transportation law provisions

NOVEMBER 19, 2011

CIVIL CODE

Art. 1174. Except in cases expressly specified by the law, or when it is otherwise declared by stipulation, or when the nature of the obligation requires the assumption of risk, no person shall be responsible for those events which could not be foreseen, or which, though foreseen, were inevitable. (1105a)

Art. 1733. Common carriers, from the nature of their business and for reasons of public policy, are bound to observe extraordinary diligence in the vigilance over the goods and for the safety of the passengers transported by them, according to all the circumstances of each case.

Such extraordinary diligence in the vigilance over the goods is further expressed in Articles 1734, 1735, and 1745, Nos. 5, 6, and 7, while the extraordinary diligence for the safety of the passengers is further set forth in Articles 1755 and 1756.

Art. 1755. A common carrier is bound to carry the passengers safely as far as human care and foresight can provide, using the utmost diligence of very cautious persons, with a due regard for all the circumstances.

Art. 1756. In case of death of or injuries to passengers, common carriers are presumed to have been at fault or to have acted negligently, unless they prove that they observed extraordinary diligence as prescribed in Articles 1733 and 1755.

Art. 1757. The responsibility of a common carrier for the safety of passengers as required in Articles 1733 and 1755 cannot be dispensed with or lessened by stipulation, by the posting of notices, by statements on tickets, or otherwise.

Art. 1758. When a passenger is carried gratuitously, a stipulation limiting the common carrier's liability for negligence is valid, but not for wilful acts or gross negligence.

The reduction of fare does not justify any limitation of the common carrier's liability.

Art. 1761. The passenger must observe the diligence of a good father of a family to avoid injury to himself.

Art. 1762. The contributory negligence of the passenger does not bar recovery of damages for his death or injuries, if the proximate cause thereof is the negligence of the common carrier, but the amount of damages shall be equitably reduced.

Art. 1766. In all matters not regulated by this Code, the rights and obligations of common carriers shall be governed by the Code of Commerce and by special laws.

Art. 2179. When the plaintiff’s own negligence was the immediate and proximate cause of his injury, he cannot recover damages. But if his negligence was only contributory, the immediate and proximate cause of the injury being the defendant’s lack of due care, the plaintiff may recover damages, but the courts shall mitigate the damages to be awarded. (n)

CODE OF COMMERCE

ARTICLE 693. Should the passage price not have been agreed upon, the judge or court shall summarily fix it, after a statement of experts.

ARTICLE 694. Should the passenger not arrive on board at the time

fixed, or should leave the vessel without permission from the captain, when the latter is ready to leave the port, the captain may continue the voyage and demand the full passage price.

ARTICLE 695. The right to passage, if issued to a specified person,

can not be transferred without the consent of the captain or of the consignee.

ARTICLE 696. If before beginning the voyage the passenger should die, his heirs shall only be obliged to pay half of the passage agreed upon.

If there should be understood in the price stipulated the expenses of subsistence, the judge, or court, hearing experts if he considers it necessary, shall fix the amount to be paid the vessel.

Should another passenger be received in the place of the deceased, nothing shall be paid by said heirs.

ARTICLE 697. If before beginning the voyage it should be

suspended through the sole fault of the captain or agent, the passengers shall be entitled to have their passage refunded and to recover for losses and damages; but if the suspension was due to an accidental cause, or to force majeure, or to any other cause beyond the control of the captain or agent, the passengers shall only be entitled to the return of the passage money. cd

ARTICLE 698. In case a voyage already begun should be interrupted

the passengers shall be obliged only to pay the passage in proportion to the distance covered, and shall not be entitled to recover for losses and damages if the interruption is due to an accidental cause or to force majeure, but have a right to indemnity if the interruption should have been caused by the captain exclusively. If the interruption should be by reason of the disability of the vessel, and the passenger should agree to await her repair, he can not be required to pay any increased price of passage, but his living expenses during the delay shall be for his own account.

In case the departure of the vessel is delayed the passengers have a right to remain on board and to be furnished with food for the account of the vessel, unless the delay is due to an accidental cause or to force majeure. If the delay should exceed ten days, the passengers who request it shall be entitled to the return of the passage; and if it were due exclusively to the captain or agent they may furthermore demand indemnity for losses and damages.

A vessel which is exclusively destined to the transportation of passengers must take them directly to the port or ports of destination, no matter what the number of passengers may be, making all the stops indicated in her itinerary.

ARTICLE 699. After the contract has been rescinded, before or after

the commencement of the voyage, the captain shall have a right to claim payment for what he may have furnished the passengers.

ARTICLE 700. In all that relates to the preservation of order and

police on board the vessel the passengers shall conform to the orders given by the captain, without any distinction whatsoever.

ARTICLE 701. The convenience or the interest of the passengers

shall not obligate nor empower the captain to stand in shore or enter places which may take the vessel out of her course, nor to remain in the ports he must or is under the necessity of touching for a period longer than that required for the business of the navigation.

ARTICLE 702. In the absence of an agreement to the contrary, it

shall be understood that the maintenance of the passengers during the voyage is included in the price of the passage; but should said maintenance be for the account of the latter, the captain shall be under the obligation, in case of necessity, to furnish them the victuals at a reasonable price necessary for their maintenance.

ARTICLE 703. A passenger shall be looked upon as a shipper in so

far as the goods he carries on board are concerned, and the captain shall not be liable for what said passenger may preserve under his immediate and special custody unless the damage arises from an act of the captain or of the crew.

ARTICLE 704. The captain, in order to collect the price of the

passage and expenses of maintenance, may retain the goods belonging to the passenger, and in case of the sale of the same he shall be given preference over the other creditors, acting in the same way as in the collection of freight.

ARTICLE 705. In case of the death of a passenger during the voyage

the captain is authorized, with regard to the body, to take the steps required by the circumstances, and shall carefully take care of the papers and goods there may be on board belonging to the passenger, observing the provisions of Case No. 10 of Article 612 with regard to members of the crew.

WARSAW CONVENTION

Article 21

If the carrier proves that the damage was caused by or contributed to by the negligence of the injured person the Court may, in accordance with the provisions of its own law, exonerate the carrier wholly or partly from his liability.

GUADALAJARA CONVENTION

Article I

In this Convention: (a) "Warsaw Convention" means the Convention for the Unification of Certain Rules Relating to International Carriage by Air signed at Warsaw on 12 October 1929, or the Warsaw Convention as amended at The Hague, 1955, according to whether the carriage under the agreement referred to in paragraph (b) is governed by the one or by the other; (b) "contracting carrier" means a person who as a principal makes an agreement for carriage governed by the Warsaw Convention with a passenger or consignor or with a person acting on behalf of the passenger or consignor; (c) "actual carrier" means a person other than the contracting carrier, who, by virtue of authority from the contracting carrier, performs the whole or part of the carriage contemplated in paragraph (b) but who is not with respect to such part a successive carrier within the meaning of the Warsaw Convention. Such authority is presumed in the absence of proof to the contrary.

Article II

If an actual carrier performs the whole or part of carriage which,

according to the agreement referred to in Article I, paragraph (b), is

governed by the Warsaw Convention, both the contracting carrier and the

actual carrier shall, except as otherwise provided in this Convention, be

subject to the rules of the Warsaw Convention, the former for the whole of

the carriage contemplated in the agreement, the latter solely for the

carriage which he performs.

Article III

1. The acts and omissions of the actual carrier and of his servants and agents acting within the scope of their employment shall, in relation to the carriage performed by the actual carrier, be deemed to be also those of the contracting carrier.

2. The acts and omissions of the contracting carrier and of his servants and agents acting within the scope of their employment shall, in relation to the carriage performed by the actual carrier, be deemed to be also those of the actual carrier.

HAGUE PROTOCOL

Article III

In Article 3 of the Convention

(a) paragraph 1 shall be deleted and replaced by the following:-

"1. In respect of the carriage of passengers a ticket shall be

delivered containing: (a) an indication of the places of departure and destination; (b) if the places of departure and destination are within the territory of a single High Contracting Party, one or more agreed stopping places being within the territory of another State, an indication of at least one such stopping place; (c) a notice to the effect that, if the passenger's journey involves an ultimate destination or stop in a country other than the country of departure, the Warsaw Convention may be applicable and that the Convention governs and in most cases limits the liability of carriers for death or personal injury and in respect of loss of or damage to baggage."

(b) paragraph 2 shall be deleted and replaced by the following:-

"2. The passenger ticket shall constitute prima facie evidence of

the conclusion and conditions of the contract of carriage. The

absence, irregularity or loss of the passenger ticket does not affect

the existence or the validity of the contract of carriage which shall,

none the less, be subject to the rules of this Convention.

Nevertheless, if, with the consent of the carrier, the passenger

embarks without a passenger ticket having been delivered, or if the

ticket does not include the notice required by paragraph 1 (c) of this

Article, the carrier shall not be entitled to avail himself of the

provisions of Article 22."

Article IV

In Article 4 of the Convention -

(a) paragraphs 1, 2 and 3 shall be deleted and replaced

by the following:-

"1. In respect of the carriage of registered baggage, a baggage

check shall be delivered, which, unless combined with or

incorporated in a passenger ticket which complies with the

provisions of Article 3, paragraph 1, shall contain: (a) an indication of the places of departure and destination; (b) if the places of departure and destination are within the territory of a single High Contracting Party, one or more agreed stopping places being within the territory of another State, an indication of at least one such stopping place; (c) a notice to the effect that, if the carriage involves an ultimate destination or stop in a country other than the country of departure, the Warsaw Convention may be applicable and that the Convention governs and in most cases limits the liability of carriers in respect of loss of or damage to baggage."

(b) paragraph 4 shall be deleted and replaced by the following:- "2. The baggage check shall constitute prima facie evidence of the registration of the baggage and of the conditions of the contract of carriage. The absence, irregularity or loss of the baggage check does not affect the existence or the validity of the contract of carriage which shall, none the less, be subject to the rules of this Convention. Nevertheless, if the carrier takes charge of the baggage without a baggage check having been delivered or if the baggage check (unless combined with or incorporated in the passenger ticket which complies with the provisions of Article 3, paragraph 1 (c)) does not include the notice required by paragraph 1 (c) of this Article, he shall not be entitled to avail himself of the provisions of Article 22, paragraph 2." NOVEMBER 23, 2011

CIVIL CODE

Art. 1755. A common carrier is bound to carry the passengers safely as far as human care and foresight can provide, using the utmost diligence of very cautious persons, with a due regard for all the circumstances.

Art. 1756. In case of death of or injuries to passengers, common carriers are presumed to have been at fault or to have acted negligently, unless they prove that they observed extraordinary diligence as prescribed in Articles 1733 and 1755.

Art. 1757. The responsibility of a common carrier for the safety of passengers as required in Articles 1733 and 1755 cannot be dispensed with or lessened by stipulation, by the posting of notices, by statements on tickets, or otherwise.

Art. 1758. When a passenger is carried gratuitously, a stipulation limiting the common carrier's liability for negligence is valid, but not for wilful acts or gross negligence.

The reduction of fare does not justify any limitation of the common carrier's liability.

Art. 1759. Common carriers are liable for the death of or injuries to passengers through the negligence or wilful acts of the former's employees, although such employees may have acted beyond the scope of their authority or in violation of the orders of the common carriers.

This liability of the common carriers does not cease upon proof that they exercised all the diligence of a good father of a family in the selection and supervision of their employees.

Art. 1760. The common carrier's responsibility prescribed in the preceding article cannot be eliminated or limited by stipulation, by the posting of notices, by statements on the tickets or otherwise.

Art. 1763. A common carrier is responsible for injuries suffered by a passenger on account of the wilful acts or negligence of other passengers or of strangers, if the common carrier's employees through the exercise of the diligence of a good father of a family could have prevented or stopped the act or omission.


Art. 1636. In the preceding articles in this Title governing the sale of goods, unless the context or subject matter otherwise requires:

(1) "Document of title to goods" includes any bill of lading, dock warrant, "quedan," or warehouse receipt or order for the delivery of goods, or any other document used in the ordinary course of business in the sale or transfer of goods, as proof of the possession or control of the goods, or authorizing or purporting to authorize the possessor of the document to transfer or receive, either by endorsement or by delivery, goods represented by such document.

"Goods" includes all chattels personal but not things in action or money of legal tender in the Philippines. The term includes growing fruits or crops.

"Order" relating to documents of title means an order by endorsement on the documents.

"Quality of goods" includes their state or condition.

"Specific goods" means goods identified and agreed upon at the time a contract of sale is made.

An antecedent or pre-existing claim, whether for money or not, constitutes "value" where goods or documents of title are taken either in satisfaction thereof or as security therefor.

Art. 1503. When there is a contract of sale of specific goods, the seller may, by the terms of the contract, reserve the right of possession or ownership in the goods until certain conditions have been fulfilled. The right of possession or ownership may be thus reserved notwithstanding the delivery of the goods to the buyer or to a carrier or other bailee for the purpose of transmission to the buyer.

Where goods are shipped, and by the bill of lading the goods are deliverable to the seller or his agent, or to the order of the seller or of his agent, the seller thereby reserves the ownership in the goods. But, if except for the form of the bill of lading, the ownership would have passed to the buyer on shipment of the goods, the seller's property in the goods shall be deemed to be only for the purpose of securing performance by the buyer of his obligations under the contract.

Where goods are shipped, and by the bill of lading the goods are deliverable to order of the buyer or of his agent, but possession of the bill of lading is retained by the seller or his agent, the seller thereby reserves a right to the possession of the goods as against the buyer.

Where the seller of goods draws on the buyer for the price and transmits the bill of exchange and bill of lading together to the buyer to secure acceptance or payment of the bill of exchange, the buyer is bound to return the bill of lading if he does not honor the bill of exchange, and if he wrongfully retains the bill of lading he acquires no added right thereby. If, however, the bill of lading provides that the goods are deliverable to the buyer or to the order of the buyer, or is indorsed in blank, or to the buyer by the consignee named therein, one who purchases in good faith, for value, the bill of lading, or goods from the buyer will obtain the ownership in the goods, although the bill of exchange has not been honored, provided that such purchaser has received delivery of the bill of lading

indorsed by the consignee named therein, or of the goods, without notice of the facts making the transfer wrongful. (n)

Art. 1507. A document of title in which it is stated that the goods referred to therein will be delivered to the bearer, or to the order of any person named in such document is a negotiable document of title. (n)

Art. 1508. A negotiable document of title may be negotiated by delivery:

(1) Where by the terms of the document the carrier, warehouseman or other bailee issuing the same undertakes to deliver the goods to the bearer; or

(2) Where by the terms of the document the carrier, warehouseman or other bailee issuing the same undertakes to deliver the goods to the order of a specified person, and such person or a subsequent endorsee of the document has indorsed it in blank or to the bearer.

Where by the terms of a negotiable document of title the goods are deliverable to bearer or where a negotiable document of title has been indorsed in blank or to bearer, any holder may indorse the same to himself or to any specified person, and in such case the document shall thereafter be negotiated only by the endorsement of such endorsee. (n)

Art. 1509. A negotiable document of title may be negotiated by the endorsement of the person to whose order the goods are by the terms of the document deliverable. Such endorsement may be in blank, to bearer or to a specified person. If indorsed to a specified person, it may be again negotiated by the endorsement of such person in blank, to bearer or to another specified person. Subsequent negotiations may be made in like manner. (n)

Art. 1510. If a document of title which contains an undertaking by a carrier, warehouseman or other bailee to deliver the goods to bearer, to a specified person or order of a specified person or which contains words of like import, has placed upon it the words "not negotiable," "non-negotiable" or the like, such document may nevertheless be negotiated by the holder and is a negotiable document of title within the meaning of this Title. But nothing in this Title contained shall be construed as limiting or defining the effect upon the obligations of the carrier, warehouseman, or other bailee issuing a document of title or placing thereon the words "not negotiable," "non-negotiable," or the like. (n)

Art. 1511. A document of title which is not in such form that it can be negotiated by delivery may be transferred by the holder by delivery to a purchaser or donee. A non-negotiable document cannot be negotiated and the endorsement of such a document gives the transferee no additional right. (n)

Art. 1512. A negotiable document of title may be negotiated:

(1) By the owner therefor; or

(2) By any person to whom the possession or custody of the document has been entrusted by the owner, if, by the terms of the document the bailee issuing the document undertakes to deliver the goods to the order of the person to whom the possession or custody of the document has been entrusted, or if at the time of such entrusting the document is in such form that it may be negotiated by delivery. (n)

Art. 1513. A person to whom a negotiable document of title has been duly negotiated acquires thereby:

(1) Such title to the goods as the person negotiating the document to him had or had ability to convey to a purchaser in good faith for value and also such title to the goods as the person to whose order the goods were to be delivered by the terms of the document had or had ability to convey to a purchaser in good faith for value; and

(2) The direct obligation of the bailee issuing the document to hold possession of the goods for him according to the terms of the document as fully as if such bailee had contracted directly with him. (n)

Art. 1514. A person to whom a document of title has been transferred, but not negotiated, acquires thereby, as against the transferor, the title to the goods, subject to the terms of any agreement with the transferor.

If the document is non-negotiable, such person also acquires the right to notify the bailee who issued the document of the transfer thereof, and thereby to acquire the direct obligation of such bailee to hold possession of the goods for him according to the terms of the document.

Prior to the notification to such bailee by the transferor or transferee of a non-negotiable document of title, the title of the transferee to the goods and the right to acquire the obligation of such bailee may be defeated by the levy of an attachment of execution upon the goods by a creditor of the transferor, or by a notification to such bailee by the transferor or a subsequent purchaser from the transfer of a subsequent sale of the goods by the transferor. (n)

Art. 1515. Where a negotiable document of title is transferred for value by delivery, and the endorsement of the transferor is essential for negotiation, the transferee acquires a right against the transferor to compel him to endorse the document unless a contrary intention appears. The negotiation shall take effect as of the time when the endorsement is actually made. (n)

Art. 1516. A person who for value negotiates or transfers a document of title by endorsement or delivery, including one who assigns for value a claim secured by a document of title unless a contrary intention appears, warrants:

(1) That the document is genuine;

(2) That he has a legal right to negotiate or transfer it;

(3) That he has knowledge of no fact which would impair the validity or worth of the document; and

(4) That he has a right to transfer the title to the goods and that the goods are merchantable or fit for a particular purpose, whenever such warranties would have been implied if the contract of the parties had been to transfer without a document of title the goods represented thereby. (n)

Art. 1517. The endorsement of a document of title shall not make the endorser liable for any failure on the part of the bailee who issued the document or previous endorsers thereof to fulfill their respective obligations. (n)

Art. 1518. The validity of the negotiation of a negotiable document of title is not impaired by the fact that the negotiation was a breach of duty on the part of the person making the negotiation, or by the fact that the owner of the document was deprived of the possession of the same by loss, theft, fraud, accident, mistake, duress, or conversion, if the person to whom the document was negotiated or a person to whom the document was subsequently negotiated paid value therefor in good faith without notice of the breach of duty, or loss, theft, fraud, accident, mistake, duress or conversion. (n)

Art. 1519. If goods are delivered to a bailee by the owner or by a person whose act in conveying the title to them to a purchaser in good faith for value would bind the owner and a negotiable document of title is issued for them they cannot thereafter, while in possession of such bailee, be attached by garnishment or otherwise or be levied under an execution unless the document be first surrendered to the bailee or its negotiation enjoined. The bailee shall in no case be compelled to deliver up the actual possession of the goods until the document is surrendered to him or impounded by the court. (n)

Art. 1520. A creditor whose debtor is the owner of a negotiable document of title shall be entitled to such aid from courts of appropriate jurisdiction by injunction and otherwise in attaching such document or in satisfying the claim by means thereof as is allowed at law or in equity in regard to property which cannot readily be attached or levied upon by ordinary legal process. (n)

CODE OF COMMERCE

ARTICLE 349. A contract for all kinds of transportation over land or river shall be considered commercial:

1. When it involves merchandise or any commercial goods.

2. When, no matter what its object may be, the carrier is a merchant or is customarily engaged in making transportation for the public.

ARTICLE 350. The shipper as well as the carrier of merchandise and

goods may mutually demand of each other the issue of a bill of lading in which there shall be stated:

1. The name, surname, and domicile of the shipper.

2. The name, surname, and domicile of the carrier.

3. The name, surname and domicile of the person to whom or to whose order the goods are addressed, or whether they are to be delivered to the bearer of the said bill.

4. A description of the goods, stating their generic character, their weight, and the external marks or signs of the packages containing the same.

5. The cost of the transportation.

6. The date on which the shipment is made.

7. The place of the delivery to the carrier.

8. The place and time at which the delivery is to be made to the consignee.

9. The damages to be paid by the carrier in case of delay, if any agreement is made on this point.

ARTICLE 351. In shipments made over railroads or by other

enterprises which are subject to schedules or the time fixed by regulations, it shall be sufficient that the bills of lading or declarations of shipment furnished by the shipper refer, with regard to the rate, terms, and special conditions of the transportation, to the schedules and regulations, the application of which is requested; and should no schedule be determined the carrier must apply the rate of the merchandise paying the lowest, with the condition inherent thereto, always including such statement or reference in the bill of lading delivered to the shipper.

ARTICLE 352. Bills of lading or tickets in the case of transportation

of passengers may be different, one for persons and another for baggage, but all of them shall contain the name of the carrier, the date of shipment, the points of departure and arrival, the price, and with regard to baggage, the number and weight of the packages, with any other indications which may be considered necessary in order to easily identify them.

ARTICLE 706. The captain and the freighter of the vessel are obliged to draft the bill of lading, in which there shall be stated:

1. The name, registry, and tonnage of the vessel.

2. The name of the captain and his domicile.

3. The port of loading and that of unloading.

4. The name of the shipper.

5. The name of the consignee, if the bill of lading is issued to order.

6. The quantity, quality, number of packages, and marks of the merchandise.

7. The freight and the primage stipulated.

The bill of lading may be issued to bearer, to order, or in the name of a specific person, and must be signed within twenty-four hours after the cargo has been received on board, the freighter being able to request the unloading thereof at the expense of the captain should he not sign it, and in every case indemnity for the losses and damages suffered thereby. cdasia

ARTICLE 707. Four true copies of the original bill of lading shall be

made, all of which shall be signed by the captain and by the freighter. Of these copies the freighter shall keep one and send another to the consignee; the captain shall take two, one for himself and another for the agent.

