ATTORYNEY  

ABANO  TRANSPORTATION  LAW  TABLES  (  WITH  CASES  AND  ANNOTATIONS)                       ISABELLE  POBLETE  
CONTRACTS  IN  MARITIME  COMMERCE  (A)  
LOAN  ON  
BILL  OF  LADING   ELECTRONIC  BILL  OF  LADING   CHARTER  PARTY  
BOTTOMRY/RESPONDENTIA  
A.  DEFINITION   A.   ADVANTAGES   OVER   PAPER   BILL   A.  Meaning    
What  is  a  bill  of  lading?   OF  LADING   What  Is  a  charter  party  agreement?   A.  LOAN  ON  BOTTOMRY  
A   written   acknowledgement   of   the   receipt   of   the     A   contract   by   which   the   shipowner   or   ship   agent    
goods,   their   quantity   and   condition,   and   an   1.  Avoids  delay   leases  for  a  price  certain  the  whole  or  a  portion  of   1.   Shipowner   borrows   money   for   use,  
agreement   to   transport   and   deliver   them   at   a   2.  Prevents  fraud:  alteration,  forgery   the   vessel   for   the   transport   of   goods   or   persons   equipment  or  repair  of  vessel  
specific  place  to  a  person  named  or  on  his  order.  It   3.  Prevents  Counterfeiting   from  one  place  to  another.    
is  signed  by  the  captain  and  shipper,  and  furnished       2.   For  ad  definite   term  and  with  extraordinary  
to  the  consignee.  (  Art.  706)   B.  NECESSITATED  BY   B.  Kinds:   interest  called  premium  
(this   is   also   proof   that   the   customs   broker   has   1.  Containerization   What  are  the  kinds  of  charter  party  agreements  and    
authority  over   the  goods  and   that   the   captain  has   2.Computerization,   electronic   data   how  do  they  affect  liability?   The  interest  can  be  really  high  since  the  creditor  
received  the  goods)   interchange  (EDI)     takes  the  risk  that  he  may  not  be  repaid  
    1.   CONTRACT   OF   AFFREIGHTMENT:   the    
B.  FUNCTIONS   C.  ELECTRONIC  COMMERCE  ACT   shipowner   retains   the   possession,   command   and   3.  Secured  pledge  on  vessel  or  a  portion  thereof  
1.  A  receipt  for  the  goods     navigation  of  the  vessel,  while  the  charterer  merely    
2.  A  contract  of  carriage   The  Electronic  Commerce  Act  provides  for   uses  the  vessel  or  a  space  therein  for  a  fixed  price,   4.  Loan  repayment  depends  or  is  conditioned  on  
3.  A  document  of  title   the   legal   recognition   and   admissibility   as   at  a  fixed  time  or  for  a  single  or  consecutive  voyage.     the  safe  arrival  of  the  vessel  
  evidence  of  electronic  data  messages  and   Who  is  liable  for  any  damage  that  may  be  caused?    
C.  KINDS  OF  BILL  OF  LADING   electronic   documents   so   long   as   they   THE  SHIPOWNER.       5.  Obligation  to  repay  is  extinguished  if  vessel  is  
1.   NEGOTIABLE:   goods   to   be   delivered   to   the   can   be   authenticated   by   electronic   (  THIS  IS  STILL  A  COMMON  CARRIER.)   lost   due   to   specified   peris   lint   he   course   of  
bearer  or  to  the  order  of  the  person  named   signature.  A  holder  of  the  bill  of  lading  is     voyage  or  within  limited  time  (  Art.  719)  
  the   holder   of   the   “private   keys”   and   can   In  Ouano  v.  CA,  what  made  the  court  decide  that  it    
2.   CLEAN:   goods   received   in   good   condition   claim   delivery   of   the   goods,   transfer   his   was  a  contract  of  affreightment  was  the  fact  that  it   The  obligation  to  repay  is  condition  on  the  safe  
and/or  correct  quantity   right   to   another,   and   substitute   or   was  up   to   the   captain   to  obey   the   order  or  not.   It   arrival  of  the  vessel.    
  terminate  the  nominated  consignee.   was  not  under  any  obligation  to  sale.  This  more  or    
3.   FOUL:   goods   received   in   bad   condition   and/or     less  emphasized  the  fact  that  this  is  a  contract  of   B.  LOAN  ON  RESPONDENTIA  
short  quantity   D.  E-­DOCUMENTS   affreightment.    
      1.  Same  as  above,  except  that  what  is  pledged  
4.  THROUGH:  Issued  by  first  carrier  and  honored   E   documents   may   now   be   used   in   2.   BAREBOAT   OR   DEMISE   CHARTER:   the   is  the  goods;;  
by  the  successive  carriers   furnishing  the  marks,  number  and  weight   charterer  mans  the  vessel  with  his  own  people  and    
  of  goods;;  in  stating  or  declaring  the  nature   becomes,  in  effect,  the  owner  of  the  vessel  for  the   2.   Loan   repayment   depends   on   safe   arrival   of  
5.   ON   BOARD:   goods   received   on   board   the   or   value   of   goods;;   issuing   a   receipt   for   voyage  of  service  stipulated.     goods  and  obligation  to  repay  is  extinguished  if  
vessel  which  will  transport  the  goods   goods;;   confirming   the   loading   of   goods;;   Who  is  liable  for  any  damage  that  may  be  caused?   pledged  goods  are  lost  
  claiming   delivery   of   goods;;   authorizing   THE  CHARTERER    
5.   RECEIVED   SHIPMENT:   goods   received   for   release  of  goods;;  giving  notice  of  loss  of,   (THE  VESSEL  BECOMES  A  PRIVATE  CARRIER)   C..  No  loan  on  bottomry  on  wages  of  the  crew  or  
shipment   with   or   without   specifying   the   vessel   or   damage   to   goods;;   undertaking   to     profit  expected  (  Art.  731)  
which  will  transport  the  goods   deliver  the  goods  to  a  named  person  or  a   C.  DEFINITIONS  (IMPORTANT!  He  will  ask  about    
  person   authorized   to   claim   delivery;;   this)   D.   Loans   for   the   last   voyage   shall   have  
granting,   acquiring,   renouncing,   preference  over  prior  ones  
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ATTORYNEY  ABANO  TRANSPORTATION  LAW  TABLES  (  WITH  CASES  AND  ANNOTATIONS)                       ISABELLE  POBLETE  
D.   JURISPRUDENCE   (   these   are   the   three   most   surrendering,   transferring   or   negotiating   1.  LAY  DAYS:  stipulated  period  for  the  loading  or    
important  rulings.)   rights   in   goods.   (   Section   25,     Electronic   unloading  of  a  vessel    
  Commerce  Act  R.A.  8792)   2.  EXTRA  LAY  DAYS:  days  of  delay  beyond  the  lay   Who  has  preference  of  credit?    
1.   A   bill   of   lading   when   properly   executed   and   days   The   loan   for   the   last   voyage   shall   have  
delivered  to  a  shipper,  is  evidence  that  the  carrier   3.   CUSTOMARY   QUICK   DISPATCH:   reasonable   preference  over  prior  ones.  Why  Because  it  is  
received  the  goods  described  therein  for  shipment   period  for  the  loading  or  unloading  according  to  the   the  last  loan  that  was  able  to  save  the  vessel.  
  custom  or  usage  of  the  port   Meaning,  even  if  there  was  a  loan  before,  but  
2.   Acceptance   of   a   bill   of   lading   without   dissent     the  vessel  had  some  damage  again,  and  the  
raises  the  presumption  that  all  terms  therein  were   When  it  doesn’t  say  a  specific  number  of  lay  days,   completion  of  the  voyage  is  in  danger  so  the  
brought  to  the  knowledge  of  the  shipper  and  agreed   look  at  the  boarding  of  the  goods.     ship   owner   takes   out   another   loan   and   the  
to  by  him  and  in  the  absence  of  fraud  or  mistake,  he   Ex.   1300   Metric   Tons   a   day.   Lets   say   you   have   voyage  is  completed,  it  was  the  LAST  LOAN  
is  estopped  from  denying  that  he  assented  to  such   10,300  tons.  10,300/1300  =  10.  So  10  lay  days.     that  should  be  paid  first  because  it  was  the  
terms     one  that   was  the   one   that   was   able   to   save  
  4.  DEMURRAGE:  fixed  remuneration  to  the  owner   the  vessel.  
3.  A  bill  of  lading  is  an  actionable  document  which   of  the  vessel  for  its  detention  beyond  the  lay  days    
must   be   properly   pleaded,   and   the   genuineness   or  extra  lay  days   E.  Cause  of  loss  must  be  a  marine  peril  
and   due   execution   thereof   are   deemed   admitted     This   must   be   stated   in   the   loan   agreement,   a  
unless  specifically  denied  by  the  adverse  party.     Ex.   Parties   stipulate   that   for   every   day   of   delay,   marine   peril   must   be   very   specific,   it   can   be   a  
  there  is  a  demurrage  rate  of  5k  dollars.  So  if  there   storm  at  sea  or  earthquake  at  sea.  As  long  as  it  
It   is   a   long   standing   jurisprudential   rule   that   a   bill   of   lading   was  a  delay  of  2  days,  its  10k  dollars.   is  specific.  
operates  both  as  a  receipt  and  as  a  contract.  It  is  a  receipt  for  
the  goods  shipped  and  a  contract  to  transport  and  deliver  the  
 
same   as   therein   stipulated.   As   a   contract,   it   names   the   parties,   5.  DEAD  WEIGHT:  cargo  which  the  charterer  fails  
which   includes   the   consignee,   fixes   the   route,   destination,   and   to   load   in   the   vessel   or   payment   made   by   the  
freight   rates   or   charges,   and   stipulates   the   rights   and   obligations  
charterer   to   the   shipowner   for   the   portion   of   the  
assumed  by  the  parties.   Being  a  contract,  it  is  the  law  between  
the  parties  who  are  bound  by  its  terms  and  conditions  provided   vessel  chartered  but  not  occupied  
that   these   are   not   contrary   to   law,   morals,   good   customs,    
public  order  and  public  policy.   NOTE:    
 

A  bill   of  lading   usually  becomes  effective   upon  its   delivery  to  and   When   you   say   a   vessel   is   an   “arrived   ship”   it   is  
acceptance  by  the  shipper.  It  is  presumed  that  the  stipulations  of  the   ready   for   unloading.   It   is   understood   that   the  
bill  were,  in  the  absence  of  fraud,  concealment  or  improper  conduct,   charterer   has   already   arranged   all   the   permits  
known  to  the  shipper,  and  he  is  generally  bound  by  his  acceptance  
whether  he  reads  the  bill  or  not.   needed   for   the   goods   to  be   released.   That   is   the  
  responsibility   of   the   charterer   in   so   far   as   the  
The  holding  in  most  jurisdictions  has  been  that  a  shipper  who   common  carrier  is  concerned.    
receives  a  bill  of  lading  without  objection  after  an  opportunity  
to  inspect  it,  and  permits  the  carrier  to  act  on  it  by  proceeding  
 
with  the  shipment  is  presumed  to  have  accepted  it  as  correctly   D.  TERMS  
stating  the  contract  and  to  have  assented  to  its  terms.  In  other   1.  CQD:  CUSTOMARY  QUICK  DISPATCH  (  this  is  
words,   the   acceptance   of   the   bill   without   dissent   raises   the  
presumption   that   all   the   terms   therein   were   brought   to   the  
based  on  the  customs  in  the  place)  
knowledge  of  the  shipper  and  agreed  to  by  him  and,  in  the  absence    
of  fraud  or  mistake,  he  is  estopped  from  thereafter  denying  that  he   2.   WWDSHINC:   WEATHER,   WORKING   DAY  
assented  to  such  terms.  This  r ule  applies  with  particular  force  where  
a  shipper  accepts  a  bill  of  lading  with  full  knowledge  of  its  contents  
SUNDAYS  HOLIDAYS  INCLUDED  
and   acceptance   under   such   circumstances   makes   it   a   binding    
contract.  (  Magellan  Manufacturing  v  CA)  

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  3.   WWDSHEX-­EIU:   WEATHER   WORKING   DAY  
A  limited  liability  clause  in  a  bill  of  lading,  limiting  the  liability  to  an  
agreed   valuation,   unless   the   shipper   declares   a   higher   value   SUNDAYS   HOLIDAYS   EXCLUDED   EVEN   IF  
and   inserts   it   into   said   the   said   contract   or   bill   is   valid   and   USED  
enforceable.  (  Everett  Steamship  v.  CA)    
 
