Transportation and maritime law

Partial delivery: The consignee may refuse to receive the goods delivered, if he can prove that he cannot make use of them independently of those not delivered --> true solution depends upon the economic use which the goods transported have (consignee cannot be arbitrary and must justify his determination)

Estoppel of shipper by laches : neglect or delay of shipper to demand immediately, or within a reasonable time, the return of the merchandise shipped or its value in case of non-delivery constitutes estoppel by laches

Places the CC at a disadvantageous position to show that it had fulfilled what it had undertaken; makes it difficult for the CC to prove delivery


Art. 364. If the effect of the damage referred to in Arti­cle 361 should be only a reduction in the value of the goods, the obligation of the carrier shall be reduced to the payment of the amount of said reduction in value, after appraisal by experts.
Where all the goods are delivered but damage is to such an extent that their value is diminished, the obligation of the CC shall be reduced to the payment of the amount which, in the judgment of experts, constitute such difference in value --> subject of course to other damages under the NCC

Art. 365. If, on account of the damage, the goods are rendered useless for sale or consumption for the use for which they are properly destined the consignee shall not be bound to receive them, and may leave them in the hands of the carrier, demanding payment of their value at the current market price that day.

If among the goods damages there should be some in good condition and without any defect whatsoever, the foregoing provi­sion shall be applicable with regard to the damaged ones, and the consignee shall receive those which are sound, this separation being made by distinct and separate articles, no object being divided for the purpose, unless the consignee proves the impos­sibility of conveniently making use thereof in this form.

The same provision shall be applied to merchandise in bales or packages, with distinction of the packages which appear sound.

Where damage renders the goods useless for sale and consumption for the purposes for which they are properly destined:

1. if the damage affects all goods, the consignee may abandon all the goods to the CC who shall pay the corresponding damages

2. if the damage affects only some of the goods, the consignee may abandon only the damaged goods --> but if the consignee can prove that it is impossible to conveniently use the undamaged goods in that form, without the damaged goods, the law authorizes the consignee to abandon all the goods

Art. 366. Within the twenty-four hours following the receipt of the merchandise a claim may be made against the carrier on account of damage or average found upon opening the packages, provided that the indications of the damage or average giving rise to the claim cannot be ascertained from the exterior of said packages, in which case said claim shall only be admitted at the time of the receipt of the packages.
After the periods mentioned have elapsed, or after the transportation charges have been paid, no claim whatsoever shall be admitted against the carrier with regard to the condition in which the goods transported were delivered.

In case of damaged goods, the damage may either be (1) ascertainable only by opening of the packages, or (2) ascertainable from the outside part of the package

In Case 1, the claim against the CC for damages must be made within 24 hours following the receipt of the merchandise

In Case 2, the claim must be made at the time of receipt

The claim must be made before the payment of transportation charges

** otherwise, no action for damages may be maintained against the CC

When period begins to run : period begins to run when the consignee received possession of the goods such that he may exercise over it the ordinary control pertinent to ownership

There must be delivery of the merchandise by the CC to the consignee at the place of destination --> Art. 366 applies only to cases of claims for damage to goods actually turned over by the CC and received by the consignee

The conditions under Art. 366 are not limitation of action but are conditions precedent to a cause of action --> if the shipper or consignee fails to allege and prove the conditions under 366, he shall have no right of action against the CC
The CC may require in the B/L that the goods be examined at the time of delivery thereof --> the CC may likewise waive such right
Art. 366 is modified by a B/L prescribing a longer period for filing of written claim with the CC or its agent

The unilateral action of a CC in stamping a condition in the notice of arrival, requiring examination of bad order cargo by the ship's agent before removal from port authorities as condition precedent to an action for recovery cannot modify or add conditions to the B/L --> unreasonable and unfair in that it allows CC to avoid responsibility for the loss of or damage to their cargo when in packages or covered

The purpose of short period for claiming damages : to afford the CC a reasonable opportunity and facilities to check the validity of the claims while the acts are still fresh in the minds of the person who took part in the transaction and the documents are still available.
The consignee may file a provisional claim : it is not necessary that such claim should state a detailed list of the loss or damage; they only have to contain descriptions of the shipments in question sufficient to have allowed the CC to make reasonable verifications of such claim --> the determination of the specific amount of damages claimed should be done carefully and without haste and these can be done only in a formal claim which will be filed after the provisional claim
This stipulation is in the nature of a limitation upon the owner's right to recovery --> the burden of proof is on the CC to show that the limitation was reasonable and in proper form or within the time stated (see Southern Lines vs CA)
A a stipulation in the B/L providing for a shorter period than the statutory period within which to bring action for breach is valid --> does not in any way defeat the right to recover but merely requires that said right be asserted by action at an earlier period (filing of claims is different from filing of suits)

