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CODE OF COMMERCE OF THE PHILIPPINES
2.
COMMERCIAL CONTRACTS FOR TRANSPORTATION TRANSPORTATION ARTICLE 349. A contract of transportation by land or water ways of any kind shall be considered commercial: 1. When it has for its object merchandise merchandise or any article article of commerce. 2. When, whatever whatever its object may be, the carrier carrier is a merchant or is habitually engaged in transportation for the public. Note: Air transportation is not mentioned in ARTICLE 349 but it is considered as commercial as well. The noninclusion of air transportation in the code its because air transportation is not yet known at the time of the promulgation of the Code of Commerce. ARTICLE 350. The shipper as well as the carrier of merchandise or goods may mutually demand that a bill of lading be made, stating: 1. The n name, ame, surname and residence of the the sshipper. hipper. 2. The name, name, surname surname and residence of the carrier. 3. The name, name, surname and residence residence of the person to whom or to whose order the goods are to be sent or whether they are to be delivered to the bearer of said bill. 4. The description description of the goods, goods, with a statement statement of their kind, of their weight, and of the external marks or signs of the packages in which they are contained. 5. The cost of transportation. 6. The date on which shipment shipment is made. made. 7. The place of delivery to the carrier. 8. The place and the the time time at which delivery delivery to the consignee shall be made. 9. The indemnity indemnity to be paid by the carrier in case of delay, if there should be any agreement on this matter.
It is a contract by w hich the three parties, the shipper, the carrier and the consignee undertakes specific responsibilities and assume stipulated obligations.
The bill of lading also fixes the route, destination, free charges and stipulates the rights and obligations assumed by the parties under article 353. *Is a bill of lading essential or indispensable for the creation of a contract of carriage? Bill of lading is not indispensable in the creation of the contract of carriage. The contract of carriage arises the moment the goods delivered to the carrier and the carrier assumes responsibility over the goods. Compania Maritima vs. Insurance Insurance Company Company of North America, 12 SCRA 213 *Period of bringing a claim against the carrier, Article 350352. If the damage is apparent?
If the consignee receives the package and the damage is apparent from the exterior of the p ackage, the consignee must make a claim against the carrier upon receipt. A verbal claim is sufficient compliance under the law. If the damage is not apparent, when must the period must be brought?
It must be brought within 24hours upon the receipt of the package if the damage cannot be known from the exterior part. What happen if the consignee receives the merchandise and pays for the free charges without protest?
All claims against the carrier are extinguished. ARTICLE 351. In transportation made by railroads or other enterprises subject to regulation rate and time schedules, it shall be sufficient for the bills of lading or the declaration of shipment furnished by the shipper to refer, with respect to the cost, time and special conditions of the carriage, to the schedules and regulations the application of which he requests; and if the shipper does not determine the schedule, the carrier must apply the rate of those which appear to be the lowest, with the conditions inherent thereto, always including a statement or reference to in the bill of lading which he delivers to the shipper. ARTICLE 352. The bills of lading, or tickets in cases of transportation of passengers, may be diverse, some for persons and others for baggage; but all of them shall bear the name of the carrier, the date of shipment, the points of departure and arrival, the cost, and, wi th respect to the baggage, the number and weight of the packages, with such other manifestations which may be considered necessary for their easy identification. Bill of lading is a written acknowledgement of the receipt of goods and an agreement to transport and to deliver them at a specified place to a person named or on his or her order. It 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 receipt, it recites the date and place of shipment, describes the goods as to quantity, weight, dimensions, identification marks, condition, quality, and value. As a contract, it names the contracting parties, which include the consignee; fixes the route, destination, and freight rate or charges; and stipulates the rights and obligations assumed by the parties.
The two-fold character of bill of lading: 1. It is a receipt which specifies the quantity, condition and character of the goods received, and it recites the date and place of shipment and the fees paid by the shipper;
When shall the period commence to run? The moment the consignee actually receives the goods. ( NOT upon notification ) The prescriptive period to file for the recovery of undelivered cargo?
1. 2. 3.
If with Bill of Lading – 10 years from non delivery If No Bill of Lading – 6 years from non delivery If it involves overseas trading – 1 year from non delivery
Nature of Bill of Lading
A bill of lading aside from being a contract and a receipt is also a symbol of the goods covered by it. A bill of lading which has no notation of any defect or damage in the goods is called a clean bill of lading which constitute prima facie evidence of the receipt by the carrier of the goods as therein describe. (LORENZO SHIPPING CORP., petitioner, vs. CHUBB and SONS, Inc., GEARBULK, Ltd. and PHILIPPINE TRANSMARINE CARRIERS, INC., respondents respondents.) In the limitation of the value of goods that is recoverable under the bill of lading is it allowed?
That is allowed provided that the contract is reasonable and just under the circumstances and it has been fairly and freely freely agreed by the parties. (Belgian Overseas vs Philippine First Insurance) Rationale: Is to bind the shippers to their agreement to the value that is the maximum valuation of their goods.