 
4.   WWDSHEX-­UU:   WEATHER   WORKING   DAY  
A  bill  of  lading  is  a  written  acknowledgement  of  the  receipt  of  goods   SUNDAYS   HOLIDAYS   EXCLUDED   UNLESS  
and   an   agreement   to   transport   and   to   deliver   them   at   a   specified   USED  (time  during  the  weekend  is  not  counted  as  
place  to  a  person  name  or  on  his  or  her  order.  It  operates  both  as  a  
receipt  and  as  ac  contract.  It  is  a  receipt  for  the  goods  shipped  and  
laytime  unless  any  loading  or  discharging  was  done  
ac  contract  to  transport  and  deliver  the  same  as  therein  stipulated.   during  the  weekend.)  
As  a  receipt,  it  recites  the  date  and  place  of  shipment,  describes  the    
goods   as   to   quantity,   weight,   dimensions,   identification   marks,   Does   a   charter   party   between   a   shipowner   and   a   charterer  
conditions,  quality  and  value.  As  a  contract,  it  names  the  contracting   transform  a  common  carrier  into  a  private  one  as  to  negate  the  civil  
parties,  which  include  the  consignee,  ;;  fixes  the  route,  destination,   law   presumption   of   negligence   in   case   of   loss   or   damage   to   its  
and  freight  rate  or  charges;;  and  stipulates  the  rights  and  obligations   cargo?  
assumed  by  the  parties.  (Unsworth  Transport  v.  CA)    
  A  charter  party  is  defined  as  a  contract  by  which  an  entire  ship,  or  
The   bill   of   lading   defines   the   rights   and   liabilities   of   the   parties   in   some  principal  part  thereof,  is  lent  by  the  owner  to  another  person  
reference  to  the  contract  of  carriage.  Stipulations  therein  are  valid   for  a  specified  time  or  use.  A  contract  of  affreightment  by  which  the  
and   binding   in   the   absence   of   any   showing   that   the   same   are   owner  of  a  ship  or  other  vessel  lets  the  whole  or  a  party  of  her  to  a  
contrary   to   law,   morals,   customs,   public   order   and   public   policy.   merchant   or   other   person   for   the   conveyance   of   goods,   on   a  
Where  the  terms  of  the  contract  are  clear  and  leave  no  doubt  upon   particular   voyage,   in   consideration   of   the   payment   of   freight.  
the   intention   of   the   contracting   parties,   the   literal   meaning   fot   he   Charter  parties  are  of  two  types:  (a)  contract  of  affreightment  which  
stipulations  shall  control.   involves  the  use  of  shipping  space  on  vessels  leased  by  the  owner  
  in  pat  or  as  a  whole,  to  carry  goods  for  others;;  and  (b)  charter  by  
In  light  of  the  foregoing,  there  can  be  no  question  about  the  validity   demise   or   bareboat,    charter,   by   the   terms   of   which   the   whole  
and   enforceability   of   Stipulation   no.   7   in   the   bill   of   lading.   The   24   vessel   is   let   to   the   charterer   with   a   transfer   to   him   of   its   entire  
hour   requirement   under   the   stipulation   is   by   agreement   of   the   command   and   possession   and   consequent   control   over   its  
parties,  a  sine  qua  non  for  the  accrual  of  the  right  of  action  to  recover   navigation,  including  the  master  and  the  crew,  who  are  his  servants.  
damages   against   the   carrier.   Carriers   and   depositaries    
sometimes  require  presentation  of  claims  within  a   short  time   Contract   of   affreightment  may  either   be   time  charter,  wherein  the  
after   delivery   as   a   condition   precedent   to   their   liability   for   vessel  is  leased  to  the  charterer  for  a  fixed  period  of  time,  or  v oyage  
losses.  Such  requirement  is  not   an  empty  formalism,  it  has   a   charter,   wherein   the   ship   is   leased   for   a   single   voyage.    In   both  
definite   purpose,   to   afford   the   carrier   or   the   depositary   a   cases,  the  charter-­party  provides  for  the  hire  of  vessel  only,  either  
reasonable   opportunity   and   facilities   to   check   the   validity   of   for   a   determinate   period   of   time   or   for   a   single   or   consecutive  
the   claims   while   the   facts   are   still   fresh   in   the   minds   of   the   voyage,   the   shipowner   to   supply   the   ship's   stores,   pay   for   the  
person  who  took  part  in  the  transaction  and  the  documents  are   wages  of  the  master  and  the  crew,  and  defray  the  expenses  for  the  
still  available.   maintenance  of  the  ship.  
   
Petitioner  also  argues  that  the  print  of  Stipulation  No.  7  was  printed   Though  c ommon  carriers,  as  r equired  by  A rt.  1733  of  the  Civil  c ode,  
in   very   small   letters,   and   that   no   one   would   be   minded   to   closely   are  required  to  observe  extraordinary  diligence  I  the  vigilance  over  
examine  the  contents  thereof  and  understand  its  legal  implications.   the  goods  they  carry.  In  the  case  of  private  carriers,  the  exercise  
The  court  is  not  persuaded.    A  bill  of  lading  is  in  the  nature  of  a   of  ordinary  diligence  in  the  carriage  of  goods  will  suffice.  
contract  of  adhesion  where  one  of  the  parties  imposes  a  ready-­ Moreover,  in  the  case  of  loss,  destruction  or  deterioration  of  goods,  
made  contract  on  another  party  who  may  accept  or  reject  but   common   carriers   are   presumed   to   have   been   at   fault   or   to   have  
which  t he  latter  cannot  modify.  One  party  prepares  the  stipulation   acted  negligently,  and  the  burden  of  proving  rests  on  them.  On  the  
in   the   contract   while   the   other   merely   affixes   his   signature   or   his   contrary,   no   such   presumption   applies   to   private   carriers,   for  
adhesion  thereto,  giving  no  room  for  negotiation  and  depriving  the   whosoever  alleges  damage  to  or  deterioration  of  the  goods  carried  
latter  of  the  opportunity  to  bargain  on  equal  footing.  Nevertheless   has  the  onus  of  proving  that  the  cause  was  the  negligence  of  the  
these   types   of   contracts   have   been   declared   as   binding   as   carrier.    
ordinary  contract,  the  reason  being  that  the  party  who  adheres    
to  the  contract  is  free  to  reject  it  entirely.     It   is   imperative   that   a   public   carrier   shall   remain   as   such,  
  notwithstanding  the  charter   of  the  whole  or  portion  of   a  vessel  by  

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After   it   received   the   bill   of   lading   without   any   objection,   the   one  or  more  persons,  provided  the  charter  is  limited  to  the  ship  only,  
consignee  was  presumed  to  have  knowledge  of  its  contents  and  to   as  in  the  case  of  a  time-­charter  or  voyage-­charter.  It  is  only  when  
have   assented   to   the   terms   and   conditions   set   forth   therein.     the  charter  includes  both  the  vessel  and  its  crew,  as  in  a  bareboat  
(Provident  Insurance  v.  CA)   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.  (Planters  Products   v.  
  CA)  
 
Sidenote   of   Lolo   A:   Try   to   understand   here   (Planters   v.   CA)  
how  to  plead  and  argue  the  defense  of  extraordinary  diligence.  
You   cannot  prove  it  through  general  statements  but  through  
specifics,  about  the  weather  conditions,  the  cargo  area  etc.  So  
all  of  this  convinced  the  court  that  the  shipowner  was  able  to  
prove   and   exercise   extraordinary   diligence   and   disprove   the  
presumption  of  negligence  on  its  part.  
 
In  contracts  of  private  carriage,  the  parties  may  freely  stipulate  their  
duties   and   obligations   which   perforce   would   be   binding   on   them.  
Unlike   in   a   contract   involving   a   common   carrier,   private   carriage  
does  not  involve  the  general  public.  Hence,  the  stringent  provisions  
of  the  Civil  Code  on  common  carriers,  protecting  the  general  public  
cannot   justifiably   be   applied   to   a   ship   transporting   commercial  
goods   as   a   private   carrier.   Consequently,   the   public   policy  
embodied   therein   is   not   contravened   by   stipulations   in   a   charter  
party  that  lessen  or  remove  the  protection  given  by  law  in  contracts  
involving  common  carriers.(  Ouano  v.  CA)  
 

EXAMPLES  FOR  COUNTING  LAY  DAYS  AND  APPLICABLE  DEMURRAGE  RATE  

   
(2014  SAMPLEX)     SAT   SUN   MON   TUES   WED   THURS   FRI   SAT   SUN   MON   TUES   TOTAL:  
The  chartered  vessel  MV  Jupiter  transported  40,000  metric  tons  of  wheat  in  bulk   (holiday)   (typhoon)  
from  the  US.  The  cahrter  party  provided  five  (5)  lay  days  and  demurrage  charge   USED?   X   used   used   used   used   X   X   used   X   used   used    
of  US  $5,000  a  day.  The  vessel  arrived  at  the  North  Harbour  in  Manila  on  Friday   WWDSHINC                         10  total  days  counted-­  5  allowed  lay  
and  notified  the  charterer-­consignee  that  it  was  an  arrived  ship  ready  for  unloading   days=  5  days  to  be  charged  
that  midnight.  The  charter-­consignee  commenced  the  unloading  of  the  wheat  only   demurrage  rate  
the  first  hour  of  the  following  Sunday  and  continued  until  the  whole  of  Wednesday   5X5000=  $25,000  
which  was  All  Heroes  Day.  There  was  no  unloading  on  Thursday  due  to  a  typhoon,   WWDSHEX-­                       9  total  days  counted-­  5  allowed  lay  
UU   days=  4  days  to  be  charhegd  
nor  on  Friday.  The  unloading  resumed  the  following  Saturday  but  none  on  Sunday,  
demurrage  rate  
was   done   on   Monday   and   finally   completed   by   Tuesday   midnight.   Was   there   4X5,000-­$20,000  
demurrage   and   if   so,   how   much   demurrage   charges   should   be   paid   by   the   WWDSHEX-­                       7  total  days  counted-­  5  allowed  lay  
charterer-­consignee   if   the   charter   party   provided   for:   a)   WWDSHINC;;   b)   EIU   days  =  2  days  to  be  charged  
WWDSHEX-­UU;;  c)  WWDSHEX-­EIU  AND  d)  CQD  at    an  unloading  rate  of  8,000   demurrage  rate  
metric  tons  a  day?   2X5,000=  $10,000  
IMPORTANT  RATES:   CD                         7  total  days  counted  –  5  days  (  since  
A.   40,000  METRIC  TONS   CQD  is  8,000  a  day,  the  allowable  lay  
B.   5  LAY  DAYS   days  is  :  40,000/8,000=5.)  
So,  7  total  days  counted  –  5  days=  2  
C.   DEMURRAGE  RATE:  $5,000  PER  DAY  
days  to  be  charged  demurrage  rate.  
  2  X5000=  $10,000  
 
 

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CONTRACTS  IN  MARITIME  COMMERCE  (B)  
MULTI-­MODAL  TRANSPORT   FREIGHT  FORWARDING   ARRESTRE/STEVEDORING   CONTRACT  OF  TOWAGE  
A.  INTERNATIONAL  TRADE   WHAT  ARE  THE  DIFFERENT  KINDS  OF   WHAT  IS  A  STEVEDORING  OPERATOR?    
  MULTI  MODAL  TRANSPORT     A.  DEFINITION  
Transport   of   goods   is   by   more   than   one   OPERATORS?   A.  Stevedoring  means  all  works  performed  on  board  vessel,    
carrier   or   mode   of   transportation.     such  as  loading  or  unloading  cargo,  stowing  inside  hatches,   A  contract  for  the  hire  of  services  by  which  a  
Containerization   enhances   transport   A.  FORWARDING  AGENT   compartments,  and  on  decks  or  open  cargo  spaces,  on  board   vessel   is   hired   to   tow   another   vessel   from  
capabilities  in  the  transfer  of  goods  from  ship   Who  is  considered  a  forwarding  agent?   vessel.     one  port  to  another  for  a  consideration.  
to  truck,  train,  plan,  or  another  ship      
 
