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CODE OF COMMERCE OF THE with the conditions inherent thereto, always

PHILIPPINES including a statement or reference to in the bill
of lading which he delivers to the shipper.
COMMERCIAL CONTRACTS FOR ARTICLE 352. The bills of lading, or
TRANSPORTATION tickets in cases of transportation of passengers,
may be diverse, some for persons and others
ARTICLE 349. A contract of transportation for baggage; but all of them shall bear the
by land or water ways of any kind shall be name of the carrier, the date of shipment, the
considered commercial: points of departure and arrival, the cost, and,
1. When it has for its object merchandise or with respect to the baggage, the number and
any article of commerce. weight of the packages, with such other
2. When, whatever its object may be, the manifestations which may be considered
carrier is a merchant or is habitually engaged necessary for their easy identification.
in transportation for the public.
Note: Air transportation is not mentioned in Bill of lading is a written acknowledgement of
ARTICLE 349 but it is considered as the receipt of goods and an agreement to
commercial as well. The non-inclusion of air transport and to deliver them at a specified
transportation in the code its because air place to a person named or on his or her order.
transportation is not yet known at the time of It operates both as a receipt and as a contract.
the promulgation of the Code of Commerce. It is a receipt for the goods shipped and a
contract to transport and deliver the same as
ARTICLE 350. The shipper as well as the therein stipulated. As a receipt, it recites the
carrier of merchandise or goods may mutually date and place of shipment, describes the
demand that a bill of lading be made, stating: goods as to quantity, weight, dimensions,
1. The name, surname and residence of the identification marks, condition, quality, and
shipper. value. As a contract, it names the contracting
2. The name, surname and residence of the parties, which include the consignee; fixes the
carrier. route, destination, and freight rate or charges;
3. The name, surname and residence of the and stipulates the rights and obligations
person to whom or to whose order the assumed by the parties.
goods are to be sent or whether they are to
be delivered to the bearer of said bill. The two-fold character of bill of lading:
4. The description of the goods, with a 1. It is a receipt which specifies the
statement of their kind, of their weight, and quantity, condition and character of the
of the external marks or signs of the goods received, and it recites the date
packages in which they are contained. and place of shipment and the fees paid
5. The cost of transportation. by the shipper;
6. The date on which shipment is made. 2. It is a contract by which the three
7. The place of delivery to the carrier. parties, the shipper, the carrier and the
8. The place and the time at which delivery consignee undertakes specific
to the consignee shall be made. responsibilities and assume stipulated
9. The indemnity to be paid by the carrier in obligations.
case of delay, if there should be any
agreement on this matter.
The bill of lading also fixes the route,
destination, free charges and stipulates the
ARTICLE 351. In transportation made by rights and obligations assumed by the parties
railroads or other enterprises subject to under article 353.
regulation rate and time schedules, it shall be
sufficient for the bills of lading or the *Is a bill of lading essential or indispensable
declaration of shipment furnished by the for the creation of a contract of carriage?
shipper to refer, with respect to the cost, time
Bill of lading is not indispensable in
and special conditions of the carriage, to the
the creation of the contract of carriage. The
schedules and regulations the application of
contract of carriage arises the moment the
which he requests; and if the shipper does not
goods delivered to the carrier and the carrier
determine the schedule, the carrier must apply
assumes responsibility over the goods.
the rate of those which appear to be the lowest,
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Compania Maritima vs. Insurance Company of

North America, 12 SCRA 213 What happen if the consignee receives the
merchandise and pays for the free charges
*Period of bringing a claim against the carrier, without protest?
Article 350-352. All claims against the carrier are
extinguished.
If the damage is apparent? When shall the period commence to
If the consignee receives the package and the run? The moment the consignee actually
damage is apparent from the exterior of the receives the goods. ( NOT upon notification )
package, the consignee must make a claim
against the carrier upon receipt. A verbal claim The prescriptive period to file for the
is sufficient compliance under the law. recovery of undelivered cargo?
1. If with Bill of Lading – 10 years from
If the damage is not apparent, when must non delivery
the period must be brought? 2. If No Bill of Lading – 6 years from
It must be brought within 24hours upon non delivery
the receipt of the package if the damage cannot 3. If it involves overseas trading – 1
be known from the exterior part. year from non delivery