Belgian Overseas vs Philippine First Insurane
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IRON BULK SHIPPING PHILIPPINES, CO., LTD., petitioner, vs. REMINGTON INDUSTRIAL SALES CORPORATION, respondent .
Issue: Can the pro forma bill of lading can be relied on to establish the condition of the cargo upon landing? Held: When the hot rolled sheets arrived in Manila they were found to be wet, with slight traces of salt and rust. But the iron bulk said that when the carrier accepted the cargo the hot rolled sheets w here actually wet and covered with rust. However, it was stated in the bill of lading that it was clean on board. Iron Bulk wants to escape liability by showing evidence contrary to w hat is stated in the bill of lading. The hot rolled sheets were actually wet and covered with rust. But the SC said that the fact that the bill of lading is pro forma is of no moment, if the bill of lading is not truly reflective of the true condition of the cargo at the time of loading to the effect that the cargo was indeed in the damage state. The carrier could have refused to accept or at the least made a marginal note that the cargo is in a damage state. But the Iron bulk did not do any of those notations. Since the carrier failed to annotate in the BL the alleged damage condition of the cargo when it was loaded, the carrier is bound by the description appearing in the BL and estopped from denying liability under the BL.
As to filing notice of claim?
(Provident Insurance Case January 15, 2004) FACTS: The vessel MV Eduardo II received on board a shipment of plastic woven bags of fertilizer in good order and condition which was consigned to Atlas Fertilizer Corp. (AFC) and covered by a BL. In the p rocess of unloading at the port of destination certain good were found to have fallen overboard and some considered unrecovered. Provident (petitioner) indemnified the consignee Azucar Shipping Corporation (ASC) for its damages and seek for reimbursement from AFC for the value of the loses or damages to the cargo. AFC argued that the claim or demand by petitioner had been waived, abandoned or otherwise extinguished for failure of the consignee to comply with the required claim for damages set forth in the stipulation no. 7 of the BL. Issue: W/N failure to make prompt notice of claim as required is fatal to the right to claim for indemnification for damages. Held: The SC said that there is no question with the enforceability of stipulation no. 7 in the BL. The 24hrs requirement under such stipulation is by agreement of the contracting parties a condition sine qua non for the accrual of the right of action to recover damages against the carrier. Considering the prompt demand was necessary to foreclose the possibility of fraud or mistake in ascertaining the validity of claims, there was a need for the consignee or its agents to observe the conditions provided for in the stipulation no. 7. But here, petitioner’s insistence or its agents that the respondent carrier had knowledge of the damage because one of the respondent’s officer supervised the unloading operations and signed the discharging receipt cannot be construed as sufficient compliance with the said proviso. Even if the representative of the carrier supervised the unloading, in this case the SC said that it cannot be considered as a sufficient compliance under the law. ARTICLE 353. The legal evidence of the contract between the shipper and the carrier shall be the bills of lading, by the contents of which the disputes which may arise regarding their execution and performance shall be decided, no exceptions being admissible other than those of falsity and material error in the drafting. After the contract has been complied with, the bill of lading which the carrier has issued shall be returned to him, and by virtue of the exchange of this title with the thing transported, the respective obligations and actions
shall be considered cancelled, unless in the same act the claim which the parties may w ish to reserve be reduced to writing, with the exception of that provided for in Article 366. In case the consignee, upon receiving the goods, cannot return the bill of lading subscribed by the carrier, because of its loss or of any other cause, he must give the latter a receipt for the goods delivered, this receipt producing the same effects as the return of the bill of lading. ARTICLE 354. In the absence of a bill of lading, disputes shall be determined by the legal proofs which the parties may present in support of their respective claims, according to the general provisions established in this Code for commercial contracts.
Note: BL is the best evidence, in the absence the parties may present other evidence. ARTICLE 355. The responsibility of the carrier shall commence from the moment he receives the merchandise, personally or through a person charged for the purpose, at the place indicated for receiving them. ARTICLE 356. Carriers may refuse packages which appear unfit for transportation; and if the carriage is to be made by railway, and the shipment is insisted upon, the company shall transport them, being exempt from all responsibility if its objections, is made to appear in the bill of lading. ARTICLE 357. If by reason of w ell-founded suspicion of falsity in the declaration as to the contents of a package the carrier should decide to examine it, he shall proceed with his investigation in the presence of witnesses, with the shipper or consignee in attendance. If the shipper or consignee who has to be cited does not attend, the examination shall be made before a notary, who shall prepare a memorandum of the result of the investigation, for such purposes as may be proper. If the declaration of the shipper should be true, the expense occasioned by the examination and that of carefully repacking the packages shall be for the account of the carrier and in a contrary case for the account of the shipper. ARTICLE 360. The shipper, without changing the place where the delivery is to be made, may change the consignment of the goods which he delivered to the carrier, provided that at the time of ordering the change of consignee the bill of lading signed by the carrier, if one has been issued, be returned to him, in exchange for another wherein the novation of the contract appears. The expenses which this change of consignment occasions shall be for the account of the shipper.
Note: The shipper has the right to change the name of the consignee and the carrier has to respect this. ARTICLE 361. Has been repealed by ARTICLE 1745 of the Civil Code.