  It   receives   and   arranges   to   forward   or   send   It  may  include  other  services  like:  
  This  arises  in  instances  when  some  vessels  
  the   goods   to   their   destination   by   the   become   engineless   or   their   engines   are  
1.   rigging  and  unrigging  of  ship’s  gears  
B.  Definition   instrumentality   of   the  actual   carrier,   without   removed  or  are  so  severely  damaged.  That’s  
2.   opening  or  closing  of  hatches  
  assuming  the  role  and  responsibility  of  the   3.   snatching,   centering   to   the   hatch,   opening,   passing   why  theres  a  need  for  a  contract  of  towage  
Multi-­modal  transport  operator  (MTO)  means   carrier,     of  cargo   or  tugboats.  
any   person   who   concludes   a   multi-­modal     4.   providing  standard  stevedoring  gears  and  equipment    
contract   and   assumes   responsibility   for   the   and   is   compensated   for   his   services   by   the   as  required  by  cargo  type   B.  ENTITLED  
performance  thereof  by  a  carrier.   shipper.   5.   Also:   cleaning   holds,   shifting   of   cargoes,    
Because    sometimes,  the  manufacturer  may     shoring/unshoring   of   cargoes,   lashing/unlashing   of   Who   is   entitled   to   be   compensated   for   a  
not  have  the  means  to  do  this   He  is  an  agent  and  a  warehouseman  for  the   cargoes,   rebagging   and   sweeping,   and   contract  of  towage?  
  shipper,   and   must   exercise   the   care   and   stuffing/unstuffing  of  containers  on  board  vessel    
Multi-­modal   transport   contract   means   a   diligence  of  a  prudent  man.       Only   the   OWNER   of   the   towing   vessel   can  
single  contract  for  the  carrier  of  goods  by  at     OPERATIVE  WORDS:  ON  BOARD  VESSEL   ask   for   compensation   for   the   towage,   NOT  
least  two  different  modes  of  transport   A   FORWARING   AGENT   IS   NOT     THE  CAPTAIN.  Even  if  the  owner  waived  the  
  CONSIDERED  A  COMMON  CARRIER.   WHAT  IS  AN  ARRASTRE  OPERATOR?   claim  for  the  towage,  the  captain  still  cannot  
Considering   the   variety   of   cultures,       claim   UNLESS   the   owner   assigned   or  
languages  and  commercial  practices  of  both   B.  FREIGHT  FORWARDER   B.   Arrastre   means   the   set   of   shore-­based   cargo   handling   conveyed  his  right  to  the  captain.  
ends  of  the  trade,  it  is  reasonable  to  let  one   Who  is  considered  a  freight  forwarder?   activities  which  include  the  following:   This  does  not  apply  of  course  if  the  owner  of  
qualified   operator   organize   and   be      
the  vessel  is  also  the  captain.  
responsible   and   accountable   for   the   entire   A  transport  intermediary  which:     1.   Receive/load  cargo  from/to  ship’s  tackle  with  use  of  
dock  gangs  and  cargo  handling  equipment  
 
transport   chain.   (UNCTAD-­ICC   Rules   for   1.   publishes  its  own  tariff,     TOWAGE  V.  SALVAGE  
 
Multi-­Modal  Transport)   2.   issues  its  own  bill  of  lading  and     When   you   talk   about   a   contract   of   towage,  
2.   Check   cargo   by   marks   and   quantity,   acknowledge  
  3.   assumes   all   responsibilities   of   a   even  if  the  vessel  does  not  have  any  engine  
and  sign  tally  sheets  sort,  pile,  stow  and  classify  
EX.   common   carrier   without   operating   its     anymore,  its  sort  of  drifting,  and  there  is  no  
Lets   say,   the   shipper   is   a   Cebu   Ratan   own  vessel.     3.   Cargoes   in   sheds/   open   storage/warehouse   of   not   danger   of   sinking   or  being   lost,   you   cannot  
furniture  manufacturer.  He  has  this  container     taken/delivered  from  truck   declare  that  the  vessel  as  being  salvaged.    
of  rattan  furniture  and  he  wants  it  sent  to  the   This   Non-­vessel   Operating   Common     At  the  most,  the  vessel  will  be  towed  by  a  tug  
buyers  who  are  in  Detroit  Michigan.  So  how   Carrier   (NVOCC)   acts   as   a   shipper   in   4.   Check  and  recoup  bad  order  and  damaged  cargoes   boat  or  a  towing  vessel  of  another  company.    
does  he  do  it?  First  of  all,  he  has  to  look  for  a   relation   to   the   actual   carried   and   as   a   caused  by  contractor    
vessel  who  will  bring  the  goods  from  Cebu  up   carrier  to  the  shipper.  He  charges  for  the      
to  San  Francisco.   entire   distance,   and   assumes  
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He  then  has  to  find  another  common  carrier   responsibility  for  the  transportation  of  the   5.   Secure   cargo   from   pilferage   or   losses   while   under   "Salvage"   has   been   defined   as   "the   compensation  
that  will  bring  it  to  the  railway  track  which  will   goods   from   point   of   receipt   to   point   of   cargo  handler’s  custody   allowed   to   persons   by   whose   assistance   a   ship   or  
  her  cargo  has  been  saved,  in  whole  or  in  part,  from  
bring   the   container   to   Detroit   Michigan   by   destination.    
6.   Provide   manpower,   equipment   and   such   other   impending   peril   on   the   sea,   or   in   recovering   such  
train.     property  from  actual   loss,  as   in   case   of  shipwreck,  
Then   in   Detroit   Michigan,   the   container   will   The  applicable  rate  of  freightage  should  be  the  one   necessary   cargo   handling   gears   for   derelict,  or  recapture.  
again  be  loaded  then  transferred  to  another   agreed  to   by   the   parties.   The   petitioner   in  this   case   receiving/stowing/delivery/transfer/shifting/pelletizing    
truck   to   be   brought   to   its   final   destination,   can  no  longer  impugn  the  liability  because  it  had   of  cargo   Three   elements   are   necessary   to   a   valid   salvage  
where  the  furniture  is  stored  or  warehoused.     already   partially   paid   the   amount.   The   petitioner     claim,  namely,    
was  a  regular  customer  of  private  respondent  and   OPERATIVE  WORDS:  SHORE-­BASED   (1)  a  marine  peril,    
  it  did  not  assail  the  rate  then  being  charged  on  the   Arrastre  services  are  usually  rom  the  pier  to  the  warehouse.   (2)  service  voluntarily  rendered  when  not  required  as  
Normally,   the   shipper   has   no   facilities   to   shipments.   They   had   therefore,   acquiesced   an  existing  duty  or  from  a  special  contract,  and    
Often,   there   is   only   one   single   entity   acting   or   doing   the  
contract  all  the  multicarrier  and  he  does  not   thereto,  accepting  whatever  rate  the  respondents   (3)   success   in   whole   or   in   part,  or   that   the   service  
functions  of  an  arrastre  operator.  There  is  only  one  arrastre  
want   to   be   bothered   with   contacting   these   imposed.   It   cannot   now   belatedly   challenge   the   rendered  contributed  to  such  success.  
amount   being   collected   as   an   afterthought.   in   a   port   and   he   submit   a   bid   to   the   port   operator   to   be   the  
carriers   so   it   is   here   that   a   multi   modal    
Estoppel  has  set  in.  (Brillo  v.  CA)   authorized  arrastre  operator.   Was   there   a   marine   peril,   in   the   instant   case,   to  
operator   comes   in.   The   MTO   is  not  actively    
involved   in   the   transportation   of   the   goods     justify   a   valid   salvage   claim   by   plaintiff   against  
Abano:   Bringing  down  the  goods  from  the  vessel,  from  the  hull  to  the   defendant?   We   do   not   think   there   was.   It   appears  
unlike   in   a   multi   carrier   arrangement,   its   deck  to  the  pier  that’s  the  functions  of  an  arrastre  operator.   that   although   the   defendant's   vessel   in   question  
A   freight   forwarder   is   somewhat   a   quasi  
usually   the   last   carrier   who   is   held   liable  by     was,   on   the   night   of   May   1,   1958,   in   a   helpless  
common  carrier.  If  something  happens  to  the  
the  consignee  (  although  he  has  the  option  to   What  if  the  arrastre  operator  performs  only  one  of  the  acts?   condition  due  to  engine  failure,  it  did  not  drift  too  far  
go   after  previous   carriers).   IN   AN  MTO,   the   goods,  he  will  be  responsible  to  the  consignee   from  the  place  where  it  was.  The  weather  was  fair,  
Does  he  still  have  the  right  to  charge  a  fee?    
shipper   will   go   after   the   MTO   because   the   because   he   is   considered   under   the   law,   a   clear,   and   good.   The   waves   were   small   and   too  
 
Common  Carrier.     Yes  because  he  was  able  to  do  it.  The  consignee  must  pay   slight,   so  much   so,   that  there   were   only   ripples   on  
MTO   assumes   responsibility   for  
If  he  was  just  a  forwarding  agent,  (  which  is   the  sea,  which  was  quite  smooth.    
transportation  of  goods  from  the  starting   the   charge   because   it   is   provide   for   in   the   Philippine   ports    
place  to  the  end.  He  guarantees   it   that   if   not   considered   a   CC),   there   can   be   no   authority   order   that   enumerates   the   acts   of   the   arrastre   During  the  towing  of  the  vessel  on  the  same  night,  
presumption  of  liability.  But  when  the  MTO  is   operator.  So  even  if  just  one  is  performed  by  the  arrastre,  the  
something  happens  to  the  goods,  he  will   there   was   moonlight.   Although   said   vessel   was  
a   freight   forwarder,   he   IS   A   COMMON   consignee  must  pay.   drifting  towards  the  open  sea,  there  was  no  danger  
be   the   one   liable   to   the   shipper   or  
consignee.   CARRIER.     of  it  floundering  or  being  stranded,  as  it  was  far  from  
  The  relationship  between  the  consignee  and  an  arrastre  operator  is   any  island  or  rocks.  In  case  of  danger  of  stranding,  
  akin   to   that   existing   between   the   consignee   and/or   owner   of   the   its   anchor   could   released,   to   prevent   such  
  shipped  good  and  the  common  carrier  or  that  between  a  depositor   occurrence.   There   was   no   danger  that   defendant's  
  and  a  warehouseman.  Hence,  in  the  performance  of  its  obligations,   vessel  would  sink,  in  view  of  the  smoothness  of  the  
an  arrastre  operator  should  observe  the  same  degree  of  diligence   sea  and  the  fairness  of  the  weather.  That  there  was  
C.  CARGO  CONSOLIDATOR  
as  that  required  of  a  common  carrier  and  a  warehouseman.  Being   absence   of   danger   is   shown   by   the   fact   that   said  
  the   custodian   of   the   goods   discharged   from   a   vessel,   an   arrastre   vessel  or  its  crew  did  not  even  find  it  necessary  to  
It   consolidates   small   shipments   for   various   operator’s  duty  is  to  take  good  care  of  the  goods  and  to  turn  them   lower   its   launch   and   two   motor   boats,   in   order   to  
consignors/consignees   by   procuring   over  to  the  party  entitled  to  their  possession.  (Asian  Terminal  v.  First   evacuate   its   passengers   aboard.   Neither   did   they  
vessel/container   space   from   carriers   and   Lepanto  Taisho)   find   occasion   to   jettison   the   vessel's   cargo   as   a  
issuing   its   own   bill   of   lading.   Its   destination     safety   measure.   Neither   the   passengers   nor   the  
In   case   of   claim   for   loss   filed   by   a   consignee   or   the   insurer   as   cargo   were   in   danger   of   perishing.   All   that   the  
agents   distribute   the   small   shipments   to   the  
subrogee,23  it   is   the   arrastre   operator   that   carries   the   burden   of   vessel's   crew  members  could   not  do   was   to  move  
consignees   named   in   the   consolidator’s   proving  compliance   with   the   obligation   to   deliver   the   goods  to  the   the  vessel  on  its  own  power.  That  did  not  make  the  
manifest.   appropriate  party.  It  must  show  that  the  losses  were  not  due  to  its   vessel  a  quasi-­derelict,  considering  that  even  before  
  negligence  or  that  of  its  employees.     the   appellant   extended   the   help   to   the   distressed  
Ex.   Sometimes   they  have   their  own   vessels     ship,  a  sister  vessel  was  known  to  be  on  its  way  to  
but   others   don’t.   They   send   it   through   other    It  must  establish  that  it  observed  the  required  diligence  in  handling   succor  it.  
the  shipment.  Otherwise,  it  shall  be  presumed  that  the  loss  was  due  
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common   carriers.   Examples   of   cargo   to  its  fault.  In  the  same  manner,  an  arrastre  operator  shall  be  liable   If  plaintiff's  service  to  defendant  does  not  constitute  
consolidators  are  LBC  and  DHL.     for   damages   if   the   seal   and   lock   of   the   goods   deposited   and   "salvage"  within  the  purview  of  the  Salvage  Law,  can  
delivered  to  it  as  closed  and  sealed,  be  broken  through  its  fault.  Such   it   be   considered   as   a   quasi-­contract   of   "towage"  
fault  on  the  part  of  the  arrastre  operator  is  likewise  presumed  unless   created   in   the   spirit   of   the   new   Civil   Code?   The  
there  is  proof  to  the  contrary.   answer   seems   to   incline   in   the   affirmative,   for   in  
  consenting   to   plaintiff's   offer   to   tow   the   vessel,  
The   signature   of   a   consignee   on   the   gate   pass   constitutes   defendant  (through  the  captain  of  its  vessel  MV  Don  
acceptance  of  the  goods  in  good  order  and  condition.  (  Marina  Port   Alfredo)   thereby   impliedly   entered   into   a   juridical  
Services  v.  American  Home  Assurance  Corporation)   relation  of  "towage"  with  the  owner  of  the  vessel  MV  
  Henry   I,   captained   by   plaintiff,   the   William   Lines,  
    Incorporated.  
   
