crew should have undertaken precautionary measures to avoid possible deterioration of the cargo.

4. Negligence of Captain and CrewMecenas v. CA - Whether or not the captain was "off-duty" or "on-duty" at or around the time of

actual collision is quite immaterial; there is, both realistically speaking and in contemplation of law, no such thing as "off-duty" hours for the master of a vessel at sea that is a common carrier upon whom the law imposes the duty of extraordinary diligence- the duty to carry the passengers safely as far as human care and foresight can provide, using the utmost diligence of very cautious persons, with a due regard for all the circumstances.

C. Extraordinary Diligence in Carriage by Land1. Condition of Vehicle

Bayasen v. CA - Under the particular circumstances of the instant case, the petitioner- driver who skidded could not be regarded as negligent, the skidding being an unforeseen event, so that the petitioner had a valid excuse for his departure from his regular course. The negligence of the petitioner not having been sufficiently established, his guilt of the crime charged has not been proven beyond reasonable doubt. He is, therefore, entitled to acquittal.

2. Traffic RulesMallari v. CA - Under Art. 2185 of the Civil Code, unless there is proof to the contrary, it is

presumed that a person driving a motor vehicle has been negligent if at the time of the mishap he was violating a traffic regulation.

Pestano v. Sumayang - When an injury is caused by the negligence of a servant or an employee, the master or employer is presumed to be negligent either in the selection or in the supervision of that employee. This presumption may be overcome only by satisfactorily showing that the employer exercised the care and the diligence of a good father of a family in the selection and the supervision of its employee.

3. Duty to InspectNocum v. Laguna Tayabas Bus Co - A carrier is ordinarily not liable for injuries to passengers from

fires or explosions caused by articles brought into its conveyances by other passengers, in the absence of any evidence that the carrier, through its employees, was aware of the nature of the article or had any reason to anticipate danger therefrom

D. Extraordinary Diligence in Carriage by AirKorean Airlines v. CA - The contract of air carriage generates a relation attended with a public duty

and any discourteous conduct on the part of the carrier’s employees toward a passenger gives the latter an action for damages against the carrier.

PAL v. CA - The duty to exercise the utmost diligence on the part of common carriers is for the safety of passengers as well as for the members of the crew or the complement operating the carrier, the airplane in the case at bar. And this must be so for any omission, lapse or neglect thereof will certainly result to the damage, prejudice, nay injuries and even death to all aboard the plane, passengers and crew members alike.

Zalamea v. CA - Whether or not said policies (that overbooking of flights is a common and accepted practice in the US, thus does not amount to bad faith) were incorporated or deemed written on petitioners’ contracts of carriage. -> Foreign laws do not prove themselves nor can the court take judicial notice of them. Like any other fact, they must be alleged and proved.

IV. BILL OF LADING AND OTHER FORMALITIESA. Concepts

1. DefinitionMacondray v. Acting Commissioner of Customs

2. Kinds Magellan v. CA - An on board bill of lading is one in which it is stated that the goods have been

received on board the vessel which is to carry the goods, whereas a received for shipment bill of lading is one in which it is stated that the goods have been received for shipment with or without specifying the vessel by which the goods are to be shipped. Received for shipment bills of lading are issued whenever conditions are not normal and there is insufficiency of shipping space.

B. Bill of Lading as Contract1. Prohibited and Limiting Stipulations

Ysmael v. Barretto - A common carrier cannot lawfully stipulate for exemption from liability, unless such exemption is just and reasonable and the contract is freely and fairly made.

Shewaram v. PAL - The carrier cannot limit its liability for injury to or loss of goods shipped where such injury or loss was caused by its own negligence.

Ong Yiu v. CA - Provisions in the ticket have been held to be a part of the contract of carriage, and valid and binding upon the passenger regardless of the latter’s lack of knowledge or assent to the regulation

Aboitiz v. CA - a stipulation, limiting the common carrier's liability to the value of the goods appearing in the bill of lading, unless the shipper or owner DECLARES A GREATER VALUE, is valid.

Sea Land Services v. IAC - There is nothing in the Civil Code, which absolutely prohibits agreement between shipper, and carrier limiting the latter's liability for loss of or damage to cargo shipped under contracts of carriage.