Goods are transported at the risk of the carrier and any stipulation to the contrary is void. Except however, if the contract is p urely private wherein such arrangement is valid. ARTICLE 362. Repealed by Article 1752 CC. Wherein the presumption now is there is negligence in the event of damage to cargo. ARTICLE 363. Outside of the cases mentioned in the second paragraph of Article 361, the carrier shall be obliged to deliver the goods shipped in the same condition in which, according to the bill of lading, they were found at the time they were received, without any damage or impairment, and failing to do so, to pay the value which those not delivered may have at the point
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and at the time at which their delivery should have been made. If those not delivered form part of the goods transported, the consignee may refuse to receive the latter, when he proves that he cannot make use of them independently of the others. ARTICLE 364. If the effect of the damage referred to in Article 361 is merely a diminution in the value of the goods, the obligation of the carrier shall be reduced to the payment of the amount which, in the judgment of experts, constitutes such difference in value. ARTICLE 365. If, in consequence of the damage, the goods are rendered useless for sale and consumption for the purposes for which they are properly destined, the consignee shall not be bound to receive them, and he may have them in the hands of the carrier, demanding of the latter their value at the current price on that day. If among the damaged goods there should be some pieces in good condition and wi thout any defect, the foregoing provision shall be applicable with respect to those damaged and the consignee shall receive those which are sound, this segregation to be made by distinct and separate pieces and without dividing a single object, unless the consignee proves the i mpossibility of conveniently making use of them in this form. The same rule shall be applied to merchandise in bales or packages, separating those parcels which appear sound.
Note: Article 365 governs the case where the goods are so damaged that they are rendered useless for sale and consumption for purposes that they are properly destined. The damage may affect some or all of the goods. a. If the damage affects all of the goods – paragraph 1authorizes the consignee to abandon all the goods to the carrier who shall pay the corresponding damages. b. If the damage affects some of the goods – paragraph 2 authorizes the consignee to abandon only the damage goods. But if the consignee prove that it is impossible to conveniently use the undamaged goods in that form without the damage goods. The law authorizes the consignee to abandon all of the goods. ARTICLE 366. Within the twenty-four hours following the receipt of the merchandise, the claim against the carrier for damage or average be found therein upon opening the packages, may be made, provided that the indications of the damage or average which gives rise to the claim cannot be ascertained from the outside part of such packages, in which case the claim shall be admitted only at the time of receipt. After the periods mentioned have elapsed, or the transportation charges have been paid, no claim shall be admitted against the carrier with regard to the condition in which the goods transported were delivered. (Very important)
Note: If the goods transported are damaged, the damage may either be apparent from the exterior of the package or cannot be ascertained from the outside of the package. If the damage can be ascertained from the outside of the package, the claim must be made immediately. If the damage cannot be ascertained from the outside of the package, the claim must be made within 24hours. But Article 366, the claim must be made before the payment of freight charges because the moment the consignee pays for the freightage, all the claims are considered extinguished. The 24hrs period is not a prescriptive period, it is only intended to afford the carrier of a reasonable opportunity to check the validity of the claims of the consignee while the facts are still fresh in the minds of the persons who took
part in the transaction and the documents are still available. Otherwise if you bring the claim more than 24hrs, it is more litigious. Was there valid claim? (LORENZO SHIPPING VS CHUBB) The parties: Carrier: Lorenzo Shipping Consignee: Sumitomo Corporation of San Francisco, California, USA The Goods transported from Manila to Davao City. The Ship arrived in Sasa wharf on December 2, 1987 and it was received by Transmarine Carriers. When the goods arrived in Sasa wharf, it was found that the black steel pipes where rusty and it was checked by R.J. Del Pan Surveyors, wherein the surveyors made a report that the black steel pipes where no longer in good condition. After the survey, respondent Gearbulk loaded the shipment on board i ts vessel M/V San Mateo Victory, for carriage to the United States. It issued Bills of Lading stating that all units are heavily rusted. While the cargo was in transit from Davao City to the U.S.A., consignee Sumitomo sent a l etter of intent dated December 7, 1987, to petitioner Lorenzo Shipping, which the latter received on December 9, 1987. Sumitomo informed petitioner Lorenzo Shipping that it will be filing a claim b ased on the damaged cargo once such damage had been ascertained. On January 17, 1988, M/V San Mateo Victory arrived at Oakland, California, U.S.A., where it unloaded 364 bundles of the subject steel pipes. It then sailed to Vancouver, Washington on January 23, 1988 where i t unloaded the remaining 217 bundles. Toplis and Harding, Inc. of San Franciso, California, surveyed the steel pipes, and also discovered the latter heavily rusted. When the steel pipes were tested with a silver nitrate solution, Toplis and Harding found that they had come in contact with salt water. Due to its heavily rusted condition the consignee Sumitomo rejected the damaged steel pipes and declare them unfit for the purpose they were intended. On December 2, 1988, respondent Chubb and Sons, Inc. filed a complaint for collection of a sum of money, against respondents Lorenzo Shipping, Gearbulk, and Transmarine. Issue: W/N Sumitomo filed the complaint within the period prescribe by the Code of Commerce. Ruling: The cargo arrived December 2, it sent a letter on December 7, 1987. How many days? The SC ruled that Sumitomo has not yet actually received the possession of the cargo and has not physically inspected the same at the time the shipment was discharge from MV Lorcon of the Lorenzo shipping. Transmarine carrier as agent of respondent Gearbulk which carried the goods from Davao City to USA and respondent Gearbulk itself are not authorized agents of Sumitomo Corporation. What is clear from the evidence is that the consignee received and took possession of the entire shipment only when the black steel pipes reach USA shore. Only then was delivery is made and completed, and only then the 24hrs prescriptive period starts to run. What law applies? Philippine law or law of USA? Remember that the place of destination applies. The place of destination is Davao City, then Philippine law applies.