  Tug  which  put  line  aboard  liberty  ship  which  was  not  
in  danger  or  peril  but  which  had  reduced  its  engine  
  speed   because   of   hot   grounds,   and   assisted   ship  
  over  bar  and,  thereafter,  dropped  towline  and  stood  
by  while  ship  proceeded  to  dock  under  own  power,  
was  entitled,  in  absence  of  written  agreement  as  to  
amount   to   be   paid   for   services,   to   payment   for  
towage  services,  and  not  for  salvage  services.    
 
If  the  contract  thus  created,  in  this  case,  is  one  for  
towage,  then  only  the  owner  of  the  towing  vessel,  
to  the  exclusion  of  the  crew  of  the  said  vessel,  
may  be  entitled  to  remuneration.  
 
It   often   becomes   material  too,   for   courts   to  draw   a  
distinct   line   between  salvage  and  towage,   for   the  
reason   that   a   reward   ought   sometimes   to   be  
given   to   the   crew   of   the   salvage   vessel   and   to  
other  participants  in  salvage  services;;  and  such  
reward  should  not  be  given  if  the  services  were  
held  to  be  merely  towage.    
 
The  master  and  members  of  the  crew  of  a  tug  were  
not  entitled  to  participate  in  payment  by  liberty  ship  
for   services   rendered   by   tug   which  
were  towage  services  and  not  salvage  services.    
 
The   distinction   between  salvage  and  towage  is   of  
importance  to  the  crew  of  the  salvaging  ship,  for  the  
following  reasons:  If  the  contract  for  towage  is  in  
fact   towage,   then   the   crew   does   not   have   any  
interest   or   rights   in   the   remuneration   pursuant  
to   the   contract.   But   if   the   owners   of   the  
respective   vessels   are   of   a   salvage   nature,   the  
crew  of  the  salvaging  ship  is  entitled  to  salvage,  
and  can  look  to  the  salvaged  vessel  for  its  share.  
(Barrios  v.  Go  Thong)  
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ATTORYNEY  ABANO  TRANSPORTATION  LAW  TABLES  (  WITH  CASES  AND  ANNOTATIONS)                       ISABELLE  POBLETE  
 
 
SPECIAL  LAWS  IN  TRANSPORTATION  (A)  
CARRIAGE  OF  GOODS  BY  SEA  ACT   WARSAW/MONTREAL  CONVENTIONS  
A.   ORIGIN  AND  PURPOSE   Only  the  carrier’s  liability  is  extinguished  if  no   A.   ORIGIN/PURPOSE   D.   Two-­tier  liability  system  under  Montreal  
What   is   the   origin   and   purpose   of   the   suit   is   filed   within   1   year   by   shipper,     Convention  
Carriage  of  Goods  by  Sea  Act?   consignee   or   insurer.   The   prescriptive   WC  was  signed  by  30  countries  in  October  1929  to    
  period  does  not  apply  to  suits  by  insured   establish   uniform   system   of   rules   for   international   1.   Air  carriers  are  strictly  liable  (no  defense)  for  
COGSA  is  a  U.S.  law  which  was  adopted  by   against  insurer.     air  transportation  of  persons,  baggage  or  goods,  RP   proven   damages   up   to   113,100   SDR   (  
the   Philippines   as   C.A.   No.   65   in   1936,   to     concurred  in  1950.   special   drawing   rights)   which   is   around  
govern  contracts  for  the  carriage  of  goods  by   Lolo  A:     $138,000  as  of  December  2011  
sea  to  and  from  the  RP  in  Foreign  Trade.   Lets   say   consignee   is   unable   to   file   a   case   MC  introduced  amendments  on  amounts  of  liability   (   defense   that   accident   was   not   due   to   its  
  during  the  prescriptive  period,  can  the  insurer   of   carrier   and   compensation   for   passengers,   and   negligence   IS   NOT   AVAILABLE   when   amount  
B.   PRIMARY  LAW   file   case   against   the   CC?   No.   because   the   additional  jurisdictional  provision.   sought  is  less  than  113,100  SDR)  
  consignee   did   not   file   a   claim   within   the      
COGSA   is   governing   law   if   stated   in   bill   of   prescriptive   period.   Thus,   the   insurance   B.   LIABILITY  OF  CARRIER   2.   Where  damages  of  more  than  113,100  SDR  
lading   or   similar   document   that   contract   of   company   is  affected  negatively.   So   if   you’re     are   claimed   by   passenger,   carrier   may  
carriage  is  subject  to  its  provisions  (Sec.  13)   the  insurance  company  and  you  learn  about   1.   Death  or  injury  happening  on  board  aircraft   avail   of   defense   that   accident   causing  
  a   claim   of   a   consignee,   you   should   ask   or  during  embarking/disembarking   injury   or   death   was   not   due   to   its  
 Note  effect  on  Article  1753  of  NCC   whether  he  filed  a  complaint  or  suit  within  the     negligence  but  to  that  of  a  third  party  
  prescriptive   period   so   that   the   insurance   2.   Destruction   loss   or   damage   to   checked    
Art.  1753.  The  law  of  the  country  to  which  the   company   will   know   if   it   has   already   lost   baggage  or  goods  while  in  the  charge  of  the   This   amended   the   provisions   in   the   Warsaw  
goods  are  to  be  transported  shall  govern  the   subrogation  rights.  Failure  of  the  consignee  to   carrier,   whether   on   board   aircraft   or   in   Convention  on  liability  
liability   of   the   common   carrier   for   their   loss,   do  that  means  the  insurer  cannot  be  paid.   airport    
destruction  or  deterioration.       E.   Prescriptive  Period  (  Arts.  26  &  29)  
  The  insurance  policy  should  also  provide  that   3.   Damage  occasioned  by  delay    
Art.  1766.  In  all  matters  not  regulated  by  this   the   consignee,   if   he   fails   to   file   a   law   suit     1.   In  case  of  damage,  written  complaint  within  
Code,  the  rights  and  obligations  of  common   within   the   prescriptive   period,   the   insurance   The  Warsaw  Convention  does  not  operate  as  an  exclusive   3  days  from  receipt  of  baggage  and  7  days  
carriers   shall   be   governed   by   the   Code   of   company   is   not   obligated   to   pay   the   enumeration  of  the  instances  of  an  airlines  liability,  or  as  an   from  receipt  of  goods.  
absolute  limit  of  the  extent  of  that  liability.  Such  a  proposition  
Commerce  and  by  special  laws.   consignee.   That’s   usually   provided   in   an   is  not  borne  out  by  the  language  of  the  Convention,  as  this  
2.   In   case  of   delay,   14   days   from   delivery   of  
  insurance  policy  when  what  is  being  insured   Court  has  now,  and  at  an  earlier  time,  pointed  out.  Moreover,   goods/baggage.  
Lolo  A:  So  we’re  finished  with  the  Civil  Code   is  a  transaction  governed  by  COGSA.   slight  reflection  readily  leads  to  the  conclusion  that  it  should   3.   No   action   lies   if   complaint   beyond   period,  
and   the   Code   of   Commernce.   If   the   Civil     be  deemed  a  limit  of  liability  only  in  those  cases  where   unless  there  is  fraud.  
Code   does   not   apply,   then   it’s   the   Code   of     the   cause   of   the   death   or   injury   to   person,   or   4.   Action  must  be  filed  within  2  years  from  date  
Commerce.  If  the  Code  of  Commerce  doesn’t   E.  LIABILITY  (Section  4[5])   destruction,  loss  or  damage  to  property  or  delay  in  its   of  arrival,  or  when  ought  to  arrive,  or  when  
transport  is  not  attributable  to  or  attended  by  any  willful  
apply  then  you  go  to  Special  laws.  Here,  the     transportation  stopped.  
misconduct,   bad   faith,   recklessness,   or   otherwise  
very   first  special   law   is   the   COGSA.   You   1.   Maximum   amount   of   P500   per   improper  conduct  on  the  part  of  any  official  or  employee    
apply   the   COGSA   suppletorily   to   the   package   or,   if   not   shipped   in   for   which   the   carrier   is   responsible,   and   there   is   Despite   the   express   mandate   of   Art.   29   of   the   Warsaw  
missing  provisions.     package,  per  customary  freight  unit   otherwise  no  special  or  extraordinary  form  of  resulting   convention  that  an  action  for  damages  should  be  filed  within  
injury.     2   years   from   arrival   to   the   place   of   destination,   such   rule  
What   if   there   is   a   contradiction   between   (e.g.  metric  ton  of  bulk  shipment)  
  shall   not   be   applied   in   the   instant   case   because   of   the  
the  COGSA  and  the  Code  of  Commerce?    
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ATTORYNEY  ABANO  TRANSPORTATION  LAW  TABLES  (  WITH  CASES  AND  ANNOTATIONS)                       ISABELLE  POBLETE  
Code   of   Commerce   applies,   unless   it   is   NOTE:     The   Conventions   provisions,   in   short,   do   not   regulate   or   delaying   tactics   employed   by  the   petitioner   airline.  (United  
expressly  stated  that  COGSA  applies.     Example,  you  have  a  carton  of  cigarettes,  that   exclude  liability  for  other  breaches  of  contract  by  the  carrier   Airlines  v.  Uy)  
Remember,   if   its   transportation   is   a   package.   If   it’s   a   box,   it   will   also   be   or   misconduct   of   its   officers   and   employees,   or   for   some    
particular   or   exceptional   type   of   damage.   (   Northwest   F.   Jurisdiction  (Art.  28)  
OVERLAND:   COGSA   DOES   NOT   APPLY.   considered   a   package.   But   there   are   Airlines  v.  CA)  
 
