MARCH 6, 2015

GOVERNING LAWS1916- Code of Commerce1936 COGSA (CA 65) 1950 Civil Code Primary law is the latest law Civil Code Special provision in Civil Code (1753) all matters not covered by this law shall be governed by Code of Commerce and Special law Supplementary application: COGSA and Code of Commerce From the Abroad to the Philippines Primary law: NCC Supplementary: COGSA and Code of Commerce GR: COGSA is not the primary law E: If it is stipulated (stated and inserted in the bill of lading, x mere verbal) by the parties (Current trend)

COGSA Introduced during the Commonwealth of the Philippines (American Era) CA 65 accepting COGSA as part of the Philippine Maritime Commerce Law

Sec 3, par 1 Warranty of seaworthiness Fit Properly manner and equipped Cargo worthy Can take the hazards of the sea Bar question: Cannery birds were imported from HK to Manila and when it was loaded, the birds died before they got to Manila because there was no proper place for the birds in the vessel. Owner of the birds filed a case against the vessel owner. Owner of vessel contended that owner of cargo should have inspected first the vessel. Is this correct? NO! Because there is an implied warranty that the vessel has facilities (seaworthy). No need for the owner of the cargo to inspect.

Sec 3, par 2 When the cargoes are loaded, they have to be stowed properly. Vessel employees should not just throw the packages and should load them carefully

Sec 3, par 3 When the cargo is already loaded, the shipper has to have some security/ evidence that the packages have been turned over best evidence: BILL OF LADING

Sec 3, par 6 The shippers are asked to first file a notice of damage upon arrival of the cargo If apparent damage consignee has to immediately file notice of damage If not apparent damage consignee 3 days to file notice of damage If there is a joint inspection made by shipper and consignee x need to file notice of damage since they both know already that there was damage pursuant to the inspection Case must be filed within 1 year from the date of: Actual Delivery Constructive Delivery 2 things to file: File notice of Damage File Case What is the effect of filing of notice of damage? It is NOT a condition precedent. You can file a case without even filing a notice of damage as long as you have filed it within the prescriptive period of 1 year from the date of delivery Not really important in terms of the filing of the case Purpose of the law for requiring notice: If the shipper has failed to file a notice of damage then it is a PRIMA FACIE evidence that the shipment was delivered to the consignee in the same condition as it appears in the bill of lading 1 year prescription only applies to loss or damage X apply to misdelivery or conversion/taking/stealing Misdelivery example: Cargo was given to the wrong person (Mr. B). Mr. A filed the case after 1 year from the arrival of the vessel. Will the case prosper? YES, because the prescriptive period is not one year because it is not a case of damage, but a case of misdelivery. Apply NCC. NCC applies 10 years prescription (contract), 4 years (quasi-contract)

LIABILITY OF COMMON CARRIER $500 per package if there is no declaration of value of cargo per package If the value per package is declared (inserted in the bill lading) then such declared value will govern Example: Declared that value per package is $5k $5k will be paid There is already declaration that value per package but there is already a finding through inspection or survey of amount of actual damage Amount of actual damage will prevail Example: Declared 5k value, but 3k damage only 3k will be paid What if there is a stipulation that the liability per package is $5k, but upon inspection it was only $2k Stipulation should not be the actual value of damage. So, $2k dollars (actual value of damage) will be paid and not the declared liability per package If the shipment causes danger (flammable, prohibited): WITHOUT KNOWLEDGE OF SHIPPER Shipper can go to the nearest port and shipper will be liable for incidental expenses for rendering the shipment innocuous or harmless X reimbursed value of shipment shipper is liable for incidental expenses WITH KNOWLEDGE OF SHIPPER Shipper can go to the nearest port and shipper will NOT be liable for incidental expenses for rendering the shipment innocuous or harmless

EXTRAJUDICIAL DEMAND Effect of demand letter Merely interrupts the running of prescriptive period It does not suspend the prescriptive period indefinitely Interruption March 2013 Shipment arrive May 2013 EJ Demand was sent interrupts April 2014 Filed case From March to April more than 1 year If not for the EJ demand, it is very clear that it has already expired After the filing of the EJ demand, it gives you a FRESH PERIOD of one year from May 2013 to April 2014 X suspend indefinitely Why? If it suspends prescription period upon filing of EJ demand, you can still file any time (even after 20 years) X reasonable at all!!!

PRACTICE OF MARITIME LAW STEPS (EXHIBITS)1. Invoice2. Packing list Volume, weight, contents of the package 3. Insurance policy To protect your cargoes Get insurance coverage from insurance company4. Bill of lading Proof to employer that you have turned it over to the vessel Demand bill of lading from the common carrier Best evidence Description, stipulations, identifications, volume of package 5. Survey Report Before it is unloaded in the pier by the arrestee operator, you have to make sure that you will not be liable for damage Common carrier will have the shipment surveyed first before it is unloaded 6. Bad Order Certificate If the Survey report will say that there are 10 cargoes that are in bad condition it will be noted 7. Survey Certificate The arrestee operator will turn over the cargo to the customs broker who will release the cargo from the pier Survey will be conducted to see if there are damages attributable to the arrestee operator