Nature of Bill of Lading

Held: When the hot rolled sheets arrived in
A bill of lading aside from being a Manila they were found to be wet, with slight
contract and a receipt is also a symbol of the traces of salt and rust. But the iron bulk said
goods covered by it. A bill of lading which has
no notation of any defect or damage in the that when the carrier accepted the cargo the
goods is called a clean bill of lading which hot rolled sheets where actually wet and
constitute prima facie evidence of the receipt covered with rust. However, it was stated in
by the carrier of the goods as therein describe. the bill of lading that it was clean on board.
(LORENZO SHIPPING CORP., petitioner, vs. Iron Bulk wants to escape liability by showing
CHUBB and SONS, Inc., GEARBULK, Ltd. evidence contrary to what is stated in the bill
and PHILIPPINE TRANSMARINE of lading. The hot rolled sheets were actually
CARRIERS, INC., respondents.)
wet and covered with rust. But the SC said that
In the limitation of the value of goods that is the fact that the bill of lading is pro forma is of
recoverable under the bill of lading is it no moment, if the bill of lading is not truly
allowed? reflective of the true condition of the cargo at
the time of loading to the effect that the cargo
That is allowed provided that the
was indeed in the damage state. The carrier
contract is reasonable and just under the
could have refused to accept or at the least
circumstances and it has been fairly and freely
made a marginal note that the cargo is in a
agreed by the parties. (Belgian Overseas vs
damage state. But the Iron bulk did not do any
Philippine First Insurance)
of those notations. Since the carrier failed to
annotate in the BL the alleged damage
Rationale: Is to bind the shippers to their condition of the cargo when it was loaded, the
agreement to the value that is the maximum carrier is bound by the description appearing
valuation of their goods. in the BL and estopped from denying liability
under the BL.
Belgian Overseas vs Philippine First Insurane
As to filing notice of claim?
IRON BULK SHIPPING PHILIPPINES, (Provident Insurance Case January 15, 2004)
CO., LTD., petitioner, vs. REMINGTON
INDUSTRIAL SALES CORPORATION, FACTS: The vessel MV Eduardo II received
respondent. on board a shipment of plastic woven bags of
fertilizer in good order and condition which
Issue: Can the pro forma bill of lading can be was consigned to Atlas Fertilizer Corp. (AFC)
relied on to establish the condition of the cargo and covered by a BL. In the process of
upon landing? unloading at the port of destination certain
good were found to have fallen overboard and
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some considered unrecovered. Provident In case the consignee, upon receiving the
(petitioner) indemnified the consignee Azucar goods, cannot return the bill of lading
Shipping Corporation (ASC) for its damages subscribed by the carrier, because of its loss or
and seek for reimbursement from AFC for the of any other cause, he must give the latter a
value of the loses or damages to the cargo. receipt for the goods delivered, this receipt
AFC argued that the claim or demand by producing the same effects as the return of the
petitioner had been waived, abandoned or bill of lading.
otherwise extinguished for failure of the
consignee to comply with the required claim ARTICLE 354. In the absence of a bill of
for damages set forth in the stipulation no. 7 of lading, disputes shall be determined by the
the BL. legal proofs which the parties may present in
support of their respective claims, according to
Issue: W/N failure to make prompt notice of the general provisions established in this Code
claim as required is fatal to the right to claim for commercial contracts.
for indemnification for damages.
 Note: BL is the best evidence, in the absence
the parties may present other evidence.
Held: The SC said that there is no question
with the enforceability of stipulation no. 7 in
ARTICLE 355. The responsibility of the
the BL. The 24hrs requirement under such
carrier shall commence from the moment he
stipulation is by agreement of the contracting
receives the merchandise, personally or
parties a condition sine qua non for the accrual
through a person charged for the purpose, at
of the right of action to recover damages
the place indicated for receiving them.
against the carrier. Considering the prompt
demand was necessary to foreclose the
ARTICLE 356. Carriers may refuse
possibility of fraud or mistake in ascertaining
packages which appear unfit for
the validity of claims, there was a need for the
transportation; and if the carriage is to be made
consignee or its agents to observe the
by railway, and the shipment is insisted upon,
conditions provided for in the stipulation no. 7.
the company shall transport them, being
But here, petitioner’s insistence or its agents
exempt from all responsibility if its objections,
that the respondent carrier had knowledge of
is made to appear in the bill of lading.
the damage because one of the respondent’s
officer supervised the unloading operations
ARTICLE 357. If by reason of well-
and signed the discharging receipt cannot be
founded suspicion of falsity in the declaration
construed as sufficient compliance with the
as to the contents of a package the carrier
said proviso. Even if the representative of the
should decide to examine it, he shall proceed
carrier supervised the unloading, in this case
with his investigation in the presence of
the SC said that it cannot be considered as a
witnesses, with the shipper or consignee in
sufficient compliance under the law.
attendance.
If the shipper or consignee who has to be
ARTICLE 353. The legal evidence of the cited does not attend, the examination shall be
contract between the shipper and the carrier made before a notary, who shall prepare a
shall be the bills of lading, by the contents of memorandum of the result of the investigation,
which the disputes which may arise regarding for such purposes as may be proper.
their execution and performance shall be If the declaration of the shipper should be
decided, no exceptions being admissible other true, the expense occasioned by the
than those of falsity and material error in the examination and that of carefully repacking
drafting. the packages shall be for the account of the
After the contract has been complied with, carrier and in a contrary case for the account
the bill of lading which the carrier has issued of the shipper.
shall be returned to him, and by virtue of the
exchange of this title with the thing ARTICLE 360. The shipper, without
transported, the respective obligations and changing the place where the delivery is to be
actions shall be considered cancelled, unless in made, may change the consignment of the
the same act the claim which the parties may goods which he delivered to the carrier,
wish to reserve be reduced to writing, with the provided that at the time of ordering the
exception of that provided for in Article 366. change of consignee the bill of lading signed
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by the carrier, if one has been issued, be applicable with respect to those damaged and
returned to him, in exchange for another the consignee shall receive those which are
wherein the novation of the contract appears. sound, this segregation to be made by distinct
The expenses which this change of and separate pieces and without dividing a
consignment occasions shall be for the account single object, unless the consignee proves the
of the shipper. impossibility of conveniently making use of
them in this form.
Note: The shipper has the right to change the The same rule shall be applied to
name of the consignee and the carrier has to merchandise in bales or packages, separating
respect this. those parcels which appear sound.