ABOITIZ CASE Carrier: Aboitiz Consignee: Science Teaching Improvement Project(STIP)
The representative of STIP received the cargo on Aug. 11, 1993, then the representative made a phone call to the representative of Aboitiz informing the status of the cargo. But STIP made only a formal claim on Sept. 21, 1993. (more than a month) But the SC said there was a timely filing of the notice of claim under Article 366. According to the SC, this case is peculiar that lead to the SC conclude that the notice requirement was complied with taking into notice that the consignee is a school
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institution that there are rules and regulations that need to be followed and there actions need to be approved by the superiors unlike in a case of a corporation wherein it has a different set up. Compare ABOITIZ vs STIP with PHILIPPINE CHARTER INSURANCE CORPORATION vs. CHEMOIL LIGHTERAGE HITE GOLD CORPORATION Wherein the notice here upon receipt of the damage cargo the representative of the consignee made a phone call to the carrier that the cargo was in damage condition. Then eventually it made a claim but the SC said that no timely filing of the notice of claim. ARTICLE 367. If doubts and disputes should arise between the consignee and the carrier with respect to the condition of the goods transported at the time their delivery to the former is made, the goods shall be examined by experts appointed by the parties, and, in case of disagreement, by a third one appointed by the judicial authority, the results to be reduced to writing; and if the interested parties should not agree with the expert opinion and they do not settle their differences, the merchandise shall be deposited in a safe warehouse by order of the judicial authority, and they shall exercise their rights in the manner that may be proper.
Note: Art. 367 governs a situation wherein the consignee and the carrier do not agree with respect to the condition of the goods transported at the time of delivery. The expert opinion on the matter of the condition of the goods is not conclusive. Art. 367 allows the party to submit the valuation of damage to the arbiters. ARTICLE 368. The carrier must deliver to the consignee, without any delay or obstruction, the goods which he may have received, by the mere fact of being named in the bill of lading to receive them; and if he does not do so, he shall be liable for the damages which may be caused thereby. Note: The duty of the carrier is not only to carry the goods, but also to deliver the goods to the consignee as indicated in the BL. ARTICLE 369. If the consignee cannot be found at the residence indicated in the bill of lading, or if he refuses to pay the transportation charges and expenses, or if he refuses to receive the goods, the municipal judge, where there is none of the first instance, shall provide for their deposit at the disposal of the shipper, this deposit producing all the effects of delivery without prejudice to third parties with a better right.
Note: The consignation is allowed if the consignee cannot be found, refuses to accept the goods or refuses to pay the freightage. What happens if the consignee is unknown to the carrier? The carrier is still expected to observe proper and reasonable diligence to find the consignee. If after the exercise of proper and reasonable diligence, the consignee cannot be found. The goods may be stored in a proper place and the carrier have perform its duty will be discharge from liability as carrier. Art. 370 - Art. 371 Covers the agreement between the carrier and shipper for the delivery of goods on certain date and consequent right of abandonment. ARTICLE 370. If a period has been fixed for the delivery of the goods, it must be made within such time, and, for failure to do so, the carrier shall pay the indemnity stipulated in the bill of lading, neither the shipper nor the consignee being entitled to anything else. If no indemnity has been stipulated and the delay exceeds the time fixed in the bill of lading, the carrier shall be liable for the damages which the delay may have caused. ARTICLE 371. In case of delay through the fault of the carrier, referred to in the preceding articles, the consignee may leave the goods transported in the hands of the
former, advising him thereof in writing before their arrival at the point of destination. When this abandonment takes place, the carrier shall pay the full value of the goods as if they had been lost or mislaid. If the abandonment is not made, the indemnification for losses and damages by reason of the delay cannot exceed the current price which the goods transported would have had on the day and at the place in which they should have been delivered; this same rule is to be observed in all other cases in which this indemnity may be due. Article 372. Repealed by Article 1749 of the CC. Subject matter is the validity of a carrier to stipulate in a BL for a reduction of its liability for damages.
