Article 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.

CHAPTER 4 DEFENSE OF THE COMMON CARRIER The carrier is not an insurer of the passenger’s safety or the safety of the goods that it is transporting. The carrier’s liability rests upon its failure to exercise extraordinary degree of diligence that the law requires. The carrier bears the burden of satisfying the court that he has duly discharged the duty of prudence required in case of a passenger’s death, or injury by the carrier, or damage to or loss of the cargoes. KINDS OF DEFENSES Defenses may either totally bar recovery from the carrier or may mitigate and/or limit its liability. For instance, fortuitous event may be invoked in proper cases to prevent the passenger or shipper from recovering from the carrier. On the other hand, there are defenses that will not totally bar recovery but will merely reduce or mitigate the liability of the carrier. Examples of defense that mitigate liability are the Doctrine of Contributory Negligence 1and Avoidable Consequences Rule2. A validly stipulated limitation on liability of the carrier may also be invoked to limit the liability to a certain amount although the actual value of the damage or injury is much more that the stipulated ceiling.

Article 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.

DEFENSE IN THE CARRIAGE OF GOODS The applicable provisions of the New Civil Code are Articles 1734, 1742, and 1743. Article 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 or omission of the shipper or owner of the goods; (4) The character of the goods or defects in the packing or in the containers;

PROXIMATE CAUSATION The common carrier is presumed negligent the moment he fails to deliver the goods to its destination or the moment the passenger did not reach his destination while riding the carrier. It is by reason of such presumption that it has been observed that the doctrine of proximate cause 3is inapplicable to a contract of carriage. The injured passenger or owner of goods need not prove causation to establish his case. The presumption arises upon the happening of the accident.

(5) Order or act of competent public authority. Article 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. Article 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.

ABSENCE OF CAUSATION AS A DEFENSE Nevertheless, it is not correct to state that proximate causation is not an important consideration in cases involving common carriers. What the law means is that the absence of causal connection is only a matter of defense. In other words, the passenger or the shipper has no burden of proving that his injury was caused by the negligent or intention act or omission of the carrier or his agents.

1

a doctrine of common law that if a person was injured in part due to his/her own negligence (his/her negligence "contributed" to the accident), the injured party would not be entitled to collect any damages (money) from another party who supposedly caused the accident.

EXCLUSIVITY OF DEFENSE No other defense may be raised by the common carrier in the carriage of goods. The above enumeration is EXCLUSIVE OR A CLOSED LIST. If not one of those is present, the carrier is liable.

3

that cause, which, in natural and continuous sequence, unbroken by any efficient intervening cause,

produces the injury, and without which the result would not have occurred

.

2

a common-law rule barring recovery of damages that a tort victim "could have avoided by the use of reasonable effort or expenditure after the commission of the tort."

1 Stephen Michael Ben AUSL

For example, the defense of exercise of due diligence in the selection and supervision of employees that is available in tort is not available in an action for breach of contract of carriage. DEFENSES IN CARRIAGE OF PASSENGERS With respect to passengers, the carrier’s defense is exercise of extraordinary or utmost diligence. It is believed that the defenses mentioned above like fortuitous event or acts pf a public enemy may be invoked against the passenger or his heirs provided that utmost diligence is exercised. However, the presumption under Article 1756 applies. Article 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.