ARTICLE 361. Has been repealed by Note: Article 365 governs the case where the
ARTICLE 1745 of the Civil Code. goods are so damaged that they are rendered
useless for sale and consumption for purposes
Goods are transported at the risk of the that they are properly destined. The damage
carrier and any stipulation to the contrary is may affect some or all of the goods.
void. Except however, if the contract is purely a. If the damage affects all of the
private wherein such arrangement is valid. goods – paragraph 1authorizes the
consignee to abandon all the goods
ARTICLE 362. Repealed by Article 1752 to the carrier who shall pay the
CC. Wherein the presumption now is there is corresponding damages.
negligence in the event of damage to cargo. b. If the damage affects some of the
goods – paragraph 2 authorizes the
ARTICLE 363. Outside of the cases consignee to abandon only the
mentioned in the second paragraph of Article damage goods. But if the
361, the carrier shall be obliged to deliver the consignee prove that it is
goods shipped in the same condition in which, impossible to conveniently use the
according to the bill of lading, they were found undamaged goods in that form
at the time they were received, without any without the damage goods. The
damage or impairment, and failing to do so, to law authorizes the consignee to
pay the value which those not delivered may abandon all of the goods.
have at the point and at the time at which their
delivery should have been made. ARTICLE 366. Within the twenty-four hours
If those not delivered form part of the following the receipt of the merchandise, the
goods transported, the consignee may refuse to claim against the carrier for damage or average
receive the latter, when he proves that he be found therein upon opening the packages,
cannot make use of them independently of the may be made, provided that the indications of
others. the damage or average which gives rise to the
claim cannot be ascertained from the outside
ARTICLE 364. If the effect of the damage part of such packages, in which case the claim
referred to in Article 361 is merely a shall be admitted only at the time of receipt.
diminution in the value of the goods, the After the periods mentioned have elapsed, or
obligation of the carrier shall be reduced to the the transportation charges have been paid, no
payment of the amount which, in the judgment claim shall be admitted against the carrier with
of experts, constitutes such difference in value. regard to the condition in which the goods
transported were delivered. (Very important)
ARTICLE 365. If, in consequence of the
damage, the goods are rendered useless for Note: If the goods transported are damaged,
sale and consumption for the purposes for the damage may either be apparent from the
which they are properly destined, the exterior of the package or cannot be
consignee shall not be bound to receive them, ascertained from the outside of the package.
and he may have them in the hands of the  If the damage can be ascertained from the
carrier, demanding of the latter their value at outside of the package, the claim must be
the current price on that day. made immediately.
If among the damaged goods there should  If the damage cannot be ascertained from
be some pieces in good condition and without the outside of the package, the claim must
any defect, the foregoing provision shall be be made within 24hours. But Article 366,
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the claim must be made before the steel pipes and declare them unfit for the
payment of freight charges because the purpose they were intended.
moment the consignee pays for the On December 2, 1988, respondent
freightage, all the claims are considered Chubb and Sons, Inc. filed a complaint for
extinguished. collection of a sum of money, against
The 24hrs period is not a prescriptive period, it respondents Lorenzo Shipping, Gearbulk, and
is only intended to afford the carrier of a Transmarine.
reasonable opportunity to check the validity of
the claims of the consignee while the facts are Issue: W/N Sumitomo filed the complaint
still fresh in the minds of the persons who took within the period prescribe by the Code of
part in the transaction and the documents are Commerce.
still available. Otherwise if you bring the
claim more than 24hrs, it is more litigious. Ruling: The cargo arrived December 2, it sent
a letter on December 7, 1987. How many
Was there valid claim? (LORENZO days? The SC ruled that Sumitomo has not yet
SHIPPING VS CHUBB) actually received the possession of the cargo
The parties: and has not physically inspected the same at
Carrier: Lorenzo Shipping the time the shipment was discharge from MV
Consignee: Sumitomo Corporation of San Lorcon of the Lorenzo shipping. Transmarine
Francisco, California, USA carrier as agent of respondent Gearbulk which
The Goods transported from Manila to carried the goods from Davao City to USA and
Davao City. The Ship arrived in Sasa wharf on respondent Gearbulk itself are not authorized
December 2, 1987 and it was received by agents of Sumitomo Corporation. What is
Transmarine Carriers. When the goods arrived clear from the evidence is that the consignee
in Sasa wharf, it was found that the black steel received and took possession of the entire
pipes where rusty and it was checked by R.J. shipment only when the black steel pipes reach
Del Pan Surveyors, wherein the surveyors USA shore. Only then was delivery is made
made a report that the black steel pipes where and completed, and only then the 24hrs
no longer in good condition. prescriptive period starts to run.
After the survey, respondent Gearbulk What law applies? Philippine law or law of
loaded the shipment on board its vessel M/V USA? Remember that the place of destination
San Mateo Victory, for carriage to the United applies. The place of destination is Davao
States. It issued Bills of Lading stating that all City, then Philippine law applies.
units are heavily rusted.
While the cargo was in transit from ABOITIZ CASE
Davao City to the U.S.A., consignee Carrier: Aboitiz
Sumitomo sent a letter of intent dated Consignee: Science Teaching Improvement
December 7, 1987, to petitioner Lorenzo Project(STIP)
Shipping, which the latter received on
December 9, 1987. Sumitomo informed The representative of STIP received the
petitioner Lorenzo Shipping that it will be cargo on Aug. 11, 1993, then the
filing a claim based on the damaged cargo representative made a phone call to the
once such damage had been ascertained. representative of Aboitiz informing the status
On January 17, 1988, M/V San Mateo of the cargo. But STIP made only a formal
Victory arrived at Oakland, California, U.S.A., claim on Sept. 21, 1993. (more than a month)
where it unloaded 364 bundles of the subject But the SC said there was a timely filing of the
steel pipes. It then sailed to Vancouver, notice of claim under Article 366. According
Washington on January 23, 1988 where it to the SC, this case is peculiar that lead to the
unloaded the remaining 217 bundles. Toplis SC conclude that the notice requirement was
and Harding, Inc. of San Franciso, California, complied with taking into notice that the
surveyed the steel pipes, and also discovered consignee is a school institution that there are
the latter heavily rusted. When the steel pipes rules and regulations that need to be followed
were tested with a silver nitrate solution, and there actions need to be approved by the
Toplis and Harding found that they had come superiors unlike in a case of a corporation
in contact with salt water. wherein it has a different set up.
Due to its heavily rusted condition the
consignee Sumitomo rejected the damaged
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Compare ABOITIZ vs STIP with effects of delivery without prejudice to third