Article 373 Refers to a case where several carrier successively transport the goods or by the use of a BL. The original carrier enters into an inter connecting contract of carriage shall be liable for damages caused by its connecting carrier. Ex. A transports his goods from Davao City to Cebu, and from Cebu to Manila pu rsuant to combine agreement of services. Shipment was through FedEx, then from Cebu to Manila through DHL. FedEx being the first carrier shall assume the responsibility of the DHL under the combined services. Take note that FedEx must have entered into contract of the combined services with DHL. ARTICLE 373. The carrier who makes the delivery of the merchandise to the consignee by virtue of combined agreements or services with other carriers shall assume the obligations of those who preceded him in the conveyance, reserving his right to proceed against the latter if he was not the party directly responsible for the fault which gave rise to the claim of the shipper or consignee. The carrier who makes the delivery shall likewise acquire all the actions and rights of those who preceded him in the conveyance. The shipper and the consignee shall have an immediate right of action against the carrier who executed the transportation contract, or against the other carriers who may have received the goods transported without reservation. However, the reservation made by the latter shall not relieve them from the responsibilities which they may have incurred by their own acts.
Article 374- 377 ( not so important) Article 378 Wherein it requires the carrier to keep a registry of cargo. ARTICLE 378. Agents for transportation shall be obliged to keep a special registry, with the formalities required by Article 36, in which all the goods the transportation of which is undertaken shall be entered in consecutive order of number and dates, with a statement of the circumstances required in Article 350 and others following for the respective bills of l ading. ARTICLE 379. The provisions contained in Articles 349 and following shall be understood as equally applicable to those who, although they do not personally effect the transportation of the merchandise, contract to do so through others, either as contractors for a particular and definite operation, or as agents for transportations and conveyances. In either case they shall be subrogated in the place of the carriers themselves, with respect to the obligations and responsibility of the latter, as well as with regard to their rights.
PUBLIC ACT NO. 521 CARRIAGE OF GOODS BY SEA ACT (COGSA)
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Section 1. That the provisions of Public Act No. 521 of the 7th Congress of the United States, approved on April 16, 1936, be accepted, as it is hereby accepted to be made applicable to all contracts for the carriage of goods by sea to and from Philippine ports in foreign trade: Provided, that nothing in this Act shall be construed as repealing any existing provision of the Code of Commerce which is now in force, or as limiting its application. .
(b) Properly man, equip, and supply the ship;
Note: The requisite of applicability of COGSA:
(3) After receiving the goods into his carrier, or the master or agent of the carrier, shall, on demand of the shipper, issue to the shipper a bill of lading showing among other things
1.
The contract must be for contract of carriage of goods; 2. Then it is by sea; 3. To and from the Philippine ports and in foreign trade. ( If it is coastwise then COGSA does not apply ) What is the effect of COGSA to our Maritime laws? As expressly stated in section 1, it shall not repeal any existing provisions of the Code of Commerce which is now in force nor does it limit its application.
Applicability of COGSA sample case: A cargo was loaded in New York for Davao City. Since most of the cargo was for Manila, the carrier unloaded all the cargo including that for Davao in Manila and did not make a trip to Davao. Instead the goods is transship with an inter island vessel. The cargo arrived in a damage condition. The SC ruled that the law of COGSA still applies since the contract of carriage if from New York to Davao City. The inter island vessel from Manila to Davao is considered merely as a connecting vessel and the shipment did not constitute a separate contract of carriage. Sec. 2. This Act shall take effect upon its approval. (Approved October 22, 1936
TITLE I Sec. 1. When used in this Act — .
(a) The term "carrier" includes the owner or the charterer who enters into a contract of carriage with a shipper. (b) The term " contract of carriage" applies only to contracts of carriage by covered by a bill of lading or any similar document of title, insofar as such document relates to the carriage of goods by sea, including any bill of lading or any similar document as aforesaid issued under or pursuant to a character party from the moment at which such bill of lading or similar document of title regulates the relations between a carrier and a holder of the same. . (c) The term "goods" includes goods, wares, merchandise, and articles of every kind whatsoever, except live animals and cargo which by the contract of carriage is stated as being carried on deck and is so carried.. (d) The term "ship" means any vessel used for the carriage of goods by sea.. (e) The term "carriage of goods" covers the period from the time when the goods are loaded to the time when they are discharged from the ship. RISKS Sec. 2. Subject to the provisions of Section 6, under every contract of carriage of goods by sea, the carrier in relation to the loading, handling, stowage, carriage, custody, care, and discharge of such goods shall be subject to the responsibilities and liabilities and entitled to the rights and immunities hereinafter set forth
RESPONSIBILITIES AND LIABILITIES Sec. 3. (1) The carrier shall be bound before and at the beginning of the voyage to exercise due diligence to —
(a) Make the ship seaworthy;
(c) Make the holds, refrigerating and cooling chambers, and all other parts of the ship in which goods are carried, fit and safe for their reception, carriage, and preservation. (2) The carrier shall properly and carefully load, handle, stow, carry, keep, care for,and discharge the goods carried.