There may, furthermore, be made as many copies of the bill of lading as may be considered necessary by the persons interested; but when they are issued to order or to the bearer there shall be stated in all the copies, be they either of the first four or of the subsequent ones, the destination of each one, stating whether it is for the agent, for the captain, for the freighter, or for the consignee. If the copy sent to the latter should be duplicated there must be stated in said duplicate this fact, and that it is not valid except in case of the loss of the first one.

ARTICLE 708. The bills of lading issued to the bearer sent to the

consignee shall be transferable by the actual delivery of the instrument; and by virtue of an indorsement, those issued to order.

In either case, the person to whom the bill of lading is transferred shall acquire all the rights and actions of the assignor or indorser with regard to the merchandise mentioned in the same.

ARTICLE 709. A bill of lading drawn up in accordance with the

provisions of this title shall be proof as between all those interested in the cargo and between the latter and the underwriters, proof to the contrary being reserved by the latter.

ARTICLE 710. Should the bills of lading not agree, and there should

not be observed any correction or erasure in any of them, those possessed by the freighter or consignee signed by the captain shall be proof against the captain or agent in favor of the consignee or freighter; and those possessed by the captain or agent signed by the freighter shall be proof against the freighter or consignee in favor of the captain or agent.

ARTICLE 711. The legitimate holder of a bill of lading who does not

present it to the captain of the vessel before her unloading, obliging the latter thereby to unload it and place it in deposit, shall be liable for the cost of warehousing and other expenses arising therefrom.

ARTICLE 712. The captain can not himself change the destination

of merchandise. In admitting this change at the instance of the freighter, he must first take up the bills of lading he may have issued, under the penalty of being liable for the cargo to the legitimate holder of the same.

ARTICLE 713. If before delivering the cargo a new bill of lading

should be demanded of the captain, it being alleged that the previous ones

are not presented on account of their loss or for any other sufficient cause, he shall be obliged to issue it, provided security for the value of the cargo is given to his satisfaction; but without changing the consignment and stating therein the circumstances prescribed in the last paragraph of Article 707, when the bills of lading referred to therein are in question, under the penalty otherwise to be liable for said cargo if not properly delivered through his fault.

ARTICLE 714. If before the vessel puts to sea the captain should die

or should discontinue in his position through any accident, the freighters shall have a right to demand of the new captain the ratification of the first bills of lading, and the latter must do so, provided all the copies previously issued be presented or returned to him, and it should appear from an examination of the cargo that they are correct.

The expenses arising from the examination of the cargo shall be defrayed by the agent, without prejudice to the right of action of the latter against the first captain, if he ceased to be such through his own fault. Should said examination not be made, it shall be understood that the new captain accepts the cargo as it appears from the bills of lading issued.

ARTICLE 715. Bills of lading will give rise to a most summary

action or to judicial compulsion, according to the case, for the delivery of the cargo and the payment of the freightage and proper expenses.

ARTICLE 716. If several persons should present bills of lading issued

to bearer or to order, indorsed in their favor, demanding the same merchandise, the captain shall prefer in delivering the same, the person presenting the copy first issued, with the exception of the case when the latter one was issued on account of the loss of the first one, and if they are held by different persons.

In such case, as well as when only second or subsequent copies issued without this proof are presented, the captain shall apply to the judge or court, so that he may order the deposit of the merchandise, and that through him it may be delivered to the proper person.

ARTICLE 717. The delivery of the bill of lading shall effect the

cancellation of all the provisional receipts of prior date given by the captain or his subalterns for partial deliveries of the cargo which may have been made.

ARTICLE 718. After the cargo has been delivered, the bills of lading

which the captain signed shall be returned to him, or at least the copy by reason of which the delivery is made, with the receipt for the merchandise mentioned therein.

The delay on the part of the consignee shall make him liable for the damages which may be caused the captain thereby.

CA 65 TITLE I

Section 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 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 charter 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.

Section 3.

(3) After receiving the goods into his charge the 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 —

(a) The leading 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, or on the cases or coverings in which such goods are contained, 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 condition 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 goods 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: Provided, That nothing in this Act shall be construed as repealing or limiting the application of any part of the Act, as amended, entitled "An Act relating to bills of lading in interstate and foreign commerce," approved August 29, 1916 (U. S. C. title 49, secs. 81-124), commonly known as the "Pomerene Bills of Lading Act."

(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 or to any person other than the shipper.

(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 name or name the 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.

Section 6. Notwithstanding the provisions of the preceding sections, 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 of such goods, or his obligation as to seaworthiness (so far as the stipulation regarding seaworthiness is not 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 embodied in a receipt which 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.

Section 11. Where under the customs 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 is so ascertained or accepted is stated in the bill of lading, then, notwithstanding any thing 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 bill of lading, and the accuracy thereof at the time of shipment shall not be deemed to have been guaranteed by the shipper.

WARSAW CONVENTION

Article 5

1. Every carrier of goods has the right to require the consignor tomake out and hand over to him a document called an "air consignment note"; every consignor has the right to require the carrier to accept this document.

2. The absence, irregularity or loss of this document does not affectthe existence or the validity of the contract of carriage which shall, subject to the provisions of Article 9, be none the less governed by the rules of this Convention.

Article 6

1. The air consignment note shall be made out by the consignor inthree

original parts and be handed over with the goods. 2. The first part shall be marked "for the carrier," and shall besigned by the

consignor. The second part shall be marked "for the consignee"; it shall be signed by the consignor and by the carrier and shall accompany the goods. The third part shall be signed by the carrier and handed by him to the consignor after the goods have been accepted.

3. The carrier shall sign on acceptance of the goods. 4. The signature of the carrier may be stamped; that of theconsignor may

be printed or stamped. 5. If, at the request of the consignor, the carrier makes out the

airconsignment note, he shall be deemed, subject to proof to the contrary, to have done so on behalf of the consignor.

Article 7

The carrier of goods has the right to require the consignor to make

out separate consignment notes when there is more than one package.

Article 10

1. The consignor is responsible for the correctness of the particularsand statements relating to the goods which he inserts in the air consignment note.

2. The consignor will be liable for all damage suffered by thecarrier or any other person by reason of the irregularity, incorrectness or incompleteness of the said particulars and statements.

Article 11 1. The air consignment note is prima facie evidence of theconclusion of

the contract, of the receipt of the goods and of the conditions of carriage.

2. The statements in the air consignment note relating to the weight,dimensions and packing of the goods, as well as those relating to the number of packages, are prima facie evidence of the facts stated; those relating to the quantity, volume and condition of the goods do not constitute evidence against the carrier except so far as they both have been, and are stated in the air consignment note to

have been, checked by him in the presence of the consignor, or relate to the apparent condition of the goods.

Article 12

1. Subject to his liability to carry out all his obligations under thecontract of carriage, the consignor has the right to dispose of the goods by withdrawing them at the aerodrome of departure or destination, or by stopping them in the course of the journey on any landing, or by calling for them to be delivered at the place of destination or in the course of the journey to a person other than the consignee named in the air consignment note, or by requiring them to be returned to the aerodrome of departure. He must not exercise this right of disposition in such a way as to prejudice the carrier or other consignors and he must repay any expenses occasioned by the exercise of this right.

2. If it is impossible to carry out the orders of the consignor thecarrier must so inform him forthwith.

3. If the carrier obeys the orders of the consignor for the dispositionof the goods without requiring the production of the part of the air consignment note delivered to the latter, he will be liable, without prejudice to his right of recovery from the consignor, for any damage which may be caused thereby to any person who is lawfully in possession of that part of the air consignment note.

4. The right conferred on the consignor ceases at the moment whenthat of the consignee begins in accordance with Article 13. Nevertheless, if the consignee declines to accept the consignment note or the goods, or if he cannot be communicated with, the consignor resumes his right of disposition. Article 13

1. Except in the circumstances set out in the preceding Article, theconsignee is entitled, on arrival of the goods at the place of destination, to require the carrier to hand over to him the air consignment note and to deliver the goods to him, on payment of the charges due and on complying with the conditions of carriage set out in the air consignment note.

2. Unless it is otherwise agreed, it is the duty of the carrier to givenotice to the consignee as soon as the goods arrive.

3. If the carrier admits the loss of the goods, or if the goods havenot arrived at the expiration of seven days after the date on which they ought to have arrived, the consignee is entitled to put into force against the carrier the rights which flow from the contract of carriage.

Article 14

The consignor and the consignee can respectively enforce all the

rights given them by Articles 12 and 13, each in his own name, whether he

is acting in his own interest or in the interest of another, provided that he

carries out the obligations imposed by the contract.

Article 15

1. Articles 12, 13 and 14 do not affect either the relations of theconsignor or the consignee with each other or the mutual relations of third parties whose rights are derived either from the consignor or from the consignee.

2. The provisions of Articles 12, 13 and 14 can only be varied byexpress provision in the air consignment note.

Article 16

1. The consignor must furnish such information and attach to

theair consignment note such documents as are necessary to meet the

formalities of customs, octroi or police before the goods can be

delivered to the consignee. The consignor is liable to the carrier for any

damage occasioned by the absence, insufficiency or irregularity of any

such information or documents, unless the damage is due to the fault of

the carrier or his agents.

2. The carrier is under no obligation to enquire into the correctnessor

sufficiency of such information or documents.

HAGUE PROTOCOL

Article V

In Article 6 of the Convention paragraph 3 shall

be deleted and replaced by the following:-"3. The

carrier shall sign prior to the loading of the cargo on

board the aircraft."

Article VI

Article 8 of the

Convention shall be deleted

and replaced by the following:-

"The air waybill shall contain:

(a) an indication of the places of departure and destination; (b) if the places of departure and destination are within the territory of a single High Contracting Party, one or more agreed stopping places being within the territory of another State, an indication of at least one such stopping place; (c) a notice to the consignor to the effect that, if the carriage involves an ultimate destination or stop in a country other than the country of departure, the Warsaw Convention may be applicable and that the Convention governs and in most cases limits the liability of carriers in respect of loss of or damage to cargo."

Article VII

Article 9 of the Convention shall be deleted and replaced by the

following:-"If, with the consent of the carrier, cargo is loaded on

board the aircraft without an air waybill having been made out, or if

the air waybill does not include the notice required by Article 8,

paragraph (c), the carrier shall not be entitled to avail himself of the

provisions of Article 22, paragraph 2."

Article VIII

In Article 10 of the Convention paragraph 2 shall be deleted and

replaced by the following:-

"2. The consignor shall indemnify the carrier against all damage

suffered by him, or by any other person to whom the carrier is liable, by

reason of the irregularity, incorrectness or incompleteness of the

particulars and statements furnished by the consignor."

Article IX

To Article 15 of the Convention the following paragraph shall be added:-

"3. Nothing in this Convention prevents the issue of a negotiable air

waybill

NOVEMBER 26, 2011

CIVIL CODE

Art. 1174. Except in cases expressly specified by the law, or when it is otherwise declared by stipulation, or when the nature of the obligation requires the assumption of risk, no person shall be responsible for those events which could not be foreseen, or which, though foreseen, were inevitable. (1105a)

Art. 1733. Common carriers, from the nature of their business and for reasons of public policy, are bound to observe extraordinary diligence in the vigilance over the goods and for the safety of the passengers transported by them, according to all the circumstances of each case.

Such extraordinary diligence in the vigilance over the goods is further expressed in Articles 1734, 1735, and 1745, Nos. 5, 6, and 7, while the extraordinary diligence for the safety of the passengers is further set forth in Articles 1755 and 1756.

Art. 1734. Common carriers are responsible for the loss, destruction, or deterioration of the goods, unless the same is due to any of the following causes only:

(1) Flood, storm, earthquake, lightning, or other natural disaster or calamity;

(2) Act of the public enemy in war, whether international or civil;

(3) Act of omission of the shipper or owner of the goods;

(4) The character of the goods or defects in the packing or in the containers;

(5) Order or act of competent public authority.

Art. 1735. In all cases other than those mentioned in Nos. 1, 2, 3, 4, and 5 of the preceding article, if the goods are lost, destroyed or deteriorated, common carriers are presumed to have been at fault or to have acted negligently, unless they prove that they observed extraordinary diligence as required in Article 1733.

Art. 1736. The extraordinary responsibility of the common carrier lasts from the time the goods are unconditionally placed in the possession of, and received by the carrier for transportation until the same are delivered,

actually or constructively, by the carrier to the consignee, or to the person who has a right to receive them, without prejudice to the provisions of Article 1738.

Art. 1737. The common carrier's duty to observe extraordinary diligence over the goods remains in full force and effect even when they are temporarily unloaded or stored in transit, unless the shipper or owner has made use of the right of stoppage in transitu.

Art. 1738. The extraordinary liability of the common carrier continues to be operative even during the time the goods are stored in a warehouse of the carrier at the place of destination, until the consignee has been advised of the arrival of the goods and has had reasonable opportunity thereafter to remove them or otherwise dispose of them.

Art. 1739. In order that the common carrier may be exempted from responsibility, the natural disaster must have been the proximate and only cause of the loss. However, the common carrier must exercise due diligence to prevent or minimize loss before, during and after the occurrence of flood, storm or other natural disaster in order that the common carrier may be exempted from liability for the loss, destruction, or deterioration of the goods. The same duty is incumbent upon the common carrier in case of an act of the public enemy referred to in Article 1734, No. 2.

Art. 1740. If the common carrier negligently incurs in delay in transporting the goods, a natural disaster shall not free such carrier from responsibility.

Art. 1741. If the shipper or owner merely contributed to the loss, destruction or deterioration of the goods, the proximate cause thereof being the negligence of the common carrier, the latter shall be liable in damages, which however, shall be equitably reduced.

Art. 1742. Even if the loss, destruction, or deterioration of the goods should be caused by the character of the goods, or the faulty nature of the packing or of the containers, the common carrier must exercise due diligence to forestall or lessen the loss.

Art. 1743. If through the order of public authority the goods are seized or destroyed, the common carrier is not responsible, provided said public authority had power to issue the order.

CODE OF COMMERCE

ARTICLE 349. A contract for all kinds of transportation over land or river shall be considered commercial:

1. When it involves merchandise or any commercial goods.

2. When, no matter what its object may be, the carrier is a merchant or is customarily engaged in making transportation for the public.

ARTICLE 350. The shipper as well as the carrier of merchandise and

goods may mutually demand of each other the issue of a bill of lading in which there shall be stated:

1. The name, surname, and domicile of the shipper.

2. The name, surname, and domicile of the carrier.

3. The name, surname and domicile of the person to whom or to whose order the goods are addressed, or whether they are to be delivered to the bearer of the said bill.

4. A description of the goods, stating their generic character, their weight, and the external marks or signs of the packages containing the same.

5. The cost of the transportation.

6. The date on which the shipment is made.

7. The place of the delivery to the carrier.

8. The place and time at which the delivery is to be made to the consignee.

9. The damages to be paid by the carrier in case of delay, if any agreement is made on this point.

ARTICLE 351. In shipments made over railroads or by other

enterprises which are subject to schedules or the time fixed by regulations, it shall be sufficient that the bills of lading or declarations of shipment furnished by the shipper refer, with regard to the rate, terms, and special conditions of the transportation, to the schedules and regulations, the application of which is requested; and should no schedule be determined the carrier must apply the rate of the merchandise paying the lowest, with the condition inherent thereto, always including such statement or reference in the bill of lading delivered to the shipper.

ARTICLE 352. Bills of lading or tickets in the case of transportation

of passengers may be different, one for persons and another for baggage, but all of them shall contain the name of the carrier, the date of shipment, the points of departure and arrival, the price, and with regard to baggage, the number and weight of the packages, with any other indications which may be considered necessary in order to easily identify them.

ARTICLE 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 without admission of other exceptions than forgery or material errors in the drafting thereof.

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

If in case of loss or for any other reason whatsoever, the consignee can not return upon receiving the merchandise the bill of lading subscribed by the carrier, he shall give said carrier 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 the respective claims

of the parties shall be decided by the legal proofs that each one may submit in support of his claims, in accordance with the general provisions established in this Code for commercial contracts. cd

ARTICLE 355. The liability of the carrier shall begin from the

moment he receives the merchandise, in person or through a person intrusted thereto in the place indicated for their reception.

ARTICLE 356. Carriers may refuse to accept packages which appear

unfit for transportation; and if said transportation is to be made over a railroad, and the shipment is insisted on, the company shall carry it, being exempt from all liability if its objections are so stated in the bill of lading.

ARTICLE 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.

ARTICLE 359. If there should be an agreement between the shipper

and the carrier with regard to the road over which the transportation is to be made, the carrier can not change the route, unless obliged to do so by force majeure; and should he do so without being forced to, he shall be liable for any damage which may be suffered by the goods transported for any other cause whatsoever, besides being required to pay the amount which may have been stipulated for such a case.

When on account of the said force majeure the carrier is obliged to take another route, causing an increase in the transportation charges, he shall be reimbursed for said increase after presenting the formal proof thereof.

ARTICLE 360. The shipper may, without changing the place where

the delivery is to be made, change the consignment of the goods delivered to the carrier, and the latter shall comply with his orders, provided that at the time of making the change of the consignee the bill of lading subscribed by the carrier be returned to him, if one were issued, exchanging it for another containing the novation of the contract.

The expenses arising from the change of consignment shall be defrayed by the shipper.

ARTICLE 361. Merchandise shall be transported at the risk and

venture of the shipper, if the contrary was not expressly stipulated.

Therefore, all damages and impairment suffered by the goods during the transportation, by reason of accident, force majeure, or by virtue of the nature or defect of the articles, shall be for the account and risk of the shipper. cdta

The proof of these accidents is incumbent on the carrier.

ARTICLE 362. The carrier, however, shall be liable for the losses

and damages arising from the causes mentioned in the foregoing article if it is proved that they occurred on account of his negligence or because he did not take the precautions usually adopted by careful persons, unless the shipper committed fraud in the bill of lading, making him believe that the goods were of a class or quality different from what they really were.

If, notwithstanding the precaution referred to in this article, the goods transported run the risk of being lost on account of the nature or by reason of an unavoidable accident, without there being time for the owners of the same to dispose thereof, the carrier shall proceed to their sale, placing them for this purpose at the disposal, of the judicial authority or the officials determined by special provisions.

ARTICLE 363. With the exception of the cases prescribed in the

second paragraph of Article 361, the carrier shall be obliged to deliver the goods transported in the same condition in which, according to the bill of lading, they were at the time of their receipt, without any detriment or impairment, and should he not do so, he shall be obliged to pay the value of the goods not delivered at the point where they should have been and at the time the delivery should have taken place.

If part of the goods transported should be delivered the consignee may refuse to receive them, when he proves that he can not make use thereof without the others.

**(COC) ARTICLE 687. The charters and freighters can not

abandon merchandise damaged on account of the inherent vice of the goods or by reason of an accidental case, for the payment of the freight and other expenses. aisadc

The abandonment shall be proper, however, if the cargo should consist of liquids and should they have leaked out, there not remaining in the containers more than one-quarter of their contents.

ARTICLE 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.

ARTICLE 365. If, on account of the damage, the goods are rendered

useless for purposes of sale or consumption in the use for which they are properly destined the consignee shall not be bound to receive them, and may leave them on the hands of the carrier, demanding payment therefor at current market prices.

If among the goods damaged 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. cdt

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

ARTICLE 368. The carrier must deliver to the consignee without

any delay or difficulty the merchandise received by him, by reason of the mere fact of being designated in the bill of lading to receive it; and should said carrier not do so he shall be liable for the damages which may arise therefrom.

ARTICLE 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.

**(COC) ARTICLE 711. The legitimate holder of a bill of lading

who does not present it to the captain of the vessel before her unloading, obliging the latter thereby to unload it and place it in deposit, shall be liable for the cost of warehousing and other expenses arising therefrom.

ARTICLE 370. If a period has been fixed for the delivery of the

goods, it must be made within the same, and 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.

ARTICLE 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 on 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. aisadc

Should the abandonment not occur the indemnity for loss and damages on account of the delays can not 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.

ARTICLE 372. The appraisement 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, equipment, and all the other principal and accessory means of transportation, shall be especially obligated in favor of the shipper, although with relation 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 retentions against the said companies.

CA 65 TITLE I



(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 on to the time when they are discharged from the ship.

Section 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.

Section 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;

(b) Properly man, equip, and supply the ship;

(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.








(8) Any clause, covenant, or agreement in a contract of carriage relieving the carrier or 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 provided 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.

Section 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 on the part of the carrier to make the ship seaworthy, and to secure that the ship is properly manned, equipped, and supplied, and to make to the holds, refrigerating and cool 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 persons claiming exemption under the 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 waters;

(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) Riots and 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 of packing;

(o) Insufficiency of inadequacy of marks;

(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 from any cause without the act, fault, or neglect of the shipper, his agents, or 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 of this Act or of the contract of carriage, and the carrier shall not be liable for any loss or damage resulting therefrom: Provided, however, That if the deviation is for the purpose of loading cargo or unloading cargo or passengers it shall, prima facie, be regarded as unreasonable.

(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.

Section 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.

Section 6. Notwithstanding the provisions of the preceding sections, 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 of such goods, or his obligation as to seaworthiness (so far as the stipulation regarding seaworthiness is not 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 embodied in a receipt which 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.

Section 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.

DECEMBER 03, 2011

CIVIL CODE

Art. 1744. A stipulation between the common carrier 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 extraordinary 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 common carrier; and

(3) Reasonable, just and not contrary to public policy.