PHILIPPINE CHARTER INSURANCE parties with a better right.
CORPORATION vs. CHEMOIL
LIGHTERAGE HITE GOLD Note: The consignation is allowed if the
CORPORATION consignee cannot be found, refuses to accept
Wherein the notice here upon receipt of the the goods or refuses to pay the freightage.
damage cargo the representative of the What happens if the consignee is unknown to
consignee made a phone call to the carrier that the carrier? The carrier is still expected to
the cargo was in damage condition. Then observe proper and reasonable diligence to
eventually it made a claim but the SC said that find the consignee. If after the exercise of
no timely filing of the notice of claim. proper and reasonable diligence, the consignee
cannot be found. The goods may be stored in a
ARTICLE 367. If doubts and disputes proper place and the carrier have perform its
should arise between the consignee and the duty will be discharge from liability as carrier.
carrier with respect to the condition of the
goods transported at the time their delivery to Art. 370 - Art. 371 Covers the agreement
the former is made, the goods shall be between the carrier and shipper for the
examined by experts appointed by the parties, delivery of goods on certain date and
and, in case of disagreement, by a third one consequent right of abandonment.
appointed by the judicial authority, the results
to be reduced to writing; and if the interested ARTICLE 370. If a period has been fixed
parties should not agree with the expert for the delivery of the goods, it must be made
opinion and they do not settle their differences, within such time, and, for failure to do so, the
the merchandise shall be deposited in a safe carrier shall pay the indemnity stipulated in the
warehouse by order of the judicial authority, bill of lading, neither the shipper nor the
and they shall exercise their rights in the consignee being entitled to anything else.
manner that may be proper. If no indemnity has been stipulated and the
delay exceeds the time fixed in the bill of
Note: Art. 367 governs a situation wherein the lading, the carrier shall be liable for the
consignee and the carrier do not agree with damages which the delay may have caused.
respect to the condition of the goods
transported at the time of delivery. The expert ARTICLE 371. In case of delay through the
opinion on the matter of the condition of the fault of the carrier, referred to in the preceding
goods is not conclusive. Art. 367 allows the articles, the consignee may leave the goods
party to submit the valuation of damage to the transported in the hands of the former,
arbiters. advising him thereof in writing before their
arrival at the point of destination.
ARTICLE 368. The carrier must deliver to When this abandonment takes place, the
the consignee, without any delay or carrier shall pay the full value of the goods as
obstruction, the goods which he may have if they had been lost or mislaid.
received, by the mere fact of being named in If the abandonment is not made, the
the bill of lading to receive them; and if he indemnification for losses and damages by
does not do so, he shall be liable for the reason of the delay cannot exceed the current
damages which may be caused thereby. price which the goods transported would have
Note: The duty of the carrier is not only to had on the day and at the place in which they
carry the goods, but also to deliver the goods should have been delivered; this same rule is
to the consignee as indicated in the BL. to be observed in all other cases in which this
indemnity may be due.
ARTICLE 369. If the consignee cannot be
found at the residence indicated in the bill of Article 372. Repealed by Article 1749 of the
lading, or if he refuses to pay the CC. Subject matter is the validity of a carrier
transportation charges and expenses, or if he to stipulate in a BL for a reduction of its
refuses to receive the goods, the municipal liability for damages.
judge, where there is none of the first instance,
shall provide for their deposit at the disposal of Article 373 Refers to a case where several
the shipper, this deposit producing all the carrier successively transport the goods or by
the use of a BL. The original carrier enters into
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an inter connecting contract of carriage shall definite operation, or as agents for

be liable for damages caused by its connecting transportations and conveyances.
carrier. In either case they shall be subrogated in the
Ex. A transports his goods from Davao City to place of the carriers themselves, with respect
Cebu, and from Cebu to Manila pursuant to to the obligations and responsibility of the
combine agreement of services. Shipment was latter, as well as with regard to their rights.
through FedEx, then from Cebu to Manila
through DHL. FedEx being the first carrier
shall assume the responsibility of the DHL PUBLIC ACT NO. 521
under the combined services. Take note that
FedEx must have entered into contract of the CARRIAGE OF GOODS BY SEA ACT
combined services with DHL. (COGSA)