(a) The loading marks necessary for identification of the goods as the same are furnished in writing by the shipper before the loading of such goods starts, provided such marks are stamped or otherwise shown clearly upon the goods if uncovered, in such a manner as should ordinarily remain legible until the end of the voyage (b) Either the number of packages or pieces, or the quantity or weight, as the case may be, as furnished in writing by the shipper. (c) The apparent order and conditions of the goods: Provided, that no carrier, master, or agent of the carrier, shall be bound to state or show in the bill of lading any marks, number, quantity, or weight which he has reasonable ground for suspecting not accurately to represent the good actually received or which he has had no reasonable means of checking.. (4) Such a bill of lading shall be prima facie evidence of the receipt by the carrier of the goods as therein described in accordance with paragraphs (3) (a), (b), and (c), of this section: (The rest of the provision is not applicable to the Philippines). (5) The shipper shall be deemed to have guaranteed to the carrier the accuracy at the time of shipment of the marks, number, quantity, and weight, as furnished by him; and the shipper shall indemnify the carrier against all loss, damages, and expenses arising or resulting from inaccuracies in such particulars. 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 other than the shipper.. (6) Unless notice or loss or damage and the general nature of such loss or damage by given in writing to the carrier or his agent at the port of discharge or at the time of the removal of the goods into the custody of the person entitled to delivery thereof under the contract of carriage, such removal shall be prima facie evidence of the delivery by the carrier of the goods as described in the bill of lading. If the loss or damage is not apparent, the notice must be given within three days of the delivery.
Said notice of loss or damage may be endorsed upon the receipt for the goods given by the person taking delivery thereof. The notice in writing need not be given if the state of the goods has at the time of their receipt been the subject of joint survey or inspection. In any event the carrier and the ship shall be discharged from all liability in respect of loss or damage unless suit is brought within one year after delivery of the goods or the date when the goods should have been delivered: Provided, that, if a notice of loss or damage, either apparent or concealed, is not given as provided for in this section, that fact shall not affect or prejudice the right of the shipper to bring suit within one year after the delivery of the goods or the date when the goods should have been delivered. In the case of any actual or apprehended loss or damage, the carrier and the receiver shall give all reasonable facilities to each other for inspecting and tallying the goods. Note: The periods under Art. 3(6), there is the 3 day giving of notice and the 1 year prescriptive period. The requirement of 3 day notice under this section does not apply if the state of the goods at the time of their receipt has been the subject of a joined survey or inspection. Also,
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a failure to file a notice of claim within 3days will not bar a recovery if it is nonetheless filed within 1year. This 1 year prescriptive period also applies to the shipper, consignee and to the insurer of the goods or any legal holder of the BL. Under COGSA, if the goods arrived in a damage condition from a foreign port to the Philippine port of authority or port of entry, upon discharge of goods if damage is apparent, claim should be filed immediately. If the damage is not apparent, claim should be filed within 3 days from delivery. Unlike in Art. 366 of the Code of Commerce, under COGSA such acclaim is not a condition precedent but an action must be filed against the carrier within 1year from discharge. Remember in Art. 366 there must be a claim, in COGSA that claim is not a condition precedent. If there is no delivery the 1 year period starts to run from the day the vessel left the port in case of undelivered or lost cargo or from delivery to arrastre in case of damaged cargo.
BELGIAN OVERSEAS CHARTERING AND PHILIPPINE FIRST INSURANCE COMPANY
SHIPPING
VS
Issue: Whether failure to file notice of claim shall bar the respondent here from recovery. (47 days) Ruling: First, COGSA provides that the notice of claim need not be given if the state of the goods at the time of their receipt has been the subject of a joint inspection or survey. In this case, prior to the unloading of the cargo an inspection report as to the condition of the goods was prepared and signed by the representative of both parties, so there is no need of filing of notice of claim. Second, failure to file a notice of claim within 3 days will not bar recovery if it is nonetheless filed within 1year. The 1 year prescriptive period also applies to the shipper, consignee, the insurer of the good or any legal holder of the BL. The cargo was discharge on July 31, 1990 and the complaint was filed on July 25m 1991 which is within the 1 year prescriptive period. *What if the consignee merely filed an extra judicial demand? Does it toll the running of the 1year prescriptive period? No. DOLE Philippines vs Maritime company 148 SCRA 118.