But  if  its  foreign  trade  over  sea  its  COGSA.   instances  when  the  goods  are  transported  in    
Lolo   A’s   opinion:   As   far   as   I   am   concerned,   bulk.  For  example,  an  entire  ship  containing   Plaintiff  has  option  to  file  action  for  damages  at:  
  1.   Domicile  of  carrier  
and   legal   authorities   have   said,   that   only   10,000   metric   tons   of   wheat   and   barley.   So   C.   AMOUNTS  UNDER  WC   2.   Principal  place  of  business  of  carrier  
when   it   is   stated   in   the  bill  of   lading   will   the   how  many  instances  or  how  may  units  would    
COGSA   apply.   Especially   if   he   is   a   Filipino   that  be?     3.   Where  carrier  has  business  through  which  
1.   125,000   pesos   per   passenger,   unless   a   contract  made  
consignee  and  he  is  filing  a  suit  here.     It  would  still  be  considered  10,000  units  and   higher  limit  is  agreed  upon  
  if   its   lost   the   liability   (absent   stipulation   4.   Place  of  destination  
2.   250   pesos   per   kilo   of   checked   5.   In  actions  for  personal  injury  or  death  to  
C.   BILL  OF  LADING:   otherwise)  would  be  500  dollars  x10,000  if  the   baggage/goods  unless  declaration  of  higher  
  entire  thin  is  lost.   passengers,   the   principal   and  
value  and  added  payment  made   permanent   place   of   residence   of   the  
Prima   facie   evidence   of   the   receipt   by   the   Why?   3.   5,000  per  hand  carried  baggage  
carrier   of   the   goods   as   described   therein,   Because   it   is   a   customary   freight   unit.   passenger   and   in   which   the   carrier  
(   But   remember   that   these   amounts   were   already   conducts   operations   through   premises  
(Sec.   3   [4])   Contrary   evidence   may   be   Measuring  by  ton  is  a  customary  freight  unit.   amended  by  the  Montreal  Convention)   owned  or  leased  by  it.  (  This  provision  is  
presented.   That   is   why   when,   for   example,   a   common     added   by   the   Montreal   Convention,  
  carrier  charges  its  freight  cost,  a  freight  cost   The  above  limited  liability  cannot  be  availed  by  
D.   PRESCRIPTIVE  PERIOD   is  always  computed  according  to  metric  tons   ARTICLE  33  (1)  (2))  
carrier   if   damage   is   committed   by   willful    
  if  it  is  in  bulk.  So  we  follow  that  also.  One  ton   misconduct   Montreal   convention   allows   a   fifth   jurisdiction:  
1.   If  loss  or  damage  is  APPARENT  OR   is  considered  to  be  one  unit  and  one  unit  is    
EXTERNAL,  notice  in  writing  must   considered  to  be  payable  to  the  maximum  of   residence  of  the  passenger  
Any   stipulation   to   lower   the   above   limits   or   to    
be  given  to  carrier  or  agent  at  time   $500  absent  stipulation.     exempt  form  liability  is  void.     Why  here?  Easier  access  to  justice.    
of   removal   of   goods   by   person      
It  seems  clear  that  even  if  said  section  4  (5)  of  the  Carriage    
entitled   to   delivery.   Same   A   contract   of   carriage,   although   performed   by   different  
prescriptive  period  as  overland   of  Goods  by  Sea  Act  did  not  exist,  the  validity  and  binding   EXAMPLE  2:  
carriers  under  a  series  of  airline  tickets  constitutes  a  single  
    effect  of  the  liability  limitation  clause  in  the  bill  of  lading   operation  as   members   of  the  IATA.   They  act   as   agents  of   Tom  and  Jerry  went  to  Barcelona.  They  bought  
2.   If   loss   or   damage   is   NOT   here  are  nevertheless  fully  sustainable  on  the  basis  alone   each  other  in  the  issuance  of  the  tickets  and  that  the  number   their   ticket   from   a   domestic   airline   in   Spain.   It  
APPARENT,   within   3   days   of  
of  the  cited  Civil  Code  Provisions.  That  said  stipulation  is   of  tickets   issued   does   not  detract  from  the   oneness   of  the   does  not  operate  anywhere  else  except  in  Spain.  
just   and   reasonable   is   arguable   from   the   fact   that   it   contract  of  carriage  as  long  as  the  parties  regard  the  contract   So   they   bought   it   in   Air   Lingues.   Then   they  
delivery.   echoes  Art.  1750  itself  in  providing  a  limit  to  liability  only   as  a  single  operation.  A  member  airline  which  enters  into  a   boarded  a   plain   to   Air   Lingues   and   during   the  
  if  a  greater  value  is  not  declared  for  the  shipment  in  the   contract   of   carriage   consisting   of   a   series   of   trips   to   be  
NOTE:   If   the   parties   stipulate   in   the   performed   by   different  carriers   is   authorized  to  receive  the  
flight,   they   were   giving   the   passengers   food.  
bill   of   lading.   To   hold   otherwise   would   amount   to  
bill   of   lading   that   this   prescriptive   fare  for  the  whole  trip  and  through  the  required  process  of   However,   the   stewardess   did   not   give   food   to  
questioning  the  justness  and  fairness  of  the  law  itself....  
period   will   apply   in   a   transportation   But   over   and   above   that   consideration,   the   just   and   interline  settlement  of  accounts  or  the  IATA  clearing  house,   Tom.   When   Tom   asked   why,   the   stewardess  
overland   instance,   then   this   may   reasonable   character   of   such   stipulation   is   implicit   in   it   an   airline   is   duly   compensated   for   the   segment   of   the   trip   said,  you  do  not  look  like  you  need  food.    
giving  the  shipper  or  owner  the  option  of  avoiding  accrual   services  (  American  Airlines  v.  CA)    
apply   instead   of   the   prescriptive    
period  provided  by  law   of   liability   limitation   by   the   simple   and   surely   far   from   Tom  sort  of  complained  about  that  omission  on  the  
onerous  expedient   of   declaring   the   nature   and   value   of  
These  are  a  series  of  examples  given  by  Abano  during   part   of   the   stewardess   so   the   stewardess   said,   if  
  class.  
3.   If  NO  NOTICE  is  given,  there  is  prima  
the  shipment  in  the  bill  of  lading.  (  PHILIPPINE  CHARTER   you  don’t  like  it  here,  you  can  always  stand  up  and  
V.  NEPUTE  ORIENT)     walk   out   of   the   plane.   At   that   time,   the  plane   was  
facie  evidence  of  delivery  of  goods   EXAMPLE  1:  
  20,000   feet   above,   it   was   a   very   insulting   remark  
as  described  in  bill  of  lading   CONJUNCTION  TICKETS  
  from   the   stewardess.   When   they   landed   in  
 
  9  
ATTORYNEY  ABANO  TRANSPORTATION  LAW  TABLES  (  WITH  CASES  AND  ANNOTATIONS)                       ISABELLE  POBLETE  
4.   Notice   is   not   needed   if   goods   jointly   2.   Nature   and   value   of   goods   may   be   Lets  say  A  bought  a  conjunction  ticket  to  travel  from   Barcelona,   they   went   to   the   Supervisor   of   Air  
surveyed  or  inspected  at  time  of  their   declared  by  shipper  and  inserted  in   Manila   to   Riyadh.   He   bought   several   tickets   (   Lingues  and  complained  what  happened  to  Tom.  
receipt   bill   of   lading;;   declaration   is   prima   together  called  a  conjunction  ticket)  from  Singapore   The  supervisor  was  a  closet  racist  and  event  went  
  facie  evidence  and  not  conclusive   Airlines.   He   travelled   using   the   Conjunction   ticket   violent  and  injured  Jerry.    
NOTE:  This  means  the  counting  and   on  carrier   from   Manila   to   Hongkong,   Hongkong   to   Munich.   When  the  students  returned  to  the  PH,  they  decided  
inspecting   of   the   items,   both     From   Manila   to   Hongkong,   the   airline   was   to   file   a   case.   What   are   the   cause   of   actions  
representatives   of   the   common   If  for  example,  the  vessel  was  seaworthy  but   Singapore   airlines.   From   Hongkong   to   Munich,   it   available?    
carrier   and   the   consignee   must   be   he   cause   of   the   sinking   was   because   the   was  KLM.  KLM  honored  the  ticket  that  was  issued   Quasi  Delict  
present   shipper  did  not  inform  the  ship  owner  of  the   by   Singapore,   especially   since   it   had   a   coupon   Injury  
  nature  of  the  goods,  then  those  good  affected   saying  it  was  for  HK  to  Munich.   What  laws  are  applicable?  
5.   Whether   notice   of   loss/damage   is   the  seaworthiness  of  the  vessel,  then  that  can   Then   from   Munich   to   Moscow,   it   was   American   Civil  Code  for  the  Quasi  Delict  but  for  the  Injury,  he  
given  or  not,  suit  must  be  filed  within   be   an   excuse   on   the   part   of   the   common   Airlines.  For  Moscow  to  Riyadh  it  was  Emirates.   can   invoke   the   revised   penal   code   or   ask   for  
1  year  after  delivery  or  when  goods   carrier.   REMEMBER   THAT   QUESTION   IN   So   all   of   these   airlines   honored   the   tickets   damages   under   the   Montreal   or   Warsaw  
should   have   been   delivered;;   THE   MT   EXAM   ABOUT   THE   TOXIC   purchased  from  Singapore  Airlines  since  there  were   Convention.    
otherwise  prescribed.   MATERIALS?     separate  coupons  for  each  leg.   The   subject   that   can   be   covered   by   the   Warsaw  
      When   A   reached   Munich,   he   presented   the   Convention   is   death  or   injury   to   the   person   of   the  
NOTE:   The   notice   of   claim   is   not   conjunction  ticket.  The  person  in  American  Airlines   passenger.   So   there   are   two   different   laws  
required   in   this   case   or   is   not   a   A  stipulation  in  the  bill  of  lading  limiting  to  a  certain  sum  the   detached   the   coupon   for   the   trip   from     Munich   to   concerned  here.  
condition   precedent   under   the   common  carriers  liability  for  loss  or  destruction  of  a  cargo  -­ Moscow.  Inadvertedly  however,  and  without  being    
-­   unless   the   shipper   or   owner   declares   a   greater   value   is  
COGSA.  Since  its  patterned  after  US   sanctioned  by  law.     aware  of  this,  he  detached  the  next  coupon  as  well.   But  what  about  the  principal  of  criminal  law,  that  the  
law,   they   don’t   have   condition   The   passenger   did  not   notice   it  also.   So  when  he   venue  of  the  crime  is  the  place  where  the  crime  was  
There  are,  however,  two  conditions  to  be  satisfied:    
precedent  rules  under  their  law   was  about  to  board  the  plane  for  Riyadh,  the  person   committed?    
  (1)   the   contract   is   reasonable   and   just   under   the   said,  you  don’t  have  a  ticket  for  Moscow,  so  he  was   It   might   not   be   advisable   to   file   a   criminal   case.  
circumstances,  and     unable  to  take  the  flight.   That’s  why  you  have  the  Montreal  Convention  that  
Petitioners  claim  that  pursuant  to  Section  3,  paragraph  6  of  
the   Carriage   of   Goods   by   Sea   Act (COGSA),   respondent   (2)  it  has  been  fairly  and  freely  agreed  upon  by  the  parties.     Afterwards  when  he  got  back  to  the  Philippines  he   allows   the   fifth   venue   for   jurisdiction:   residence   of  
should  have  filed  its  Notice  of  Loss  within  three  days  from  
The   rationale   for,   this   rule   is   to   bind   the   shippers   by   their  
filed  a  case.     the  passenger.    
delivery.  They  assert  that  the  cargo  was  discharged  on  July   What  will  you  file  and  against  whom  and  where?    
31,  1990,  but  that  respondent  filed  its  Notice  of  Claim  only   agreement  to  the  value  (maximum  valuation)  of  their  goods.  
on  September  18,  1990.   He   can   file   against   the   airline   that   tore   the   ticket-­   EXAMPLE  3.    
It  is  to  be  noted,  however,  that  the  Civil  Code  does  not  limit  
the   liability   of   the   common   carrier   to   a   fixed   amount   per   Emirates  or  he  can  file  against  Singapore  Airlines.   Plane  going  to  the  middle  east  had  an  accident.  It  
We   are   not   persuaded.  First,  the   above-­cited  
provision  of  COGSA  provides  that  the  notice  of  claim  need   package.  In  all  matters  not  regulated  by  the  Civil  Code,  the   Why  against  Singapore  Airlines?   crashed.   It   goes   down   and   the   passengers   died.  
not  be  given  if  the  state  of  the  goods,  at  the  time  of  their   right   and   the   obligations   of   common   carriers   shall   be   Remember  the  IATA  Rule.  You  file  against  the  first   One  of  the  passengers  was  n  OFW  and  it  was  his  
governed   by   the   Code   of   Commerce   and   special   laws.  
receipt,   has   been   the   subject   of   a   joint   inspection   or  
Thus,  the  COGSA,  which  is  suppletory  to  the  provisions  of  
carrier.  In  this  case  it  was  Singapore.     first  trip  to  work.  The  other  was  a  businessman.  
survey.  As  stated  earlier,  prior  to  unloading  the  cargo,   an  
Inspection   Report   as   to   the   condition   of   the   goods   was   the   Civil   Code,   supplements   the   latter   by   establishing   a   Considering  that  A  is  a  Filipino,  where  will  you  file   You  are  the  lawyer  of  both  filing  a  case  against  the  
prepared  and  signed  by  representatives  of  both  parties.     statutory   provision   limiting   the   carriers   liability   in   the   it?   airline.  
absence  of  a  shippers  declaration  of  a   higher  value   in  the  
bill  of  lading.  The  provisions  on  limited  liability  are  as  much  
Under   the   Warsaw   and   Montreal   Conventions,   a   For  the  OFW  who  has  no  means  to  fund  a  drawn  
Second,  as  stated  in  the  same  provision,  a  failure  
to   file   a   notice   of   claim   within   three   days   will   not   bar   a  part  of  the  bill  of  lading  as  though  physically  in  it  and  as   party  may  file  against  the  carrier  where  the  contract   out  case  to  prove  injury,  what  can  he  avail  of?    
recovery  if  it  is  nonetheless  filed  within  one  year.    This   though  placed  there  by  agreement  of  the  parties.     was  made.     The   strict   liability   of   the   carrier   under   the  
one-­year   prescriptive   period   also   applies   to   the   Remember  in  American  Airlines  v.  CA,  the  filing  of   Montreal   Convention   of   138,000   dollars.  
shipper,  the  consignee,  the  insurer  of  the  goods  or  any   In  the  case  before  us,  there  was  no  stipulation  in  the  Bill  of  
legal  holder  of  the  bill  of  lading.     Lading  limiting  the  carriers  liability.  Neither  did  the  shipper   the  suit  in  manila  was  still  considered  valid.  Why?   However,   the   OFW   waives   any   claim   to  
declare  a  higher  valuation  of  the  goods  to  be  shipped.  This   Because   Singapore   airlines   was   the   one   who   additional  damages.  
fact   notwithstanding,   the   insertion   of   the   words   L/C   No.  
issued   the   ticket   in  Manila.   Singapore   was  acting    
as  agent  of  American  Airlines.  Since  Singapore  
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In  Loadstar  Shipping  Co.,  Inc.  v.  C ourt  of  Appeals,  we   90/02447   cannot   be   the   basis   for   petitioners   liability.   (   airlines  was  an  agent  of  American  airlines  in  so   For  the  businessman  who  can  and  wants  to  prove  
ruled   that   a  claim   is  not   barred   by  prescription   as  long   as   Belgian  Overseas  v.  Philippine  First)  
the  one-­year  period  has  not  lapsed.     far  as  the  issuance  of  the  ticket  was  concerned,   more,   then   he   can   go   for   the   second   option   and  
  it  is  deemed  that  it  was  American  Airlines  that   prove  more  than  the  113,100  SDR.  
3.   Shipper   and   carrier   may   agree   on  
Inasmuch   as   the   neither   the   Civil   Code   nor   the   Code   of   issued  the  ticket.    
Commerce   states   a   specific   prescriptive   period   on   the   another   maximum   amount   of    
matter,  the  Carriage  of  Goods  by  Sea  Act  (COGSA)-­-­which   So  he  can  still  file  the  case  in  manila.    
damage  actually  sustained.  (  this  is  
provides  for  a  one-­year  period  of  limitation  on  claims  for  loss  
of,  or  damage  to,  cargoes  sustained  during  transit-­-­may  be   a  form  of  liquidated  damages)    
applied  suppletorily  to  the  case  at  bar.  (  Belgian  Overseas     What  can  he  file?  
v.  Philippine  First)   If  they  are  silent  as  to  amount,  the  maximum   Breach  of  contract.  What  did  that  breach  consist  of?  
about  of  Php  500  will  apply.     Failure  to  honor  the  ticket.    
    Emirates,  when  they  discovered  that  the  coupon  for  
  NOTE:  What  if  the  bill  of  lading  says  that  the   the  trip  to  Riyadh  was  not  in  the  coupon,  they  cannot  
6.   If   it’s   a   case   of     misdelivery,   cost  of  the  a  machinery  shipped  is  5,000  per   just   deny   or   refuse   to   board   A.   They   have   to  
prescriptive  period  for  suit  is  10  years   unit?  Will  the  maximum  500  be  followed.  No   exercise  due  diligence  and  should  have  contacted  
for   breach   of   written   contract   or   4   that  would  be  unreasonable  to  the  consignee   Singapore   airlines   to   verify   if   there   was   in   fact   a  
years  for  quasi  delict.   if  they  were  to  follow  the  maximum  of  $500.   coupon.    
  What  is  stated  in  the  bill  of  lading  will  be    
followed,  unless  there  is  fraud.    
   