8. Way Bill Travel from customs broker to the warehouse via a truck or other means of transportation will be covered by the way bill Compute damages attributable to the broker 9. Warehouse Survey Certificate Determine totality of the damages suffered by the shipment 10. Notice11. Demand letter Consignee will file demand letter which will interrupt the running of the prescriptive period If the shipper does not want to pay; consignee may file claim from the insurance company 12. Subrogation Report The moment the insurance company pays the consignee, the insurance company will require the shipper to file a subrogation report Example: SMC (owner of the cargo) will file a subrogation report in favor of the insurance company Insurance company will then be subrogated to the rights of the SMC to file a case as a plaintiff against the common carrier Defenses of vessel: Failure to file notice of damage Prescription

PUBLIC UTILITY

Business or services given by the person providing the public the service

Public interest is involved May be a private company but since the business involves public utility, use and service, and is impressed with public interest, then they are subjected to GOVERNMENT REGULATIONS

The regulation should start from the basic law: o Constitution: Article 12 The ownership of these corporations should be Filipino citizen and 60% of the corporation should be owned by Filipino citizens

o If public welfare is involved, then these privately owned company can be operated and purchased by the government from the private party after payment of compensation public safety, public defense

Key words: public use and public service

Example: o Transportation, Telegraph, Telephone

GOVERNMENT AGENCIES INVOLVED

1. Legislative branch

Origin of the power Handles hearing for franchise and CPC Issues CPC and franchise 2. Executive Branch

Delegated power by the legislative branch to administrative agencies by virtue of a law What has been delegated cannot be re-delegated Some departments: (p.613) 1. Department of Transportation and Communication (DOTC) 2. Land Transportation Franchising and Regulatory Board (LTFRB) 3. Land Transportation Office (LTO) 4. Maritime Industries (MARINA) maritime vessels 5. Civil Aeronautics Office

6. National Water Resources Council 7. Energy Regulatory Commission 8. Philippine Coast Guard

9. CAAP

10. Philippine Ports Authority

11. NATO

POLICE POWER

Right of the government to regulate is based on Police Power Police power the power to promulgate laws in order to regulate the conduct of activities

FRANCHISE OR CERTIFICATE OF PUBLIC CONVENIENCE

Has to apply for this Must show that you are qualified: Qualifications: 1. Filipino Citizen/ 60% Filipino owned 2. Financial Capability 3. Public Use

CPC o X property righto May be withdrawn by the governmento Grounds for revocation: (page 648) 1. Ceases to operate 2. Violates rules 3. Dummy 4. Totally abandoned service

DETERMINATION OF RATE

1. Reasonable and just 2. 3 major factors 1. Rate of return 2. Rate base 3. Return itself

Case: Regulation of the coming in of buses in Manila Valid exercise of police power because it was only for a certain period and was done to prevent traffic

RULES AND POLICIES (p.641)

1. Previous operator rule

There is already an operator that is operating on that particular route, can another operator operate there?

GR: No more new operators on that particular route especially if such operator is doing what is to be done, complies with all the requirements and is capable of supplying the needed number of buses

o E (considerations): 1. If there is a need for additional units 2. Increase in population 2. Third operator rule

Michelle Duguil

There are only 2 operators already, is it possible to have a 3rd or 4th one? o Yes, considering the needs of the public. If it not enough to transport the people 3. Prior applicant rule

The one who applied FIRST who is capable of doing it, should be given priority 4. Protection of investment rule X mentioned by sir

NB: One accident is not enough to suspend the CPC

FINALS REVIEW

*Multiple choice, Essay, Enumeration *Cover to cover exam

COGSA

GR: Applies only to international shipment

o E: Transshipments from international vessel to local vessel because the voyage is still considered an international voyage Example: SF to Philippines cargo loaded on international vessel from US to Manila with stipulation that it has to be transshipped

(there must be a stipulation for it to be valid) from Manila to Cebu (local shipping company) transshipped cargo suffered damages the other party filed a claim. Since it is damaged during the voyage from Manila to Cebu (domestic), does the COGSA apply?

o YES! The voyage from Manila to Cebu is still considered an international voyage because it is still considered from SF to Cebu Manila to San Francisco via airplane passes by Hawaii travel from Hawaii to San Francisco is still part of the international flight

LIABILITY OF COMMON CARRIER

If x stipulated = $500 per package Example: Shipment consisting of 100 packages from SF to Manila damages were suffered when it reached manila consignee that insured the cargo claimed the damages from the insurance company. Since it was already claimed from the insurance company, what is the document that must be executed between the consignee (SMC) and insurance company once it is paid?oSUBROGATION RECEIPT/ REPORTThe insurance company is now subrogated to the rights of the consignee

Plaintiff now is now longer the consignee (SMC) but the insurance company Relationship is between insurance company and ship owner Plaintiff: Insurance company

Defendant: Shipping line/ arrestre operator/ broker Prescription on action if relationship is:

o Based on maritime law (COGSA) case has to be filed within 1 yearo Based on insurance law 10 years When you have voluminous documents, what do you do? o Choose only those which are material and important o Mark the exhibits in chronological order Plaintiff alphabets Defendant numbers o Submit the purpose of why your marked it Examples:

You are showing the invoice to show the amount involved

Bill of lading to show extent of damage Basic rule: Exercise EOD EXTRA-JUDICIAL DEMAND Interrupts the running of the prescriptive period

5Michelle Duguil PALABRICA NOTES