Art. 1745. Any of the following or similar stipulations shall be considered unreasonable, unjust and contrary to public policy:

(1) That the goods are transported at the risk of the owner or shipper;

(2) That the common carrier will not be liable for any loss, destruction, or deterioration of the goods;

(3) That the common carrier need not observe any diligence in the custody of the goods;

(4) That the common carrier shall exercise a degree of diligence less than that of a good father of a family, or of a man of ordinary prudence in the vigilance over the movables transported;

(5) That the common carrier shall not be responsible for the acts or omission of his or its employees;

(6) That the common carrier's liability for acts committed by thieves, or of robbers who do not act with grave or irresistible threat, violence or force, is dispensed with or diminished;

(7) That the common carrier is not responsible for the loss, destruction, or deterioration of goods on account of the

defective condition of the car, vehicle, ship, airplane or other equipment used in the contract of carriage.

Art. 1746. An agreement limiting the common carrier's liability may be annulled by the shipper or owner if the common carrier refused to carry the goods unless the former agreed to such stipulation.

Art. 1747. If the common carrier, without just cause, delays the transportation of the goods or changes the stipulated or usual route, the contract limiting the common carrier's liability cannot be availed of in case of the loss, destruction, or deterioration of the goods.

Art. 1748. An agreement limiting the common carrier's liability for delay on account of strikes or riots is valid.

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.

Art. 1750. A contract fixing the sum that may be recovered. by the owner or shipper for the loss, destruction, or deterioration of the goods is valid, if it is reasonable and just under the circumstances, and has been fairly and freely agreed upon.

Art. 1751. The fact that the common carrier has no competitor along the line or route, or a part thereof, to which the contract refers shall be taken into consideration on the question of whether or not a stipulation limiting the common carrier's liability is reasonable, just and in consonance with public policy.

Art. 1752. Even when there is an agreement limiting the liability of the common carrier in the vigilance over the goods, the common carrier is disputably presumed to have been negligent in case of their loss, destruction or deterioration.

Art. 1753. The law of the country to which the goods are to be transported shall govern the liability of the common carrier for their loss, destruction or deterioration.

Art. 1754. The provisions of Articles 1733 to 1753 shall apply to the passenger's baggage which is not in his personal custody or in that of his employee. As to other baggage, the rules in Articles 1998 and 2000 to 2003 concerning the responsibility of hotel-keepers shall be applicable.

CODE OF COMMERCE

ARTICLE 357. If the carrier by reason of well-founded suspicions as

to the correctness of the declaration of the contents of a package should determine to examine it, he shall do so before witnesses, in the presence of the shipper or of the consignee.

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

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.

**Sec. 2530.Property Subject to Forfeiture Under Tariff and Customs Laws. — Any vessel or aircraft, cargo, articles and other objects shall, under the following conditions, be subject to forfeiture:

a. Any vessel or aircraft, including cargo, which shall be used lawfully in the importation or exportation of articles into or from any Philippine port or place except a port of entry; and any vessel which, being of less than thirty tons capacity shall be used in the importation of articles into any Philippine port or place except into a port of the Sulu sea where

importation in such vessel may be authorized by the Commissioner, with the approval of the department head. b. Any vessel engaging in the coastwise trade which shall have on board any article of foreign growth, product or manufacture in excess of the amount necessary for sea stores, without such article having been properly entered or legally imported. c. Any vessel or aircraft into which shall be transferred cargo unladen contrary to law prior to the arrival of the importing vessel or aircraft at her port of destination. d. Any part of the cargo of a vessel or aircraft arriving from a foreign port which is unladen before arrival at the vessel's or aircraft's port of destination and without authority from the proper customs official; but such cargo shall not be forfeited if such unlading was due to accident, stress of weather or other necessity and is subsequently approved by the Collector. e. Any article which is fraudulently concealed in or removed from any public or private warehouse under customs supervision. f. Any article of prohibited importation or exportation, the importation or exportation of which is effected or attempted contrary to law, and all other articles which, in the opinion of the Collector, have been used, are or were intended to be used as instrument in the importation or exportation of the former. g. Unmanifested article found on any vessel or aircraft, if manifest therefor is required. h. Sea stores or stores for aircraft adjudged by the Collector to be excessive, when the duties assessed by the Collector thereon are not paid or secured forthwith upon assessment of the same. i. Any package of imported article which is found by the examining official to contain any article not specified in the invoice or entry, including all other packages purportedly containing imported articles similar to those declared in the invoice or entry to be the contents of the misdeclared package, provided the Collector is of the opinion that the misdeclaration was caused with fraudulent intent. j. Boxes, cases, trunks, envelopes and other containers of whatever character used as receptacles or as devices to conceal article which is itself subject to forfeiture under the customs and tariff laws or which is so designed as to conceal the character of such article. k. Any beast actually being used for the conveyance of article subject to forfeiture under the customs and tariff laws with its equipage or trappings, and any vehicles similarly used, together with its equipage and appurtenances, including the beast, team or other motive power drawing or propelling the same; but the forfeiture shall not be effected if it is established that the owner of the means of conveyance used as aforesaid or his agent in charge thereof at the time, has no knowledge of the unlawful act. l. Any money or thing of value offered as a bribe or for the purpose of exerting improper influence over a customs official or employee. m. Any article sought to be imported or exported: (1) Without going through a customhouse, whether the act was consummated, frustrated or attempted; (2) By failure to mention to a customs official, articles found in the baggage of a person arriving from abroad. (3) On the strength of a false declaration or affidavit executed by the owner, importer, exporter or consignee concerning the importation or exportation of such article. (4) On the strength of a false invoice or other document executed by the owner, importer, exporter or consignee concerning the importation or exportation of such article.

(5) Through any other fraudulent practice or device by means of which such articles was entered through a customhouse to the prejudice of the government.

**Sec. 2531. Conditions Affecting Forfeiture of Article. — As regards imported or exported article or articles whereof the importation or exportation is merely attempted, the forfeiture shall be effected only when and while the article is in the custody or within the jurisdiction of the customs authorities or in the hands or subject to the control of the importer, exporter, original owner, consignee, agent or other person effecting the importation, entry or exportation in question, or in the hands or subject to the control of some person who shall receive, conceal, buy, sell or transport the same or aid in any such acts, with knowledge that the article was imported, or was the subject of an attempt at importation or exportation, contrary to law.

ARTICLE 374. The consignees to whom the remittance may have

been made can not defer the payment of the expenses and transportation charges on the goods that they received after twenty-four hours have elapsed from the time of the delivery; and in case of delay in making this payment, the carrier may request the judicial sale of the goods he transported to a sufficient amount to cover the transportation charges and the expenses incurred.

ARTICLE 375. The goods transported shall be specifically obligated

to answer for the transportation charges and for the expenses and fees caused by the same during their transportations, or until the time of their delivery.

This special right shall be limited to eight days after the delivery has been made, and after said prescription the carrier shall have no further right of action than that corresponding to an ordinary creditor.

** ARTICLE 665. The cargo shall be specially liable for the payment of

the freight expenses, and duties arising therefrom, which must be reimbursed by the shippers, as well as for the part of the general average which may be due, but it shall not be legal for the captain to delay unloading on account of delay in complying with this obligation.

Should there be reasons for distrust, the judge or court, at the instance of the captain, may order the deposit of the merchandise until he has been paid in full.

**ARTICLE 666. The captain may request the sale of the cargo to the

amount necessary to pay the freight, expenses, and averages due him, reserving the right to demand the balance due him therefor if the proceeds of the sale should not have sufficed to cover his credit.

**ARTICLE 704. The captain, in order to collect the price of the

passage and expenses of maintenance, may retain the goods belonging to the passenger, and in case of the sale of the same he shall be given preference over the other creditors, acting in the same way as in the collection of freight.

**Art. 2241. With reference to specific movable property of the debtor, the following claims or liens shall be preferred:

(9) Credits for transportation, upon the goods carried, for the

price of the contract and incidental expenses, until their

delivery and for thirty days thereafter;

ARTICLE 376. The preference of the carrier to the payment of what

is due him for the transportation and expenses of the goods delivered to the consignee shall not be affected by the bankruptcy of the latter, provided the action is brought within the eight days mentioned in the foregoing article.

ARTICLE 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 on the 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. cd

ARTICLE 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 numbers and dates, all the goods the transportation of which is undertaken, stating the circumstances required by Articles 350 et seq. for the responsive bills of lading.

ARTICLE 379. The provisions contained in Articles 349 et seq. shall

also be understood as relating to persons who, although they do not personally effect the transportation of commercial goods, contract to do so through others, either as contractors for a special and fixed transaction or as freight and transportation agents.

In either case they shall be subrogated to the place of the carriers with regard to the obligations and liability of the latter, as well as with regard to their right.

WARSAW CONVENTION

Article 23

Any provision tending to relieve the carrier of liability or to fix a lower limit than that which is laid down in this Convention shall be null and void, but the nullity of any such provision does not involve the nullity of the whole contract, which shall remain subject to the provisions of this Convention.

HAGUE PROTOCOL

Article XI

Article 22 of the Convention shall be deleted and

replaced by the following:-

"Article 22

1. In the carriage of persons the liability of the carrier for eachpassenger is limited to the sum of two hundred and fifty thousand francs. Where, in accordance with the law of the court seised of the case, damages may be awarded in the form of periodical payments, the equivalent capital value of the said payments shall not exceed two hundred and fifty thousand francs. Nevertheless, by special contract, the carrier and the passenger may agree to a higher limit of liability.

2. (a) In the carriage of registered baggage and of cargo, theliability of the carrier is limited to a sum of two hundred and fifty francs per kilogramme, unless the passenger or consignor has made, at the time when the package was handed over to the carrier, a special declaration of interest in delivery at destination and has paid a supplementary sum if the case so requires. In that case the carrier will be liable to pay a sum not exceeding the declared sum, unless he proves that that sum is greater than the passenger's or consignor's actual interest in delivery at destination.

(b) In the case of loss, damage or delay of part ofregistered baggage

or cargo, or of any object contained therein, the weight to be taken

into consideration in determining the amount to which the carrier's

liability is limited shall be only the total weight of the package or

packages concerned. Nevertheless, when the loss, damage or delay of

a part of the registered baggage or cargo, or of an object contained

therein, affects the value of other packages covered by the same

baggage check or the same air waybill, the total weight of such

package or packages shall also be taken into consideration in

determining the limit of liability.

3. As regards objects of which the passenger takes charge himselfthe

liability of the carrier is limited to five thousand francs per passenger. The limits prescribed in this article shall not prevent the courtfrom

awarding, in accordance with its own law, in addition, the whole or part of the court costs and of the other expenses of the litigation incurred by the plaintiff. The foregoing provision shall not apply if the amount of the damages awarded, excluding court costs and other expenses of the litigation, does not exceed the sum which the carrier has offered in writing to the plaintiff within a period of six months from the date of the occurrence causing the damage, or before the commencement of the action, if that is later.

5. The sums mentioned in francs in this Article shall be deemed torefer to

a currency unit consisting of sixty-five and a half milligrammes of gold of millesimal fineness nine hundred. These sums may be converted into national currencies in round figures. Conversion of the sums into national currencies other than gold shall, in case of judicial proceedings, be made according to the gold value of such currencies at the date of the judgment."

Article XII

In Article 23 of the Convention, the existing provision

shall be renumbered as paragraph 1 and another paragraph

shall be added as follows:-

"2. Paragraph 1 of this Article shall not apply to provisions governing

loss or damage resulting from the inherent defect, quality or vice of the

cargo carried."

Article XIII

In Article 25 of the Convention paragraphs 1 and 2 shall be deleted

and replaced by the following:-

"The limits of liability specified in Article 22 shall not apply if it is

proved that the damage resulted from an act or omission of the carrier, his

servants or agents, done with intent to cause damage or recklessly and

with knowledge that damage would probably result; provided that, in the

case of such act or omission of a servant or agent, it is also proved that he

was acting within the scope of his employment."

Article XIV

After Article 25 of the Convention, the following article

shall be inserted:-

"Article 25 A

1. If an action is brought against a servant or agent of the carrierarising out of damage to which this Convention relates, such servant or agent, if he proves that he acted within the scope of his employment, shall be entitled to avail himself of the limits of liability which that carrier himself is entitled to invoke under Article 22.

2. The aggregate of the amounts recoverable from the carrier, hisservants and agents, in that case, shall not exceed the said limits.

3. The provisions of paragraphs 1 and 2 of this article shall notapply if it is proved that the damage resulted from an act or omission of the servant or agent done with intent to cause damage or recklessly and with knowledge that damage would probably result."

DECEMBER 06, 2011

CODE OF COMMERCE

ARTICLE 586. The owner of a vessel and the agent shall be civilly

liable for the acts of the captain and for the obligations contracted by the latter to repair, equip, and provision the vessel, provided the creditor proves that the amount claimed was invested therein.

By agent is understood the person intrusted with the provisioning of a vessel, or who represents her in the port in which she happens to be.

ARTICLE 587. The agent shall also be civilly liable for the

indemnities in favor of third persons which arise from the conduct of the captain in the care of the goods which the vessel carried; but he may exempt himself therefrom by abandoning the vessel with all her equipments and the freight he may have earned during the voyage.

ARTICLE 588. Neither the owner of the vessel nor the agent shall be

liable for the obligations contracted by the captain if the latter exceeds his powers and privileges which are his by reason of his position or have been conferred upon him by the former.

However, if the amounts claimed were made use of for the benefit of the vessel, the owner or agent shall be liable.

ARTICLE 590. The owners of a vessel shall be civilly liable in the

proportion of their contribution to the common fund, for the results of the acts of the captain, referred to in Article 587.

Each part owner may exempt himself from this liability by the abandonment before a notary of the part of the vessel belonging to him.

ARTICLE 591. All the part owners shall be liable, in proportion to

their respective ownership, for the expenses of repairs to the vessel, and for other expenses which are incurred by virtue of a resolution of the majority.

They shall likewise be liable in the same proportion for the expenses of maintenance, equipment, and provisioning of the vessel, necessary for navigation.

ARTICLE 594. The part owners shall elect the manager who is to represent them in the capacity of agent.

The appointment of director or agent shall be revocable at the will of the members.

ARTICLE 595. The agent, be he at the same time an owner of a

vessel or a manager for an owner or for an association of co-owners, must be qualified to trade and must be recorded in the merchant's registry of the province.

The agent shall represent the ownership of the vessel, and may in his own name and in such capacity take judicial and extrajudicial steps in all that relates to commerce.

ARTICLE 596. The agent may discharge the duties of captain of the

vessel, subject, in every case, to the provisions contained in Article 609.

If two or more co-owners request the position of captain, the disagreement shall be decided by a vote of the members; and if the vote should result in a tie, the position shall be given to the part owner having the larger interest in the vessel.

If the interest of the petitioners should be the same, and there should be a tie, the matter shall be decided by lot.

ARTICLE 597. The agent shall select and come to an agreement

with the captain, and shall contract in the name of the owners, who shall be bound in all that refers to repairs, details of equipment, armament, provisions, fuel, and freight of the vessel, and, in general, in all that relates to the requirements of navigation.

ARTICLE 598. The agent can not order a new voyage, nor make

contracts for a new charter, nor insure the vessel, without the authority of her owner or by virtue of a resolution of the majority of the co-owners, unless these privileges were granted him in the certificate of his appointment. cdasia

If he should insure the vessel without authority therefor he shall be secondarily liable for the solvency of the underwriter.

ARTICLE 599. The managing agent of an association, shall give his

co-owners an account of the results of each voyage of the vessel, without prejudice to always having the books and correspondence relating to the vessel and to its voyages at the disposal of the same.

ARTICLE 600. After the account of the managing agent has been

approved by a relative majority, the co-owners shall satisfy the expenses in proportion to their interest, without prejudice to the civil or criminal actions which the minority may deem fit to institute afterwards.

In order to enforce the payment, the managing agent shall have a right of action to secure execution, which shall be instituted by virtue of a resolution of the majority, and without further proceedings than the acknowledgment of the signatures of the persons who voted the resolution.

ARTICLE 601. Should there be any profits, the co-owners may

demand of the managing agent the amount due them, by means of an executory action without further requisites than the acknowledgment of the signatures of the instrument approving the account.

ARTICLE 602. The agent shall indemnify the captain for all the

expenses he may have incurred from his own funds or from those of other persons, for the benefit of the vessel.

ARTICLE 603. Before a vessel goes out to sea the agent shall have at

his discretion, a right to discharge the captain and members of the crew whose contract did not state a definite period nor a definite voyage, paying them the salaries earned according to their contracts, and without any indemnity whatsoever, unless there is a special and specific agreement in respect thereto.

ARTICLE 604. If the captain or any other member of the crew

should be discharged during the voyage, they shall receive their salary until the return to the place where the contract was made, unless there are good reasons for the discharge, all in accordance with Articles 636 et seq. of this Code.

ARTICLE 605. If the contracts of the captain and members of the

crew with the agent should be for a definite period or voyage, they can not be discharged until the fulfillment of their contracts, except for reasons of insubordination in serious matters, robbery, theft, habitual drunkenness, and damage caused to the vessel or to its cargo by malice or manifest or proven negligence.

ARTICLE 618. The captain shall be civilly liable to the agent, and

the latter to the third persons who may have made contracts with the former —

1. For all the damages suffered by the vessel and his cargo by reason of want of skill or negligence on his part. If a misdemeanor or crime has been committed he shall be liable in accordance with the Penal Code. cda

2. For all the thefts committed by the crew, reserving his right of action against the guilty parties.

3. For the losses, fines, and confiscations imposed an account of violation of the laws and regulations of customs, police, health, and navigation.

4. For the losses and damages caused by mutinies on board the vessel, or by reason of faults committed by the crew in the service and defense of the same, if he does not prove that he made full use of his authority to prevent or avoid them.

5. For those arising by reason of an undue use of powers and non-fulfillment of the obligations which are his in accordance with Articles 610 and 612.

6. For those arising by reason of his going out of his course or taking a course which he should not have taken without sufficient cause, in the opinion of the officers of the vessel, at a meeting with the shippers or supercargoes who may be on board.

No exception whatsoever shall exempt him from this obligation.

7. For those arising by reason of his voluntarily entering a port other than his destination, with the exception of the cases or without the formalities referred to in Article 612.

8. For those arising by reason of the non-observance of the provisions contained in the regulations for lights and evolutions for the purpose of preventing collisions.

ARTICLE 619. The captain shall be liable for the cargo from the

time it is turned over to him at the dock, or afloat alongside the ship, at the port of loading until he delivers it on the shores or on the discharging wharf, of the port of unloading unless the contrary has been expressly agreed upon.

ARTICLE 620. The captain shall not be liable for the damages

caused to the vessel or to the cargo by reason of force majeure; but he shall always be so — no agreement to the contrary being valid — for those arising through his own fault.

Neither shall he be personally liable for the obligations he may have contracted for the repair, equipment, and provisioning of the vessel, which shall be incurred by the agent, unless the former has expressly bound himself personally or signed a draft or promissory note in his name.

CA 65 TITLE 1




(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.



RESPONSIBILITIES AND LIABILITIES










(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: Provided, That nothing in this Act shall be construed as repealing or limiting the application of any part of the Act, as amended, entitled "An Act relating to bills of lading in interstate and foreign commerce," approved August 29, 1916 (U. S. C. title 49, secs. 81-124), commonly known as the "Pomerene Bills of Lading Act."


(6) Unless notice of loss or damage and the general nature of such loss or damage be given in writing to the carrier or his agent at the port of discharge before 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 maybe 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.



RIGHTS AND IMMUNITIES






(d) Act of God;

(e) Act of war,















(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 $600 per package 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.

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 or 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.


Section 13. This Act shall apply to all contracts for carriage of goods by

sea to or from ports of the United States in foreign trade. As used in this Act the term "United States" includes its districts, territories, and possessions:Provided, however, That the Philippine legislature may by law exclude its application to transportation to or from ports of the Philippine Islands. The term "foreign trade" means the transportation of goods between the ports of the United States and ports of foreign countries. Nothing in this Act shall be held to apply to contracts for carriage of goods by sea between any port of the United States or its possessions, and any other port of the United States or its possession: Provided, however, That any bill of lading or similar document of title which is evidence of a contract for the carriage of goods by sea between such ports, containing an express statement that it shall be subject to the provisions of this Act, shall be subjected hereto as fully as if subject hereto as fully as if subject hereto by the express provisions of this Act: Provided, further, That every bill of lading or similar document of title which is evidence of a contract for the carriage of goods by sea from ports of the United States, in foreign trade, shall contain a statement that it shall have effect subject to the provisions of this Act.

DECEMBER 07, 2011

CIVIL CODE

Art. 1144. The following actions must be brought within ten years from the time the right of action accrues:

(1) Upon a written contract;

(2) Upon an obligation created by law;

(3) Upon a judgment. (n)

Art. 1148. The limitations of action mentioned in Articles 1140 to 1142, and 1144 to 1147 are without prejudice to those specified in other parts of this Code, in the Code of Commerce, and in special laws. (n)

Art. 1155. The prescription of actions is interrupted when they are filed before the court, when there is a written extrajudicial demand by the creditors, and when there is any written acknowledgment of the debt by the debtor. (1973a)

Art. 1744. A stipulation between the common carrier 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 extraordinary 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 common carrier; and

(3) Reasonable, just and not contrary to public policy.

Art. 1745. Any of the following or similar stipulations shall be considered unreasonable, unjust and contrary to public policy:

(1) That the goods are transported at the risk of the owner or shipper;

(2) That the common carrier will not be liable for any loss, destruction, or deterioration of the goods;

(3) That the common carrier need not observe any diligence in the custody of the goods;

(4) That the common carrier shall exercise a degree of diligence less than that of a good father of a family, or of a man of ordinary prudence in the vigilance over the movables transported;

(5) That the common carrier shall not be responsible for the acts or omission of his or its employees;

(6) That the common carrier's liability for acts committed by thieves, or of robbers who do not act with grave or irresistible threat, violence or force, is dispensed with or diminished;

(7) That the common carrier is not responsible for the loss, destruction, or deterioration of goods on account of the defective condition of the car, vehicle, ship, airplane or other equipment used in the contract of carriage.