Under  Article  1753  of  the  Civil  Code,  the  law  of  the  
country  to  which  the  goods  are  to  be  transported  shall  
govern   the   liability   of   the   common   carrier   for   their  
loss,   destruction   or   deterioration.   Since   the   subject  
shipment  was  being  transported  from  South  Korea  to  
the  Philippines,  the  Civil  Code  provisions  shall  apply.  
In   all   matters   not   regulated   by   the   Civil   Code,   the  
rights   and   obligations   of   common   carriers   shall   be  
governed  by  the  Code  of  Commerce  and  by  special  
laws,  such  as  the  COGSA.  

While  the  Civil  Code  contains  provisions  making  the  

common  carrier  liable  for  loss/damage  to  the  goods  
transported,   it   failed   to   outline   the   manner   of  
determining  the  amount  of  such  liability.  Article372  of  
the  Code  of  Commerce  fills  in  this  gap,  thus:  

Article  372.  The  value  of  the  goods  which  the  carrier  
must   pay   in   cases   if   loss  or  misplacement  shall   be  
determined   in   accordance   with   that   declared   in   the  
bill  of  lading,  the  shipper  not  being  allowed  to  present  
proof   that   among   the   goods   declared   therein   there  
were  articles  of  greater  value  and  money.  

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In  case,  however,  of  the  shipper’s  failure  to  declare  
the  value  of  the  goods  in  the  bill  of  lading,  Section  4,  
paragraph  5  of  the  COGSA  provides:  

Neither  the  carrier  nor  the  ship  shall  in  any  event  be  
or   become   liable   for   any   loss   or   damage   to   or   in  
connection   with   the   transportation   of   goods   in   an  
amount   exceeding   $500   per   package   lawful  money  
of  the  United  States,  or  in  case  of  goods  not  shipped  
in   packages,   per   customary   freight   unit,   or   the  
equivalent  of  that  sum  in  other  currency,  unless  the  
nature  and  value  of  such  goods  have  been  declared  
by  the  shipper  before  shipment  and  inserted  in  the  bill  
of  lading.  This  declaration,  if  embodied  in  the  bill  of  
lading   shall   be   prima   facie   evidence,   but   shall   be  
conclusive  on  the  carrier.  

Hence,   when   there   is   a   loss/damage   to   goods  

covered  by  contracts  of  carriage  from  a  foreign  port  
to   a   Philippine   port   and   in   the   absence   a   shipper’s  
declaration   of   the   value   of   the   goods   in   the   bill   of  
lading,   as   in   the   present   case,   the   foregoing  
provisions  of  the  COGSA  shall  apply  thus  limiting  the  
liability  to  $500  per  unit.  (  ATI  v.  Philamgen)  

 
When   the   packages   are   shipped   in   a  
container  supplied  by  carrier  and  the  number  
of   such   units   is   stated   in   the   bill   of   lading,  
each   unit   and   not   the   container   constitutes  
the  package.  (Eastern  Shipping  Lines  v.  IAC)  
 
 
 
 
 
 
 
 
 
 
 
 
 
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SPECIAL  LAWS  IN  TRANSPORTATION  (B)  
SALVAGE  LAW   SHIP  MORTGAGE  DECREE   FOREIGN  SHIPS  CO-­LOADING  ACT   LAND  TRANSPORTATION  TRAFFIC  CODE  (  
(R.A.  2616)   (P.D.  1521)   (CABOTAGE  LAW,  RA  10668)   R.A.  4136)  
A.   DEFINITIONS   A.   PURPOSE  OF  MORTGAGE:   This  only  became  law  last  year!!    
    Before   the   Cabotage   law,   foreign   ships   should    
How  is  salvage  defined?   To   finance   the   construction,   acquisition,   dock  in  South  Ports  of  the  PH  only.  The  foreign   1.   A   motor   vehicle   must   be   registered   for   the  
1.   Service   rendered   to   preserve   the   goods   or   purchase   of   vessel,   or   initial   inspection   vessel  would  have  to  unload  in  the  south  and  the   current  year,  as  a  condition  for  its  operation  on  a  
ship  which  the  owner  has  either  abandoned  in   thereof.   goods   would   have   had   to   be   transferred   to   an   public  road  or  highway  
distress   at   sea   or   is   unable   to   protect   or     interisland   or   domestic   vessel   and   that    
secure.   P.D.  1521  or  the  Ship  Mortgage  Decree  was  enacted  to   interisland  vessel  will  bring  the  goods  to  its  final   2.  Mortgage,  attachment  or  other  encumbrances  
  accelerate  the  growth  and  development  of  the  shipping   destination.   The   foreign   vessel   alone   is   not   on   a   motor   vehicle   must   be   registered   and  
industry  and  to  extend  the  benefits  accorded  to  overseas  
2.  Compensation  to  one  by  whose  assistance  a   permitted   to   bring   the   goods   to   its   final   recorded   on   the   face   of   the   Certificate   of  
shipping   under   PD   214   to   domestic   shipping.   It   is  
ship   or   its   cargo   has   been   saved   from   patterned  closely  from  the   US   Ship  Mortgage   Act.   The   destination.  That  was  the  cabotage  law  before.  I   Registration  (  if  there  is  notation  on  the  certificate  
impending   danger   or   recovered   from  actual   public  policy  behind  the  law  is  to  develop  the  domestic   think  they  realized  that  it  was  more  expensive  to   of  the  registration,  an  IPV  will  not  be  prejudiced)  
loss;;   shipping   industry.   Opening   up   the   courts   to   foreign   the  consigneed  when  they  did  this.  O  they  came    
  suppliers   by   granting   them   a   maritime   lien   under   out  with  this  law.  But  right  now,  with  this  new  law,   3.  A  person  can  still  drive  a  vehicle  even  without  
3.   vessel   or   cargo   recovered   from   Philippine  laws  even  if  they  are  not  entitled  to  a  maritime   there  is  no  need  to  get  a  permit  if  the  vessel  is   possessing  his  driver’s  license  albeit  he  may  be  
lien   UNder   under   their   laws   will   encourage   forum  
abandonment  at  sea   coming   from   Manila.   The   foreign   vessel   can   violating  traffic  rules.  (  Manuel  v.  CA  227  SCRA  
shopping.  (  Crescent  Petroleum  v.  MV  Lor)  
Remember   the   contract   of   towage?   Don’t     proceed  to  its  destination,  a  provincial  port.   29)   (   Issue  in   this   case   was   about   liability,   just  
confuse  it  with  this.  In  the  contract  of  towage,  it   B.   Conditions  for  preferred  mortgage:     because  a  person  did  not  have  his  license  at  the  
does  not  necessarily  mean  that  the  vessel  to  be     A.   DEFINITION   time  an  accident  occurs,  does  not  mean  he  will  
towed  is  in  danger,  it  may  be  that  it  is  just  without   1.   Registration   with   PCG   (   PHILIPPINE     be  automatically  liable  for  the  injury.  There  is  a  
engine  so  it  needed  to  be  towed.     COAST  GUARD)     presumption  but  if  there  is  proof  that  negligence  
In   salvage   law,   it   is   different.   The   vessel   being     Cabotage  refers  to  transit  of  a  vessel  along  the   is   on   the   part   of   the   other   party,   his   lack   of  
salvaged   cannot   navigate,   it   has   been   2.   Affidavit  of  good  faith   coast   of   a   country   for   the   purpose   of   trade   license  will  not  impute  liability  on  him.)  
abandoned  or  sunk,  without  any  intention  of     from  one  port  to  another  within  the  territorial    
being  recovered   To   be   considered   a   preferred   mortgage   it   is   limits  of  that  country   4.   A   person   driving   with   an   expired   and  
  necessary  that:     unrenewed   drivers   license   is   deemed   not   to  
Remember  salvage  is  a  SERVICE  the  service   Section   4   No.   2:   An   affidavit   is   filed   with   the   Prior  to  R.A.  10668  foreign  vessels  have  to  load   have  any  license  at  all  
being  rendered  is  what  we  call  salvage   record   of   such   mortgage   to   the   effect   that   the   and   unload   in   Manila   ports.   They   may   enter    
  mortgage  is  made  in  good  faith  and  without  any   coastwise  ports  but  with  special  permits  from  the   5.   Insurance   requires  an  authorized  driver   who  
  design  to  hinder,  delay  or  defraud  any  existing  or   Marina.   is   either   the   insured   or   a   person   driving   on  
B.   ELEMENTS   OF   A   VALID   SALVAGE   future  creditor  of  the  mortgage  or  any  lien  or  of     insured’s  order  or  with  his  permission,  provided  
CLAIM   the  mortgaged  vessel.   B.   Under  the  new  law,  a  foreign  vessel:   he   abides   with   licensing   rules.   A   driver   with  
      expired   Traffic   Violation   Receipts   (   TVR)   or  
1.  There  must  be  MARINE  PERIL   3.   No  waiver  of  preferred  status   1.  Arriving  from  a  foreign  port  may  carry  foreign   Temporary   Operation   Permit   (TOP)   is   not   an  
    cargo   to   its   Philippine   port   of   final   destination   authorized   driver   within   the   meaning   of  
2.  Service  of  Salvor  is  VOLUNTARY;;  and   C.   Preferred  Mortgage   has   priority   over   after  being  cleared  at  its  port  of  entry   insurance  policy.    
  all  claims  against  the  vessel  EXCEPT:      
 
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3.   Salvage   is   SUCCESSFUL   IN   WHOLE   OR   1.   Taxes,   crew’s  wages,   general  average,   2.  Arriving  from  a  foreign  port,  may  carry  foreign   The   rule   is   settled   that   a   driver   abandoning   his   proper  
PART.   salvage,  damages  arising  out  of  torts   cargo   by   another   foreign   vessel   calling   at   the   lane  for  the  purpose  of  overtaking  another  vehicle  in  an  
ordinary  situation  has  the  duty  to  see  to  it  that  the  road  is  
If   there   was   an   attempt   to   save   the   vessel   but     same  port  of  entry  to  the  Philippine  port  of  final  
clear   and   not   to   proceed   if   he   cannot   do   so   in   safety.  
there  was  nothing  actually  saved,  then  that  cant   2.   Preferred   mortgage   registered   prior   to   destination  of  such  foreign  cargo.     When   a   motor   vehicle   is   approaching   or   rounding   a  
be  considered  a  successful  salvage   time   (  The  cargo  brought  by  a  foreign  vessel  can  be   curve,  there  is  special  necessity  for  keeping  to  the  right  
    transferred   and   loaded   on   a   foreign   vessel   as   side  of  the  road  and  the  driver  does  not  have  the  right  to  
  3.   Maritime  lien  arising  prior  to  registration   well)   drive   on   the   left   hand   side  relying   upon   having  time   to  
C.   PROCEDURE  AFTER  SALVAGE   of  preferred  mortgage     turn  to   the   right   if   a   car   approaching   from   the   opposite  
direction  comes  into  view  (  Mallari  v.  CA)  
    3.   Departing   from   a   Philippine   port   of   origin  
 