ARTICLE 373. The carrier who makes the Section 1. That the provisions of Public Act
delivery of the merchandise to the consignee No. 521 of the 7th Congress of the United
by virtue of combined agreements or services States, approved on April 16, 1936, be
with other carriers shall assume the obligations accepted, as it is hereby accepted to be made
of those who preceded him in the conveyance, applicable to all contracts for the carriage of
reserving his right to proceed against the latter goods by sea to and from Philippine ports in
if he was not the party directly responsible for foreign trade: Provided, that nothing in this
the fault which gave rise to the claim of the Act shall be construed as repealing any
shipper or consignee. existing provision of the Code of Commerce
The carrier who makes the delivery shall which is now in force, or as limiting its
likewise acquire all the actions and rights of application. .
those who preceded him in the conveyance.
Note: The requisite of applicability of
The shipper and the consignee shall have an
COGSA:
immediate right of action against the carrier
who executed the transportation contract, or 1. The contract must be for contract of
against the other carriers who may have carriage of goods;
received the goods transported without 2. Then it is by sea;
reservation. 3. To and from the Philippine ports and in
However, the reservation made by the latter foreign trade.
shall not relieve them from the responsibilities ( If it is coastwise then COGSA does not apply
which they may have incurred by their own )
acts.
What is the effect of COGSA to our Maritime
Article 374- 377 ( not so important) laws? As expressly stated in section 1, it shall
not repeal any existing provisions of the Code
Article 378 Wherein it requires the carrier to of Commerce which is now in force nor does it
keep a registry of cargo. limit its application.

ARTICLE 378. Agents for transportation Applicability of COGSA sample case:

shall be obliged to keep a special registry, with A cargo was loaded in New York for
the formalities required by Article 36, in which Davao City. Since most of the cargo was for
all the goods the transportation of which is Manila, the carrier unloaded all the cargo
undertaken shall be entered in consecutive including that for Davao in Manila and did not
order of number and dates, with a statement of make a trip to Davao. Instead the goods is
the circumstances required in Article 350 and transship with an inter island vessel. The cargo
others following for the respective bills of arrived in a damage condition. The SC ruled
lading. that the law of COGSA still applies since the
contract of carriage if from New York to
ARTICLE 379. The provisions contained in Davao City. The inter island vessel from
Articles 349 and following shall be understood Manila to Davao is considered merely as a
as equally applicable to those who, although connecting vessel and the shipment did not
they do not personally effect the transportation constitute a separate contract of carriage.
of the merchandise, contract to do so through
others, either as contractors for a particular and
8|Page

Sec. 2. This Act shall take effect upon its (2) The carrier shall properly and carefully
approval. (Approved October 22, 1936 load, handle, stow, carry, keep, care for,and
TITLE I discharge the goods carried.
(3) After receiving the goods into his carrier,
or the master or agent of the carrier, shall, on
Sec. 1. When used in this Act —. demand of the shipper, issue to the shipper a
(a) The term "carrier" includes the owner or bill of lading showing among other things
the charterer who enters into a contract of (a) The loading marks necessary for
carriage with a shipper. identification of the goods as the same are
(b) The term "contract of carriage" applies furnished in writing by the shipper before the
only to contracts of carriage by covered by a loading of such goods starts, provided such
bill of lading or any similar document of title, marks are stamped or otherwise shown clearly
insofar as such document relates to the upon the goods if uncovered, in such a manner
carriage of goods by sea, including any bill of as should ordinarily remain legible until the
lading or any similar document as aforesaid end of the voyage
issued under or pursuant to a character party (b) Either the number of packages or pieces,
from the moment at which such bill of lading or the quantity or weight, as the case may be,
or similar document of title regulates the as furnished in writing by the shipper.
relations between a carrier and a holder of the
same. . (c) The apparent order and conditions of the
goods: Provided, that no carrier, master, or
(c) The term "goods" includes goods, wares, agent of the carrier, shall be bound to state or
merchandise, and articles of every kind show in the bill of lading any marks, number,
whatsoever, except live animals and cargo quantity, or weight which he has reasonable
which by the contract of carriage is stated as ground for suspecting not accurately to
being carried on deck and is so carried.. represent the good actually received or which
(d) The term "ship" means any vessel used for he has had no reasonable means of checking..
the carriage of goods by sea.. (4) Such a bill of lading shall be prima facie
(e) The term "carriage of goods" covers the evidence of the receipt by the carrier of the
period from the time when the goods are goods as therein described in accordance with
loaded to the time when they are discharged paragraphs (3) (a), (b), and (c), of this section:
from the ship. (The rest of the provision is not applicable to
the Philippines).
RISKS (5) The shipper shall be deemed to have
Sec. 2. Subject to the provisions of Section 6, guaranteed to the carrier the accuracy at the
under every contract of carriage of goods by time of shipment of the marks, number,
sea, the carrier in relation to the loading, quantity, and weight, as furnished by him; and
handling, stowage, carriage, custody, care, and the shipper shall indemnify the carrier against
discharge of such goods shall be subject to the all loss, damages, and expenses arising or
responsibilities and liabilities and entitled to resulting from inaccuracies in such particulars.
the rights and immunities hereinafter set forth The right of the carrier to such indemnity shall
in no way limit his responsibility and liability
under the contract of carriage to any person
RESPONSIBILITIES AND LIABILITIES other than the shipper..
(6) Unless notice or loss or damage and the
Sec. 3. (1) The carrier shall be bound before general nature of such loss or damage by
and at the beginning of the voyage to exercise given in writing to the carrier or his agent at
due diligence to — the port of discharge or at the time of the
(a) Make the ship seaworthy; removal of the goods into the custody of the
person entitled to delivery thereof under the
(b) Properly man, equip, and supply the ship; contract of carriage, such removal shall be
(c) Make the holds, refrigerating and cooling prima facie evidence of the delivery by the
chambers, and all other parts of the ship in carrier of the goods as described in the bill of
which goods are carried, fit and safe for their lading. If the loss or damage is not apparent,
reception, carriage, and preservation. the notice must be given within three days of
the delivery.
9|Page