Art. 1746. An agreement limiting the common carrier's liability may be annulled by the shipper or owner if the common carrier refused to carry the goods unless the former agreed to such stipulation.

Art. 1747. If the common carrier, without just cause, delays the transportation of the goods or changes the stipulated or usual route, the contract limiting the common carrier's liability cannot be availed of in case of the loss, destruction, or deterioration of the goods.

Art. 1748. An agreement limiting the common carrier's liability for delay on account of strikes or riots is valid.

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.

Art. 1750. A contract fixing the sum that may be recovered. by the owner or shipper for the loss, destruction, or deterioration of the goods is valid, if it is reasonable and just under the circumstances, and has been fairly and freely agreed upon.

Art. 1751. The fact that the common carrier has no competitor along the line or route, or a part thereof, to which the contract refers shall be taken into consideration on the question of whether or not a stipulation limiting the common carrier's liability is reasonable, just and in consonance with public policy.

Art. 1752. Even when there is an agreement limiting the liability of the common carrier in the vigilance over the goods, the common carrier is disputably presumed to have been negligent in case of their loss, destruction or deterioration.

Art. 1753. The law of the country to which the goods are to be transported shall govern the liability of the common carrier for their loss, destruction or deterioration.

Art. 1754. The provisions of Articles 1733 to 1753 shall apply to the passenger's baggage which is not in his personal custody or in that of his employee. As to other baggage, the rules in Articles 1998 and 2000 to 2003 concerning the responsibility of hotel-keepers shall be applicable.


CA 65 TITLE I




(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.



RESPONSIBILITIES AND LIABILITIES












(6) Unless notice of loss or damage and the general nature of such loss or damage be given in writing to the carrier or his agent at the port of discharge before 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 maybe 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.



RIGHTS AND IMMUNITIES






(d) Act of God;

(e) Act of war,















(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 $600 per package 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.

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 or 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.


Section 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.

Section 9. Nothing contained in this Act shall be construed as permitting

a common carrier by water to discriminate between competing shippers similarly place in time and circumstances, either (a) with respect to the right to demand and receive bills of lading subject to the provisions of this Act; or (b) when 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 6, title I, of this Act or (c) in any other way prohibited by the Shipping Act, 1916, s amended.

Section 13. This Act shall apply to all contracts for carriage of goods by

sea to or from ports of the United States in foreign trade. As used in this Act the term "United States" includes its districts, territories, and possessions:Provided, however, That the Philippine legislature may by law exclude its application to transportation to or from ports of the Philippine Islands. The term "foreign trade" means the transportation of goods between the ports of the United States and ports of foreign countries. Nothing in this Act shall be held to apply to contracts for carriage of goods by sea between any port of the United States or its possessions, and any other port of the United States or its possession: Provided, however, That any bill of lading or similar document of title which is evidence of a contract for the carriage of goods by sea between such ports, containing an express statement that it shall be subject to the provisions of this Act, shall be subjected hereto as fully as if subject hereto as fully as if subject hereto by the express provisions of this Act: Provided, further, That every bill of lading or similar document of title which is evidence of a contract for the carriage of goods by sea from ports of the United States, in foreign trade, shall contain a statement that it shall have effect subject to the provisions of this Act.

WARSAW CONVENTION

Article 29

1. The right to damages shall be extinguished if an action is notbrought within two years, reckoned from the date of arrival at the destination, or from the date on which the aircraft ought to have arrived, or from the date on which the carriage stopped.

2. The method of calculating the period of limitation shall bedetermined by the law of the Court seised of the case.

DECEMBER 10, 2011

CODE OF COMMERCE

ARTICLE 366. Within the twenty-four hours following the receipt of

the merchandise a claim may be brought against the carrier on account of damage or average found therein on opening the packages, provided that the indications of the damage or average giving rise to the claim can not be ascertained from the exterior of said packages, in which case said claim would only be admitted on 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.

ARTICLE 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 a third one, in case of disagreement, 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 deposits of the merchandise in a safe warehouse, and the parties interested shall make use of their rights in the proper manner.

ARTICLE 652. A charter party must be drawn in duplicate and

signed by the contracting parties, and when either does not know how or can not do so, by two witnesses at their request.

The charter party shall include, besides the conditions unrestrictedly stipulated, the following statements:

1. The kind, name, and tonnage of the vessel.

2. Her flag and port of registry.

3. The name, surname, and domicile of the captain.

4. The name, surname, and domicile of the agent, if the latter should make the charter party.

5. The name, surname, and domicile of the charterer, and if he states that he is acting by commission, that of the person for whose account he makes the contract.

6. The port of loading and unloading.

7. The capacity, number of tons or weight, or measure which they respectively bind themselves to load and transport, or whether it is the total cargo.

8. The freightage to be paid, stating whether it is to be a fixed amount for the voyage or so much per month, or for the space to be occupied, or for the weight or measure of the goods of which the cargo consists, or in any other manner whatsoever agreed upon.

9. The amount of primage to be paid to the captain.

10. The days agreed upon for loading and unloading.

11. The lay days and extra lay days to be allowed and the rate of demurrage.

ARTICLE 653. If the freight should be received without the charter

party having been signed, the contract shall be understood as executed in accordance with what appears in the bill of lading, which shall be the only instrument with regard to the freight to determine the rights and obligations of the owner, of the captain, and of the charterer. cdt

ARTICLE 654. The charter parties executed with the intervention of

a broker, who certifies to the authenticity of the signatures of the contracting parties made in his presence, shall be full evidence in court; and if said signatures should not agree the ones identical with the signatures the broker must keep in his registry, if kept in accordance to law, shall be final.

The contracts shall also be admitted as evidence, even though a broker has not taken part therein, if the contracting parties acknowledge the signatures to be the same as their own.

Should no broker have taken part in the charter party and should the signatures not have been acknowledged, doubts shall be decided by what is provided for in the bill of lading, and in the absence thereof by the proofs submitted by the parties.

ARTICLE 655. Charter parties executed by the captain in the

absence of the agent shall be valid and efficient, even though in executing them he should have acted in violation of the orders and instructions of the agent or shipowner; but the latter shall have a right of action against the captain to recover damages.

ARTICLE 656. If in the charter party the time in which the loading

and unloading is to take place is not stated, the customs of the port where these acts take place shall be observed. After the period stipulated or the customary one has passed, and should there not be in the freight contract an express clause fixing the indemnification for the delay, the captain shall be entitled to demand demurrage for the usual and extra lay days which may have elapsed in loading and unloading.

ARTICLE 657. If during the voyage the vessel should be rendered

unseaworthy the captain shall be obliged to charter another one at his expense, in good condition, to take the cargo to its destination, for which purpose he shall be obliged to look for a vessel not only at the port of arrival but in the other ports within a distance of 150 kilometers.

If the captain should not furnish a vessel to take the cargo to its destination, either through indolence or malice, the freighters, after a demand of the captain to charter a vessel within an unextendible period, may charter one and apply to the judicial authority requesting that the charter party which may have been made be immediately approved.

The same authority shall judicially compel the captain to confirm the charter made by the shippers for his account and under his responsibility.

If the captain, notwithstanding his efforts, should not find a vessel to charter, he shall deposit the cargo at the disposal of the freighters, to whom he shall communicate the facts on the first opportunity presenting itself, the charter being regulated in such cases by the distance covered by the vessel, there being no right to any indemnification whatsoever.

ARTICLE 658. The freight shall be paid according to the conditions

stipulated in the contract, and should they not be specific, or should they be ambiguous, the following rules shall be observed:

1. If the vessel has been chartered by months or by days, the freight shall begin to run from the day the loading of the vessel is begun.

2. In charters made for a fixed period, the freight shall begin from that very day.

3. If the freight is charged according to weight, the payment shall be made according to gross weight, including the containers, such as barrels or any other objects containing the cargo.

ARTICLE 659. The merchandise sold by the captain to pay for the

necessary repairs to the hull, machinery or equipment, or for unavoidable and urgent requirements, shall pay freight. cdt

The price of this merchandise shall be fixed according to the success of the voyage, namely:

1. If the vessel should arrive safely at the port of destination, the captain shall pay the price which the sale of merchandise of the same kind brings at that port.

2. If the vessel should be lost, the captain shall pay the price said merchandise would have brought in the sale.

The same rule shall be observed in the payment of the freight which shall be in full if the vessel arrives at her destination, and in proportion to the distance covered if she should be lost beforehand.

ARTICLE 660. Merchandise jettisoned for the common safety shall

not pay freight; but its value shall be considered as general average, and shall be computed in proportion to the distance covered when it was jettisoned.

ARTICLE 661. Neither shall merchandise which was lost by reason

of shipwreck or stranding pay freight, nor that seized by pirates or enemies.

If the freight should have been paid in advance, it shall be returned, unless there was an agreement to the contrary.

ARTICLE 662. If the vessel or the merchandise should be recovered,

or should the goods of the shipwreck be picked up, the freight corresponding to the distance covered by the vessel transporting the cargo shall be paid; and should the vessel be repaired and transport said merchandise to the port of destination, the full freight shall be paid, without prejudice to what may be due by reason of the average.

ARTICLE 663. Merchandise which is damaged or reduced on

account of its own defects or bad quality and condition of the packing, or by reason of an accidental case, shall pay full freight, and as was stipulated in the charter party.

ARTICLE 664. The natural increase in weight or size of the

merchandise loaded on the vessel shall accrue to the benefit of the owner, and shall pay the proper freight fixed in the contract for the same.

ARTICLE 665. The cargo shall be specially liable for the payment of

the freight expenses, and duties arising therefrom, which must be reimbursed by the shippers, as well as for the part of the general average which may be due, but it shall not be legal for the captain to delay unloading on account of delay in complying with this obligation.

Should there be reasons for distrust, the judge or court, at the instance of the captain, may order the deposit of the merchandise until he has been paid in full.

ARTICLE 666. The captain may request the sale of the cargo to the

amount necessary to pay the freight, expenses, and averages due him, reserving the right to demand the balance due him therefor if the proceeds of the sale should not have sufficed to cover his credit.

ARTICLE 667. The goods loaded shall be liable in the first place for

their freight and expenses during twenty days, to be counted from the date of their delivery or deposit. During this period, the sale of the same may

be requested, even though there be other creditors and the case of bankruptcy of the freighter or consignee should occur.

This right can not be made use of, however, on the goods which after being delivered, were turned over to a third person without malice on the part of the latter and for a valuable consideration.

** Art. 2241. With reference to specific movable property of the debtor, the following claims or liens shall be preferred:

(9) Credits for transportation, upon the goods carried, for the price of the contract and incidental expenses, until their delivery and for thirty days thereafter;

ARTICLE 668. If the consignee should not be found or should refuse

to receive the cargo, the judge or court, at the instance of the captain, shall order its deposit and the sale of the merchandise in so far as necessary to pay the freight and other expenses on the same.

The sale shall likewise take place when the goods deposited run the risk of deteriorating or by reason of their condition or for other reasons the expenses of preservation and custody should be disproportionate to the value thereof.

2. Rights and Obligations of Owners

ARTICLE 669. The owners or the captain shall observe in charter

parties the capacity of the vessel or that expressly designated in the registry of the same, a difference greater than 2 per cent between that stated and her true capacity not being permissible.

If the owners or the captain should contract to carry a greater amount of cargo than the vessel can hold, in view of her tonnage, they shall indemnify the freighters whose contracts they do not fulfill for the losses they may have caused them by reason of their default, according to the cases, viz:

If the vessel has been chartered by one freighter only, and there should appear to be an error or fraud in her capacity, and the charterer should not wish to rescind the contract, when he has a right to do so, the charter should be reduced in proportion to the cargo the vessel can not receive, the person from whom the vessel is chartered being furthermore obliged to indemnify the charterer for the losses he may have caused.

If, on the contrary, there should be several charter parties, and by reason of the want of space all the cargo contracted for can not be received, and none of the charterers desires to rescind the contract, preference shall be given to the person who has already loaded and arranged the freight in the vessel, and the rest shall take the place corresponding to them in the order of the dates of their contracts.

Should there be no priority, the charterers may load, if they wish, pro rata of the amounts of weight or space they may have engaged, and the person from whom the vessel was chartered shall be obliged to indemnify them for the loss and damage.

ARTICLE 670. If the person from whom the vessel is chartered, after

receiving a part of the freight, should not find sufficient to make up at least three-fifths of the amount which the vessel can hold, at the price he may have fixed, he may substitute for the transportation another vessel inspected and declared suitable for the same voyage, the expenses of transfer being defrayed by him, as well as the increase, should there be any, in the price of the charter. Should he not be able to make this change, the voyage shall be undertaken at the time agreed upon; and should no time have been fixed, within fifteen days from the time of beginning to load, should nothing to the contrary have been stipulated.

If the owner of the part of the freight already loaded should procure some more at the same price and under similar or proportionate conditions to

those accepted for the freight received, the person from whom the vessel is chartered or the captain can not refuse to accept the rest of the cargo; and should he do so, the freighter shall have a right to demand that the vessel put to sea with the cargo she may have on board.

ARTICLE 671. After three-fifths of the vessel is loaded, the person

from whom she is chartered can not, without the consent of the charterers or freighters substitute the vessel designated in the charter party by another one, under the penalty of making himself thereby liable for all the losses and damages occurring during the voyage to the cargo of the person who did not consent to the change.

ARTICLE 672. If the vessel has been chartered in whole, the captain

can not, without the consent of the person chartering her, accept freight from any other person; and should he do so, said charterer may oblige him to unload it and require him to indemnify him for the losses suffered thereby.

ARTICLE 673. The person from whom the vessel is chartered shall

be liable for all the losses caused the charterer by reason of the voluntary delay of the captain in putting to sea, according to the rules prescribed, provided he has been requested to put to sea at the proper time through a notary or judicially.

ARTICLE 674. If the charterer should carry to the vessel more

freight than that contracted for, the excess may be admitted in accordance with the price stipulated in the contract, if it can be well stowed without injuring the other freighters, but if in order to stow said freight it should be necessary to stow it in such manner as to throw the vessel out of trim the captain must refuse it or unload it at the expense of its owner.

The captain may likewise, before leaving the port, unload the merchandise placed on board clandestinely, or transport it, if he can do so and keep the vessel in trim, demanding by way of freightage the highest price which may have been stipulated for said voyage.

ARTICLE 675. If the vessel has been chartered to receive the cargo

in another port, the captain shall appear before the consignee designated in the charter party, and, should the latter not deliver the cargo to him, he shall inform the charterer and await his instructions, and in the meantime the lay days agreed upon shall begin to run, or those allowed by custom in the port, unless there is a special agreement to the contrary.

Should the captain not receive an answer within the time necessary therefor, he shall make efforts to find freight; and should he not find any after the lay days and extra lay days have elapsed, he shall make a protest and return to the port where the charter was made.

The charterer shall pay the freightage in full, discounting that which may have been earned on the merchandise which may have been carried on the voyage out or on the return trip, if carried for the account of third persons.

The same shall be done if a vessel, having been chartered for the round trip, should not be given any cargo for her return.

ARTICLE 676. The captain shall lose the freightage and shall

indemnify the charterers if the latter should prove, even against the certificate of inspection, should one have taken place at the port of departure, that the vessel was not in a condition to navigate at the time of receiving the cargo.

ARTICLE 677. The charter party shall be enforced if the captain

should not have any instructions from the charterer, and a declaration of war or a blockade should take place during the voyage.

In such case the captain shall be obliged to make the nearest safe and neutral port, and request and await orders from the freighter; and the

expenses incurred and salaries earned during the detention shall be paid as general average.

If, by orders of the freighter, the cargo should be discharged at the port of arrival, the freight for the voyage out shall be paid in full.

ARTICLE 678. If the time necessary, in the opinion of the judge or

court, in which to receive orders from the freighters should have elapsed without the captain having received any instructions, the cargo shall be deposited, and it shall be liable for the payment of the freight and expenses incurred by reason of the delay which shall be paid from the proceeds of the part first sold.

3. Obligations of Charterers

ARTICLE 679. The charterer of an entire vessel may subcharter the

whole or part thereof for the amounts he may consider most convenient, without the captain being allowed to refuse to receive on board the freight delivered by the second charterers, provided the conditions of the first charter are not changed, and that the person from whom the vessel is chartered be paid the full price agreed upon even though the full cargo is not embarked, with the limitation established in the next article. cdtai

ARTICLE 680. A charterer who does not make up the full cargo he

bound himself to ship shall pay the freightage of the amount he fails to ship, if the captain did not take other freight to make up the cargo of the vessel, in which case he shall pay the first charterer the difference should there be any.

ARTICLE 681. If the charterer should ship goods different from

those indicated at the time of executing the charter party, without the knowledge of the person from whom the vessel was chartered or of the captain, and should thereby give rise to losses, by reason of confiscation, embargo, detention, or other causes, to the person from whom the vessel was chartered or to the shippers, the person giving rise thereto shall be liable with the value of his shipment and furthermore with his property, for the full indemnity to all those injured through his fault.

ARTICLE 682. If the merchandise shipped should have been for the

purpose of illicit commerce, and was taken on board with the knowledge of the person from whom the vessel was chartered or of the captain, the latter, jointly with the owner of the same, shall be liable for all the losses which may be caused the other shippers, and even though it may have been agreed, they can not demand any indemnity whatsoever of the charterer for the damage caused the vessel.

ARTICLE 683. In case of making a port to repair the hull,

machinery, or equipment of the vessel, the freighters must wait until the vessel is repaired, being permitted to unload her at their own expense should they deem it advisable.

If, for the benefit of the cargo subject to deterioration, the freighters or the court, or the consul, or the competent authority in a foreign land should order the merchandise to be unloaded, the expenses of loading and unloading shall be for the account of the former.

ARTICLE 684. If the charterer, without the occurrence of any of the

cases of force majeure mentioned in the foregoing article, should wish to unload his merchandise before arriving at the port of destination, he shall pay the full freight, the expenses of the stop made at his request, and the losses and damages caused the other freighters, should there be any.

ARTICLE 685. In charters for transportation of general freight any

of the freighters may unload the merchandise before the beginning of the voyage, by paying one-half the freight, the expense of stowing and restowing the cargo, and any other damage which may be caused the other shippers.

ARTICLE 686. After the vessel has been unloaded and the cargo

placed at the disposal of the consignee, the latter must immediately pay the captain the freight due and the other expenses to which he may be liable for said cargo.

The primage must be paid in the same proportion and at the same time as the freight, all the changes and modifications to which the latter should be subject also governing the former.

ARTICLE 687. The charters and freighters can not abandon

merchandise damaged on account of the inherent vice of the goods or by reason of an accidental case, for the payment of the freight and other expenses. aisadc

The abandonment shall be proper, however, if the cargo should consist of liquids and should they have leaked out, there not remaining in the containers more than one-quarter of their contents.

4. Total or Partial Rescissions of Charter Parties

ARTICLE 688. A charter party may be annulled at the request of the

charterer:

1. If before loading the vessel he should abandon the charter, paying half of the freightage agreed upon.

2. If the capacity of the vessel should not agree with that stated in the certificate of the tonnage, or if there is an error in the statement of the flag under which she sails.

3. If the vessel should not be placed at the disposal of the charterer within the period and in the manner agreed upon.

4. If, after the vessel has put to sea, she should return to the port of departure, on account of risk of pirates, enemies, or bad weather, and the freighters should agree to unload her.

In the second and third cases the person from whom the vessel was chartered shall indemnify the charterer for the losses he may suffer.

In the fourth case the person from whom the vessel was chartered shall have a right to the freightage in full for the voyage out.

If the charter should have been made by the months, the charterers shall pay the full freightage for one month, if the voyage were to a port in the same waters, and two months, if the voyage were to a port in different waters.

From one port to another of the Peninsula and adjacent islands, the freightage for one month only shall be paid.

5. If a vessel should make a port during the voyage in order to make urgent repairs and the freighters should prefer to dispose of the merchandise.

When the delay does not exceed thirty days, the freighters shall pay the full freight for the voyage out.

Should the delay exceed thirty days, they shall only pay the freight in proportion to the distance covered by the vessel.

ARTICLE 689. At the request of the person from whom the vessel is chartered the charter party may be rescinded:

1. If the charterer at the termination of the extra lay days does not place the cargo alongside the vessel.

In such case the charterer must pay half the freight stipulated besides the demurrage for the lay days and extra lay days elapsed.

2. If the person from whom the vessel was chartered should sell her before the charterer has begun to load her and the purchaser should load her for his own account.

In such case the vendor shall indemnify the charterer for the losses he may suffer.

If the new owner of the vessel should not load her for his own account the charter party shall be respected, and the vendor shall indemnify the purchaser if the former did not inform him of the charter pending at the time of making the sale.

ARTICLE 690. The charter party shall be rescinded and all action

arising therefrom shall be extinguished if, before the vessel puts to sea from the port of departure, any of the following cases should occur:

1. A declaration of war or interdiction of commerce with the power to whose ports the vessel was going to sail.

2. A condition of blockade of the port of destination of said vessel, or the breaking out of an epidemic after the contract was executed.

3. The prohibition to receive the merchandise of the vessel at the said port.

4. An indefinite detention, by reason of an embargo of the vessel by order of the government or for any other reason independent of the will of the agent.

5. The impossibility of the vessel to navigate, without fault of the captain or agent.

The unloading shall be made for the account of the charterer.

ARTICLE 691. If the vessel can not put to sea on account of the

closing of the port of departure, or any other temporary cause, the charter shall be in force without any of the contracting parties having a right to claim damages.

The subsistence and wages of the crew shall be considered as general average.

During the interruption the charterer may, at the proper time and for his own account, unload and load the merchandise, paying demurrage if the reloading should continue after the reason for the detention has ceased.