FORTUITOUS EVENT Fortuitous event, to be a valid defense, must be established to be the proximate cause of the loss. Lasam vs Smith This brings us to the principal question in the case: What is meant by "events which cannot be foreseen and which, having been foreseen, are inevitable?" The Spanish authorities regard the language employed as an effort to define the term caso fortuito and hold that the two expressions are synonymous. What is meant by "events which cannot be foreseen and which, having been foreseen, are inevitable?" The Spanish authorities regard the language employed as an effort to define the term caso fortuito and hold that the two expressions are synonymous. (Manresa, Comentarios al Codigo Civil Español, vol. 8, pp. 88 et seq.; Scævola, Codigo Civil, vol. 19, pp. 526 et seq.) The antecedent to article 1105 is found in Law 11, Title 33, Partida 7, which defines caso fortuito as "occasion que a case por aventura de que non se puede ante ver. E son estos, derrivamientos de casas e fuego que se enciende a so ora, e quebrantamiento de navio, fuerca de ladrones. . . . (An event that takes place by accident and could not have been foreseen. Examples of this are destruction of houses, unexpected fire, shipwreck, violence of robbers. . . .)" Escriche defines caso fortuito as "an unexpected event or act of God which could either be foreseen nor resisted, such as floods, torrents, shipwrecks, conflagrations, lightning, compulsion, insurrections, destructions, destruction of buildings by unforseen accidents and other occurrences of a similar nature."

In discussing and analyzing the term caso fortuito the Enciclopedia Juridica Española says: "In a legal sense and, consequently, also in relation to contracts, a caso fortuito presents the following essential characteristics: (1) The cause of the unforeseen and unexpected occurrence, or of the failure of the debtor to comply with his obligation, must be independent of the human will. (2) It must be impossible to foresee the event which constitutes the caso fortuito, or if it can be foreseen, it must be impossible to avoid. (3) The occurrence must be such as to render it impossible for the debtor to fulfill his obligation in a normal manner. And (4) the obligor (debtor) must be free from any participation in the aggravation of the injury resulting to the creditor."

REQUISITES OF FORTUITOUS EVENT The following requisites must be present before the carrier can properly invoke fortuitous events as a defense: (1) The cause of the unforeseen event and unexpected occurrence, or of the failure of the debtor to comply with his obligation, must be independent from human will. (2) It must be impossible to foresee the event that constitutes the casa fortuito, or if it can be foreseen, it must be impossible to avoid. (3) The occurrence must be such as to render it impossible for the debtor to fulfill his obligation in a normal manner. (4) The obligor (debtor) must be free from any participation in or the aggravation of the injury resulting to the creditor. EFFECT OF CARRIER’S PARTICIPATION The requirement that the carrier must be free from any participation in causing the damage or injury is in line with Article 1739 that provides that the carrier will be excused from liability if the natural disaster is the proximate and only cause. Article 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.

RATIONALE The statutory provision is consistent with the view of Justice Moreland.

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Tan Chion Sian vs Inchausti An act of God can not be urged for the protection of a person who has been guilty of gross negligence in not trying to avert its results. One who has accepted responsibility for pay can not weakly fold his hands and say that he was prevented from meeting that responsibility by an act of God, when the exercise of the ordinary care and prudence would have averted the results flowing from that act. One who has placed the property of another, intrusted to his care, in an unseaworthy craft, upon dangerous waters, cannot absolve himself by crying, "an act of God," when every effect which a typhoon produced upon that property could have been avoided by the exercise of common care and prudence. When the negligence of the carrier concurs with an act of God producing a loss, the carrier is not exempted from liability by showing that the immediate cause of the damage was the act of God; or, as it has been expressed, "when the loss is caused by the act of God, if the negligence of the carrier mingles with it as an active and cooperative cause, he is still liable." The loss and damage to perishable articles in consequence of the weather will not excuse the carrier if it could have been prevented by due care and diligence. The carrier must not only show that it did all that was usual, but all that was necessary to be done under the circumstances. (Wing vs. New York, etc., Ry. Co., 1 Hilt. (N.Y.), 235; Philleo vs. Sanford, 17 Tex., 228.) To be exempt from liability for loss because of an act of God, the common carrier must be free from any previous negligence or misconduct by which that loss or damage may have been occasioned. For, although the immediate or proximate cause of a loss in any given instance may have been what is termed an act of God, yet if the carrier unnecessarily exposed the property to such accident by any culpable act or omission of his own, he is not excused. The act of God which excuses the carrier must not only be the proximate cause of the loss, but the better opinion is that it must be the sole cause. And where the loss is caused by the "act of God," if the negligence of the carrier mingles with it as an active and cooperative cause, he is still responsible.