on the part of the carrier to make the ship seaworthy and to secure that the ship is p roperly manned, equipped, and supplied, and to make the holds, refrigerating and cooling chambers, and all other parts of the ship in which goods are carried fit and safe for their reception, carriage, and preservation, in accordance with the provisions of paragraph (1) of Section (3). Whenever loss or damage has resulted from unseaworthiness, the burden of proving the exercise of due diligence shall be on the carrier or other person claiming exemption under this section. (2) Neither the carrier nor the ship shall be responsible for loss or damage arising or resulting from — (a) Act, neglect, or default of the master, mariner, pilot, or the servants of the carrier in the navigation or in the management of the ship; (b) Fire, unless caused by the actual fault or privity of the carrier; (c) Perils, dangers, and accidents of the sea or other navigable water; (d) Act of God; (e) Act of war; (f) Act of public enemies; (g) Arrest or restraint of princes, rulers, or people, or seizure under legal process; (h) Quarantine restrictions;. (i) Act or omission of the shipper or owner of the goods, his agent or representative;. (j) Strikes or lockouts or stoppage or restraint of labor from whatever cause, whether partial or general: Provided, that nothing herein contained shall be construed to relieve a carrier from responsibility for the carrier's own acts;. (k) Riotsand civil commotions;. (l) Saving or attempting to save life or property at sea;. (m) Wastage in bulk or weight or any other loss or damage arising from inherent defect, quality, or vice of the goods; (n) Insufficiency or packing; (o) Insufficiency or inadequacy of marks;
*When there is miss delivery of cargo, does COGSA apply? COGSA does not apply incase of miss delivery of cargo. The prescriptive now becomes 10 years because there is already a violation of a contract and COGSA does not apply to miss delivery. (7) After the goods are loaded the bill of lading to be issued by the carrier, master, or agent of the carrier to the shipper shall if the shipper so demands, be a "shipped" bill of lading: Provided, that if the shipper shall have previously taken up any document of title to such goods, he shall surrender the same as against the issue of the "shipped" bill of lading, but at the option of the carrier such document of title may be noted at the port of shipment by the carrier, master, or agent with the name or names of the ship or ships upon which the goods have been shipped and the date or dates of shipment, and when so noted the same shall for the purpose of this section be deemed to constitute a "shipped" bill of lading. (8) Any clause, covenant, or agreement in a contract of carriage relieving the carrier of the ship from liability for loss or damage to or in connection with the goods, arising from negligence, fault, or failure in the duties and obligations provide in this section or lessening such liability otherwise than as provided in this Act, shall be null and void and of no effect. A benefit of insurance in favor of the carrier, or similar clause, shall be deemed to be a clause relieving the carrier from liability. RIGHTS AND IMMUNITIES Sec. 4. (1) Neither the carrier nor the ship shall be liable for loss or damage arising or resulting from unseaworthiness unless caused by want of due diligence
(p) Latent defects not discoverable by due diligence; and (q) Any other cause arising without the actual fault and privity of the carrier and without the fault or neglect of the agents or servants of the carrier, but the burden of proof shall be on the person claiming the benefit of this exception to show that neither the actual fault or privity of the carrier nor the fault or neglect of the agents or servants of the carrier contributed to the loss or damage. (3) The shipper shall not be responsible for loss or damage sustained by the carrier or the ship arising or resulting from any cause without the act, or neglect of the shipper, his agents, or his servants. (4) Any deviation in saving or attempting to save life or property at sea, or any reasonable deviation shall not be deemed to be an infringement or breach or this Act or of the contract of carriage, and carrier shall not be liable for any loss or damage resulting therefrom: Provided, however, that if the deviation is for the purpose of loading or unloading cargo or passengers it shall, prima facie, be regarded as unreasonable. (5) 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 of 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 not be conclusive on the carrier.
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By agreement between the carrier, master or agent of the carrier, and the shipper another maximum amount than that mentioned in this paragraph may be fixed: Provided, that such maximum shall not be less than the figure above named. In no event shall the carrier be liable for more than the amount of damage actually sustained. Neither the carrier nor the ship shall be responsible in any event for loss damage to or in connection with the transportation of the goods if the nature or value thereof has been knowingly and fraudulently misstated by the shipper in the bill of lading. Note: COGSA provides for a valuation of clauses on cargo, if value is stated, the maximum liability is $500. If value is stated, then apply the rule on qualified liability in the Civil Code. If a higher value was declared then you pay for the corresponding freightage and that is the liability. PHILIPPINE CHARTER INSURANCE VS NEPTUNE 2008 CASE The shipper in Hongkong did not declare the actual value of the goods as insu red before shipment and the said value was inserted before shipment in the BL for which no additional charges were paid. What shall apply? The stipulation from the BL that the carrier’s liability shall not exceed $500 or what is inserted in the BL? What shall apply, the provision in COGSA on the maximum liability or what is inserted in the BL but for which no additional freightage was paid? The Rule on COGSA applies, the maximum liability shall not exceed $500.
(6) Goods of an inflammable, explosive, or dangerous nature to the shipment whereof, the carrier, master or agent of the carrier, has not consented with knowledge of their nature and character, may at any time before discharge be landed at any place or destroyed or rendered innocuous by the carrier without compensation, and the shipper of such goods shall be liable for all damages and expenses directly or indirectly arising out of or resulting from such shipment. If any such goods shipped with such knowledge and consent shall become a danger to the ship or cargo, they may in like manner be landed at any place, or destroyed or rendered innocuous by the carrier without liability on the part of the carrier except to general average if any. SURRENDER OF RIGHTS AND IMMUNITIES AND INCREASE OF RESPONSIBILITIES AND LIABILITIES Sec. 5. A carrier shall be at liberty to surrender in whole or in part all or any of his rights and immunities or to increase any of his responsibilities and liabilities under this Act, provided such surrender or increase shall be embodied in the bill of lading issued to the shipper. The provisions of this Act shall not be applicable to charter parties; but if bills of lading are issued in the case of a ship under a charter party, they shall comply with the terms of this Act. Nothing in this Act shall be held to prevent the insertion in a bill of lading of any lawful provisions regarding general average. SPECIAL CONDITIONS Sec. 6. Notwithstanding the provisions of the preceding section, a carrier, master or agent of the carrier, and a shipper shall, in regard to any particular goods be at liberty to enter into any agreement in any terms as to the responsibility and liability of the carrier for such goods, and as to the rights and immunities of the carrier in respect to such goods, or his obligation to seaworthiness, (so far as the stipulation regarding seaworthiness is contrary to public policy), or the care or diligence of his servants or agents in regard to the loading, handling, stowage, carriage, custody, care and discharge of the goods carried by sea; provided, that in this case no bill of lading has been or shall be issued and that the terms agreed shall be a non-negotiable document and shall be marked as such. .