Said notice of loss or damage may be endorsed BELGIAN OVERSEAS CHARTERING

upon the receipt for the goods given by the AND SHIPPING VS PHILIPPINE FIRST
person taking delivery thereof. INSURANCE COMPANY
The notice in writing need not be given if the Issue: Whether failure to file notice of claim
state of the goods has at the time of their shall bar the respondent here from recovery.
receipt been the subject of joint survey or (47 days)
inspection. Ruling: First, COGSA provides that the notice
In any event the carrier and the ship shall be of claim need not be given if the state of the
discharged from all liability in respect of loss goods at the time of their receipt has been the
or damage unless suit is brought within one subject of a joint inspection or survey. In this
year after delivery of the goods or the date case, prior to the unloading of the cargo an
when the goods should have been delivered: inspection report as to the condition of the
Provided, that, if a notice of loss or damage, goods was prepared and signed by the
either apparent or concealed, is not given as representative of both parties, so there is no
provided for in this section, that fact shall not need of filing of notice of claim.
affect or prejudice the right of the shipper to Second, failure to file a notice of claim within
bring suit within one year after the delivery of 3 days will not bar recovery if it is nonetheless
the goods or the date when the goods should filed within 1year. The 1 year prescriptive
have been delivered. period also applies to the shipper, consignee,
In the case of any actual or apprehended loss the insurer of the good or any legal holder of
or damage, the carrier and the receiver shall the BL. The cargo was discharge on July 31,
give all reasonable facilities to each other for 1990 and the complaint was filed on July 25m
inspecting and tallying the goods. 1991 which is within the 1 year prescriptive
Note: The periods under Art. 3(6), there is the period.
3 day giving of notice and the 1 year *What if the consignee merely filed an extra
prescriptive period. The requirement of 3 day judicial demand? Does it toll the running of
notice under this section does not apply if the the 1year prescriptive period? No. DOLE
state of the goods at the time of their receipt Philippines vs Maritime company 148 SCRA
has been the subject of a joined survey or 118.
inspection. Also, a failure to file a notice of
claim within 3days will not bar a recovery if it *When there is miss delivery of cargo, does
is nonetheless filed within 1year. This 1 year COGSA apply? COGSA does not apply incase
prescriptive period also applies to the shipper, of miss delivery of cargo. The prescriptive
consignee and to the insurer of the goods or now becomes 10 years because there is already
any legal holder of the BL. a violation of a contract and COGSA does not
apply to miss delivery.
Under COGSA, if the goods arrived in a
damage condition from a foreign port to the
Philippine port of authority or port of entry, (7) After the goods are loaded the bill of
upon discharge of goods if damage is apparent, lading to be issued by the carrier, master, or
claim should be filed immediately. If the agent of the carrier to the shipper shall if the
damage is not apparent, claim should be filed shipper so demands, be a "shipped" bill of
within 3 days from delivery. Unlike in Art. lading: Provided, that if the shipper shall have
366 of the Code of Commerce, under COGSA previously taken up any document of title to
such acclaim is not a condition precedent but such goods, he shall surrender the same as
an action must be filed against the carrier against the issue of the "shipped" bill of
within 1year from discharge. Remember in lading, but at the option of the carrier such
Art. 366 there must be a claim, in COGSA that document of title may be noted at the port of
claim is not a condition precedent. If there is shipment by the carrier, master, or agent with
no delivery the 1 year period starts to run from the name or names of the ship or ships upon
the day the vessel left the port in case of which the goods have been shipped and the
undelivered or lost cargo or from delivery to date or dates of shipment, and when so noted
arrastre in case of damaged cargo. the same shall for the purpose of this section
be deemed to constitute a "shipped" bill of
lading.
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(8) Any clause, covenant, or agreement in a carrier from responsibility for the carrier's own
contract of carriage relieving the carrier of the acts;.
ship from liability for loss or damage to or in (k) Riotsand civil commotions;.
connection with the goods, arising from
negligence, fault, or failure in the duties and (l) Saving or attempting to save life or
obligations provide in this section or lessening property at sea;.
such liability otherwise than as provided in (m) Wastage in bulk or weight or any other
this Act, shall be null and void and of no loss or damage arising from inherent defect,
effect. A benefit of insurance in favor of the quality, or vice of the goods;
carrier, or similar clause, shall be deemed to be (n) Insufficiency or packing;
a clause relieving the carrier from liability.
(o) Insufficiency or inadequacy of marks;
(p) Latent defects not discoverable by due
RIGHTS AND IMMUNITIES
diligence; and
Sec. 4. (1) Neither the carrier nor the ship
(q) Any other cause arising without the actual
shall be liable for loss or damage arising or
fault and privity of the carrier and without the
resulting from unseaworthiness unless caused
fault or neglect of the agents or servants of the
by want of due diligence on the part of the
carrier, but the burden of proof shall be on the
carrier to make the ship seaworthy and to
person claiming the benefit of this exception to
secure that the ship is properly manned,
show that neither the actual fault or privity of
equipped, and supplied, and to make the holds,
the carrier nor the fault or neglect of the agents
refrigerating and cooling chambers, and all
or servants of the carrier contributed to the loss
other parts of the ship in which goods are
or damage.
carried fit and safe for their reception,
carriage, and preservation, in accordance with (3) The shipper shall not be responsible for
the provisions of paragraph (1) of Section (3). loss or damage sustained by the carrier or the
Whenever loss or damage has resulted from ship arising or resulting from any cause
unseaworthiness, the burden of proving the without the act, or neglect of the shipper, his
exercise of due diligence shall be on the carrier agents, or his servants.
or other person claiming exemption under this (4) Any deviation in saving or attempting to
section. save life or property at sea, or any reasonable
(2) Neither the carrier nor the ship shall be deviation shall not be deemed to be an
responsible for loss or damage arising or infringement or breach or this Act or of the
resulting from — contract of carriage, and carrier shall not be
liable for any loss or damage resulting
(a) Act, neglect, or default of the master,
therefrom: Provided, however, that if the
mariner, pilot, or the servants of the carrier in
deviation is for the purpose of loading or
the navigation or in the management of the
unloading cargo or passengers it shall, prima
ship;
facie, be regarded as unreasonable.
(b) Fire, unless caused by the actual fault or
(5) Neither the carrier nor the ship shall in
privity of the carrier;
any event be or become liable for any loss or
(c) Perils, dangers, and accidents of the sea or damage to or in connection with the
other navigable water; transportation of goods in an amount
(d) Act of God; exceeding $500 per package of lawful money
(e) Act of war; of the United States, or in case of goods not
shipped in packages, per customary freight
(f) Act of public enemies; unit, or the equivalent of that sum in other
(g) Arrest or restraint of princes, rulers, or currency, unless the nature and value of such
people, or seizure under legal process; goods have been declared by the shipper
(h) Quarantine restrictions;. before shipment and inserted in the bill of
lading. This declaration, if embodied in the
(i) Act or omission of the shipper or owner of bill of lading, shall be prima facie evidence,
the goods, his agent or representative;. but shall not be conclusive on the carrier.
(j) Strikes or lockouts or stoppage or restraint By agreement between the carrier, master or
of labor from whatever cause, whether partial agent of the carrier, and the shipper another
or general: Provided, that nothing herein maximum amount than that mentioned in this
contained shall be construed to relieve a paragraph may be fixed: Provided, that such
11 | P a g e