ARTICLE 692. A charter party shall be partially rescinded, unless

there is an agreement to the contrary, and the captain shall only be entitled to the freight for the voyage out, if, by reason of a declaration of war, closing of ports, or interdiction of commercial relations during the voyage, the vessel should make the port designated for such a case in the instructions of the charterer.

CA 65 TITLE I

Section 5. (2nd paragraph)

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 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 provision regarding general average.

WARSAW CONVENTION

Article 26

1. Receipt by the person entitled to delivery of luggage or goodswithout complaint is prima facie evidence that the same have been delivered in good condition and in accordance with the document of carriage. 2. In the case of damage, the person entitled to delivery mustcomplain to the carrier forthwith after the discovery of the damage, and, at the latest, within three days from the date of receipt in the case of luggage and seven days from the date of receipt in the case of goods. In the case of delay the complaint must be made at the latest within fourteen days from the date on which the luggage or goods have been placed at his disposal. 3. Every complaint must be made in writing upon the document

ofcarriage or by separate notice in writing despatched within the times aforesaid.

4. Failing complaint within the times aforesaid, no action shall lieagainst the carrier, save in the case of fraud on his part.

HAGUE PROTOCOL

Article XV

In Article 26 of the Convention paragraph 2 shall be deleted and

replaced by the following:- "2. In the case of damage, the person entitled to delivery must complain to the carrier forthwith after the discovery of the damage, and, at the latest, within seven days from the date of receipt in the case of baggage and fourteen days from the date of receipt in the case of cargo. In the case of delay the complaint must be made at the latest within twenty-one days from the date on which the baggage or cargo have been placed at his disposal."

DECEMBER 13, 2011

CODE OF COMMERCE

ARTICLE 573. Merchant vessels constitute property which may be

acquired and transferred by any of the means recognized by law. The acquisition of a vessel must be included in a written instrument, which shall not produce any effect with regard to third persons if not recorded in the mercantile registry. cd

The ownership of a vessel shall also be acquired by the possession thereof in good faith for three years, with a good title duly recorded.

In the absence of any of these requisites, uninterrupted possession for ten years shall be necessary in order to acquire ownership.

A captain can not acquire by prescription the ship of which he is in command.

**PD 474

Section 3. Definition of Terms. The terms, as used, in this Decree, shall have the following meaning, unless the context of the particular usage of the term indicates otherwise;

a. "Maritime Industry", briefly referred to as "industry" in the broadest concept of the term. All enterprises engaged in the business of designing, constructing, manufacturing, acquiring, operating, supplying, repairing and/or maintaining vessels, or component parts thereof; of managing and/or operating shipping lines, stevedoring arrastre and customs brokerage services, shipyards, drydocks, marine railways, marine repair shops, shipping and freight forwarding agencies and similar enterprises.

b. "Vessels" or "Watercraft" Any barge, lighter, bulk carrier, passenger ship freighter, tanker, container ship, fishing boats or other artificial contrivance utilizing any source of motive power, designed, used or capable of being used as a means of water transportation operating either as common contract carrier, including fishing vessels covered under Presidential Decree No. 43, except (1) those owned and/or operated by the Armed Forces of the Philippines and by foreign governments for military purposes, and (ii) bancas, sailboats and other waterborne contrivance of less than three gross tons capacity and not motorized.

c. "Philippine national" A citizen of the Philippines; or a partnership or association wholly owned by and composed of citizens of the Philippines; or a corporation organized under the laws of the Philippines of which at least sixty per cent of the capital stock outstanding and entitled to vote is owned and held by Philippine citizens; or a trustee of funds for pensions or other employee retirement or separation benefits, where the trustee is a Philippine national and at least sixty per cent of the funds will accrues to the benefit of the Philippine nationals: Provided, That where a corporation and its non-Filipino stockholders own stock in an enterprise, at least sixty percent of the members of the governing board of both corporations must be Philippine nationals.

d. "Philippine flag vessel" A vessel or watercraft registered under Philippine laws.

e. "Foreign flag vessel" A vessel or watercraft registered under the laws of a country other than the Philippines.

f. "Philippines shipping companies" Philippine nationals registered and licensed under the laws of the Philippines to engage in the business of overseas and/or domestic water transportation.

Section 12. Specific Powers and Functions of the Administrator. In addition to his general powers and functions, the Administrator shall;

h. Approve the sale, lease or transfer of management of vessels owned by Philippine Nationals to foreign owned or controlled enterprises;

**PD 761- Section 1. Section 806 of the Tariff and Customs Code of the Philippines, as amended, is hereby amended to read as follows:

Sec. 806. Certificate of Philippine Registry. Upon registration of a vessel of domestic ownership, and of more than fifteen tons gross, a certificate of Philippine registry shall be issued for it. If the vessel is of domestic ownership, and of fifteen tons gross or less, the taking of the certificate of Philippine registry shall be optional with the owner.

"Domestic ownership, as used in this section means ownership vested in citizens of the Philippines or corporations or associations organized under the laws of the Philippines at least sixty per centum of the capital stock or capital of which is wholly owned by citizens of the Philippines, and, in the case of corporations or associations which will engage in coastwise trade the president or managing directors thereof shall be such citizens: Provided, That the members of the crew of the vessel, except specialized fishing vessels, shall all be citizens of the Philippines, Provided, That the certificate of Philippine registry issued to a vessel prior to the approval of this Code shall not be affected; Provided, further, That any vessel of more than fifteen gross tons which on February eight, nineteen hundred and eighteen, had a certificate of Philippine registry under existing law, shall likewise be, deemed a vessel of domestic ownership if there has been no change in its ownership or if the capital of the association or capital stock of the corporation owning such vessel has not been transferred to persons who are not citizens of the Philippines and if any such vessels should have been totally lost through shipwreck, collision or any other marine disaster while being lawfully operated, it may be replaced with another vessel of the same or lesser tonnage by the same person, association or corporation owning and operating same by virtue of this section, under such terms and conditions as may be prescribed by the Maritime Industry Authority

consistent with public policy and with the view of its utility for government service in case of war or any public emergency: Provided, further, That the controlling interest of the association or corporation shall not be considered as held by the citizen of the Philippines; (a) if less than sixty percent of the capital or capital stock is held by such citizens or such capital or capital stock is subject to any trust or fiduciary obligation in favor of any person not a citizen of the Philippines; (b) if less than sixty percent of the capital or capital stock in said association or corporation entitled to vote is in the hands of citizens of the Philippines; (c) if by means of (a) any contract or agreement, more than forty percent of the capital or capital stock can be voted directly or indirectly in favor of any person not a citizen of the Philippines: or (d) if by other means, the control of more than forty percent of the capital or capital stock of the association or corporation is conferred upon or allowed to be exercised by any person not a citizen of the Philippines."

Section 2. The above definition of "domestic ownership" notwithstanding, an enterprise duly registered with the Board of Investments, under R.A. 5186 or 6135, whether or not entirely owned by foreign nationals, may register its own vessels under the provision of the section immediately preceding if such vessels are to be used exclusively to transport its own raw materials and finished products in Philippine waters as an incident to its manufacturing, processing or business activity registered with the Board of Investments and certified to by said Board as an essential element in the operation of the registered project.

Section 3. Any provision of the law, decree, executive order, or rules and regulations to the contrary notwithstanding, the Maritime Industry Authority is hereby vested with the exclusive authority over the registration and documentation of Philippine vessels, as well as the issuance of all certificates, licenses or other documents necessary or incident to such registration and documentation.

Section 4. The Maritime Industry Authority shall be subject to approval by the Office of the President, issue such rules and regulations implementing the provisions of this decree.

Section 5. All laws, decrees, executive orders, or rules and regulations, or parts thereof, inconsistent with this Decree are hereby repealed or modified accordingly.

Section 6. This Decree shall take effect immediately.

**CA 65, Title I, Section 1



**CIVIL CODE

Art. 1132. The ownership of movables prescribes through uninterrupted possession for four years in good faith.

The ownership of personal property also prescribes through uninterrupted possession for eight years, without need of any other condition.

With regard to the right of the owner to recover personal property lost or of which he has been illegally deprived, as well as with respect to movables acquired in a public sale, fair, or market, or from a merchant's store the provisions of Articles 559 and 1505 of this Code shall be observed. (1955a)

Art. 1484. In a contract of sale of personal property the price of which is payable in installments, the vendor may exercise any of the following remedies:

(1) Exact fulfillment of the obligation, should the vendee fail to pay;

(2) Cancel the sale, should the vendee's failure to pay cover two or more installments;

(3) Foreclose the chattel mortgage on the thing sold, if one has been constituted, should the vendee's failure to pay cover two or more installments. In this case, he shall have no further action against the purchaser to recover any unpaid balance of the price. Any agreement to the contrary shall be void. (1454-A-a)

Art. 1485. The preceding article shall be applied to contracts purporting to be leases of personal property with option to buy, when the lessor has deprived the lessee of the possession or enjoyment of the thing. (1454-A-a)

Art. 1486. In the case referred to in two preceding articles, a stipulation that the installments or rents paid shall not be returned to the vendee or lessee shall be valid insofar as the same may not be unconscionable under the circumstances. (n)

**EO 125-A

Sec. 3. Section 14 of said Executive Order is hereby renumbered as Section 12 and amended to read as follows:

"Sec. 12. Maritime Industry Authority. The Maritime Industry Authority is hereby retained and shall have the following functions:

(a) Develop and formulate plans, policies, programs, projects, standards, specifications and guidelines geared toward the promotion and development of the maritime industry, the growth and effective regulation of shipping enterprises, and for the national security objectives of the country;

(b) Establish, prescribe and regulate routes, zones and/or areas of operation of particular operators of public water services;

(c) Issue Certificates of Public Convenience for the operation of domestic and overseas water carriers;

(d) Register vessels as well as issue certificates, licenses or documents necessary or incident thereto;

(e) Undertake the safety regulatory functions pertaining to vessel construction and operation including the determination of manning levels and issuance of certificates of competency to seamen;

(f) Enforce laws, prescribe and enforce rules and regulations, including penalties for violations thereof, governing water transportation and the Philippine merchant marine, and deputize the Philippine Coast Guard and other law enforcement agencies to effectively discharge these functions;

(g) Undertake the issuance of licenses to qualified seamen and harbor, bay and river pilots;

(h) Determine, fix and/or prescribe charges and/or rates pertinent to the operation of public water transport utilities, facilities and services except in cases where charges or rates are established by international bodies or associations of which the Philippines is a participating member or by bodies or

associations recognized by the Philippine Government as the proper arbiter of such charges or rates.

(i) Accredit marine surveyors and maritime enterprises engaged in shipbuilding, shiprepair, shipbreaking, domestic and overseas shipping ship management and agency;

(j) Issue and register the continuous discharge book of Filipino seamen;

(k) Establish and prescribe rules and regulations, standards and procedures for the efficient and effective discharge of the above functions;

(l) Perform such other functions as may now or hereafter be provided by law."

ARTICLE 574. The builders of vessels may employ the material and

with regard to their construction and rigging may follow the system which is most convenient to their interests. Ship agents and seamen shall be subject to the provisions of the laws and regulations of the public administration on navigation, customs, health, safety of the vessels, and other similar provisions.

ARTICLE 575. Part owners of vessels shall enjoy the right of option

of purchase and withdrawal in the sales made to strangers; but they can only exercise it within the nine days following the record of the sale in the registry and by delivering the price at once.

**(CC) Art. 1620. A co-owner of a thing may exercise the right of redemption in case the shares of all the other co-owners or of any of them, are sold to a third person. If the price of the alienation is grossly excessive, the redemptioner shall pay only a reasonable one.

Should two or more co-owners desire to exercise the right of redemption, they may only do so in proportion to the share they may respectively have in the thing owned in common. (1522a)

ARTICLE 576. The rigging, tackle, stores, and engine of a vessel, if

it is a steamer, shall always be understood as included in the sale thereof if they are owned by the vendor at the time of the sale.

The arms, munitions of war, provisions, and fuel shall not be considered as included in the sale.

The vendor shall be under the obligation to deliver to the purchaser a certificate of the record of the vessel in the registry up to the date of the sale.

ARTICLE 577. If the alienation of the vessel should take place while

said vessel is on a voyage, the purchaser shall receive all the freights it earns from the time it received its last cargo, and the payment of the crew and other persons which go to make up its complement shall be paid by the purchaser for the said voyage.

If the sale takes place after the arrival of the vessel at the port of its destination, the freights shall belong to the vendors and he shall pay the crew and other persons which go to make up its complement, unless there is an agreement to the contrary in either case.

ARTICLE 578. If, the steamer being on a voyage or in a foreign port,

her owner or owners should voluntarily alienate her either to Spaniards * or to foreigners domiciled in the capital or in a port of another country,

the bill of sale shall be executed before the consul of Spain * of the port where she terminates her voyage, and said instrument shall have no effect with regard to third persons if it is not recorded in the registry of the consulate. The consul shall immediately forward a true copy of the bill of purchase of the vessel to the [commercial registry] of the port where said vessel is recorded and registered.

In every case the alienation of the vessel must be stated, indicating whether the vendor receives the full price or part thereof, or whether he retains any interest in said vessel in full or in part. In case the sale is made to a Spaniard, * this fact shall be stated in the certificate of navigation. aisadc

When, the ship being on a voyage, it should be rendered useless for navigation, the captain shall apply to the judge or court of competent jurisdiction of the port of arrival, should it be a foreign port, to the consul of Spain, * should there be one or to the judge, or court, or local authority in the absence of the former; and the consul, or the judge, or court, or in their absence, the local authority, shall order an examination of the vessel to be made.

If the consignee or the underwriter should reside at said port, or should have representatives there, they must be cited in order to take part in the proceedings for the account of whom it may concern.

ARTICLE 579. After the damage to the vessel has been proven as

well as the impossibility of her being repaired, to continue the voyage, her sale at public auction shall be ordered, subject to the following rules:

1. The hull of the vessel, her rigging, engines, stores, and other articles shall be appraised by means of an inventory, said proceedings being brought to the notice of the persons who may wish to take part in the auction.

2. The order or decree ordering the public auction shall be posted in the usual places, and shall be advertised in the newspapers of the port where the auction is to be held, should there be any, and in the other newspapers which the court may determine.

The period which may be fixed for the auction can not be less than twenty days.

3. These advertisements shall be repeated every ten days, and their publication shall be stated in the proceedings.

4. The auction shall be held on the day fixed, with the formalities prescribed in the common law for judicial sales.

5. If the sale should take place when the vessel is in a foreign country, the special provisions governing such cases shall be observed.

ARTICLE 585. For all purposes of law not modified or restricted by

the provisions of this Code, vessels shall continue to be considered as personal property.

ARTICLE 589. If two or more persons should be part owners of a

merchant vessel, an association shall be presumed as established by the part owners.

This association shall be governed by the resolutions of a majority of the members.

A majority shall be the relative majority of the voting members.

If there should be only two part owners, in case of disagreement the vote of the member having the largest interest shall be decisive. If the interests are equal, it shall be decided by lot.

The representation of the smallest part in the ownership shall have one vote; and proportionately the other part owners as many votes as they have parts equal to the smallest one. aisadc

A vessel can not be detained, attached or levied upon execution in her entirety for the private debts of a part owner, but the proceedings shall be limited to the interest the debtor may have in the vessel, without interfering with her navigation.

ARTICLE 591. All the part owners shall be liable, in proportion to

their respective ownership, for the expenses of repairs to the vessel, and for other expenses which are incurred by virtue of a resolution of the majority.

They shall likewise be liable in the same proportion for the expenses of maintenance, equipment, and provisioning of the vessel, necessary for navigation.

ARTICLE 592. The resolutions of the majority with regard to the

repair, equipment, and provisioning of the vessel in the port of departure shall bind the majority unless the partners in the minority renounce their participation therein, which must be acquired by the other part owners after a judicial appraisement of the value of the portion or portions assigned.

The resolutions of the majority relating to the dissolution of the association and sale of the vessel shall also be binding on the minority.

The sale of the vessel must take place at a public auction, subject to the provisions of the law of civil procedure unless the part owners unanimously agree otherwise, the right of option to purchase and to withdraw mentioned in Article 575 being always reserved in favor of said part owners.

ARTICLE 593. The owners of a vessel shall have preference in her

charter to other persons, offering equal conditions and price. If two or more of the former should claim said right the one having greater interest shall be preferred, and should they have an equal interest it shall be decided by lot.

ARTICLE 606. If the captain should be a part owner in the vessel, he

can not be discharged without the agent returning him the amount of his interest therein, which, in the absence of an agreement between the parties, shall be appraised by experts appointed in the manner established in the law of civil procedure.

ARTICLE 607. If the captain who is a part owner should have

obtained the command of the vessel by virtue of a special agreement contained in the articles of co-partnership, he can not be deprived thereof except for the reasons mentioned in Article 605.

ARTICLE 608. In case of the voluntary sale of the vessel, all

contracts between the agent and captain shall terminate, the right to proper indemnity being reserved in favor of the captain, according to the agreements made with the agent.

They vessel sold shall remain subject to the security of the payment of said indemnity if, after the action against the vendor has been instituted, the latter should be insolvent.

DECEMBER 14, 2011

CODE OF COMMERCE

ARTICLE 580. In all judicial sales of vessels for the payment of creditors, the said creditors shall have preference in the order stated:

1. The credits in favor of the public treasury proven by means of an official certificate of the competent authority.

2. The judicial costs of the proceedings, according to an appraisement approved by the judge or court.

3. The pilotage charges, tonnage dues, and the other sea or port charges, proven by means of proper certificates of the officers intrusted with the collection.

4. The salaries of the caretakers and watchmen of the vessel and any other expense connected with the preservation of said vessel, from the time of arrival until her sale, which appear to have been paid or are due by virtue of a true account approved by the judge or court. cdta

5. The rent of the warehouse where the rigging and stores of the vessel have been taken care of, according to contract.

6. The salaries due the captain and crew during their last voyage, which shall be verified by virtue of the liquidation made from the rolls of the crew and account books of the vessel, approved by the chief of the Bureau of Merchant Marine where there is one, and in his absence by the consul, or judge, or court.

7. The reimbursement for the parts of the freight the captain may have sold in order to repair the vessel, provided the sale has been ordered by a judicial instrument executed with the formalities required in such cases, and recorded in the certificate of the registry of the vessel.

8. The part of the price which has not been paid the last vendor, the credits pending for the payment of material and work in the construction of the vessel, when it has not navigated, and those arising from the repair and equipment of the vessel and its provisioning with victuals and fuel during its last voyage.

In order that the credits provided for in this subdivision may enjoy the preference they must appear by contracts recorded in the commercial registry, or if they were contracted for the vessel while on a voyage and said vessel has not returned to the port of her registry, they must be made under the authority required for such cases and entered in the certificate of registry of the said vessel. cdtai

9. The amounts borrowed on bottomry bonds before the departure of the vessel, proven by means of the contracts executed according to law and recorded in the commercial registry; the amounts borrowed during the voyage with the authority mentioned in the foregoing subdivision, filling the same requisites, and the insurance premium, proven by the policy of the contract or certificate taken from the books of the broker.

10. The indemnity due the shippers for the value of the goods shipped, which were not delivered to the consignees, or for averages suffered for which the vessel is liable, provided either appear in a judicial or arbitration decision.

ARTICLE 581. If the proceeds of the sale are not sufficient to pay all

the creditors included in one number or grade, the amount shall be divided among them pro rata.

ARTICLE 582. After the bill of the judicial sale at auction has been

executed and recorded in the commercial registry, all the other liabilities of the vessel in favor of the creditors shall be considered canceled.

But if the sale should have been voluntary, and took place while the vessel was on a voyage, the creditors shall retain their rights against the vessel

until her return to the port of her registry, and three months after the record of sale in the commercial registry, or after her arrival.

ARTICLE 583. If the ship being on a voyage the captain should find

it necessary to contract one or more of the obligations mentioned in Nos. 8 and 9 of Article 580, he shall apply to the judge or court if he is in Spanish * territory, and otherwise to the consul of Spain, * should there be one, and, in his absence to the judge or court or to the proper local authority, presenting the certificate of the registry of the vessel treated of in Article 612, and the instruments proving the obligation contracted.

The judge or court, the consul or the local authority as the case may be, in view of the result of the proceedings instituted, shall make a temporary memorandum in the certificate of their result, in order that it may be recorded in the registry when the vessel returns to the port of her registry, or so that it can be admitted as a legal and preferred obligation in case of sale before the return, by reason of the sale of the vessel by virtue of a declaration of unseaworthiness.

The lack of this formality shall make the captain personally liable to the creditors who may be prejudiced through his fault.

ARTICLE 584. The vessels subject to the liability for the credits

mentioned in Article 580 may be attached and judicially sold in the manner prescribed in Article 579, in the port in which they are, at the instance of any of the creditors; but if they should be freighted and ready to sail the attachment can not take place except for debts contracted for the preparation and provisioning of the vessel for the same voyage, and even then the attachment shall be dissolved if any person interested in her sailing should give bond for the return of the vessel within the period fixed in the certificate of navigation, and binding himself to pay the debt in so far as it may be legal, should the vessel be delayed in her return even if it were caused by some fortuitous event.

For debts of any other kind whatsoever not included in the said Article 580, the vessel can only be attached in the port of her registry.

ARTICLE 621. A captain who borrows money on bottomry, or who

pledges or sells merchandise or provisions in other cases and without the formalities prescribed in this Code, shall be liable for the principle, interest, and costs, and shall indemnify for the damages he may cause.

The captain who commits fraud in his accounts shall reimburse the amount defrauded, and shall be subject to the provisions contained in the Penal Code.

ARTICLE 719. A loan on bottomry or respondentia shall be

considered that which the repayment of the sum loaned and the premium stipulated, under any condition whatsoever, depends on the safe arrival in port of the goods on which it is made, or of their value in case of accident.