Art. 367. If there should occur doubts and disputes between the consignee and the carrier with regard to the condition of goods transported at the time of their delivery to the former, the said goods shall be examined by experts appointed by the parties, and in case of disagreement, a third one appointed by the judicial authority, the result of the examination being reduced to writing; and if the persons interested should not agree to the report of the experts and could not settle their disputes, said judicial authority shall order the deposit of the merchandise in a safe warehouse, and the parties interested shall make use of their rights in the proper manner.
If doubts and disputes should arise between the consignee and the CC with respect to the condition of the goods transported at the time of the delivery, Art. 367 shall govern --> expert opinion on the matter is not conclusive on the parties

(b) To Whom Delivery Made

Art. 368. The carrier must deliver to the consignee without any delay or obstruction the merchandise received by him, by the mere fact of being designated in the bill of lading to receive it; and should he not do so he shall be liable for the damages which may arise therefrom.

The delivery must be made to the consignee

Where the B/L is issued to the order of the shipper, the CC is under a duty not to deliver the merchandise except upon presentation of the B/L duly indorsed by the shipper, and where the CC delivered the goods to another person who did not present the B/L, such CC is liable for misdelivery --> duty to transport the goods safely and to deliver them to the person indicated in the B/L
Misdelivery: Delivery to a person different from that indicated in the B/L --> different from non-delivery

In case of conflicting orders of the shipper and the consignee (where one orders the return and the other orders the delivery of the goods), there is no other recourse than to determine at what moment the right of the shipper to countermand the shipment terminates --> this moment can be no other than the time when the consignee or legitimate holder of the B/L appears with such B/L before the CC and makes himself a party to the contract (prior to that time, he is a stranger to the contract)

(c) Judicial Deposit
Art. 369. Should the consignee be not found at the domi­cile indicated in the bill of lading, or should refuse to pay the transportation charges and expenses, or to receive the goods, the deposit of said goods shall be ordered by the municipal judge, where there is no judge of first instance, to be placed at the disposal of the shipper or sender, without prejudice to a person having a better right, this deposit having all the effects of a delivery.

Judicial deposit as a remedy:

1. where the consignee cannot be found at the residence indicated

2. where the consignee refused to pay the transportation charges

3. where the consignee refuses to receive the goods

Judicial deposit shall produce all the effects of delivery subject to third persons with better rights

Duty to look for consignee : if consignee is not present, he is entitled to reasonable notice from the CC of their arrival and a fair opportunity to take care of and remove them

: if the consignee is unknown to the CC, the latter must use proper and reasonable diligence to find him, and if the consignee still cannot be found, the goods may be stored in a proper place and the CC will have performed his whole duty and shall be discharged from liability as a CC

Failure to look for consignee and to give him reasonable notice shall make the CC liable for damages resulting from the delay in the receipt of the goods by the consignee --> apply 1738 on the liability of the CC even when the goods are deposited in its warehouse until after the consignee has been given reasonable notice and opportunity to remove the goods

Art. 1752. Even when there is an agreement limiting the liability of the CC in the vigilance over the goods, the CC is disputably presumed to have been negligent in case of their loss, destruction or deterioration. (New Civil Code.)

(d) When to be made

Article 370. If a period has been fixed for the delivery of the goods, it must be made within the same, otherwise the carrier shall pay the indemnity agreed upon in the bill of lading, neith­er the shipper nor consignee being entitled to anything else.

Should no indemnity have been agreed upon and the delay exceeds the time fixed in the bill of lading, the carrier shall be liable for the damages which may have been caused by the

delay.
Art. 358. Should no period within which goods are to be delivered be previously fixed, the carrier shall be under the obligation to forward them in the first shipment of the same or similar merchandise which he may make to the point of delivery; and should he not do so, the damages occasioned by the delay shall be suffered by him.