FIRE Broadly speaking, force majeure generally applies to a natural accident, such as that caused by a lightning, an earthquake, a tempest or a public enemy. Hence, fire is not considered a natural disaster or calamity. STORM PAGASA described a storm as having a wind force of 48 to 55 knots or 55 to 63 miles per hour. The presence of strong wind does not by itself justify the conclusion that there is a storm. For instance, strong monsoon winds are not a storm within the contemplation of Article 1734 [1] of the New Civil Code. Monsoon wind is not an unusual occurrence and is a normal and foreseeable condition while navigating in the sea. However, there may be cases

when strong winds may be unforeseeable. Hence,in one case, the carrier was not made liable because the proximate and only cause of the loss was unforeseeable strong winds and enormous waves. Article 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;

HIJACKING Hijacking of the carrier does not fall among the five categories of exempting causes. The carrier’s vehicle must be dealt with under Article 1735 of the New Civil Code. In other words, the common carrier is presumed be at fault or to have acted negligently unless there is a proof of extraordinary diligence on its part of the common carrier. Article 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.

MECHANICAL DEFECTS Damage or injury that can be traced to mechanical defects is not a damage or injury that is caused by fortuitous event. The prevailing rule in this jurisdiction is that a carrier is liable to its passengers for damages caused by mechanical defects. One of the reasons why the carrier is made liable despite the presence of mechanical defect is the absence of privity 4between the passenger and the manufacturer. TIRE BLOWOUTS The rule on mechanical defects applies to “tire blow-outs”. The SC did not consider the explosions of the tire pf the jeepney as a fortuitous event although the tires were allegedly in good condition; no evidence was presented to show that the accident was due to adverse road conditions. The explosion could have been caused by too much air pressure injected into the tires coupled by the fact that the jeepney was overloaded and speeding at the time of the accident.

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a relation between two parties that is recognized by law, such as that of blood, lease, or service

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OTHER INVALID DEFENSES

NATURE OF GOODS AND IMPROPER PACKING

The common carrier cannot likewise invoke explosion, the presence of worm and rats, water damage, and barratry.

The fourth paragraph of Article 1734 specifies the character of goods or defects in the packing or in the containers as a defense that is available to common carriers.

(a) Explosion. Damage to cargo from explosion of another cargo is not ordinarily attribute to peril of the sea or accidents of navigation particularly where it occurs after the vessel has ended its voyage and is finally moored to unload. (b) Worms and Rats. Whenever the ship is damaged by worms resulting in damage to the cargo, the carrier cannot cite the same as an excuse. The same is true with respect to damage of the cargo by rats whether the cargo was directly damaged by the rats or by water let in through holes gnawed by rats in the ship or her fixtures. (c) Water Damage. Damage by seawater is not a valid excuse where the water gains entrance through a port that had been left open or insufficiently fastened on sailing. (d) Barratry. The shipowner cannot escape liability to 3rd persons if the case of damage is barratry. It is an act committed by the master or crew of the ship for some unlawful or fraudulent purpose, contrary to their duty to the owner. Intentional fraud or breach of trust or willful violation of law is necessary to constitute barratry. Barratry includes theft by the purser of a specie shipped on board and fraudulently running the ship ashore. PUBLIC ENEMY An act of a public enemy is a defense that is available to the carrier not only under the Civil Code but also under the Carriage of Goods by Sea Act. Professor Francisco explained that the exception concerning the acts of public enemies is understandable because the government itself is called upon to protect its subjects from loss from such hazards and private citizens haven no power to furnish the security and protection required. Exceptionally, the acts of pirates on high seas are likewise included in the exception under Article 1734 [3] of the New Civil Code even if there is no declaration of a state of war. The rationale for this is that pirates on high seas are enemies of all civilized nations and humanity.