The Civil Code in fact has agreements of such character in contemplation in providing, in its Articles 1749 and 1750, that:

ART. 1749 A stipulation that the common carrier's liability is limited to the value of the goods appearing in the bill of lading, unless the shipper or owner declares a greater value, is binding.

ART. 1750. A contract fixing the sum that may be recovered by the owner or shipper for the loss, destruction, or deterioration of the goods is valid, if it is reasonable and just under the circumstances, and has been fairly and freely agreed upon.

Citadel Lines v. CA - That said stipulation is just and reasonable arguable from the fact that it echoes Art. 1750 itself in providing a limit to liability only if a greater value is not declared for the shipment in the bill of lading. To hold otherwise would amount to questioning the justice and fairness of that law itself, and this the private respondent does not pretend to do

Everett v. CA - A stipulation in the bill of lading limiting the common carrier’s liability for loss or destruction of a cargo to a certain sum, unless the shipper or owner declares a greater value, is sanctioned by law particularly Articles 1749 and 1750 of the Civil Code.

British Airways v. CA - In a contract of air carriage, a declaration by the passenger of a higher value is needed to recover a greater amount.— Article 22(1) of the Warsaw Convention, provides as follows: “x x x x x x x x x (2) In the transportation of checked baggage and goods, the liability of the carrier shall be limited to a sum of 250 francs per kilogram, unless the consignor has made, at the time the packages was handed over to the carrier, a special declaration of the value at delivery and has paid a supplementary sum if the case so requires. In that case the carrier will be liable to pay a sum not exceeding the declared sum, unless he proves that the sum is greater than the actual value to the consignor at delivery.”

An air carrier is not liable for the loss of baggage in an amount in excess of the limits specified in the tariff which was filed with the proper authorities, such tariff being binding on the passenger regardless of the passenger’s lack of knowledge thereof or assent thereto.

Benefits of limited liability are subject to waiver such as when the air carrier failed to raise timely objections during the trial when questions and answers regarding the actual claims and damages sustained by the passenger were asked.

H.E. Heacock v. Macondray - A stipulation limiting the liability of the carrier to an agreed valuation unless the shipper declares a higher value and pays a higher rate of freight invalid and enforceable.

Sweet Lines v. Teves - When a Bill of Lading or a passenger ticket contains a stipulation constituting a “contract of adhesion”, the court must be vigilant of the right of the riding public. When the stipulations contained therein are against public policy, the said stipulations must necessarily be declared null and void. Hence, it shall not be binding to the public.

i. International Air TransportationAlitalia v. IAC - The Warsaw Convention's provisions do not "regulate or exclude liability for other

breaches of contract by the carrier" or misconduct of its officers and employees, or for some particular or exceptional type of damage. Otherwise, "an air carrier would be exempt from any liability for damages in the event of its absolute refusal, in bad faith, to comply with a contract of carriage, which is absurd." Nor may it for a moment be supposed that if a member of the aircraft complement should inflict some physical injury on a passenger, or maliciously destroy or damage the latter's property, the Convention might successfully be pleaded as the sole gauge to determine the carrier's liability to the passenger. Neither may the Convention be invoked to justify the disregard of some extraordinary sort of damage resulting to a passenger and preclude recovery therefor beyond the limits set by said Convention. It is in this sense that the Convention has been applied, or ignored, depending on the peculiar facts presented by each case.

Pan Am v. IAC - 1. A contract of adhesion is valid -- Such provisions have been held to be a part of the contract of carriage, and valid and binding upon the passenger regardless of the latter's lack of knowledge or assent to the regulation. 2. The common carrier is held liable only for damages that were foreseen or might have been foreseen at the time the contract of transportation was entered into.