maximum shall not be less than the figure Sec. 5. A carrier shall be at liberty to
above named. In no event shall the carrier be surrender in whole or in part all or any of his
liable for more than the amount of damage rights and immunities or to increase any of his
actually sustained. responsibilities and liabilities under this Act,
Neither the carrier nor the ship shall be provided such surrender or increase shall be
responsible in any event for loss damage to or embodied in the bill of lading issued to the
in connection with the transportation of the shipper.
goods if the nature or value thereof has been The provisions of this Act shall not be
knowingly and fraudulently misstated by the applicable to charter parties; but if bills of
shipper in the bill of lading. lading are issued in the case of a ship under a
Note: COGSA provides for a valuation of charter party, they shall comply with the terms
clauses on cargo, if value is stated, the of this Act. Nothing in this Act shall be held to
maximum liability is $500. If value is stated, prevent the insertion in a bill of lading of any
then apply the rule on qualified liability in the lawful provisions regarding general average.
Civil Code. If a higher value was declared then
you pay for the corresponding freightage and SPECIAL CONDITIONS
that is the liability. Sec. 6. Notwithstanding the provisions of the
preceding section, a carrier, master or agent of
PHILIPPINE CHARTER INSURANCE VS the carrier, and a shipper shall, in regard to any
NEPTUNE 2008 CASE particular goods be at liberty to enter into any
The shipper in Hongkong did not declare agreement in any terms as to the responsibility
the actual value of the goods as insured before and liability of the carrier for such goods, and
shipment and the said value was inserted as to the rights and immunities of the carrier in
before shipment in the BL for which no respect to such goods, or his obligation to
additional charges were paid. What shall seaworthiness, (so far as the stipulation
apply? The stipulation from the BL that the regarding seaworthiness is contrary to public
carrier’s liability shall not exceed $500 or policy), or the care or diligence of his servants
what is inserted in the BL? What shall apply, or agents in regard to the loading, handling,
the provision in COGSA on the maximum stowage, carriage, custody, care and discharge
liability or what is inserted in the BL but for of the goods carried by sea; provided, that in
which no additional freightage was paid? The this case no bill of lading has been or shall be
Rule on COGSA applies, the maximum issued and that the terms agreed shall be a
liability shall not exceed $500. non-negotiable document and shall be marked
as such. .
Any agreement so entered into shall have full
(6) Goods of an inflammable, explosive, or legal effect: Provided, that this section shall
dangerous nature to the shipment whereof, the not apply to ordinary commercial shipments
carrier, master or agent of the carrier, has not made in the ordinary course of trade but only
consented with knowledge of their nature and to other shipments where the character or
character, may at any time before discharge be condition of the property to be carried or the
landed at any place or destroyed or rendered circumstances, terms and conditions under
innocuous by the carrier without which the carriage is to be performed are such
compensation, and the shipper of such goods as reasonably to justify a special agreement.
shall be liable for all damages and expenses
directly or indirectly arising out of or resulting Sec. 7. Nothing contained in this Act shall
from such shipment. If any such goods shipped prevent a carrier or a shipper from entering
with such knowledge and consent shall into any agreement, stipulation, condition,
become a danger to the ship or cargo, they reservation, or exemption as to the
may in like manner be landed at any place, or responsibility and liability of the carrier or the
destroyed or rendered innocuous by the carrier ship for the loss or damage to or in connection
without liability on the part of the carrier with the custody and care and handling of
except to general average if any. goods prior to the loading on and subsequent
to the discharge from the ship on which the
goods are carried by sea.
SURRENDER OF RIGHTS AND
IMMUNITIES AND INCREASE OF Sec. 8. The provisions of this Act shall not
RESPONSIBILITIES AND LIABILITIES affect the rights and obligations of the carrier
12 | P a g e