ARTICLE 720. Loans on bottomry or respondentia may be executed:

1. By means of a public instrument.

2. By means of a bond signed by the contracting parties and the broker who took part therein. cdt

3. By means of a private instrument.

Under whichever of these forms the contract is executed, it shall be entered in the certificate of the registry of the vessel and shall be recorded in the commercial registry, without which requisites the credits originating from the same shall not have, with regard to other credits, the preference which, according to their nature, they should have, although the obligation shall be valid between the contracting parties.

The contracts made during a voyage shall be governed by the provisions of Articles 583 and 611, and shall be effective with regard to third persons from the date of their execution, if they should be recorded in the commercial registry of the port of registry of the vessel before eight days have elapsed from the date of her arrival. If said eight days should elapse without the record having been made in the commercial registry, the contracts made during the voyage of a vessel shall not have any effect with regard to third persons, except from the day and date of their entry.

In order that the bonds of the contracts celebrated in accordance with No. 2 may have legal force, they must conform to the registry of the broker who took part therein. In those celebrated in accordance with No. 3 the acknowledgment of the signature must precede.

Contracts which are not reduced to writing shall not be the basis for a judicial action.

ARTICLE 721. In a bottomry or respondentia bond there must be

stated:

1. The kind, name, and registry of the vessel.

2. The name, surname, and domicile of the captain.

3. The names, surnames, and domicile of the person giving and of the person receiving the loan.

4. The amount of the loan and the premium stipulated.

5. The time for repayment.

6. The goods pledged to secure repayment.

7. The voyage for which the risk is run.

ARTICLE 722. The bonds may be issued to order, in which case

they shall be transferable by indorsement, and the assignee shall acquire all the rights and run all the risks corresponding to the indorser.

ARTICLE 723. Loans may be made in goods and in merchandise, their value being fixed in order to determine the amount of the loan.

ARTICLE 724. The loans may be constituted jointly or separately:

1. On the hull of the vessel.

2. On the rigging.

3. On the equipment, provisions, and fuel.

4. On the engine, if the vessel is a steamer.

5. On the cargo.

If the loan is constituted on the hull of the vessel, there shall be understood as also subject to the liability of the loan, the rigging, equipment and other goods, provisions, fuel, steam engines, and the freight earned during the voyage subject to the loan. cdta

If the loan is made on the cargo, all that constitutes the same shall be subject to the repayment; and if on a particular object of the vessel or of the cargo, the object exclusively and specifically mentioned only shall be liable.

**(COC) ARTICLE 617. The captain can not contract loans on respondentia, and should he do so the contracts shall be void.

Neither can he borrow money on bottomry for his own transactions, except on the portion of the vessel he owns, provided no money has been previously borrowed on the whole vessel, and provided there does not exist any other kind of lien or obligation thereon. When he is permitted to do so, he must necessarily state what interest he has in the vessel.

In case of violation of this article the principal, interest, and costs shall be charged to the private account of the captain, and the agent may furthermore have the right to discharge him.

**(COC) ARTICLE 621. A captain who borrows money on

bottomry, or who pledges or sells merchandise or provisions in other cases and without the formalities prescribed in this Code, shall be liable for the principle, interest, and costs, and shall indemnify for the damages he may cause.

The captain who commits fraud in his accounts shall reimburse the amount defrauded, and shall be subject to the provisions contained in the Penal Code.

ARTICLE 725. No loans can be made on the salaries of the crew, nor on the profits which it is expected to earn.

ARTICLE 726. If the lender should prove that he loaned a larger

amount than the value of the article liable for the bottomry loan, by reason of fraudulent measures employed by the borrower the loan shall only be valid for the amount at which said object is appraised by experts.

The surplus principal shall be returned with legal interest for the whole period of the duration of the disbursement.

ARTICLE 727. If the full amount of the loan contracted to load the

vessel should not be made use of for the cargo, the surplus shall be returned before clearing.

The same procedure shall be observed with regard to the goods taken as a loan if they could not all have been loaded.

ARTICLE 728. The loan which the captain takes at the point of

residence of the owners of the vessel shall only affect that part of the latter which belongs to the captain, if the other owners or their agents should not have given their express authorization thereto or should not have taken part in the transaction.

If one or more of the owners should be requested to furnish the amount necessary to repair or provision the vessel, and should not do so within twenty-four hours, the interest which the parties in default may have in the vessel shall be liable for the loan in the proper proportion.

Outside of the residence of the owners the captain may contract loans in accordance with the provisions of Articles 583 and 611.

ARTICLE 729. Should the goods on which money is taken not be

subjected to any risk, the contract shall be considered an ordinary loan, the borrower being under the obligation to return the principal and interest at the legal rate, if the interest stipulated should not have been lower.

ARTICLE 730. Loans made during the voyage shall have preference

over those made before the clearing of the vessel, and they shall be graduated by the inverse order to that of their dates.

The loans for the last voyage shall have preference over prior ones.

Should several loans have been made at a port made under stress and for the same purpose, all of them shall be paid pro rata.

ARTICLE 731. The actions which may be brought by the lender

shall be extinguished by the absolute loss of the goods on which the loan was made, if said loss arose from an accident of the sea at the time and during the voyage designated in the contract, and should it be proven that the cargo was on board; but this shall not take place if the loss were caused by the inherent defect of the thing or through the fault or malice of the borrower, or through barratry on the part of the captain, or if it were caused by damages suffered by the vessel as a consequence of being engaged in contraband, or if it arose through loading the merchandise on a vessel other than that designated in the contract, unless this change should have been made by reason of force majeure.

The proof of the loss is incumbent upon the person who received the loan, as well as the proof of the existence in the vessel of the goods declared to the lender as the object thereof.

ARTICLE 732. Lenders on bottomry or respondentia shall suffer in

proportion to their respective interest, the general average which may take place in the goods on which the loan was made.

In particular averages, in the absence of an express agreement between the contracting parties, the lender on bottomry or respondentia shall also contribute in proportion to his respective interest, should it not belong to the kind of risks excepted in the foregoing article.

ARTICLE 733. Should it not have been stated in the contract for

what period the lender runs the risk, the said risk shall last with regard to the vessel, engines, rigging, and equipment from the moment said vessel puts to sea until she drops anchor in the port of destination, and with regard to the merchandise, from the time it is loaded on the shore or wharf of the port of shipment until unloaded in the port of consignment. aisadc

ARTICLE 734. In case of shipwreck the amount liable for the return

of the loan shall be reduced to the proceeds of the goods saved, after the costs of the salvage have been deducted.

If the loan were on the vessel or any of her parts, the freightage earned during the voyage for which said loan was contracted shall also be liable for its payment, as far as it is available.

ARTICLE 735. If the same vessel or cargo should be the object of a

loan on bottomry or respondentia and marine insurance, the value of what may be saved shall be divided, in case of shipwreck, between the lender and the underwriter, in proportion to the legitimate interest of each one, taking into consideration, for this purpose only, the principal with relation to the loan, and without prejudice to the right of preference of other creditors in accordance with Article 580.

**(Insurance Code) Sec. 101. The insurable interest of the owner of the ship hypothecated by bottomry is only the excess of its value over the amount secured by bottomry.

ARTICLE 736. If there should be delay in the repayment of the

principal or premiums of the loan, the former only shall bear legal interest.

THE NEGOTIABLE INSTRUMENTS LAW

ACT NO. 2031 February 03, 1911

THE NEGOTIABLE INSTRUMENTS LAW

I. FORM AND INTERPRETATION

Section 1. Form of negotiable instruments. - An instrument to be negotiable must conform to the following requirements:chanroblesvirtuallawlibrary (a) It must be in writing and signed by the

maker or drawer; (b) Must contain an unconditional promise or

order to pay a sum certain in money; (c) Must be payable on demand, or at a fixed

or determinable future time; (d) Must be payable to order or to bearer; and (e) Where the instrument is addressed to a

drawee, he must be named or otherwise indicated therein with reasonable certainty.

Sec. 2. What constitutes certainty as to sum. - The sum payable is a sum certain within the meaning of this Act, although it is to be paid:chanroblesvirtuallawlibrary (a) with interest; or (b) by stated installments; or (c) by stated installments, with a provision

that, upon default in payment of any installment or of interest, the whole shall become due; or

(d) with exchange, whether at a fixed rate or

at the current rate; or (e) with costs of collection or an attorney's fee,

in case payment shall not be made at maturity.

Sec. 3. When promise is unconditional. - An unqualified order or promise to pay is unconditional within the meaning of this Act though coupled with:chanroblesvirtuallawlibrary (a) An indication of a particular fund out of

which reimbursement is to be made or a particular account to be debited with the amount; or

(b) A statement of the transaction which gives

rise to the instrument. But an order or promise to pay out of a particular

fund is not unconditional.chan robles virtual law library Sec. 4. Determinable future time; what constitutes. - An instrument is payable at a determinable future time, within the meaning of this Act, which is expressed to be payable:chanroblesvirtuallawlibrary (a) At a fixed period after date or sight; or (b) On or before a fixed or determinable future

time specified therein; or (c) On or at a fixed period after the occurrence

of a specified event which is certain to happen, though the time of happening be uncertain.

An instrument payable upon a contingency is not negotiable, and the happening of the event does not cure the defect. Sec. 5. Additional provisions not affecting negotiability. - An instrument which contains an order or promise to do any act in addition to the payment of money is not negotiable. But the negotiable character of an instrument otherwise negotiable is not affected by a provision which:chanroblesvirtuallawlibrary (a) authorizes the sale of collateral securities

in case the instrument be not paid at maturity; or

(b) authorizes a confession of judgment if the

instrument be not paid at maturity; or (c) waives the benefit of any law intended for

the advantage or protection of the obligor; or (d) gives the holder an election to require

something to be done in lieu of payment of money.

But nothing in this section shall validate any provision or stipulation otherwise illegal. Sec. 6. Omissions; seal; particular money. - The validity and negotiable character of an instrument are not affected by the fact that:chanroblesvirtuallawlibrary (a) it is not dated; or (b) does not specify the value given, or that

any value had been given therefor; or (c) does not specify the place where it is

drawn or the place where it is payable; or (d) bears a seal; or (e) designates a particular kind of current

money in which payment is to be made. But nothing in this section shall alter or repeal any statute requiring in certain cases the nature of the consideration to be stated in the instrument. Sec. 7. When payable on demand. - An instrument is payable on demand:chanroblesvirtuallawlibrary (a) When it is so expressed to be payable on

demand, or at sight, or on presentation; or (b) In which no time for payment is expressed. Where an instrument is issued, accepted, or indorsed when overdue, it is, as regards the person so issuing, accepting, or indorsing it, payable on demand. Sec. 8. When payable to order. - The instrument is payable to order where it is drawn payable to the order of a specified person or to him or his order. It may be drawn payable to the order of:chanroblesvirtuallawlibrary (a) A payee who is not maker, drawer, or

drawee; or (b) The drawer or maker; or (c) The drawee; or (d) Two or more payees jointly; or (e) One or some of several payees; or (f) The holder of an office for the time being. Where the instrument is payable to order, the payee must be named or otherwise indicated therein with reasonable certainty. Sec. 9. When payable to bearer. - The instrument is payable to bearer:chanroblesvirtuallawlibrary (a) When it is expressed to be so payable; or (b) When it is payable to a person named

therein or bearer; or (c) When it is payable to the order of a

fictitious or non-existing person, and such fact was known to the person making it so payable; or

(d) When the name of the payee does not

purport to be the name of any person; or (e) When the only or last indorsement is an

indorsement in blank.

Sec. 10. Terms, when sufficient. - The instrument need not follow the language of this Act, but any terms are sufficient which clearly indicate an intention to conform to the requirements hereof. Sec. 11. Date, presumption as to. - Where the instrument or an acceptance or any indorsement thereon is dated, such date is deemed prima facie to be the true date of the making, drawing, acceptance, or indorsement, as the case may be. chanrobles law Sec. 12. Ante-dated and post-dated. - The instrument is not invalid for the reason only that it is ante-dated or post-dated, provided this is not done for an illegal or fraudulent purpose. The person to whom an instrument so dated is delivered acquires the title thereto as of the date of delivery. Sec. 13. When date may be inserted. - Where an instrument expressed to be payable at a fixed period after date is issued undated, or where the acceptance of an instrument payable at a fixed period after sight is undated, any holder may insert therein the true date of issue or acceptance, and the instrument shall be payable accordingly. The insertion of a wrong date does not avoid the instrument in the hands of a subsequent holder in due course; but as to him, the date so inserted is to be regarded as the true date. Sec. 14. Blanks; when may be filled. - Where the instrument is wanting in any material particular, the person in possession thereof has a prima facie authority to complete it by filling up the blanks therein. And a signature on a blank paper delivered by the person making the signature in order that the paper may be converted into a negotiable instrument operates as a prima facie authority to fill it up as such for any amount. In order, however, that any such instrument when completed may be enforced against any person who became a party thereto prior to its completion, it must be filled up strictly in accordance with the authority given and within a reasonable time. But if any such instrument, after completion, is negotiated to a holder in due course, it is valid and effectual for all purposes in his hands, and he may enforce it as if it had been filled up strictly in accordance with the authority given and within a reasonable time. Sec. 15. Incomplete instrument not delivered. - Where an incomplete instrument has not been delivered, it will not, if completed and negotiated without authority, be a valid contract in the hands of any holder, as against any person whose signature was placed thereon before delivery.

Sec. 16. Delivery; when effectual; when presumed. - Every contract on a negotiable instrument is incomplete and revocable until delivery of the instrument for the purpose of giving effect thereto. As between immediate parties and as regards a remote party other than a holder in due course, the delivery, in order to be effectual, must be made either by or under the authority of the party making, drawing, accepting, or indorsing, as the case may be; and, in such case, the delivery may be shown to have been conditional, or for a special purpose only, and not for the purpose of transferring the property in the instrument. But where the instrument is in the hands of a holder in due course, a valid delivery thereof by all parties prior to him so as to make them liable to him is conclusively presumed. And where the instrument is no longer in the possession of a party whose signature appears thereon, a valid and intentional delivery by him is presumed until the contrary is proved. Sec. 17. Construction where instrument is ambiguous. - Where the language of the instrument is ambiguous or there are omissions therein, the following rules of construction apply:chanroblesvirtuallawlibrary (a) Where the sum payable is expressed in

words and also in figures and there is a discrepancy between the two, the sum denoted by the words is the sum payable; but if the words are ambiguous or uncertain, reference may be had to the figures to fix the amount;

(b) Where the instrument provides for the

payment of interest, without specifying the date from which interest is to run, the interest runs from the date of the instrument, and if the instrument is undated, from the issue thereof;

(c) Where the instrument is not dated, it will

be considered to be dated as of the time it was issued;

(d) Where there is a conflict between the

written and printed provisions of the instrument, the written provisions prevail;

(e) Where the instrument is so ambiguous that

there is doubt whether it is a bill or note, the holder may treat it as either at his election;

(f) Where a signature is so placed upon the

instrument that it is not clear in what capacity the person making the same intended to sign, he is to be deemed an indorser;

(g) Where an instrument containing the word "I promise to pay" is signed by two or more persons, they are deemed to be jointly and severally liable thereon.

Sec. 18. Liability of person signing in trade or assumed name. - No person is liable on the instrument whose signature does not appear thereon, except as herein otherwise expressly provided. But one who signs in a trade or assumed name will be liable to the same extent as if he had signed in his own name. Sec. 19. Signature by agent; authority; how shown. - The signature of any party may be made by a duly authorized agent. No particular form of appointment is necessary for this purpose; and the authority of the agent may be established as in other cases of agency. Sec. 20. Liability of person signing as agent, and so forth. - Where the instrument contains or a person adds to his signature words indicating that he signs for or on behalf of a principal or in a representative capacity, he is not liable on the instrument if he was duly authorized; but the mere addition of words describing him as an agent, or as filling a representative character, without disclosing his principal, does not exempt him from personal liability. Sec. 21. Signature by procuration; effect of. - A signature by "procuration" operates as notice that the agent has but a limited authority to sign, and the principal is bound only in case the agent in so signing acted within the actual limits of his authority. Sec. 22. Effect of indorsement by infant or corporation.- The indorsement or assignment of the instrument by a corporation or by an infant passes the property therein, notwithstanding that from want of capacity, the corporation or infant may incur no liability thereon. Sec. 23. Forged signature; effect of. - When a signature is forged or made without the authority of the person whose signature it purports to be, it is wholly inoperative, and no right to retain the instrument, or to give a discharge therefor, or to enforce payment thereof against any party thereto, can be acquired through or under such signature, unless the party against whom it is sought to enforce such right is precluded from setting up the forgery or want of authority.

II. CONSIDERATION Sec. 24. Presumption of consideration. - Every negotiable instrument is deemed prima facie to have been issued for a valuable consideration; and every person whose signature appears thereon to have become a party

thereto for value. Sec. 25. Value, what constitutes. — Value is any consideration sufficient to support a simple contract. An antecedent or pre-existing debt constitutes value; and is deemed such whether the instrument is payable on demand or at a future time. Sec. 26. What constitutes holder for value. - Where value has at any time been given for the instrument, the holder is deemed a holder for value in respect to all parties who become such prior to that time. Sec. 27. When lien on instrument constitutes holder for value. — Where the holder has a lien on the instrument arising either from contract or by implication of law, he is deemed a holder for value to the extent of his lien. Sec. 28. Effect of want of consideration. - Absence or failure of consideration is a matter of defense as against any person not a holder in due course; and partial failure of consideration is a defense pro tanto, whether the failure is an ascertained and liquidated amount or otherwise. Sec. 29. Liability of accommodation party. - An accommodation party is one who has signed the instrument as maker, drawer, acceptor, or indorser, without receiving value therefor, and for the purpose of lending his name to some other person. Such a person is liable on the instrument to a holder for value, notwithstanding such holder, at the time of taking the instrument, knew him to be only an accommodation party.

III. NEGOTIATION

Sec. 30. What constitutes negotiation. - An instrument is negotiated when it is transferred from one person to another in such manner as to constitute the transferee the holder thereof. If payable to bearer, it is negotiated by delivery; if payable to order, it is negotiated by the indorsement of the holder and completed by delivery. Sec. 31. Indorsement; how made. - The indorsement must be written on the instrument itself or upon a paper attached thereto. The signature of the indorser, without additional words, is a sufficient indorsement. Sec. 32. Indorsement must be of entire instrument. - The indorsement must be an indorsement of the entire instrument. An indorsement which purports to transfer to the indorsee a part only of the amount payable, or which purports to transfer the instrument to two or more indorsees severally, does not operate as a negotiation of the instrument. But where the

instrument has been paid in part, it may be indorsed as to the residue. Sec. 33. Kinds of indorsement. - An indorsement may be either special or in blank; and it may also be either restrictive or qualified or conditional. Sec. 34. Special indorsement; indorsement in blank. - A special indorsement specifies the person to whom, or to whose order, the instrument is to be payable, and the indorsement of such indorsee is necessary to the further negotiation of the instrument. An indorsement in blank specifies no indorsee, and an instrument so indorsed is payable to bearer, and may be negotiated by delivery. Sec. 35. Blank indorsement; how changed to special indorsement. - The holder may convert a blank indorsement into a special indorsement by writing over the signature of the indorser in blank any contract consistent with the character of the indorsement. Sec. 36. When indorsement restrictive. - An indorsement is restrictive which either:chanroblesvirtuallawlibrary (a) Prohibits the further negotiation of the

instrument; or (b) Constitutes the indorsee the agent of the

indorser; or (c) Vests the title in the indorsee in trust for or

to the use of some other persons. But the mere absence of words implying power to negotiate does not make an indorsement restrictive. Sec. 37. Effect of restrictive indorsement; rights of indorsee. - A restrictive indorsement confers upon the indorsee the right:chanroblesvirtuallawlibrary (a) to receive payment of the instrument; (b) to bring any action thereon that the

indorser could bring; (c) to transfer his rights as such indorsee,

where the form of the indorsement authorizes him to do so.

But all subsequent indorsees acquire only the title of the first indorsee under the restrictive indorsement. Sec. 38. Qualified indorsement. - A qualified indorsement constitutes the indorser a mere assignor of the title to the instrument. It may be made by adding to the indorser's signature the words "without recourse" or any words of similar import. Such an indorsement does not impair the negotiable character

of the instrument. Sec. 39. Conditional indorsement. - Where an indorsement is conditional, the party required to pay the instrument may disregard the condition and make payment to the indorsee or his transferee whether the condition has been fulfilled or not. But any person to whom an instrument so indorsed is negotiated will hold the same, or the proceeds thereof, subject to the rights of the person indorsing conditionally. Sec. 40. Indorsement of instrument payable to bearer. - Where an instrument, payable to bearer, is indorsed specially, it may nevertheless be further negotiated by delivery; but the person indorsing specially is liable as indorser to only such holders as make title through his indorsement. Sec. 41. Indorsement where payable to two or more persons. - Where an instrument is payable to the order of two or more payees or indorsees who are not partners, all must indorse unless the one indorsing has authority to indorse for the others. Sec. 42. Effect of instrument drawn or indorsed to a person as cashier. - Where an instrument is drawn or indorsed to a person as "cashier" or other fiscal officer of a bank or corporation, it is deemed prima facie to be payable to the bank or corporation of which he is such officer, and may be negotiated by either the indorsement of the bank or corporation or the indorsement of the

officer.

Sec. 43. Indorsement where name is misspelled, and so forth. - Where the name of a payee or indorsee is wrongly designated or misspelled, he may indorse the instrument as therein described adding, if he thinks fit, his proper signature. Sec. 44. Indorsement in representative capacity. - Where any person is under obligation to indorse in a representative capacity, he may indorse in such terms as to negative personal liability. robles virtual law library Sec. 45. Time of indorsement; presumption. - Except where an indorsement bears date after the maturity of the instrument, every negotiation is deemed prima facie to have been effected before the instrument was overdue. Sec. 46. Place of indorsement; presumption. - Except where the contrary appears, every indorsement is presumed prima facie to have been made at the place where the instrument is dated.