China Airlines v. Chiok - Carriage to be performed by several successive carriers under one ticket, or under a ticket and any conjunction ticket issued therewith, is regarded as a single operation

Santos III v. Northwest - : International transportation" shall mean any transportation in which, according to the contract made by the parties, the place of departure and the place of destination, whether or not there be a break in the transportation or a transshipment, are situated [either] within the territories of two High Contracting Parties . . . Since the flight involved in the case at bar is international, the same being from the United States to the Philippines and back to the United States, it is subject to the provisions of the Warsaw Convention, including Article 28(1), which enumerates the four places where an action for damages may be brought

United Airlines v. UY - Warsaw Convention intended the two (2)-year limitation incorporated in Art. 29 as an absolute bar to suit and not to be made subject to the various tolling provisions of the laws of the forum. It only allows local laws determine whether an action had been commenced within the two (2)-year period, and within our jurisdiction an action shall be deemed commenced upon the filing of a complaint. However, such rule shall not be applied in the instant case because of the delaying tactics employed by petitioner airline itself.

C. Bill of Lading as ReceiptSaludo v. Ca - Articles 2221 and 2222 of the Civil Code make it clear that nominal damages are not

intended for indemnification of loss suffered but for the vindication or recognition of a right violated or invaded. They are recoverable where some injury has been done but the amount of which the evidence fails to show, the assessment of damages being left to the discretion of the court according to the circumstances of the case.

V. ACTIONS AND DAMAGES IN CASE OF BREACHA. Concurrent Causes of ActionFabre v. CA - It is permissible for the plaintiff to allege in the Complaint alternative causes of action

and join as many parties as may be liable on such causes of action so long as the plaintiff does not recover twice.

Air France v. Carrascoso – A contract to transport passengers is quite different in kind and degree from any other contractual relation. And this, because of the relation which an air-carrier sustains with the public. Its business is mainly with the travelling public. It invites people to avail of the comforts and advantages it offers. The contract of air carriage, therefore, generates a relation attended with a public duty. Neglect or malfeasance of the carrier's employees, naturally, could give ground for an action for damages.

Tiu v. Arriesgado - While the immediate beneficiaries of the standard of extraordinary diligence are, of course, the passengers, and owners of the cargo carried by a common carrier, they are not the only persons that the law seeks to benefit. For if common carriers carefully observed the statutory standard of extraordinary diligence in respect of their own passengers, they cannot help but simultaneously benefit pedestrians and the passengers of other vehicles who are equally entitled to the safe and convenient use of our roads and highways. The law seeks to stop and prevent the slaughter and maiming of the people (whether passengers or not) on our highways and buses, the very size and power of which seem to inflame the minds of their drivers. Article 2231 of the Civil Code explicitly authorizes the imposition of exemplary damages in cases of quasi-delicts “if the defendant acted with gross negligence...”

B. Notice of Claim and Prescriptive Period1. Overland Transportation of Goods and Coastwise Shipping

Phil Am General Insurance v. Sweet Lines - “where the contract of shipment contains a reasonable requirement of giving notice of loss of or injury to the goods, the giving of such notice is a condition precedent to the action for loss or injury or the right to enforce the carrier's liability. Such requirement is not an empty formalism. The fundamental reason or purpose of such a stipulation is not to relieve the carrier from just liability, but reasonably to inform it that the shipment has been damaged and that it is charged with liability therefor, and to give it an opportunity to examine the nature and extent of the injury. This protects the carrier by affording it an opportunity to make an investigation of a claim while the matter is fresh and easily investigated so as to safeguard itself from false and fraudulent claims.”

2. COGSADole Phil v. Maritime Co of the Phil - The period is not suspended by an extra judicial demand.

Article 1155 of the civil code cannot be applied because matters affecting transportation of goods by sea should be decided in as short time as possible.

Maritime Agencies v. CA - It is a well-settled principle that the agent shall be liable for the act or omission of the principal only if the latter is undisclosed.

C. Recoverable Damages1. Kinds of Damages

i. Actual/Compensatory DamagesZulueta v. Pan AM –

Gatchalian v. Delim - Actual or compensatory damages must be substantiated and may not be awarded on the basis of speculation or conjecture. Moral damages may be awarded where gross negligence on the part of the common carrier is shown.

Marchan v. Mendoza - 1. The award of actual/compensatory damages is well within the discretion of the CA. 2. Exemplary damages may be imposed by way of example or correction only in addition to compensatory damages, but that they cannot be recovered as a matter of right.