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

Similarly, the Carriage of Goods by Sea Act provides that the carrier shall not be liable for: (1) Wastage in bulk or weight or any other loss or damage arising from inherent defect, quality or vice of goods; (2) Insufficiency of packing; (3) Insufficiency or inadequacy of the marks; (4) Latent defects not discoverable by due diligence. However, Article 1742 provides Article 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

The carrier is not responsible if the loss occurs because of the inherent nature of the shipment. This applies even to hand-carried baggage. It is also true that if the carrier accepts the goods knowing the fact of improper packing of the goods upon ordinary observation or notwithstanding such condition, it is not relieved of liability for loss or injury resulting therefrom. ORDER OF PUBLIC AUTHORITY An order of a public authority may be used to excuse liability only if the public authority who issued the order is duly authorized to issue the order as provided for in Article 1743. Hence, the defense is not available if: (1) The public authority has no authority to issue the subject order; (2) If the public authority exceeded his authority. Article 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.

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

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DEFENSES IN CARRIAGE OF PASSENGERS The primary defense of the carrier in transporting passengers is the exercise of extraordinary diligence. Thus, even if there is a fortuitous event, the carrier must also present proof of exercise of extraordinary diligence. This is also reflected in Article 1763 which provides that a common carrier is responsible for injuries suffered by a passenger on account of the willful 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. This rule applies to cases involving fortuitous events because the carrier will still be responsible if it did not exercise due diligence in preventing the injury or death of the employee. Article 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.

ACTS OF EMPLOYEES The carrier is liable for the acts of its employees. Unlike in quasi-delict, the carrier cannot escape liability by claiming the he exercised due diligence in the selection and supervision of the employee. Article 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.

PASSENGER HAS NO DUTY TO INQUIRE By express provision of Article 1759, it is no defense that the employee acted beyond the scope of his authority because the riding public is not expected to inquire from time to time before they board the carrier whether or not the driver or any other employee is authorized to drive the vehicle or that said driver is acting within the scope of his authority and observing the existing rules and regulations required of him by management. RATIONALE

degree of care prescribed by the law, inter alia from violence and insults at the hands of strangers and other passengers, but above all, from the acts of the carrier’s own servants charged with the passenger’s safety; (2) Said liability of the carrier for the servant’s violation of duty to passengers, is the result of the former’s confiding in the servant’s hands the performance of his contract to safely transport the passenger, delegating therewith the duty of protecting the passenger with the utmost care prescribed by law; (3) As between the carrier and the passenger, the former must bear the risk of wrongful acts or negligence of the carrier’s employees against passengers, since it, and not the passengers, has power to select and remove them. THEFT BY EMPLOYEES Willful acts of the employees include theft. It should be pointed out that the Code of Commerce expressly provides that the captain shall be civilly liable to the naviero and the latter to third persons for all the thefts committed by the crew, reserving the right of action against the guilty party. The Civil Code does not change the rule and the same is in fact further reinforced by the duty to exercise extraordinary diligence. ACTS OF OTHER PASSENGERS AND THIRD PERSONS With respect to acts of strangers and other passengers resulting in injury to a passenger, the availability of such defense is also subject to the exercise of a carrier of due diligence to prevent or stop the act or omission. Article 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.

Thus, the defense that the death or injury was caused by third person is not available if the carrier’s driver even allowed another person who is not an employee or a regular driver to take over the task of driving the vehicle. The negligence of the carrier need not be the sole cause of the damage or injury to the passenger or the goods. The carrier would still be liable even if the contractual breach concurs with the negligent act or mission of another person.

(1) The special undertaking of the carrier requires that it furnish its passengers that full measure of protection afforded by the exercise of the high

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Oligario Brito Sy vs Malate Taxicab and Garage I concur for the additional reason that the concurrent negligence of a third person will not exempt the appellant from responsibility; in other words, if the driver of the taxicab was negligent and thereby caused the collision, the fact that another driver’s negligence also contributed thereto will not exempt the taxicab company. Hence, the negligence of the other driver is not a prejudicial question to the present action.