Where period fixed for delivery : the CC must deliver the goods within the time fixed --> for failure to do so, the CC shall pay indemnity stipulated in the B/L, neither the shipper nor the consignee being entitled to anything else --> however, under the CC, damages shall be paid if the carrier refuses to pay the stipulated indemnity or is guilty of fraud in the fulfillment of his obligation (Art. 1126,NCC)

If no indemnity has been stipulated and the delay exceeds the time fixed in the B/L, the CC shall be liable for the damages that the delay may have caused, e.g. the difference between the MV of the goods at the time when they should have been delivered, and the price at the time when they were delivered to which may be added reasonable expenses caused by delay
A CC in GF may be held liable only for damages that were foreseen or might have been foreseen at the time the contract of transpo was entered into --> before a CC could be held liable for special damages, such as loss of profits on account of the delay or failure of deliver, he must have notice at the time of the delivery of the particular circumstances attending the shipment and which would probably lead to such special loss if he defaulted (Mendoza vs PAL)

If the CC incurs in delay in transporting the goods, a natural disaster shall not free such carrier from responsibility; where the CC without cause delays the transportation of the goods, the contract limiting the CC's liability cannot be availed of in case of the loss, destruction or deterioration of the goods

Where property in the hands of a CC is not delivered within a reasonable time after it has reached its destination, the CC in the absence of any legal exemption and after demand has been made and delivery refused, is liable for a conversion of the property --> the consignee may waive title to the property and sue for conversion and is entitled to the value of the goods at the time they should have been delivered to him --> subsequent tender of the goods by the CC is not available as a defense

If there has been demand and the CC tenders the goods, the consignee cannot refuse to receive the goods and sue for conversion; his sole remedy is an action for damages on account of the delay --> there can only be conversion if there has been demand and the CC refuses delivery

The time for delivery when no period fixed : the CC shall be bound to forward them in the first shipment of the same or similar goods which he makes to the point where he must deliver them --> should he not do so, the damages caused by the delay shall be for his account

Art. 358 is not violated when though the goods were not shipped on the train agreed upon, they were shipped on another train which arrived earlier than the one agreed upon

(e) Two or more carriers
Art. 373. A carrier who delivers merchandise to a consignee by virtue of agreements or combined services with other carriers shall assume the obligations of the carriers who preceded him, reserving his right to proceed against the latter if he should not be directly responsible for the fault which gives rise to the claim of the shipper or of the consignee.
The carrier making the delivery shall also assume all the actions and rights of those who may have preceded him in the transportation.
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 received the goods transported without reservation.
The reservations made by the latter shall not however exempt them from the liabilities they may have incurred by reason of their own act.

Successive carriers shall assume the obligations of previous carriers but have a right of action against previous carriers is the latter are directly responsible for the fault giving rise to the claim of the shipper

(f) Obligation to keep registry
Art. 378. Transportation agents shall be obliged to keep a special registry, with the formalities required by Article 36, in which there shall be entered, in progressive order of number and dates, all the goods the transportation of which is undertaken, stating the circumstances required by Articles 350 et seq. for the respective bills of lading.

(g) Compliance with administrative regulations

Art. 377. The carrier shall be liable for all the consequences arising from noncompliance on his part with the formalities prescribed by the laws and regulations of the public administration during the entire course of the trip and upon arrival at the point of destination, except when his omis­sion arises from his having been induced into error by false statements of the shipper in the declaration of the merchandise.

If the carrier has acted in accordance with a formal order received from the shipper or consignee of the merchandise both shall incur liability.

The CC is exempted from responsibility where his failure to comply arises from having been led into error by the falsehood on the part of the shipper in the declaration of the merchandise

The shipper or consignee may become liable for noncompliance with govt. rules and regulations, when the CC has acted by virtue of a formal order of the shipper or consignee --> but the CC continues to be liable
F. Rights and Obligations of Shipper and/or Consignee
1. Right to Damages
(a) Condition imposed on right

Art. 366. Within the twenty-four hours following the receipt of the merchandise a claim may be made against the carrier on account of damage or average found upon opening the packages, provided that the indications of the damage or average giving rise to the claim cannot be ascertained from the exterior of said packages, in which case said claim shall only be admitted at the time of the receipt of the packages.

After the periods mentioned have elapsed, or after the transportation charges have been paid, no claim whatsoever shall be admitted against the carrier with regard to the condition in which the goods transported were delivered.

Art. 357. If by reason of well-founded suspicions of falsi­ty in the declaration of the contents of a package, the carrier should decide to examine it, he shall do so before witnesses, in the presence of the shipper or of the consignee.