De Caliston v. CA - Award of pension to deceased accident victim which was lost by his death, justified.·The pension of the decedent being a sure income that was cut short by her death for which Dalmacio was responsible, the surviving heir of the former is entitled to the award of P10,000.00 which is just equivalent to the pension the decedent would have received for one year if she did not die.

ii. Moral DamagesTransworld Airlines v. CA - Such inattention and lack of care for the interest of its passengers who

are entitled to its utmost consideration, particularly as to their convenience, amount to bad faith which entitles the passenger to the award of moral damages.

iii. Exemplary DamagesPrudenciado vs. Alliance Transport - Article 2231 of the Civil Code: In quasi-delicts, exemplary

damages may be granted if the defendant acted with grave negligence.

MARITIME LAWI. GENERAL CONCEPTS

A. Real and Hypothecary NatureYangco v. Laserna - Assuming that petitioner is liable for a breach of contract of carriage, the

exclusively "real and hypothecary nature" of maritime law operates to limit such liability to the value of the vessel, or to the insurance thereon, if any. In the instant case it does not appear that the vessel was insured. Whether the abandonment of the vessel sought by the petitioner in the instant case was in accordance with law of not, is immaterial. The vessel having totally perished, any act of abandonment would be an idle ceremony.

B. Limited Liability RuleChua Yek Hong v. IAC - Under Art. 587 of the Code of Commerce, “The ship agent shall also be

civilly liable for the indemnities in favor of third persons which may arise from the conduct of the captain in the care of the goods which he loaded on the vessel; but he may exempt himself therefrom by abandoning the vessel with all the equipments and the freight it may have earned during the voyage.” (Doctrine of Limited Liability)

Heirs of Amparo de los Santos v. CA - The limited liability doctrine applies not only to the goods but also in all cases like death or injury to passengers wherein the shipowner or agent may properly be held liable for the negligent or illicit acts of the captain. Article 587 speaks only of situations where the fault or negligence is committed solely by the captain. In cases where the shipowner is likewise to be blamed, Article 587 does not apply. Such a situation will be covered by the provisions of the New Civil Code on Common Carriers.

II. VESSELSPhil Refining Corp v. Jarque - Vessels are considered personal property under the civil law. The

only difference between a chattel mortgage of a vessel and a chattel mortgage of other personalty is that it is not now necessary for a chattel mortgage of a vessel to be noted n the registry of the register of deeds, but it is essential that a record of documents affecting the title to a vessel be entered in the record of the Collector of Customs at the port of entry.

III. PERSONS WHO TAKE PART IN MARITIME COMMERCEA. Ship Owners and Ship Agents; Captains and Masters of Vessels; Officers and Crew, SupercargoesChua Yek Hong v. IAC - Under Art. 587 of the Code of Commerce, “The ship agent shall also be

civilly liable for the indemnities in favor of third persons which may arise from the conduct of the captain in the care of the goods which he loaded on the vessel; but he may exempt himself therefrom by abandoning the vessel with all the equipment and the freight it may have earned during the voyage.” (Doctrine of Limited Liability)

Phil Am General Insurance v. CA - The ship agent is liable for the negligent acts of the captain in the care of goods loaded on the vessel. This liability however can be limited through abandonment of the vessel, its equipment and freightage as provided in Art. 587. Nonetheless, there are exceptional circumstances wherein the ship agent could still be held answerable despite the abandonment, as where the loss or injury was due to the fault of the shipowner and the captain.

Sweet Lines v. CA – ART. 614. A captain who, having agreed to make a voyage, fails to fulfill his undertaking, without being prevented by fortuitous event or force majeure, shall indemnify all the losses which his failure may cause, without prejudice to criminal penalties which may be proper.

ART. 698. In case of interruption of a voyage already begun, the passengers shall only be obliged to pay the fare in proportion to the distance covered, without right to recover damages if the interruption is due to fortuitous event or force majeure, but with a right to indemnity, if the interruption should have been caused by the captain exclusively. If the interruption should be caused by the disability of the vessel, and the passenger should agree to wait for her repairs, he may not be required to pay any increased fare of passage, but his living expenses during the delay shall be for his own account.

The crucial factor then is the existence of a fortuitous event or force majeure. Without it, the right to damages and indemnity exists against a captain who fails to fulfill his undertaking or where the interruption has been caused by the captain exclusively.