1.  Salvor  does  not  become  the  owner  but  must   D.   Enforcement   or   preferred   mortgage   through  another  Philippine  port  to  its  foreign  port   Relevant  provision  in  Mallari:  
deliver   recovered   or   saved   vessel/cargo   to   the   lien  in  case  of  default   of   final   destination   may   carry   foreign   cargo   Sec.  41.  Restrictions  on  overtaking  and  passing.  –    
authorities   (   Bureau   of   Customs   and   Municipal   What  remedies  does  the  creditor  have  against  a   intended  for  export.   (a)  The  driver  of  a  vehicle  shall  not  drive  to  the  left  side  
treasurer)   defaulting  debtor?     of  the  center  line  of  a  highway  in  overtaking  or  passing  
    4.  Departing  from  a  Philippine  port  of  origin,  may   another  vehicle  proceeding  in  the  same  direction,  unless  
such   left   side   is  clearly   visible   and   is   free   of   oncoming  
2.  PUBLICATION  OF  NOTICE  for  the  owner  to   1.   Suit  in  rem  in  admiralty  (  the  creditor  can   carry   foreign   cargo   by   another   foreign   vessel  
traffic   for   a   sufficient   distance   ahead   to   permit   such  
appear  and  claim  salvaged  vessel/cargo  and  to   ask   for   the   judicial   or   extrajudicial   through   a   domestic   transshipment   port   to   its   overtaking  or  passing  to  be  made  in  safety.  
pay  compensation  (50%  of  value)   foreclosure  as  to  the  vessel)   foreign  port  of  final  destination    
      (b)   The   driver   of   a   vehicle   shall   not   overtake   or   pass  
What  if  no  owner  appears?   2.   Suit   in   personam   in   admiralty   (   against   5.   An   empty   foreign   container   van   going   to   or   another  vehicle  proceeding  in  the  same  direction  when  
3.  If  no  owner  appears,  salvaged  vessel/cargo  to   the  shipowner/mortgagor)   coming  from  any  Philippine  port  or  foreign  port,   approaching  the  crest  of  a  grade,  nor  upon  a  curve  in  the  
highway,   where   the   drivers   view   along   the   highway   is  
be  sold  at  public  auction,  then  proceeds  to  be     and  being  transshipped  between  two  Philippine  
obstructed  within  a  distance  of  five  hundred  feet  ahead  
shared  by  owner  of  salvor  vessel  (50%)  and   3.   Personal  action  against  the  debtor   ports  is  allowed   except   on   a   highway   having   two   or   more   lanes   for  
capita/crew  (50%)     movement  of  traffic  in  one  direction  where  the  driver  of  a  
  What   courts   have   jurisdiction:   CFIs   of   the   vehicle  may  overtake  or  pass  another  vehicle:  
Section   7   of   Salvage   Law   provides   that   if   no   Philippines.      
claim  is  presented  in  three  months  subsequent     Provided   That   on   a   highway,   within   a   business   or  
residential   district,   having   two   or   more   lanes   for  
to   the   publication   of   the   advertisement   ,   the   E.   Suit  in  rem  and  arrest  of  vessel  
movement   of   traffic   in   one   direction,   the   driver   of   a  
things  saved  shall  be  sold  at  public  auction  and     vehicle   may   overtake   or   pass   another   vehicle   on   the  
their   proceeds,   after   deducting   the   expenses   The   vessel   may   be   made   a   party   defendant.   right.  
and  the  proper  reward  shall  be  deposited  in  the   Upon   filing   of   petition   for   judicial   foreclosure,    
insular  treasury.  If  three  years  shall  pass  without   petitioner   may   apply   ex   parte   for   an   order   of    
anyone  claiming  it,  one  half  of  the  deposit  shall   arrest  of  the  vessel.    
be   adjudged   to   him  who  saved   the   things,   and   This   is  one  of   the   times  when   a   non   person   is  
the  other  half  to  the  insular  government.   impleaded  as  a  defendant.  When  you  say  arrest  
  of  vessel,  this  means  you  apply  with  the  court  for  
  an   arrest   of   vessel,   it   will   be   served   on   the  
25%  Captain,  25%  Crew   captain,  and  the  vessel  is  prohibited  from  leaving  
  the  country.  
 
Requisites  for  a  maritime  lien  under  the  Ship  Mortgage  
Decree:    

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1.   The  necessaries  must  have  been  furnished  to  
and  for  the  benefit  of  the  vessel  
2.   The  necessaries  must  have  been  necessary  for  
the  continuation  of  the  voyage  of  the  vessel  
3.   The   credit   must   have   been   extended   to   the  
vessel  
4.   There   must   be   necessity   for   the   extension   of  
the  credit  
5.   The   necessaries   must  be   ordered   by   persons  
authorized  to  contract  on  behalf  of  the  vessel.  (  
Crescent  Petroleum  vs.  MV  Lor)  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
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BILL  OF  RIGHTS  OF  AIR  PASSENGERS  
JOINT  DOTC-­DTI   RIGHT  TO  FULL  VALUE  
RIGHT  TO  INFORMATION   RIGHT  TO  COMPENSATION  
ADMINISTRATIVE  ORDER   (  of  the  service  purchased)  
A.   Scope  of  A.O.  NO.  01—2012   1.   Right   to   full,   fair   and   clear   1.   Right   to   transportation   and   1.   Right   to   compensation   and   amenities   in   case   of   flight  
  disclosure   of   the   service   and   baggage   conveyance   and   CANCELLATION  (  Sec.  11)  
When  does  this  rule  apply?   all  terms  and  conditions  of  the   ancillary   services,   in    
The   rules   apply   to   all   aspects   of   contract   of   contract  of  carriage  (Sec.4)   accordance   with   the   terms   and   These  include:    
carriage   for   flights   or   portion   of   a   flight   INTO,     conditions  of  the  contract  (Sec.7)   1.   prior  notification  of  cancellation  
FROM   AND   WITHIN   the   territory   of   the       2.   sufficient  refreshment  or  meals    
Philippines   operated   by   Philippine   air   carriers,   The  disclosure,  before  the  purchase  of   Any  violation  of  the  terms  and  conditions   3.   hotel  accommodation,    
and  flights  or  portions  of  a  flight  from  the  territory   any  ticket,  shall  include:     due   to   negligence   of   the   carrier   shall   4.   transportation  to  hotel,    
of   the   Philippines   operated   by   foreign   air   a.   documents   required   at   check-­ entitle  the  passenger  to  compensation  or   5.   reimbursement   of   the   value   of   the   fare   if   passenger  
carriers.   in,     other  acceptable  arrangements.   decides  not  to  fly  
(  This  means  it  applies  to  both  international  and   b.   check  in  deadlines,       6.   endorsement   to   another   carrier   without   paying   fare  
domestic   air   carriers   provided   that   they   are   c.   baggage  allowance,     2.   Right  to  be  processed  for  check-­ difference,    
registered)   d.   refund  and  rebooking  policies,   in,   within   the   check-­in   deadline   7.   rebooking  of  the  ticket  without  additional  charge.  
  e.   procedures   and   responsibility   when   the   passenger   has   a    
The   compensation   rules   do   no   not   apply   to   for   delayed   and/or   cancelled   confirmed  ticket,  with  complete   IF  cancellation  is  24  hours  before  ETD,    
foreign   carriers   flying   into   the   territory   of   the   flights.     documents,   and   has   complied   only  notification,  rebooking  or  reimbursement  are  required.    
Philippines  if  the  laws  of  the  country  of  origin     with   check-­in   procedures   (   Sec.    
provide  similar  or  higher  compensation.   The   terms   may   include   liability   8)   If   cancellation   is   due   to   force   majeure,   safety   and/or   security  
  limitations,   claim   filing   deadlines   and     seasons,  as  certified   by   CAAP,   at   least   refund   of   full   value  of  
  other   crucial   conditions.   The   A  passenger  within  designated  check-­in   fare  must  be  provided.    
B.   RIGHTS  OF  AIR  PASSENGERS   disclosure   shall   be   printed   on   the   area  1  hour  before  the  ETD  shall  not  be    
  ticket   and/or   boarding   pass,   and   in   considered  late  or  a  no-­show,  and  shall   IF  THEY  DON’T  PROVIDE  COMPENSATION,  YOU  MAY  FILE  A  
1.   Right   to   be   provided   with   accurate   carrier’s  website.   not  be  denied  check  in.  Any  dispute  shall   CASE  FOR  DAMAGES.  
information   before   purchase   of   the     be   resolved   on-­site   by   the   carrier   with    
service   2.   Right   to   clear   and   non-­ proofs,   such   as   CCTV   recordings   and   2.   Right  to  compensation  and  amenities  in  case  of  FLIGHT  
2.   Right   to   receive   the   full   value   of   the   misleading   advertisements   of,   other  available  means.   DELAY.  (  Sec.  12)  
service  purchased   and   important   reminders      
3.   Right  to  compensation  without  delay   regarding  the  far.  (Sec.5)   3.    Right  to  sufficient  processing  time  for   3  HOUR  TERMINAL  DELAY  
    check   in:   2   hours   before   ETD   in   In  case  of  terminal  delay  (  passenger  is  in  departure  area)  of  3  
C.   PENALTY   FOR   VIOLATIONS   BY   Major   restrictions,   such   as   those   on   international   airports   and   1   hour   in   hours  after  ETD,  whether  or  not  it  is  attributable  to  the  carrier  
CARRIER   rebookability   in   case   of   non-­use   of   other  airports.  (  Section  9)   he  shall  be  provided  with:    
  ticket   shall   be   disclosed   FULLY   AND     1.   meals  or  refreshment,    
1.   Violation   of   the   order   is   penalized   in   CLEARLY   THIS  IS  IMPORTANT   2.   free  phone  calls,    
accordance   with   the   Civil   Aeronautics     4.   Right   to   board   air   craft   for   the   flight,   3.   text  or  emails  and    
Act  of  the  Philippines   3.   Right   against   misleading   and   except  when  denial  has  legal  or  valid   4.   rebooking   or   refund   of   his   tickets   or   endorsement   to  
  fraudulent   sales   promotion   cause  such  as  issues  of  immigration,   another  airline.  
practices  (Section  6)    

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2.   Violation  of  Sec.  4  is  ground  for  denial     safety   and   security,   health   concerns   6  HOUR  TERMINAL  DELAY  
of   application   for,   or   All   sales   promotion   campaigns   and   or  government  requisition  of  space   In   case   of   terminal   delay   of   6   hours   after   ETD   for   causes  
suspension/recall   of   approval   of,   activities   shall   be   carried   out   with     attributable  to  the  carrier,  flight  is  deemed  CANCELLED,  and  
promo  rates/advertised  fares   honesty,   transparency   and   fairness.   In   case   of   overbooking   or   government   passenger  entitled  to  rights  and  amenities  for  flight  cancellation.  
  Copies   of   promotional   materials   shall   requisition,   the   carrier   shall   look   for    
  be  provided  to  DTI  for  post  audit.     volunteers   willing   to   give   up   their   2  HOUR  TARMAC  DELAY  
3.   Violation   of   Sections   5   and   6   are   shares   in   exchange   for   proper   In  case  of  TARMAC  DELAY  (  passenger  has  boarded  plane)  of  
governed   by   Consumer   Act   of   the   incentives/compensation/amenities   2   hours   after   ETD,   sufficient   food   and   beverage   shall   be  
Philippines   which,  if  need  be,  shall  be  increased.   provided  
  The  carrier  shall  do  the  same  when  the    
What   agency   implements   this?   CAAP   (   Civil   government   requisition   result   in   3.   In  case  of  overbooking  and  if  accepted  by  passenger,  
Aeronautics  Authority  of  the  Philippines)   passengers   having   to   forego   their   compensation  under  Section  10  shall  constitute  liquidated  
  confirmed   space.   Refund   from   the   damages  for  carrier’s  failure  to  provide  confirmed  seat  (  
government   for   the   full   value   of   the   Section  13.)  
requisitioned   seats   may   be   claimed   by    
the  air  carrier.     4.   Right   to   compensation   for   delayed,   lost   and   damaged  
(Ex.   Remember   Korean   Passenger   baggage  (  Section  14)  
dragged  off  the  flight?)    
  Baggage  shall  be  on  the  SAME  FLIGHT  taken  by  the  passenger,  
  subject  to  considerations  of  safety,  security  or  other  valid  causes.  
  The   passenger   shall   be   informed   soonest   of   off-­loading   and  
reasons  therefor.  Baggage  shell  be  carried  in  next  flight  available  
and  delivered  to  the  passenger.  
 