Should the shipper or consignee cited not appear, the exami­nations shall be made before a notary, who shall draft a certifi­cate of the result of the examination, for such purposes as may be proper.

If the declaration of the shipper should be correct, the expenses caused by the examination and those of carefully repack­ing the packages shall be defrayed by the carrier, and in a contrary case by the shipper.

Art. 353. The legal basis of the contract between the shipper and the carrier shall be the bills of lading, by the contents of which all disputes which may arise with regard to their execution and fulfillment shall be decided, no exceptions being admissible other than forgery or material errors in the drafting thereof.

After the contract has been complied with, the bill of lading shall be returned to the carrier who may have issued it, and by virtue of the exchange of this title for the article transported, the respective obligations and actions shall be considered canceled, unless the same act the claims which the contracting parties desire to reserve are reduced to writing, exception being made of the provisions of Article 366.

In case the consignee, upon receiving the goods, cannot return the bill of lading subscribed by the carrier, due to its loss or for any other cause, he shall give said carrier a receipt for the goods delivered, this receipt producing the same effect as the return of the bill of lading.

Effect of return of the B/L or giving of the receipt: The respective obligations and actions of the parties against each other shall be considered canceled, except where in the same act of return or giving of a receipt the claims of the parties be reduced to writing subject to the provisions of Art. 366

(b) Amount of damages for loss

Art. 372. The value of the goods which the carrier must pay in case of their being lost or mislaid shall be fixed in accor­dance with what is stated in the bill of lading, no proofs being allowed on the part of the shipper that there were among the goods declared therein articles of greater value, and money.
Horses, vehicles, vessels, equipments, and all the other principal and accessory means of transportation, shall be especially obligated in favor of the shipper, although with respect to railroads said obligation shall be subordinated to the provisions of the laws of concession with regard to property and to those of this Code with regard to the manner and form of making attachments and seizures against the said companies.

The value of the goods stated in the B/L is conclusive between the parties and the shipper is not allowed to prove a higher value

It is only when the CC's fault is so gross as to amount to actual fraud, that the actual amount of the losses and damages suffered may be proved by the shipper against the carrier
Par. 2 especially binds the horses, vehicles, vessels and eqpt. and all other principal and accessory means of the CC in favor of the shipper --> this lien is a security for the payment of the value of the goods which the CC must pay in case of loss or misplacement

Art. 1744, NCC. A stipulation between the CC and the shipper or owner limiting the liability of the former for the loss, destruction or deterioration of the goods to a degree less than extra-o diligence shall be valid, provided it be:

(1) in writing, signed by the shipper or owner;

(2) supported by a valuable consideration other than the service rendered by the CC; and

(3) reasonable, just, and not contrary to public policy. (New Civil Code.)
(c) Amount of damages for delay
Art. 371. In cases of delay on account of the fault of the carrier, referred to in the foregoing articles, the consignee may leave the goods transported in the hands of the carrier, informing him thereof in writing before the arrival of the same at the point of destination.

When this abandonment occurs, the carrier shall satisfy the total value of the goods, as if they had been lost or mislaid.

Should the abandonment not occur the indemnity for loss and damages on account of the delays cannot exceed the current price of the goods transported on the day and at the place where the delivery was to have been made. The same provision shall be observed in all cases where this indemnity is due.

Damages for delay (par. 3) : Provided there is no express agreement as to indemnity in the B/L and there is no fraud on the part of the CC, and the goods have a known current price at the place and on the day they should have been delivered, the damages shall not exceed such value --> subject to Civil Code provisions on damages in case of delay

2. Right to abandon
Art. 371. In cases of delay on account of the fault of the carrier, referred to in the foregoing articles, the consignee may leave the goods transported in the hands of the carrier, informing him thereof in writing before the arrival of the same at the point of destination.

When this abandonment occurs, the carrier shall satisfy the total value of the goods, as if they had been lost or mislaid.

Should the abandonment not occur the indemnity for loss and damages on account of the delays cannot exceed the current price of the goods transported on the day and at the place where the delivery was to have been made. The same provision shall be observed in all cases where this indemnity is due.

Right of abandonment: Exceptional but limited right

The right must be exercised during the intervening period between the moment when the fault of the CC produces a delay, which is the generative cause of the action, until the moment just before the arrival of the goods at the place of delivery, by communicating such abandonment to the CC in writing

Where these conditions do not concur, the refusal to accept cannot be effective
Damages for abandonment : Art. 371 (2) --> subject to Civil Code