under the provisions of the Shipping Act, not stop the running of the 1yr prescriptive
1916, or under the provisions of Sections 4281 period.
to 4292, inclusive, of the Revised Statutes of 6. Art. 366, the parties can stipulate for a
the United States, or of any amendments shorter period while in COGSA the parties
thereto, or under the provisions of any other cannot stipulate to shorten the 1yr
enactment for the time being in force relating prescriptive period.
to the limitation of the liability of the owners
of seagoing vessels.
TITLE II Maritime Commerce
Sec. 9. Nothing contained in this Act shall be
construed as permitting a common carrier by Article 573
water to discriminate between competing
shippers similarly placed in time and Definition of Vessel PD 474 Section 3:
circumstances, either (a) with respect to their Vessel is any barge, lighter, bulk carrier,
right to demand and receive bills of lading passenger ship, freighter, tanker, container
subject to the provisions of this Act; or (b) ship, fishing boat, or other artificial
when issuing such bills of lading either in the contrivance using any source of motive power.
surrender of any of the carrier's rights and Also that is designed, used or capable of being
immunities or in the increase of any of the used as a means of water transportation.
carrier's responsibilities and liabilities pursuant Operating either as common contract carrier,
to Section 5, Title I, of this Act; (c) in any fishing vessel are also considered as vessel
other way prohibited by the Shipping Act, except those owned and operated by AFP and
1916, as amended. by foreign governments for military purposes.
Also excluded bangkas, sail boat, and other
Sec. 10. (Not applicable to the Philippines.) water board contrivance of less that 3 gross
Sec. 11. When under the custom of any trade tons capacity and not motorized. Small water
the weight of any bulk cargo inserted in the craft engaged in river and bay traffic.
bill of lading is a weight ascertained or
accepted by a third party other than the carrier How is ownership of merchant vessels
or the shipper and the fact that the weight as acquired under Article 573? By any of the
ascertained or accepted is stated in the bill of means recognized by law (Art. 712 CC), by
lading, then notwithstanding anything in this donation, by testate and intestate succession,
Act, the bill of lading shall not be deemed to by consequence of other contracts, by
be prima facie evidence against the carrier of tradition.
the receipt of goods of the weight so inserted
in the bills of lading, and the accuracy thereof Prescription is 3years, the possession must be
at the time of shipment shall not be deemed to in good faith and with just title recorded. In the
have been guaranteed by the shipper. absence of good faith and recording, it is
10years. Take note also that for prescription it
Distinction of COGSA with Article 366 of must appear in written instrument, otherwise it
Code of Commerce will not produce any effect to 3rd person. In the
1. Art. 366, Notice of damage is a condition absence of these requisites, then continuous
precedent while under COGSA notice of possession for 10 years is required to acquire
claim is not a condition precedent. ownership. Another mode of acquiring owner
2. Art. 366, 24hr period for non-apparent ship of a vessel is by sale. If the sale is made
damage, so you make a claim within while the vessel is on voyage, the consequence
24hours while in COGSA it is 3day period is the freightage it earns from the time it
for non-apparent damage. receive its last cargo shall pertain entirely to
3. Art. 366, there is no prescriptive period in the purchaser and the payment of the crew and
COGSA 1yr prescriptive period. other persons who make up its complement
4. Art. 366 does not cover miss delivery or shall be for the account of the purchaser. If the
delay and COGSA also does not cover sale is made after the vessel arrived at the port
miss delivery or delay. of destination, the freightage shall be for the
5. Art. 366, extra judicial demand tolls the account of the vendor and the payment of the
running of the prescriptive period or stops crew and other individuals who make up is
the running of the prescriptive period, compliment shall be for the account of the
under COGSA extra judicial demand does vendor unless is stipulated.
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Where can you register the vessel? The

MARINA issues the certificate of public
convenience for the operation of domestic and
overseas water carriers. Marina also issues the
certificate and licenses or documents
necessary or incident thereto.

What is the purpose of registering the vessel?

The purpose is to declare the nationality of the
vessel and for her to enable to assert her
nationality wherever the vessel may be found.