Sec. 47. Continuation of negotiable character. - An instrument negotiable in its origin continues to be negotiable until it has been restrictively indorsed or discharged by payment or otherwise. Sec. 48. Striking out indorsement. - The holder may at any time strike out any indorsement which is not necessary to his title. The indorser whose indorsement is struck out, and all indorsers subsequent to him, are thereby relieved from liability on the instrument. Sec. 49. Transfer without indorsement; effect of. - Where the holder of an instrument payable to his order transfers it for value without indorsing it, the transfer vests in the transferee such title as the transferor had therein, and the transferee acquires in addition, the right to have the indorsement of the transferor. But for the purpose of determining whether the transferee is a holder in due course, the negotiation takes effect as of the time when the indorsement is actually made. Sec. 50. When prior party may negotiate instrument. - Where an instrument is negotiated back to a prior party, such party may, subject to the provisions of this Act, reissue and further negotiable the same. But he is not entitled to enforce payment thereof against any intervening party to whom he was personally liable.

IV. RIGHTS OF THE HOLDER Sec. 51. Right of holder to sue; payment. - The holder of a negotiable instrument may to sue thereon in his own name; and payment to him in due course discharges the instrument. Sec. 52. What constitutes a holder in due course. - A holder in due course is a holder who has taken the instrument under the following conditions:chanroblesvirtuallawlibrary (a) That it is complete and regular upon its

face; (b) That he became the holder of it before it

was overdue, and without notice that it has been previously dishonored, if such was the fact;

(c) That he took it in good faith and for value; (d) That at the time it was negotiated to him,

he had no notice of any infirmity in the instrument or defect in the title of the person negotiating it.

Sec. 53. When person not deemed holder in due course. - Where an instrument payable on demand is negotiated on an unreasonable length of time after its issue, the holder is not deemed a holder in due course.

Sec. 54. Notice before full amount is paid. - Where the transferee receives notice of any infirmity in the instrument or defect in the title of the person negotiating the same before he has paid the full amount agreed to be paid therefor, he will be deemed a holder in due course only to the extent of the amount therefore paid by him. Sec. 55. When title defective. - The title of a person who negotiates an instrument is defective within the meaning of this Act when he obtained the instrument, or any signature thereto, by fraud, duress, or force and fear, or other unlawful means, or for an illegal consideration, or when he negotiates it in breach of faith, or under such circumstances as amount to a fraud. Sec. 56. What constitutes notice of defect. - To constitutes notice of an infirmity in the instrument or defect in the title of the person negotiating the same, the person to whom it is negotiated must have had actual knowledge of the infirmity or defect, or knowledge of such facts that his action in taking the instrument amounted to bad faith. Sec. 57. Rights of holder in due course. - A holder in due course holds the instrument free from any defect of title of prior parties, and free from defenses available to prior parties among themselves, and may enforce payment of the instrument for the full amount thereof against all parties liable thereon. robles virtual law library Sec. 58. When subject to original defense. - In the hands of any holder other than a holder in due course, a negotiable instrument is subject to the same defenses as if it were non-negotiable. But a holder who derives his title through a holder in due course, and who is not himself a party to any fraud or illegality affecting the instrument, has all the rights of such former holder in respect of all parties prior to the latter. Sec. 59. Who is deemed holder in due course. - Every holder is deemed prima facie to be a holder in due course; but when it is shown that the title of any person who has negotiated the instrument was defective, the burden is on the holder to prove that he or some person under whom he claims acquired the title as holder in due course. But the last-mentioned rule does not apply in favor of a party who became bound on the instrument prior to the acquisition of such defective title.

V. LIABILITIES OF PARTIES Sec. 60. Liability of maker. - The maker of a negotiable instrument, by making it, engages that he will pay it

according to its tenor, and admits the existence of the payee and his then capacity to indorse. Sec. 61. Liability of drawer. - The drawer by drawing the instrument admits the existence of the payee and his then capacity to indorse; and engages that, on due presentment, the instrument will be accepted or paid, or both, according to its tenor, and that if it be dishonored and the necessary proceedings on dishonor be duly taken, he will pay the amount thereof to the holder or to any subsequent indorser who may be compelled to pay it. But the drawer may insert in the instrument an express stipulation negativing or limiting his own liability to the holder. Sec. 62. Liability of acceptor. - The acceptor, by accepting the instrument, engages that he will pay it according to the tenor of his acceptance and admits:chanroblesvirtuallawlibrary (a) The existence of the drawer, the

genuineness of his signature, and his capacity and authority to draw the instrument; and

(b) The existence of the payee and his then

capacity to indorse. Sec. 63. When a person deemed indorser. - A person placing his signature upon an instrument otherwise than as maker, drawer, or acceptor, is deemed to be indorser unless he clearly indicates by appropriate words his intention to be bound in some other capacity. Sec. 64. Liability of irregular indorser. - Where a person, not otherwise a party to an instrument, places thereon his signature in blank before delivery, he is liable as indorser, in accordance with the following rules:chanroblesvirtuallawlibrary (a) If the instrument is payable to the order of

a third person, he is liable to the payee and to all subsequent parties.

(b) If the instrument is payable to the order of

the maker or drawer, or is payable to bearer, he is liable to all parties subsequent to the maker or drawer.

(c) If he signs for the accommodation of the

payee, he is liable to all parties subsequent to the payee.

Sec. 65. Warranty where negotiation by delivery and so forth. — Every person negotiating an instrument by delivery or by a qualified indorsement warrants:chanroblesvirtuallawlibrary (a) That the instrument is genuine and in all

respects what it purports to be;

(b) That he has a good title to it; (c) That all prior parties had capacity to

contract; (d) That he has no knowledge of any fact

which would impair the validity of the instrument or render it valueless.

But when the negotiation is by delivery only, the warranty extends in favor of no holder other than the immediate transferee. The provisions of subdivision (c) of this section do not apply to a person negotiating public or corporation securities other than bills and notes. Sec. 66. Liability of general indorser. - Every indorser who indorses without qualification, warrants to all subsequent holders in due course:chanroblesvirtuallawlibrary (a) The matters and things mentioned in

subdivisions (a), (b), and (c) of the next preceding section; and

(b) That the instrument is, at the time of his

indorsement, valid and subsisting; And, in addition, he engages that, on due presentment, it shall be accepted or paid, or both, as the case may be, according to its tenor, and that if it be dishonored and the necessary proceedings on dishonor be duly taken, he will pay the amount thereof to the holder, or to any subsequent indorser who may be compelled to pay it. Sec. 67. Liability of indorser where paper negotiable by delivery. — Where a person places his indorsement on an instrument negotiable by delivery, he incurs all the liability of an indorser. Sec. 68. Order in which indorsers are liable. - As respect one another, indorsers are liable prima facie in the order in which they indorse; but evidence is admissible to show that, as between or among themselves, they have agreed otherwise. Joint payees or joint indorsees who indorse are deemed to indorse jointly and severally. robles virtual law library Sec. 69. Liability of an agent or broker. - Where a broker or other agent negotiates an instrument without indorsement, he incurs all the liabilities prescribed by Section Sixty-five of this Act, unless he discloses the name of his principal and the fact that he is acting only as agent.

VI. PRESENTATION FOR PAYMENT Sec. 70. Effect of want of demand on principal debtor. - Presentment for payment is not necessary in order to

charge the person primarily liable on the instrument; but if the instrument is, by its terms, payable at a special place, and he is able and willing to pay it there at maturity, such ability and willingness are equivalent to a tender of payment upon his part. But except as herein otherwise provided, presentment for payment is necessary in order to charge the drawer and indorsers. Sec. 71. Presentment where instrument is not payable on demand and where payable on demand. - Where the instrument is not payable on demand, presentment must be made on the day it falls due. Where it is payable on demand, presentment must be made within a reasonable time after its issue, except that in the case of a bill of exchange, presentment for payment will be sufficient if made within a reasonable time after the last negotiation thereof. Sec. 72. What constitutes a sufficient presentment. - Presentment for payment, to be sufficient, must be made:chanroblesvirtuallawlibrary (a) By the holder, or by some person

authorized to receive payment on his behalf; (b) At a reasonable hour on a business day; (c) At a proper place as herein defined; (d) To the person primarily liable on the

instrument, or if he is absent or inaccessible, to any person found at the place where the presentment is made.

Sec. 73. Place of presentment. - Presentment for payment is made at the proper place:chanroblesvirtuallawlibrary (a) Where a place of payment is specified in

the instrument and it is there presented; (b) Where no place of payment is specified but

the address of the person to make payment is given in the instrument and it is there presented;

(c) Where no place of payment is specified

and no address is given and the instrument is presented at the usual place of business or residence of the person to make payment;

(d) In any other case if presented to the person

to make payment wherever he can be found, or if presented at his last known place of business or residence.

Sec. 74. Instrument must be exhibited. - The instrument must be exhibited to the person from whom payment is demanded, and when it is paid, must be delivered

up to the party paying it. Sec. 75. Presentment where instrument payable at bank. - Where the instrument is payable at a bank, presentment for payment must be made during banking hours, unless the person to make payment has no funds there to meet it at any time during the day, in which case presentment at any hour before the bank is closed on that day is sufficient. Sec. 76. Presentment where principal debtor is dead. - Where the person primarily liable on the instrument is dead and no place of payment is specified, presentment for payment must be made to his personal representative, if such there be, and if, with the exercise of reasonable diligence, he can be found. Sec. 77. Presentment to persons liable as partners. - Where the persons primarily liable on the instrument are liable as partners and no place of payment is specified, presentment for payment may be made to any one of them, even though there has been a dissolution of the firm. Sec. 78. Presentment to joint debtors. - Where there are several persons, not partners, primarily liable on the instrument and no place of payment is specified, presentment must be made to them all. Sec. 79. When presentment not required to charge the drawer. - Presentment for payment is not required in order to charge the drawer where he has no right to expect or require that the drawee or acceptor will pay the instrument. Sec. 80. When presentment not required to charge the indorser. - Presentment is not required in order to charge an indorser where the instrument was made or accepted for his accommodation and he has no reason to expect that the instrument will be paid if presented. Sec. 81. When delay in making presentment is excused. - Delay in making presentment for payment is excused when the delay is caused by circumstances beyond the control of the holder and not imputable to his default, misconduct, or negligence. When the cause of delay ceases to operate, presentment must be made with reasonable diligence. Sec. 82. When presentment for payment is excused. - Presentment for payment is excused:chanroblesvirtuallawlibrary (a) Where, after the exercise of reasonable

diligence, presentment, as required by this Act, cannot be made;

(b) Where the drawee is a fictitious person; (c) By waiver of presentment, express or

implied. Sec. 83. When instrument dishonored by non-payment. - The instrument is dishonored by non-payment when:chanroblesvirtuallawlibrary (a) It is duly presented for payment and

payment is refused or cannot be obtained; or (b) Presentment is excused and the instrument

is overdue and unpaid. Sec. 84. Liability of person secondarily liable, when instrument dishonored. - Subject to the provisions of this Act, when the instrument is dishonored by non-payment, an immediate right of recourse to all parties secondarily liable thereon accrues to the holder. robles virtual law library Sec. 85. Time of maturity. - Every negotiable instrument is payable at the time fixed therein without grace. When the day of maturity falls upon Sunday or a holiday, the instruments falling due or becoming payable on Saturday are to be presented for payment on the next succeeding business day except that instruments payable on demand may, at the option of the holder, be presented for payment before twelve o'clock noon on Saturday when that entire day is not a holiday.

Sec. 86. Time; how computed. - When the instrument is payable at a fixed period after date, after sight, or after that happening of a specified event, the time of payment is determined by excluding the day from which the time is to begin to run, and by including the date of payment.

Sec. 87. Rule where instrument payable at bank. - Where the instrument is made payable at a bank, it is equivalent to an order to the bank to pay the same for the account of the principal debtor thereon.

Sec. 88. What constitutes payment in due course. - Payment is made in due course when it is made at or after the maturity of the payment to the holder thereof in good faith and without notice that his title is defective.

VII. NOTICE OF DISHONOR

Sec. 89. To whom notice of dishonor must be given. - Except as herein otherwise provided, when a negotiable instrument has been dishonored by non-acceptance or non-payment, notice of dishonor must be given to the drawer and to each indorser, and any drawer or indorser to whom such notice is not given

is discharged.

Sec. 90. By whom given. - The notice may be given by or on behalf of the holder, or by or on behalf of any party to the instrument who might be compelled to pay it to the holder, and who, upon taking it up, would have a right to reimbursement from the party to whom the notice is given.

Sec. 91. Notice given by agent. - Notice of dishonor may be given by any agent either in his own name or in the name of any party entitled to given notice, whether that party be his principal or not.

Sec. 92. Effect of notice on behalf of holder. - Where notice is given by or on behalf of the holder, it inures to the benefit of all subsequent holders and all prior parties who have a right of recourse against the party to whom it is given.

Sec. 93. Effect where notice is given by party entitled thereto. - Where notice is given by or on behalf of a party entitled to give notice, it inures to the benefit of the holder and all parties subsequent to the party to whom notice is given. chanrobles law

Sec. 94. When agent may give notice. - Where the instrument has been dishonored in the hands of an agent, he may either himself give notice to the parties liable thereon, or he may give notice to his principal. If he gives notice to his principal, he must do so within the same time as if he were the holder, and the principal, upon the receipt of such notice, has himself the same time for giving notice as if the agent had been an independent holder.

Sec. 95. When notice sufficient. - A written notice need not be signed and an insufficient written notice may be supplemented and validated by verbal communication. A misdescription of the instrument does not vitiate the notice unless the party to whom the notice is given is in fact misled thereby.

Sec. 96. Form of notice. - The notice may be in writing or merely oral and may be given in any terms which sufficiently identify the instrument, and indicate that it has been dishonored by non-acceptance or non-payment. It may in all cases be given by delivering it personally or through the mails.

Sec. 97. To whom notice may be given. - Notice of dishonor may be given either to the party himself or to his agent in that behalf.

Sec. 98. Notice where party is dead. - When any party is dead and his death is known to the party giving

notice, the notice must be given to a personal representative, if there be one, and if with reasonable diligence, he can be found. If there be no personal representative, notice may be sent to the last residence or last place of business of the deceased.

Sec. 99. Notice to partners. - Where the parties to be notified are partners, notice to any one partner is notice to the firm, even though there has been a dissolution.

Sec. 100. Notice to persons jointly liable. - Notice to joint persons who are not partners must be given to each of them unless one of them has authority to receive such notice for the others.

Sec. 101. Notice to bankrupt. - Where a party has been adjudged a bankrupt or an insolvent, or has made an assignment for the benefit of creditors, notice may be given either to the party himself or to his trustee or assignee.

Sec. 102. Time within which notice must be given. - Notice may be given as soon as the instrument is dishonored and, unless delay is excused as hereinafter provided, must be given within the time fixed by this Act.

Sec. 103. Where parties reside in same place. - Where the person giving and the person to receive notice reside in the same place, notice must be given within the following times:chanroblesvirtuallawlibrary (a) If given at the place of business of the

person to receive notice, it must be given before the close of business hours on the day following.

(b) If given at his residence, it must be given

before the usual hours of rest on the day following.

(c) If sent by mail, it must be deposited in the

post office in time to reach him in usual course on the day following.

Sec. 104. Where parties reside in different places. - Where the person giving and the person to receive notice reside in different places, the notice must be given within the following times:chanroblesvirtuallawlibrary (a) If sent by mail, it must be deposited in the

post office in time to go by mail the day following the day of dishonor, or if there be no mail at a convenient hour on last day, by the next mail thereafter.

(b) If given otherwise than through the post

office, then within the time that notice would have been received in due course of mail, if it had been deposited in the post office within the time specified in the last subdivision.

Sec. 105. When sender deemed to have given due notice. - Where notice of dishonor is duly addressed and deposited in the post office, the sender is deemed to have given due notice, notwithstanding any miscarriage in the mails.

Sec. 106. Deposit in post office; what constitutes. - Notice is deemed to have been deposited in the post-office when deposited in any branch post office or in any letter box under the control of the post-office department.

Sec. 107. Notice to subsequent party; time of. - Where a party receives notice of dishonor, he has, after the receipt of such notice, the same time for giving notice to antecedent parties that the holder has after the dishonor.

Sec. 108. Where notice must be sent. - Where a party has added an address to his signature, notice of dishonor must be sent to that address; but if he has not given such address, then the notice must be sent as follows:chanroblesvirtuallawlibrary (a) Either to the post-office nearest to his place

of residence or to the post-office where he is accustomed to receive his letters; or

(b) If he lives in one place and has his place of

business in another, notice may be sent to either place; or

(c) If he is sojourning in another place, notice

may be sent to the place where he is so sojourning.

But where the notice is actually received by the party within the time specified in this Act, it will be sufficient, though not sent in accordance with the requirement of this section. Sec. 109. Waiver of notice. - Notice of dishonor may be waived either before the time of giving notice has arrived or after the omission to give due notice, and the waiver may be expressed or implied.

Sec. 110. Whom affected by waiver. - Where the waiver is embodied in the instrument itself, it is binding upon all parties; but, where it is written above the signature of an indorser, it binds him only.

Sec. 111. Waiver of protest. - A waiver of protest, whether in the case of a foreign bill of exchange or other negotiable instrument, is deemed to be a waiver

not only of a formal protest but also of presentment and notice of dishonor.

Sec. 112. When notice is dispensed with. - Notice of dishonor is dispensed with when, after the exercise of reasonable diligence, it cannot be given to or does not reach the parties sought to be charged.

Sec. 113. Delay in giving notice; how excused. - Delay in giving notice of dishonor is excused when the delay is caused by circumstances beyond the control of the holder and not imputable to his default, misconduct, or negligence. When the cause of delay ceases to operate, notice must be given with reasonable diligence.

Sec. 114. When notice need not be given to drawer. - Notice of dishonor is not required to be given to the drawer in either of the following cases:chanroblesvirtuallawlibrary (a) Where the drawer and drawee are the

same person;

(b) When the drawee is fictitious person or a person not having capacity to contract;

(c) When the drawer is the person to whom

the instrument is presented for payment;

(d) Where the drawer has no right to expect or require that the drawee or acceptor will honor the instrument;

(e) Where the drawer has countermanded

payment. Sec. 115. When notice need not be given to indorser. — Notice of dishonor is not required to be given to an indorser in either of the following cases:chanroblesvirtuallawlibrary (a) When the drawee is a fictitious person or

person not having capacity to contract, and the indorser was aware of that fact at the time he indorsed the instrument;

(b) Where the indorser is the person to whom

the instrument is presented for payment;

(c) Where the instrument was made or accepted for his accommodation.

Sec. 116. Notice of non-payment where acceptance refused. - Where due notice of dishonor by non-acceptance has been given, notice of a subsequent dishonor by non-payment is not necessary unless in the meantime the instrument has been accepted.

Sec. 117. Effect of omission to give notice of non-acceptance.

- An omission to give notice of dishonor by non-acceptance does not prejudice the rights of a holder in due course subsequent to the omission.

Sec. 118. When protest need not be made; when must be made. - Where any negotiable instrument has been dishonored, it may be protested for non-acceptance or non-payment, as the case may be; but protest is not required except in the case of foreign bills of exchange. robles virtual law library

VIII. DISCHARGE OF NEGOTIABLE INSTRUMENTS

Sec. 119. Instrument; how discharged. - A negotiable instrument is discharged:chanroblesvirtuallawlibrary (a) By payment in due course by or on behalf

of the principal debtor;

(b) By payment in due course by the party accommodated, where the instrument is made or accepted for his accommodation;

(c) By the intentional cancellation thereof by

the holder;

(d) By any other act which will discharge a simple contract for the payment of money;

(e) When the principal debtor becomes the

holder of the instrument at or after maturity in his own right.

Sec. 120. When persons secondarily liable on the instrument are discharged. - A person secondarily liable on the instrument is discharged:chanroblesvirtuallawlibrary (a) By any act which discharges the

instrument;

(b) By the intentional cancellation of his signature by the holder;

(c) By the discharge of a prior party;

(d) By a valid tender or payment made by a

prior party;

(e) By a release of the principal debtor unless the holder's right of recourse against the party secondarily liable is expressly reserved;

(f) By any agreement binding upon the holder

to extend the time of payment or to postpone the holder's right to enforce the instrument unless made with the assent of the party secondarily liable or unless the right of recourse against such party is expressly

reserved. Sec. 121. Right of party who discharges instrument. - Where the instrument is paid by a party secondarily liable thereon, it is not discharged; but the party so paying it is remitted to his former rights as regard all prior parties, and he may strike out his own and all subsequent indorsements and against negotiate the instrument, except:chanroblesvirtuallawlibrary (a) Where it is payable to the order of a third

person and has been paid by the drawer; and

(b) Where it was made or accepted for accommodation and has been paid by the party accommodated.

Sec. 122. Renunciation by holder. - The holder may expressly renounce his rights against any party to the instrument before, at, or after its maturity. An absolute and unconditional renunciation of his rights against the principal debtor made at or after the maturity of the instrument discharges the instrument. But a renunciation does not affect the rights of a holder in due course without notice. A renunciation must be in writing unless the instrument is delivered up to the person primarily liable thereon.

Sec. 123. Cancellation; unintentional; burden of proof. - A cancellation made unintentionally or under a mistake or without the authority of the holder, is inoperative but where an instrument or any signature thereon appears to have been cancelled, the burden of proof lies on the party who alleges that the cancellation was made unintentionally or under a mistake or without authority.

Sec. 124. Alteration of instrument; effect of. - Where a negotiable instrument is materially altered without the assent of all parties liable thereon, it is avoided, except as against a party who has himself made, authorized, or assented to the alteration and subsequent indorsers. But when an instrument has been materially altered and is in the hands of a holder in due course not a party to the alteration, he may enforce payment thereof according to its original tenor.