Any agreement so entered into shall have full legal effect: Provided, that this section shall not apply to ordinary commercial shipments made in the ordinary course of trade but only to other shipments where the character or condition of the property to be carried or the circumstances, terms and conditions under which the carriage is to be performed are such as reasonably to justify a special agreement. Sec. 7. Nothing contained in this Act shall prevent a carrier or a shipper from entering into any agreement, stipulation, condition, reservation, or exemption as to the responsibility and liability of the carrier or the ship for the loss or damage to or in connection with the custody and care and handling of goods prior to the loading on and subsequent to the discharge from the ship on which the goods are carried by sea. Sec. 8. The provisions of this Act shall not affect the rights and obligations of the carrier under the provisions of the Shipping Act, 1916, or under the provisions of Sections 4281 to 4292, inclusive, of the Revised Statutes of the United States, or of any amendments thereto, or under the provisions of any other enactment for the time being in force relating to the limitation of the liability of the owners of seagoing vessels. TITLE II Sec. 9. Nothing contained in this Act shall be construed as permitting a common carrier by water to discriminate between competing shippers similarly placed in time and circumstances, either (a) with respect to their right to demand and receive bills of lading subject to the provisions of this Act; or (b) w hen issuing such bills of lading either in the surrender of any of the carrier's rights and immunities or in the increase of any of the carrier's responsibilities and liabilities pursuant to Section 5, Title I, of this Act; (c) in any other way prohibited by the Shipping Act, 1916, as amended. Sec. 10. (Not applicable to the Philippines.) Sec. 11. When under the custom of any trade the weight of any bulk cargo inserted in the bill of lading is a weight ascertained or accepted by a third party other than the carrier or the shipper and the fact that the weight as ascertained or accepted is stated in the bill of lading, then notwithstanding anything in this Act, the bill of lading shall not be deemed to be prima facie evidence against the carrier of the receipt of goods of the weight so inserted in the bills of lading, and the accuracy thereof at the time of shipment shall not be deemed to have been guaranteed by the shipper. Distinction of COGSA with Article 366 of Code of Commerce 1. Art. 366, Notice of damage is a condition precedent while under COGSA notice of claim is not a condition precedent. 2. Art. 366, 24hr period for non-apparent damage, so you make a claim within 24hours while in COGSA it is 3day period for non-apparent damage. 3. Art. 366, there is no prescriptive period in COGSA 1yr prescriptive period. 4. Art. 366 does not cover miss delivery or delay and COGSA also does not cover miss delivery or delay. 5. Art. 366, extra judicial demand tolls the running of the prescriptive period or stops the running of the prescriptive period, under COGSA extra judicial demand does not stop the running of the 1yr prescriptive period. 6. Art. 366, the parties can stipulate for a shorter period while in COGSA the parties cannot stipulate to shorten the 1yr prescriptive period.
Maritime Commerce Article 573 Definition of Vessel PD 474 Section 3: Vessel is any barge, lighter, bulk carrier, passenger ship, freighter, tanker, container ship, fishing boat, or other artificial contrivance
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using any source of motive power. Also that is designed, used or capable of being used as a means of water transportation. Operating either as common contract carrier, fishing vessel are also considered as vessel except those owned and operated by AFP and by foreign governments for military purposes. Also excluded bangkas, sail boat, and other w ater board contrivance of less that 3 gross tons capacity and not motorized. Small water craft engaged in river and bay traffic. How is ownership of merchant vessels acquired under Article 573? By any of the means recognized by law (Art. 712 CC), by donation, by testate and intestate succession, by consequence of other contracts, by tradition. Prescription is 3years, the possession must be in good faith and with just title recorded. In the absence of good faith and recording, it is 10years. Take note also that for prescription it must appear in written instrument, otherwise it will not produce any effect to 3 rd person. In the absence of these requisites, then continuous p ossession for 10 years is required to acquire ownership. Another mode of acquiring owner ship of a vessel is by sale. If the sale is made while the vessel is on voyage, the consequence is the freightage it earns from the time i t receive its last cargo shall pertain entirely to the p urchaser and the payment of the crew and other persons who make up its complement shall be for the account of the purchaser. If the sale is made after the vessel arrived at the port of destination, the freightage shall be for the account of the vendor and the payment of the crew and other individuals who make up is compliment shall be for the account of the vendor unless i s stipulated. 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.
