The law of the country to which the goods are to be transported governs the liability of the common carrier in case of their loss, destruction or deterioration. As the cargoes in question were transported from Japan to the Philippines, the liability of Petitioner Carrier is governed primarily by the Civil Code. However, in all matters not regulated by said Code, the rights and obligations of common carrier shall be governed by the Code of Commerce and by special laws. Thus, the Carriage of Goods by Sea Act, a special law, is suppletory to the provisions of the Civil Code.
It is to be noted that the Civil Code does not of itself limit the liability of the common carrier to a fixed amount per package although the Code expressly permits a stipulation limiting such liability. Thus, the COGSA which is suppletory to the provisions of the Civil Code, steps in and supplements the Code by establishing a statutory provision limiting the carrier's liability in the absence of a declaration of a higher value of the goods by the shipper in the bill of lading. The provisions of the Carriage of Goods by.Sea Act on limited liability are as much a part of a bill of lading as though physically in it and as much a part thereof as though placed therein by agreement of the parties.
In determining amount payable under the COGSA rule on $500 per package limit, determine the actual amount of damage sustained. If this is less than $500/package, then pay actual amount. If the amount is more than $500/package then pay $500/package.
“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”
When what would ordinarily be considered packages are shipped in a container supplied by the carrier and the number of such units is disclosed in the shipping documents, each of those units and not the container constitutes the "package" referred to in liability limitation provision of COGSA.
The individual crates or cartons prepared by the shipper and containing his goods can rightly be considered "packages" standing by themselves, they do not suddenly lose that character upon being stowed in a carrier's container. I would liken these containers to detachable stowage compartments of the ship.
A container is a permanent reusable article of transport equipment not packaging of goods durably made of metal, and equipped with doors for easy access to the goods and for repeated use. It is designed to facilitate the handling, loading, stowage aboard ship, carriage, discharge from ship, movement, and transfer of large numbers of packages simultaneously by mechanical means to minimize the cost and risks of manually processing each package individually, It functions primarily as ship's gear for cargo handling, and is usually provided by the carrier.
Aboitiz v. CA
While it is true that in the bill of lading there is such stipulation that the liability of the carrier is US$500.00 per package/container/customary freight, there is an exception, that is, when the nature and value of such goods have been declared by the shipper before shipment and inserted in the bill of lading.
It is absurd to interpret "container," as provided in the bill of lading to be valued at US$500.00 each, to refer to the container which is the modern substitute for the hold of the vessel. The package/container contemplated by the law to limit the liability of the carrier should be sensibly related to the unit in which the shipper packed the goods and described them, not a large metal object, functionally a part of the ship, in which the carrier used them to be contained. Such "container" must be given the same meaning and classification as a "package" and "customary freight unit."
Eastern & Australian Steamship v. Great American Insurance
By providing that $500.00 is the maximum liability, the law does not disallow an agreement for liability at a lesser amount.
Significantly, Article 1749 of the New Civil Code expressly allow the limitation of the carrier's liability.
Art. 1749 A stipulation that the common carrier's liability is limited to the value of the goods appearing in the bill of lading, unless the shipper or owner declares a greater value, is binding.
F.H. Stevens & Co. v. Norddeuscher Lloyd
If, in an action commenced, in due time, a judgment for the plaintiff be reversed, or if the plaintiff fail otherwise than upon the merits, and the time limited for the commencement of such action has, at the date of such reversal or failure, expired, the plaintiff, or, if he die and the cause of action survive, his representatives may commence a new action within one year after such date, and this provision shall apply to any claim asserted in any pleading by a defendant.
The action commenced by the plaintiff in the Municipal Court of Manila, on April 27, 1960, was dismissed June 13, 1960, or over twenty (20) days after the expiration of the period of one (1) year, beginning from May 21, 1959, within which plaintiff's action could be brought pursuant to Commonwealth Act No. 65, in relation to the Carriage of Goods by Sea Act. Under said section of Act No. 190, the period within which plaintiff could initiate the present case was renewed, therefore, for another year, beginning from June 14, 1960. The case at bar was commenced on June 24, 1960, or within the period last mentioned.
Dole Philippines v. Maritime Co.
In cases governed by the Carriage of Goods by Sea Act, the general provisions of the Code of Civil Procedure on prescription should not be made to apply.
Similarly, we now hold that in such a case the general provisions of the new Civil Code (Art. 1155) cannot be made to apply, as such application would have the effect of extending the one-year period of prescription fixed in the law. It is desirable that matters affecting transportation of goods by sea be decided in as short a time as possible; the application of the provisions of Article 1155 of the new Civil Code would unnecessarily extend the period and permit delays in the settlement of questions affecting transportation, contrary to the clear intent and purpose of the law.