B. Arrastre OperatorFireman’s Fund Insurance v. Metro Port Services - The legal relationship between the consignee

and the arrastre operator is akin to that of a depositor and warehouseman. The relationship between the consignee and the common carrier is similar to that of the consignee and the arrastre operator. Since it is the duty of the ARRASTRE to take good care of the goods that are in its custody and to deliver them in good condition to the consignee, such responsibility also devolves upon the CARRIER. Both the ARRASTRE and the CARRIER are therefore charged with and obligated to deliver the goods in good condition to the consignee. To carry out its duties, the ARRASTRE is required to provide cargo handling equipment which includes among others trailers, chassis for containers. In some cases, however, the shipping line has its own cargo handling equipment.

ICTSI v. Prudential - When cargo is placed on a vessel at the “shipper’s load and count,” the arrastre operator is required only to deliver to the consignee the container van received from the shipper, not to verify or to compare the contents thereof with those declared by the shipper. A claim for reimbursement for the loss, damage or misdelivery of goods must be filed within 15 days from the date the consignee learns of such problem

C. PilotsFar Eastern v. CA

IV. CHARTER PARTIES (ARTICLES 652-718)A. Different Kinds of Charter PartiesLitonjua v. NSB –

B. Effect of Charter on Character of CarrierPlanters Products v. CA - A public carrier shall remain as such, notwithstanding the charter of the

whole or portion of a vessel by one or more persons, provided the charter is limited to the ship only, as in the case of a time-charter or voyage-charter. 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 least insofar as the particular voyage covering the charter-party is concerned. Indubitably, a shipowner in a time or voyage charter retains possession and control of the ship, although her holds may, for the moment, be the property of the charterer.

Caltex v. Sulpico Lines

V. COLLISIONSWilliams v. Yatco - Since it does NOT appear from the evidence that the perilous situation of the

launch in time to avoid the accident by the exercise of ordinary care, it is very clear that the plaintiff cannot escape the legal consequences of the contributory negligence of his launch, even were we to hold that the doctrine is applicable in this jurisdiction.

Smith and Bell v. CA - FACTORS CONSTITUTIVE THEREOF WHICH NEGLIGENCE WAS THE PROXIMATE CAUSE OF THE COLLISION; 3 Principal Factors

National Dev Co v. CA - The laws of the Philippines will apply in case at bar and it is immaterial whether the collision actually occurred in foreign waters.

Liability of owner and agent of vessel; The agent even though he was not the owner of the vessel, is liable to the shippers and owners of cargo transported by it, for losses and damages to the cargo without prejudice to his rights against the owner of the ship.— It is well settled that both the owner and agent of the offending vessel are liable for the damage done where both are impleaded; that in case of collision, both the owner and the agent are civilly responsible for the acts of the captain

Mecenas v. CA - "Route observance" of the International Rules of the Road (Rule18) will not relieve a vessel from responsibility if the collision could have been avoided by proper care and skill on her part or even by a departure from the rules.

Aboitiz Shipping v. General Accident Fire and Life Insurance Corp –

Phil Am General Insurance v. CA - The right of abandonment of vessels, as a legal limitation of a shipowner’s liability, does not apply to cases where the injury or average was occasioned by the shipowner’s own fault. It must be stressed at this point that Art. 587 speaks only of situations where the fault or negligence is committed solely by the captain.

VI. SALVAGEErlanger v. Swedish East Asiatic - Three elements are necessary to a valid salvage claim: (1) A

marine peril. (2) Service voluntarily rendered when not required as an existing duty or from a special contract. (3) Success, in whole or in part, or that the service rendered contributed to such success.

Barrios v. Go Thong - When the ship stranded is not in a perilous condition, the services rendered by another ship in attaching it in tow is merely towage and not salvage.

VII. CARRIAGE OF GOODS BY SEA ACT (COGSA)Elser v. CA - A carrier cannot limit its liability in a manner contrary to what is provided for in the COGSA.

Ang v. Compania Maritima - In the American Steamship Agencies cases, it was held that the action of Ang is based on misdelivery of the cargo which should be distinguished from loss thereof. The one-year period provided for in Section 3 (6) of the Carriage of Goods by Sea Act refers to loss of the cargo. What is applicable is the four-year period of prescription for quasi-delicts prescribed in Article 1146 (2) of the Civil Code or ten years for violation of a written contract as provided for in Article 1144 (1) of the same Code.