What  is  the  proper  amount  of  compensation  in  case  of  delayed  
delivery  of  baggage  or  loss  of  baggage?  
Compensation   of   P2,000   for   delay   of   24   hours   or   portion  
thereof.    
 
For   lost   or   damaged   baggage   attributable   to   carrier,  
compensation  shall  be:  
(a)   For   international   flights:   the   relevant   convention   shall  
apply  
(b)   For   domestic   flight:   ½   of   the   amount   in   relevant  
convention  or  its  peso  equivalent  
Note:    
In  Montreal  Convention:  
1.   Air   carriers   are   strictly   liable   (no   defense)   for   proven  
damages   up   to   113,100   SDR   (   special   drawing   rights)  
which  is  around  $138,000  as  of  December  2011  
 

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2.   Where  damages  of  more  than  113,100  SDR  are  claimed  
by   passenger,   carrier   may   avail   of   defense   that  
accident   causing   injury   or   death   was   not   due   to   its  
negligence  but  to  that  of  a  third  party  
 
 
 
Baggage  is  deemed  permanently  and  totally  lost  if  not  delivered  
within   7   days.   (After   the   7   day   period,   you   can   consider   your  
baggage  lost  and  demand  compensation)  
 
5.   Right  to  Compensation  in  case  of  death  or  bodily  injury  
 
For   international   flights,   relevant   Convention   and   Inter-­Carrier  
Agreement   will   apply.   Under   the   1966   Montreal   agreement,  
$138,000   dollars   inclusive   of   attorney’s   fees   and   costs.   For  
domestic   flight,   it   is   amount   stipulated   in  relevant   convention  in  
peso  equivalent  
 
6.   Right   to   immediate   payment   of   compensation   (   Section  
16).  Checks,  cash  or  documents  convertible  to  cash  shall  
be   tendered   at   carrier’s   counter   at   airport   on   the   date  
when  occasion  entitling  passenger  occurred  
 
7.   Right   to   refund   of   other   fees,   if   any,   such   as   checked  
baggage   fees   and   other   optional   service   fees,   when  
passenger  was  not  at  fault  and  did  not  use  the  ticket  that  
is  refundable.  
 
IMPORTANT  THINGS  TO  REMEMBER:  
1.   Instances  when  the  airline  may  validly  refuse  boarding  of  
a  passenger  
2.   When  overbooking  occurs,  what  can  an  airline  do  to  avoid  
liability  
3.   Right   to   COMPENSATION   with   respect   to   flight  
cancellation  
 
 
 
 
 
 
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ATTORYNEY  ABANO  TRANSPORTATION  LAW  TABLES  (  WITH  CASES  AND  ANNOTATIONS)                       ISABELLE  POBLETE  
PUBLIC  SERVICE  
PUBLIC  UTILITIES   REGULATORY  AND  FRANCHISING  BODIES   FUNCTIONS  
  C.A.  146  (1936)   P.D.  1  (1972)   E.O.S   What  are  the  functions  of  these  regulatory  and  franchising  bodies?  
Renders  services  essential  to          
the  general  public         A.  FRANCHISING/LICENSING  
Timeline  of  how  laws  
Impressed  with  public  interest   concerning  regulatory        
and  concern   and  franchising  bodies       1.  Regulatory  bodies  grant  CPC;;  grant  of  CPCN  requires  prior  congressional  
  have  changed     LTO/LTFRB  (  land  transport)   franchise  
Public  Utilities  are  privately  owned  and         (  CPC:  Certificate  of  Public  Convenience)  
operated   businesses   whose   services       TRB  (toll  road)   (CPCN:  Certificate  of  Public  Convenience  and  Necessity)  
are   essential   to   the   general   public.          
They   are   enterprises   which   specially    
cater   to   the   needs   of   the   public   and   BOT   PCG/MARINA  (  water  transport)   2.  REQUIREMENTS:    
conduce   to   their   comfort   and     (  transportation)     A.  Filipino  citizenship,    
convenience.   As   such,   public   utility       PPA  (ports)    
services   are   impressed   with   public         B.  financial  capability,  
interest  and  concern.  (  KMU  v.  Garcia)       CAB  (air  transport)    (  on  financial  capability:  it  is  important  for  one  to  show  that  it  can  afford  all  the  
        necessary  equipment,  on  public  need:  
      MIAA/CAAP  (air  ports)    this  is  important,  before  being  granted  a  CPC,  you  have  to  show  that  there  is  a  
    public  need  )  
  PSC    
  PHILIPPINE     C.  public  need  
  PUBLIC  SERVICE    
BOC   Ex.   For   Public   Need:   If   it’s   a   transportation   company,   it   must   prove   that   a  
Subject  to  POLICE  POWER,  a   COMMISSION   NTC  (communication)  
(Communication)   particular  route  is  not  being  sufficiently  served  and  that  there  is  place  for  another  
legislative  prerogative/power   1936-­1972    
  public  transport  to  operate.  
   
   
    Public  convenience  or  necessity  generally  means  something  fitting  or  suited  to  the  public  need.  As  one  
 
  of   the   basic   requirements   for   the   grant   of   a   CPC,   public   convenience   and   necessity   exists   when   the  
proposed  facility  or  service  meets  a  reasonable  want  of  the  public  and  supply  a  need  which  the  existing  
    facilities  do  not  adequately  supply.  The  existence  or  non-­existence  of  public  convenience  and  necessity  
    is  therefore  a  question  of  fact  that  must  be  established  by  evidence  in  a  public  hearing  conducted  for  
  ERB-­ERC  (power)  
that  purpose.  The  object  and  purpose  of  such  procedure,  is  to  look  out  for,  and  protect  the  itnerst  of  the  
public  and  existing  transport  operators.  (  KMU  v.  Garcia)  
   
   
  3.  DUE  PROCESS:  notice  and  hearing  
    NEA  (electric  cooperatives)  
CONGRESS  delegates  its    
BPW     The  power  of  a  regulatory  body  to  issue  a  CPC  is  founded  on  the  condition  that  after  full-­
powers  and  responsibilities  to   (power/waterworks)     dress  hearing  and  investigation,  it  shall  fine,  as  a  fact,  that  the  proposed  operation  is  for  the  
regulate  public  utilities   NWRB  (waterworks)   convenience  of  the  public.  Basic  convenience  is  the  primary  consideration  for  which  a  PCP  
  is   issued.   Also,   existing   operators   in   subject  routes  must  be   given   an   opportunity   to   offer  
Such   delegation   of   legislative   power  to   an    
proof  and  oppose  the  application.  Therefore,  an  applicant  must,  at  all  times,  be  required  to  
administrative  agency  is  permitted  in  order     prove  his  capacity  and  capability  to  furnish  the  service.  (  KMU  v.  Garcia)  
to   adapt   to   the   increasing   complexity   of   LWUA  (water  districts)  
modern   life.   As   subjects   for   governmental    
regulation  multiply,  so  does  the  difficulty  of      
administering   the   laws.   Hence  

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ATTORYNEY  ABANO  TRANSPORTATION  LAW  TABLES  (  WITH  CASES  AND  ANNOTATIONS)                       ISABELLE  POBLETE  
specialization,   even   in   legislation   has   B.  REGULATION  
become  necessary.  (  KMU  v.  Garcia)  
  Franchising  alone  is  not  enough,  regulation  is  necessary  as  well.  Remember  
  the  whole  grab  issue?  
   
  1.   Cancellation   of   CPC/CPCN;;   imposition   of   fine   (Reasons:   e.g.   unreliable  
  service,  frequent  accidents)  
Regulatory    
bodies/Administrative  and   2.   Due   Process:   notice   and   hearing   (   Reason:   franchise   is   property   and   not  
Quasi-­Judicial  Agencies   merely  privilege;;  non  impairment  of  contract  if  investments  made)    
(  they  cannot  delegate  it  further   Constitution   says   life   liberty   and   property   cannot   be   taken   away   without   due  
to  other  agencies)   process  of  law!  
   
An   abdication   of   the   licensing   and    
regulatory   government   agencies   of   THIS  THIRD  ONE  IS  THE  MOST  IMPORTANT  
their   functions   as   the   instant   petition   C.  RATE  FIXING/DETERMINATION  
seeks   to   show,   is   indeed   lamentable.    
Not   only   is   it   an   unsound  
1.  quasi-­judicial  function  
administrative  policy  but  it  is  inimical  to  
public  trust  and  public  interest  as  well.    
(  KMU  V.  Garcia)   2.  GOAL  OF  RATE  FIXING:  balance  between  private  and  public  demands;;  the  
  rate  must  be  just  and  reasonable  rate  for  both  
  Abano:  Is  there  such  a  thing  as  a  just  and  reasonable  rate  for  both?  I  suppose  
  there  could  be  but  it  will  be  difficult  to  arrive  at  that  middle  ground  that  will  satisfy  
IMPORTANT!!!     the  public  utility  and  the  persons  enjoying  the  services  of  such  utility.  
     
  SPECIAL  CASES:     3.  fair  return  on  investment  vs.  confiscatory  measures  
POTESTAS  DELEGATA  NON     The  regulatory  body  cannot  impose  a  rate  that  is  so  low.  The  balance  between  
DELEGARI  POTEST   1.   Local  Government  (  Local  Autonomy  Code)   affordability  for  the  commuter  against  discrimination  against  the  commuter.  
  -­‐   Franchising  of  tricycles    
“  AUTHORITY  WHICH  IS     THERE  ARE  IMPORTANT  FACTORS  THAT  A  REGULATORY  BODY  MUST  
DELEGATED  CANOT  BE   2.   Special  Economic  Zones:  CDC  &  SBMA   CONSIDER:  
FURTHER  DELEGATED”   -­‐   Communication  franchises  within  their  respective  zones    
  a.   RATE  OF  RETURN:  the  SC  considers  12%  a  reasonable  rate  of  return.  
The   authority   given   by   the   LTFRB   to   Of  what?  Rate  basis.  So  what  is  rate  basis?  
the   provincial   bus   operators   to   set   a    
fare   range   over   and   above   the        
authorized   existing   fare   is   illegal   and  
invalid  as  it  is  tantamount  to  an  undue   b.   RATE  BASIS:  investments,  assets,  expenses  of  the  public  utility.    
delegation   of   legislative   authority.    
Potestas  delegate  non  delegari  potest.   For  example,  lets  take  Meralco,  its  what  Meralco  puts  in.  Therefore,  Meralco  
What   has   been   delegated   cannot   be   has  a  right  to  a  rate  of  return  of  12%.  A  lot  of  times,  a  public  utility  will  jack  
delegated.   This   doctrine   is   based   on   up  or  bloat  its  expenses  so  that  the  rate  basis  will  be  very  big.  In  the  case  
the   ethical   principle   that   such   a   of  Meralco,  the  OA  examined  all  of  these  supposed  expensed  by  Meralco.  
delegated  power  constitutes  not  only  a  
The   COA   found   out   that   the   expenses   were   not   really   incurred   or   were  
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ATTORYNEY  ABANO  TRANSPORTATION  LAW  TABLES  (  WITH  CASES  AND  ANNOTATIONS)                       ISABELLE  POBLETE  
right  but  a  duty  to  be  performed  by  the   bloated   or   were   not   really   devoted   to   the   purpose   of   the   operations   of  
delegate  through  the  instrumentality  of   Meralco.  So  these  expenses  to  bloat  the  rate  basis  were  not  allowed.  
his  own  judgment  and  not  through  the  
 
intervening  mind  of  another.  A  further  
delegation   of   such   power   would   c.   RETURN  ITSELF  
indeed   constitute   a   negation   of   the   Take  the  case  of  KMU  v.  Garcia:  There  was  an  arrangement  that  bus  companies  could  
duty  in  violation  of  the  trust  reposed  in   increase   or   lower   their   rate   anytime   they   want   provided   it   is   15%   higher   or   lower,  
the  delegate  mandated  to  discharge  it   depending  on  what  they  want.  The  SC  said  this  is  not  allowed.  Regulatory  bodies  should  
directly.  (KMU  v.  Garcia)   be  the  one  to  exercise  this  function  and  nobody  else.    
   
4.  affordability  vs.  discrimination  
 
 
 
 
 
 
 
 
 
 
 
 

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