American Insurance Co. v. Compania Maritima
Filing a case against the intermediate carrier who transported the goods during the transshipment is not the same as impleading the Principal Carrier. The prescriptive period continues to run for the Principal carrier until he is brought into court.
Universal Shipping Lines v. IAC
Prescriptive period of One year under COGSA may be suspended by express agreement of the parties.
Union Carbide Phil. v. Manila Railroad
One year period is counted from the time the goods are delivered to the arrastre.
In action against the arrastre operator to enforce liability for loss of the cargo or damage thereto should be filed within one year from the date of the discharge of the goods or from the date when the claim for the value of such goods has been rejected or denied by the arrastre operator.
However, before such action can be filed a condition precedent should be complied with and that is, that a claim (provisional or final) shall have been previously filed with the arrastre operator within fifteen days from the date of the discharge of the last package from the carrying vessel.
Having complied with the condition precedent for the filing of a claim within the fifteen- day period, Union Carbide could file the court action within one year, either from December 19, 1961 or from December 19, 1962 . This second date is regarded as the expiration of the period within which the Manila Port Service should have acted on the claim.
In other words, the claimant or consignee has a two-year prescriptive period, counted from the date of the discharge of the goods, within which to file the action in the event that the arrastre contractor, as in this case, has not rejected nor admitted liability.
Ang v. American Steamship Agencies
In order for the 1 year period under the COGSA to apply, there must be loss or damage to the cargo.
As defined in the Civil Code and as applied to Section 3 (6) paragraph 4 of the Carriage of Goods by Sea Act, "loss" contemplates merely a situation where no delivery at all was made by the shipper of the goods because the same had perished, gone out of commerce, or disappeared that their existence is unknown or they cannot be recovered. It does not include a situation where there was indeed delivery — but delivery to the wrong person, or a misdelivery, as alleged in the complaint in this case.
It follows that for suits predicated not upon loss or damage but on alleged misdelivery (or conversion) of the goods, the applicable rule on prescription is that found in the Civil Code, namely, either ten years for breach of a written contract or four years for quasi-delict.
Mitsui O.S.K v. CA
The Loss or deterioration covered by the one-year prescriptive period in the COGSA refers to physical damage to the goods.
As to loss or deterioration in the value of the goods because of the decline in market value, the prescriptive period for the recovery of the lost value is 10 years for breach of contract.
Filipino Merchants Insurance Co. v. Aviles
The one-year prescriptive period to file a case against the Carrier for loss or deterioration to the goods applies not only to the shipper but also the consignee and the subrogee-insurer.
Note: Had the shippers in the civil cases below filed an action against the insurer after the one-year prescriptive period, then the latter could have successfully denied liability on the ground that by their own doing, the shippers had prevented the insurer from being subrogated to their respective rights against the carrier by filing a suit after the one-year prescriptive period. The situation, however, does not obtain in the present case.
Mayer Steel Pipe v. CA
Section 3(6) of the Carriage of Goods by Sea Act states that the carrier and the ship shall be discharged from all liability for loss or damage to the goods if no suit is filed within one year after delivery of the goods or the date when they should have been delivered. Under this provision, only the carrier's liability is extinguished if no suit is brought within one year. But the liability of the insurer is not extinguished because the insurer's liability is based not on the contract of carriage but on the contract of insurance. A close reading of the law reveals that the Carriage of Goods by Sea Act governs the relationship between the carrier on the one hand and the shipper, the consignee and/or the insurer on the other hand. It defines the obligations of the carrier under the contract of carriage. It does not, however, affect the relationship between the shipper and the insurer. The latter case is governed by the Insurance Code.
The ruling in Filipino Merchants should apply only to suits against the carrier filed either by the shipper, the consignee or the insurer. When the court said in Filipino Merchants that Section 3(6) of the Carriage of Goods by Sea Act applies to the insurer, it meant that the insurer, like the shipper, may no longer file a claim against the carrier beyond the one-year period provided in the law. But it does not mean that the shipper may no longer file a claim against the insurer because the basis of the insurer's liability is the insurance contract.
Belgian Overseas v. Philippine First Insurance
Proof of the delivery of goods in good order to a common carrier and of their arrival in bad order at their destination constitutes prima facie fault or negligence on the part of the carrier. If no adequate explanation is given as to how the loss, the destruction or the deterioration of the goods happened, the carrier shall be held liable therefor.
Notice of Claim. First, the above-cited provision of 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. As stated earlier, prior to unloading the cargo, an Inspection Report as to the condition of the goods was prepared and signed by representatives of both parties.