Dole Phjl v. Maritime Co

Sea Land v. IAC - Even if Section 4(5) of COGSA did not exist, the validity and binding effect of the liability limitation clause in the bill of lading here are fully sustainable on the basis alone of Article 1749 and 1750 of the Civil Code. That said stipulation is just and reasonable is arguable from the fact that it echoes Art. 1750 itself in providing a limit to liability only if a greater value is not declared for the shipment in the bill of lading. To hold otherwise would amount to questioning the justice and fairness of that law itself.

Maritime Agency v. CA - In any event, the carrier and the ship shall be discharged from all liability in respect of loss or damage unless suit is brought within one year after delivery of the goods or the date when the goods should have been delivered; Provided, that if a notice of loss for damage; either apparent or concealed, is not given as provided for in this section, that fact shall not effect or prejudice the right of the shipper to bring suit within one year after the delivery of the goods or the date when the goods should have been delivered.

Mayer Steel Pipe v. CA - Section 3(6) of the Carriage of Goods by Sea Act states that the carrier and the ship shall be discharged from all liability for loss or damage to the goods if no suit is filed within one year after delivery of the goods or the date when they should have been delivered. Under this provision, only the carrier’s liability is extinguished if no suit is brought within one year. But the liability of the insurer is not extinguished because the insurer’s liability is based not on the contract of carriage but on the contract of insurance. A close reading of the law reveals that the Carriage of Goods by Sea Act governs the relationship between the carrier on the one hand and the shipper, the consignee and or insurer on the other hand. It defines the obligations of the carrier under the contract of carriage. It does not, however, affect the relationship between the shipper and the insurer. The latter case is governed by the Insurance Code.

PUBLIC UTILITIESI. PUBLIC SERVICE REGULATIONS

Luzon Stevedoring v Public Service Com - Section 13 (b) of the Public Service Law (Commonwealth Act No. 146) defines public service thus: "The term 'public service' includes every person that now or hereafter may own, operate, manage, or control in the Philippines, for hire or compensation, with general or limited clientele, whether permanent, occasional or accidental, and done for general business purposes any common carrier, railroad, street railway, traction railway, subway, motor vehicle, either for freight or passenger, or both, with or without fixed route and whatever may be its classification, freight or carrier service of any class, express service, steamboat, or steamship line, pontines, ferries, and small water craft…”

San Pablo v. Pantranco - Ferry implies the crossing of open seas, thus the service is not merely a ferry service but is actually a coastwise shipping which requires the application of separate CPC.

Manzanal v. Ausejo - The power of the Commission to suspend or revoke any certificate received under the provisions of the Act may only be exercised whenever the holder thereof has violated or willfully and contumaciously refused to comply with any order, rule or regulation of the Commission or any provision of the Act. In the absence of showing that there is willful and contumacious violation on the part of petitioner, no certificate of public convenience may be validly revoked.

Cogeo-Cubao Operator’s and Driver’s Association v. CA - Under the Public Service Law, a certificate of public convenience is an authorization issued by the Public Service Commission for the operation of public services from which no franchise is required by law. It is included in the term "property" in the broad sense of term. It can be sold by the holder thereof because it has considerable market value and is considered a valuable asset. And although it is considered a private property, it is affected with public interest and must be submitted to the control of the government for the common good.

KMU Labor Center v. Garcia - An administrative body and in this case, the LTFRB, may implement broad policies laid down in a statute by "filling in" the details which the Legislature may neither have time or competence to provide.

Tatad v. Garcia - The right to operate a public utility may exist independently and separately from the ownership of the facilities thereof. One can own said facilities without operating them as a public utility, or conversely, one may operate a public utility without owning the facilities used to serve the public. The devotion of property to serve the public may be done by the owner or by the person in control thereof who may not necessarily be the owner thereof.

PAL v. CAB - There is nothing in the law nor in the Constitution, which indicates that a legislative franchise is an indispensable requirement for an entity to operate as a domestic air transport operator. Although Section 11 of Article XII recognizes Congress' control over any franchise, certificate or authority to operate a public utility, it does not mean Congress has exclusive authority to issue the same.