Sec. 125. What constitutes a material alteration. - Any alteration which changes:chanroblesvirtuallawlibrary (a) The date;

(b) The sum payable, either for principal or

interest;

(c) The time or place of payment:chanroblesvirtuallawlibrary

(d) The number or the relations of the parties;

(e) The medium or currency in which

payment is to be made;

(f) Or which adds a place of payment where no place of payment is specified, or any other change or addition which alters the effect of the instrument in any respect, is a material alteration.

BILLS OF EXCHANGE

IX. FORM AND INTERPRETATION

Sec. 126. Bill of exchange, defined. - A bill of exchange is an unconditional order in writing addressed by one person to another, signed by the person giving it, requiring the person to whom it is addressed to pay on demand or at a fixed or determinable future time a sum certain in money to order or to bearer.

Sec. 127. Bill not an assignment of funds in hands of drawee. - A bill of itself does not operate as an assignment of the funds in the hands of the drawee available for the payment thereof, and the drawee is not liable on the bill unless and until he accepts the same.

Sec. 128. Bill addressed to more than one drawee. - A bill may be addressed to two or more drawees jointly, whether they are partners or not; but not to two or more drawees in the alternative or in succession.

Sec. 129. Inland and foreign bills of exchange. - An inland bill of exchange is a bill which is, or on its face purports to be, both drawn and payable within the Philippines. Any other bill is a foreign bill. Unless the contrary appears on the face of the bill, the holder may treat it as an inland bill.

Sec. 130. When bill may be treated as promissory note. - Where in a bill the drawer and drawee are the same person or where the drawee is a fictitious person or a person not having capacity to contract, the holder may treat the instrument at his option either as a bill of exchange or as a promissory note.

Sec. 131. Referee in case of need. - The drawer of a bill and any indorser may insert thereon the name of a person to whom the holder may resort in case of need; that is to say, in case the bill is dishonored by non-acceptance or non-payment. Such person is called a referee in case of need. It is in the option of the holder to resort to the referee in case of need or not as he may see fit.

X. ACCEPTANCE

Sec. 132. Acceptance; how made, by and so forth. - The acceptance of a bill is the signification by the drawee of his assent to the order of the drawer. The acceptance must be in writing and signed by the drawee. It must not express that the drawee will perform his promise by any other means than the payment of money.

Sec. 133. Holder entitled to acceptance on face of bill. - The holder of a bill presenting the same for acceptance may require that the acceptance be written on the bill, and, if such request is refused, may treat the bill as dishonored.

Sec. 134. Acceptance by separate instrument. - Where an acceptance is written on a paper other than the bill itself, it does not bind the acceptor except in favor of a person to whom it is shown and who, on the faith thereof, receives the bill for value.

Sec. 135. Promise to accept; when equivalent to acceptance. - An unconditional promise in writing to accept a bill before it is drawn is deemed an actual acceptance in favor of every person who, upon the faith thereof, receives the bill for value.

Sec. 136. Time allowed drawee to accept. - The drawee is allowed twenty-four hours after presentment in which to decide whether or not he will accept the bill; the acceptance, if given, dates as of the day of presentation.

Sec. 137. Liability of drawee returning or destroying bill. - Where a drawee to whom a bill is delivered for acceptance destroys the same, or refuses within twenty-four hours after such delivery or within such other period as the holder may allow, to return the bill accepted or non-accepted to the holder, he will be deemed to have accepted the same.

Sec. 138. Acceptance of incomplete bill. - A bill may be accepted before it has been signed by the drawer, or while otherwise incomplete, or when it is overdue, or after it has been dishonored by a previous refusal to accept, or by non payment. But when a bill payable after sight is dishonored by non-acceptance and the drawee subsequently accepts it, the holder, in the absence of any different agreement, is entitled to have the bill accepted as of the date of the first presentment.

Sec. 139. Kinds of acceptance. - An acceptance is either general or qualified. A general acceptance assents without qualification to the order of the drawer. A qualified acceptance in express terms varies the effect

of the bill as drawn.

Sec. 140. What constitutes a general acceptance. - An acceptance to pay at a particular place is a general acceptance unless it expressly states that the bill is to be paid there only and not elsewhere.

Sec. 141. Qualified acceptance. - An acceptance is qualified which is:chanroblesvirtuallawlibrary (a) Conditional; that is to say, which makes

payment by the acceptor dependent on the fulfillment of a condition therein stated;

(b) Partial; that is to say, an acceptance to pay

part only of the amount for which the bill is drawn;

(c) Local; that is to say, an acceptance to pay

only at a particular place;

(d) Qualified as to time;

(e) The acceptance of some, one or more of the drawees but not of all.

Sec. 142. Rights of parties as to qualified acceptance. - The holder may refuse to take a qualified acceptance and if he does not obtain an unqualified acceptance, he may treat the bill as dishonored by non-acceptance. Where a qualified acceptance is taken, the drawer and indorsers are discharged from liability on the bill unless they have expressly or impliedly authorized the holder to take a qualified acceptance, or subsequently assent thereto. When the drawer or an indorser receives notice of a qualified acceptance, he must, within a reasonable time, express his dissent to the holder or he will be deemed to have assented thereto.

XI. PRESENTMENT FOR ACCEPTANCE

Sec. 143. When presentment for acceptance must be made. - Presentment for acceptance must be made:chanroblesvirtuallawlibrary (a) Where the bill is payable after sight, or in

any other case, where presentment for acceptance is necessary in order to fix the maturity of the instrument; or

(b) Where the bill expressly stipulates that it

shall be presented for acceptance; or

(c) Where the bill is drawn payable elsewhere than at the residence or place of business of the drawee.

In no other case is presentment for acceptance necessary in order to render any party to the bill liable.

Sec. 144. When failure to present releases drawer and indorser. - Except as herein otherwise provided, the holder of a bill which is required by the next preceding section to be presented for acceptance must either present it for acceptance or negotiate it within a reasonable time. If he fails to do so, the drawer and all indorsers are discharged.

Sec. 145. Presentment; how made. - Presentment for acceptance must be made by or on behalf of the holder at a reasonable hour, on a business day and before the bill is overdue, to the drawee or some person authorized to accept or refuse acceptance on his behalf; and (a) Where a bill is addressed to two or more

drawees who are not partners, presentment must be made to them all unless one has authority to accept or refuse acceptance for all, in which case presentment may be made to him only;

(b) Where the drawee is dead, presentment

may be made to his personal representative;

(c) Where the drawee has been adjudged a bankrupt or an insolvent or has made an assignment for the benefit of creditors, presentment may be made to him or to his trustee or assignee.

Sec. 146. On what days presentment may be made. - A bill may be presented for acceptance on any day on which negotiable instruments may be presented for payment under the provisions of Sections seventy-two and eighty-five of this Act. When Saturday is not otherwise a holiday, presentment for acceptance may be made before twelve o'clock noon on that day.

Sec. 147. Presentment where time is insufficient. - Where the holder of a bill drawn payable elsewhere than at the place of business or the residence of the drawee has no time, with the exercise of reasonable diligence, to present the bill for acceptance before presenting it for payment on the day that it falls due, the delay caused by presenting the bill for acceptance before presenting it for payment is excused and does not discharge the drawers and indorsers.

Sec. 148. Where presentment is excused. - Presentment for acceptance is excused and a bill may be treated as dishonored by non-acceptance in either of the following cases:chanroblesvirtuallawlibrary (a) Where the drawee is dead, or has

absconded, or is a fictitious person or a person not having capacity to contract by bill.

(b) Where, after the exercise of reasonable diligence, presentment can not be made.

(c) Where, although presentment has been

irregular, acceptance has been refused on some other ground.

Sec. 149. When dishonored by nonacceptance. - A bill is dishonored by non-acceptance:chanroblesvirtuallawlibrary (a) When it is duly presented for acceptance

and such an acceptance as is prescribed by this Act is refused or can not be obtained; or

(b) When presentment for acceptance is

excused and the bill is not accepted. Sec. 150. Duty of holder where bill not accepted. - Where a bill is duly presented for acceptance and is not accepted within the prescribed time, the person presenting it must treat the bill as dishonored by nonacceptance or he loses the right of recourse against the drawer and indorsers.

Sec. 151. Rights of holder where bill not accepted. - When a bill is dishonored by nonacceptance, an immediate right of recourse against the drawer and indorsers accrues to the holder and no presentment for payment is necessary.

XII. PROTEST

Sec. 152. In what cases protest necessary. - Where a foreign bill appearing on its face to be such is dishonored by nonacceptance, it must be duly protested for nonacceptance, by nonacceptance is dishonored and where such a bill which has not previously been dishonored by nonpayment, it must be duly protested for nonpayment. If it is not so protested, the drawer and indorsers are discharged. Where a bill does not appear on its face to be a foreign bill, protest thereof in case of dishonor is unnecessary.

Sec. 153. Protest; how made. - The protest must be annexed to the bill or must contain a copy thereof, and must be under the hand and seal of the notary making it and must specify:chanroblesvirtuallawlibrary (a) The time and place of presentment;

(b) The fact that presentment was made and

the manner thereof;

(c) The cause or reason for protesting the bill;

(d) The demand made and the answer given, if any, or the fact that the drawee or acceptor

could not be found. Sec. 154. Protest, by whom made. - Protest may be made by:chanroblesvirtuallawlibrary (a) A notary public; or

(b) By any respectable resident of the place

where the bill is dishonored, in the presence of two or more credible witnesses.

Sec. 155. Protest; when to be made. - When a bill is protested, such protest must be made on the day of its dishonor unless delay is excused as herein provided. When a bill has been duly noted, the protest may be subsequently extended as of the date of the noting.

Sec. 156. Protest; where made. - A bill must be protested at the place where it is dishonored, except that when a bill drawn payable at the place of business or residence of some person other than the drawee has been dishonored by nonacceptance, it must be protested for non-payment at the place where it is expressed to be payable, and no further presentment for payment to, or demand on, the drawee is necessary.

Sec. 157. Protest both for non-acceptance and non-payment. - A bill which has been protested for non-acceptance may be subsequently protested for non-payment.

Sec. 158. Protest before maturity where acceptor insolvent. - Where the acceptor has been adjudged a bankrupt or an insolvent or has made an assignment for the benefit of creditors before the bill matures, the holder may cause the bill to be protested for better security against the drawer and indorsers. robles virtual law library

Sec. 159. When protest dispensed with. - Protest is dispensed with by any circumstances which would dispense with notice of dishonor. Delay in noting or protesting is excused when delay is caused by circumstances beyond the control of the holder and not imputable to his default, misconduct, or negligence. When the cause of delay ceases to operate, the bill must be noted or protested with reasonable diligence.

Sec. 160. Protest where bill is lost and so forth. - When a bill is lost or destroyed or is wrongly detained from the person entitled to hold it, protest may be made on a copy or written particulars thereof.

XIII. ACCEPTANCE FOR HONOR

Sec. 161. When bill may be accepted for honor. - When a bill of exchange has been protested for dishonor by

non-acceptance or protested for better security and is not overdue, any person not being a party already liable thereon may, with the consent of the holder, intervene and accept the bill supra protest for the honor of any party liable thereon or for the honor of the person for whose account the bill is drawn. The acceptance for honor may be for part only of the sum for which the bill is drawn; and where there has been an acceptance for honor for one party, there may be a further acceptance by a different person for the honor of another party.

Sec. 162. Acceptance for honor; how made. - An acceptance for honor supra protest must be in writing and indicate that it is an acceptance for honor and must be signed by the acceptor for honor. chanrobles law

Sec. 163. When deemed to be an acceptance for honor of the drawer. - Where an acceptance for honor does not expressly state for whose honor it is made, it is deemed to be an acceptance for the honor of the drawer.

Sec. 164. Liability of the acceptor for honor. - The acceptor for honor is liable to the holder and to all parties to the bill subsequent to the party for whose honor he has accepted.

Sec. 165. Agreement of acceptor for honor. - The acceptor for honor, by such acceptance, engages that he will, on due presentment, pay the bill according to the terms of his acceptance provided it shall not have been paid by the drawee and provided also that is shall have been duly presented for payment and protested for non-payment and notice of dishonor given to him.

Sec. 166. Maturity of bill payable after sight; accepted for honor. - Where a bill payable after sight is accepted for honor, its maturity is calculated from the date of the noting for non-acceptance and not from the date of the acceptance for honor.

Sec. 167. Protest of bill accepted for honor, and so forth. - Where a dishonored bill has been accepted for honor supra protest or contains a referee in case of need, it must be protested for non-payment before it is presented for payment to the acceptor for honor or referee in case of need.

Sec. 168. Presentment for payment to acceptor for honor, how made. - Presentment for payment to the acceptor for honor must be made as follows:chanroblesvirtuallawlibrary (a) If it is to be presented in the place where

the protest for non-payment was made, it must be presented not later than the day following its maturity.

(b) If it is to be presented in some other place

than the place where it was protested, then it must be forwarded within the time specified in Section one hundred and four.

Sec. 169. When delay in making presentment is excused. - The provisions of Section eighty-one apply where there is delay in making presentment to the acceptor for honor or referee in case of need.

Sec. 170. Dishonor of bill by acceptor for honor. - When the bill is dishonored by the acceptor for honor, it must be protested for non-payment by him.

XIV. PAYMENT FOR HONOR

Sec. 171. Who may make payment for honor. - Where a bill has been protested for non-payment, any person may intervene and pay it supra protest for the honor of any person liable thereon or for the honor of the person for whose account it was drawn.

Sec. 172. Payment for honor; how made. - The payment for honor supra protest, in order to operate as such and not as a mere voluntary payment, must be attested by a notarial act of honor which may be appended to the protest or form an extension to it.

Sec. 173. Declaration before payment for honor. - The notarial act of honor must be founded on a declaration made by the payer for honor or by his agent in that behalf declaring his intention to pay the bill for honor and for whose honor he pays.

Sec. 174. Preference of parties offering to pay for honor. - Where two or more persons offer to pay a bill for the honor of different parties, the person whose payment will discharge most parties to the bill is to be given the preference.

Sec. 175. Effect on subsequent parties where bill is paid for honor. - Where a bill has been paid for honor, all parties subsequent to the party for whose honor it is paid are discharged but the payer for honor is subrogated for, and succeeds to, both the rights and duties of the holder as regards the party for whose honor he pays and all parties liable to the latter.

Sec. 176. Where holder refuses to receive payment supra protest. - Where the holder of a bill refuses to receive payment supra protest, he loses his right of recourse against any party who would have been discharged by such payment.

Sec. 177. Rights of payer for honor. - The payer for honor, on paying to the holder the amount of the bill and the notarial expenses incidental to its dishonor, is entitled to receive both the bill itself and the protest.

XV. BILLS IN SET

Sec. 178. Bills in set constitute one bill. - Where a bill is drawn in a set, each part of the set being numbered and containing a reference to the other parts, the whole of the parts constitutes one bill.

Sec. 179. Right of holders where different parts are negotiated. - Where two or more parts of a set are negotiated to different holders in due course, the holder whose title first accrues is, as between such holders, the true owner of the bill. But nothing in this section affects the right of a person who, in due course, accepts or pays the parts first presented to him.

Sec. 180. Liability of holder who indorses two or more parts of a set to different persons. - Where the holder of a set indorses two or more parts to different persons he is liable on every such part, and every indorser subsequent to him is liable on the part he has himself indorsed, as if such parts were separate bills.

Sec. 181. Acceptance of bill drawn in sets. - The acceptance may be written on any part and it must be written on one part only. If the drawee accepts more than one part and such accepted parts negotiated to different holders in due course, he is liable on every such part as if it were a separate bill.

Sec. 182. Payment by acceptor of bills drawn in sets. - When the acceptor of a bill drawn in a set pays it without requiring the part bearing his acceptance to be delivered up to him, and the part at maturity is outstanding in the hands of a holder in due course, he is liable to the holder thereon.

Sec. 183. Effect of discharging one of a set. - Except as herein otherwise provided, where any one part of a bill drawn in a set is discharged by payment or otherwise, the whole bill is discharged.

XVI. PROMISSORY NOTES AND CHECKS

Sec. 184. Promissory note, defined. - A negotiable promissory note within the meaning of this Act is an unconditional promise in writing made by one person to another, signed by the maker, engaging to pay on demand, or at a fixed or determinable future time, a sum certain in money to order or to bearer. Where a

note is drawn to the maker's own order, it is not complete until indorsed by him.

Sec. 185. Check, defined. - A check is a bill of exchange drawn on a bank payable on demand. Except as herein otherwise provided, the provisions of this Act applicable to a bill of exchange payable on demand apply to a check.

Sec. 186. Within what time a check must be presented. - A check must be presented for payment within a reasonable time after its issue or the drawer will be discharged from liability thereon to the extent of the loss caused by the delay.

Sec. 187. Certification of check; effect of. - Where a check is certified by the bank on which it is drawn, the certification is equivalent to an acceptance.

Sec. 188. Effect where the holder of check procures it to be certified. - Where the holder of a check procures it to be accepted or certified, the drawer and all indorsers are discharged from liability thereon.

Sec. 189. When check operates as an assignment. - A check of itself does not operate as an assignment of any part of the funds to the credit of the drawer with the bank, and the bank is not liable to the holder unless and until it accepts or certifies the check.

XVII. GENERAL PROVISIONS

Sec. 190. Short title. - This Act shall be known as the Negotiable Instruments Law.

Sec. 191. Definition and meaning of terms. - In this Act, unless the contract otherwise requires:chanroblesvirtuallawlibrary "Acceptance" means an acceptance completed

by delivery or notification;

"Action" includes counterclaim and set-off;

"Bank" includes any person or association of persons carrying on the business of banking,

whether incorporated or not;

"Bearer" means the person in possession of a bill or note which is payable to bearer;

"Bill" means bill of exchange, and "note"

means negotiable promissory note;

"Delivery" means transfer of possession, actual or constructive, from one person to another;

"Holder" means the payee or indorsee of a bill or note who is in possession of it, or the bearer

thereof;

"Indorsement" means an indorsement completed by delivery;

"Instrument" means negotiable instrument;

"Issue" means the first delivery of the

instrument, complete in form, to a person who takes it as a holder;

"Person" includes a body of persons, whether

incorporated or not;

"Value" means valuable consideration;

"Written" includes printed, and "writing" includes print.

Sec. 192. Persons primarily liable on instrument. - The person "primarily" liable on an instrument is the person who, by the terms of the instrument, is absolutely required to pay the same. All other parties are "secondarily" liable.

Sec. 193. Reasonable time, what constitutes. - In determining what is a "reasonable time" regard is to be had to the nature of the instrument, the usage of trade or business with respect to such instruments, and the facts of the particular case.

Sec. 194. Time, how computed; when last day falls on holiday. - Where the day, or the last day for doing any act herein required or permitted to be done falls on a Sunday or on a holiday, the act may be done on the next succeeding secular or business day.

Sec. 195. Application of Act. - The provisions of this Act do not apply to negotiable instruments made and delivered prior to the taking effect hereof. chanrobles law

Sec. 196. Cases not provided for in Act. - Any case not provided for in this Act shall be governed by the provisions of existing legislation or in default thereof, by the rules of the law merchant. Sec. 197. Repeals. - All acts and laws and parts thereof inconsistent with this Act are hereby repealed.

Sec. 198. Time when Act takes effect. - This Act shall take effect ninety days after its publication in the Official Gazette of the Philippine Islands shall have been completed.

Enacted: February 3, 1911

PRESIDENTIAL DECREE No. 760 July 31, 1975

ALLOWING THE TEMPORARY REGISTRATION OF FOREIGN-OWNED VESSELS UNDER TIME CHARTER OR LEASE TO PHILIPPINE NATIONALS FOR USE IN THE PHILIPPINE COASTWISE TRADE SUBJECT TO CERTAIN CONDITIONS

WHEREAS, in the interest of the national economy, it is imperative that Philippine domestic shipping be expanded to meet the ever-increasing inter-island cargo and passenger traffic;

WHEREAS, due to the heavy capital requirements of the shipping industry, local ship owners and operators cannot raise sufficient financial resources to acquire new tonnage to replace their uneconomic and over aged fleet; and

WHEREAS, in order to alleviate the present plight of domestic shipping, it is necessary to temporarily relax certain aspects of the restrictive and constrictive legal framework under which vessels may be registered in the Philippines;

NOW, THEREFORE, I, FERDINAND E. MARCOS, President of the Philippines, by virtue of the powers in me vested by the Constitution, do hereby order and decree the following as part of the law of the land:

Section 1. Any provision of law, decree, executive order, or rules and regulations to the contrary notwithstanding, any foreign-owned vessel under time charter or lease to a Philippine national, as the term is defined in Section 3 of Presidential Decree No. 474, may be issued a temporary certificate of Philippine registry by the Maritime Industry Authority: Provided, That the said Charter or lease (1) has had the prior written approval of the Maritime Industry Authority, (2) shall be valid and effective for a period of not less than five years, and (3) shall be used exclusively in the coastwise trade in the Philippines: Provided, further, That the operation of the vessel shall be entirely in the hands of Philippine nationals and free from any participation or interference from the alien owner, except insofar as such action shall be to directly protect his rights as owner thereof: Provided, finally, That the registered vessel shall be manned completely by a Filipino crew, except in the case of specialized fishing vessel.

The effectivity of any charter or lease contract entered into pursuant to this Decree shall not extend beyond the year 1990, unless otherwise extended by the President of the Republic of the Philippines.

Section 2. Any vessel issued a temporary certificate of Philippine registry as provided for in the section immediately preceding shall be entitled to all the rights and privileges of a vessel of a Philippine registry, as well as the protection of Philippine law so long as its temporary certificate of registration is valid and subsisting. Correspondingly, the vessel shall also be subject to all requirements, limitations and all the duties and obligations imposed upon vessels of Philippine registry.

Section 3. The Maritime Industry Authority shall promulgate the rules and regulations, together with the procedures and guidelines, for the implementation of this Decree, subject to approval by the Office of the President.

Section 4. Any provision of law, decree, executive order, or rules and regulations inconsistent with this Decree is hereby repealed, amended or modified accordingly.

Section 5. This Decree shall take effect immediately.

transportation law provisions

Documents