Second, as stated in the same provision, a failure to file a notice of claim within three days will not bar recovery if it is nonetheless filed within one year. This one-year prescriptive period also applies to the shipper, the consignee, the insurer of the goods or any legal holder of the bill of lading.
In Loadstar Shipping Co., Inc, v. Court of Appeals, we ruled that a claim is not barred by prescription as long as the one-year period has not lapsed.
Liability Limitation. Thus, the COGSA, which is suppletory to the provisions of the Civil Code, supplements the latter by establishing a statutory provision limiting the carrier's liability in the absence of a shipper's declaration of a higher value in the bill of lading. The provisions on limited liability are as much a part of the bill of lading as though physically in it and as though placed there by agreement of the parties.
In the case before us, there was no stipulation in the Bill of Lading limiting the carrier's liability. Neither did the shipper declare a higher valuation of the goods to be shipped. This fact notwithstanding, the insertion of the words "L/C No. 90/02447 cannot be the basis for petitioners' liability.
A notation in the Bill of Lading which indicated the amount of the Letter of Credit obtained by the shipper for the importation of steel sheets did not effect a declaration of the value of the goods as required by the bill.That notation was made only for the convenience of the shipper and the bank processing the Letter of Credit.
A bill of lading was separate from the Other Letter of Credit arrangements.
In Eastern Shipping Lines, Inc. v. Intermediate Appellate Court, we explained the meaning of packages: "When what would ordinarily be considered packages are shipped in a container supplied by the carrier and the number of such units is disclosed in the shipping documents, each of those units and not the container constitutes the 'package' referred to in the liability limitation provision of Carriage of Goods by Sea Act."
Philippine First Insurance v. Wallem Shipping
For marine vessels, Article 619 of the Code of Commerce provides that the ship captain is liable for the cargo from the time it is turned over to him at the dock or afloat alongside the vessel at the port of loading, until he delivers it on the shore or on the discharging wharf at the port of unloading, unless agreed otherwise. In Standard Oil Co. of New York v. Lopez Castelo, the Court interpreted the ship captain’s liability as ultimately that of the shipowner by regarding the captain as the representative of the ship owner.
Section 2 of the COGSA provides that 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 set forth in the Act. Section 3 (2) thereof then states that among the carriers’ responsibilities are to properly and carefully load, handle, stow, carry, keep, care for, and discharge the goods carried.
The responsibility of the carrier shall commence from the time when the goods are loaded on board the vessel and shall cease when they are discharged from the vessel.
The aforementioned Section 3(2) of the COGSA states that among the carriers’ responsibilities are to properly and carefully load, care for and discharge the goods carried. The bill of lading covering the subject shipment likewise stipulates that the carrier’s liability for loss or damage to the goods ceases after its discharge from the vessel. Article 619 of the Code of Commerce holds a ship captain liable for the cargo from the time it is turned over to him until its delivery at the port of unloading.
It is settled in maritime law jurisprudence that cargoes while being unloaded generally remain under the custody of the carrier. In the instant case, the damage or losses were incurred during the discharge of the shipment while under the supervision of the carrier.
SALVAGE LAW
Erlanger & Galinger v. Swedish East Asiatic
Three elements are necessary to a valid salvage claim: (1) A marine peril. (2) Service voluntarily rendered when not required as an existing duty or from a special contract. (3) Success, in whole or in part, or that the service rendered contributed to such success.
A derelict is defined as "A ship or her cargo which is abandoned and deserted at sea by those who were in charge of it, without any hope of recovering it (sine spe recuperandi), or without any intention of returning to it (sine animo revertendi).
Prima facie a vessel found at sea in a situation of peril, with no one aboard of her, is a derelict; but where the master and crew leave such vessel temporarily, without any intention of final abandonment, for the purpose of obtaining assistance, and with the intent to return and resume possession, she is not technically a derelict. It is not of substantial importance to decide that question. She was what may be called a quasi-derelict; abandoned, helpless, her sails gone, entirely without power in herself to save herself from a situation not of imminent, but of considerable peril; lying about midway between the Gulf Stream and the shore, and about 30 miles from either.
An east wind would have driven her upon one, and a west wind into the other, where she should have become a total loss. Lying in the pathway of commence, with nothing aboard to indicate an intention to return and resume possession, it was a highly meritorious act upon the part of the Shawmut to take possession of her, and the award must be governed by the rules which govern in case of derelicts; the amount of it to be modified in some degree in the interest of the owners in consideration of their prompt, intelligent, and praiseworthy efforts to resume possession of her, wherein they incurred considerable expense.
Barrios v. Carlos A. Go Thong
In accordance with the Salvage Law, a ship which is lost or abandoned at sea is considered a derelict and, therefore, proper subject of salvage. A ship in a desperate condition, where persons on board are incapable, by reason of their mental and physical condition, of doing anything for their own safety, is a quasi-derelict and may, likewise, be the proper subject of salvage.
"Salvage" has been defined as "the compensation allowed to persons by whose assistance a ship or her cargo has been saved, in whole or in part, from impending peril on the sea, or in recovering such property from actual loss, as in case of shipwreck, derelict, or recapture."
Here, the ship was not a derelict or quasi-derelict. It was not in any danger.
In a towage, only the owner of the towing vessel, to the exclusion of the crew of the said vessel, may be entitled to remuneration.
The distinction between salvage and towage is of importance to the crew of the salvaging ship, for the following reasons: If the contract for towage is in fact towage, then the crew does not have any interest or rights in the remuneration pursuant to the contract. But if the owners of the respective vessels are of a salvage nature, the crew of the salvaging ship is entitled to salvage, and can look to the salvaged vessel for its share.
Alhambra Cigar v. La Granja
A vessel although not abandoned may be subject of salvage if at the time the services were rendered there was probable, threatening danger of the vessel or of the cargo to be damaged.
In the case at bar, there is no question that at the time the contract was entered into there was an imminent danger to Nieva and to its cargoes.
Towing a vessel may or may not be a salvage service. If the vessel towed is by this means aided in escaping from a present or prospective danger, the service will be regarded as one of salvage, and the towage as merely an incident.
If however, the vessel thus assisted is not encompassed by any actual or probable danger, and the employment is simply for the purpose of expediting the voyage, such service is towage.
Limpangco Sons v. Yongco Steamship
A vessel which undertakes a towage service is liable for reasonable care of the tow, and that reasonable care is measured by the dangers and hazards to which the tow is or may be exposed, which it is the duty of the master of the tug to know and to guard against not only by giving proper instructions for the management of the tow, but by watching her when in a dangerous locality, to see that his directions are obeyed. The duty of the tug to a tow is a continuous one from the time service commences until it is completed.
Its responsibility includes not only the proper and safe navigation of the tug on the journey, but to furnish safe, sound and reasonable appliances and instrumentalities for the service to be performed, as well as the giving of proper instructions as to the management of the tow; and if the locality in which the two finds itself at any given time is more than ordinarily dangerous, the tug is held to a proportionately higher degree of care and skill.
PRIOR OPERATOR RULE and CPC/CPCN
Martires Ereno v. PSC
In the granting of certificates of public convenience, the principle that overrides all others is that public interest, necessity and convenience should be the first and paramount consideration. The number of persons to be benefited by the proposed service is immaterial.
The "prior operator" and "protection of investment" rules cannot prevail over the convenience of the public. Said "protection of investment" rule is not absolute, for nobody has exclusive right to secure a franchise or a certificate of public convenience. Nor could an unfair or ruinous competition result from the authorization of the ice plant applied for. In order that the opposition based on ruinous competition may prosper, it must be shown that the oppositor would be deprived of fair profits on the capital invested in its business. The mere possibility of reduction in the earnings of a business is not sufficient to prove ruinous competition. It must be shown that the business would not have sufficient gains to pay a fair rate of interest on its capital.
San Pablo v. Pantranco South Express
A ferry service, in law, is treated as a continuation of the highway from one side of the water over which passes to the other side for transportation of passengers or of travellers with their teams vehicles and such other property as, they may carry or have with them.
The term "ferry" implied the continuation by means of boats, barges, or rafts, of a highway or the connection of highways located on the opposite banks of a stream or other body of water. The term necessarily implies transportation for a short distance, almost invariably between two points, which is unrelated to other transportation.
Coastwide Trade. A steamboat or motorboat service between the different islands, involving more or less great distance and over more or less turbulent and dangerous waters of the open sea, to be coastwise or inter-island service.
As the San Bernardino Strait which separates Matnog and Allen leads to the ocean it must at times be choppy and rough so that it will not be safe to navigate the same by small boats or barges but only by such steamboats or vessels as the MV "Black Double.
While a ferry boat service has been considered as a continuation of the highway when crossing rivers or even lakes, which are small body of waters - separating the land, however, when as in this case the two terminals, Matnog and Allen are separated by an open sea it can not be considered as a continuation of the highway. Respondent PANTRANCO should secure a separate CPC for the operation of an interisland or coastwise shipping service in accordance with the provisions of law. Its CPC as a bus transportation cannot be merely amended to include this water service under the guise that it is a mere private ferry service.