ACTS OF THE SHIPPER OR THE PASSENGER If the act or omission of the shipper or owner of the goods or the passenger is the proximate and only cause of the damage, then the common carrier is not liable. CONTRIBUTORY NEGLIGENCE Contributory Negligence is conduct on the part of the injured party, contributing as a legal cause to the hard he has suffered, which falls below the standard to which he is required to conform for his own protection. Contributory Negligence on the part of the shipper is not a defense that will excuse the carrier from liability. It will only mitigate such liability. Article 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.

CONTRIBUTORY NEGLIGENCE OF PASSENGER With respect to carriage of passengers, the said passengers are likewise bound to observe due diligence to avoid injury. Article 1761. The passenger must observe the diligence of a good father of a family to avoid injury to himself. Article 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.

CAUSATION The negligence of the shipper or the passenger may be the proximate and only cause of the loss, in which case, the carrier should not be made liable. The carrier may be able to overcome the presumption of negligence and may be able to prove that it exercised extraordinary diligence in handling the goods or in transporting the passenger. Thus, the carrier may be able to prove that only cause of the loss of the goods is any of the following acts of the shipper:

(1) Failure of the shipper to disclose the nature of the goods; (2) Improper marking or direction as to destination; (3) Improper loading when he assumes such responsibility. The shipper must likewise see to it that the goods are properly packed, otherwise, liability of the carrier may either be mitigated or barred depending on the circumstances. AVOIDABLE CONSEQUENCES Moreover, even if the carrier is responsible for the loss or injury, the passenger is also required to lessen the damage or injury under what is known as the doctrine of avoidable consequences. ASSUMPTION OF RISK The SC reiterated the rule that passengers must take such risks incident to the mode of travel. Carriers are not insurers of the lives of their passengers. Thus, in air travel, adverse weather conditions or extreme climactic changes are some of the perils involved in air travel, the consequences of which the passengers must assume or expect. However, there is no assumption of risk in case the passenger voluntarily boarded a carrier that was filled to capacity. There is also no assumption of risk by the mere fact that the carrier posted notices against such liability. DOCTRINE OF THE LAST CLEAR CHANCE Under the doctrine of the last clear chance, when both parties involved in the accident were both negligent, the negligence of the party will not be considered the proximate cause if the other party has the last clear chance of avoiding the injury. Thus, if the plaintiff has the last clear chance of avoiding the injury, the defendant may no longer be held liable. In such case, the negligence of the plaintiff – which is not just contributory negligence – will be considered an efficient intervening cause. •

The doctrine cannot be applied against a passenger. The principle of “last clear chance” applies in a suit between the owners and drivers of colliding vehicles.

NOTICE OF CLAIM In Civil Law, those who, in the performance of their obligation, are guilty of fraud, negligence, or delay and those who in any manner contravene the tenor of the obligation, are liable for damages. In an action for

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damages to breach of contract, it is essential that the claimant will establish the following requirement: (1) The existence of a perfected contract; (2) The breach thereof by the other contracting party; (3) The damages which he/she sustained due to the breach. It is also essential that the mandatory formal requirements that are imposed by law and the Statute of Limitations are complied with. Thus, when the law requires a notice of claim, the same must be complied with and any action that may be filed thereafter must be filed within the prescriptive period provided by law. CLAIM IN OVERLAND TRANSPORTATION AND COASTWISE SHIPPING A condition precedent for an action against the carrier in overland transportation is the filing of a claim with the carrier within the period prescribed under Article 366 of the Code of Commerce. Article 366 – Within the twenty-four hours following the receipt of the merchandise, the claim against the carrier for damage or average be found therein upon opening the packages, may be made, provided that the indications of the damage or average which gives rise to the claim cannot be ascertained from the outside part of such packages, in which case the claim shall be admitted only at the time of receipt.

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

(a) Consequently, under Article 366 of the Code of Commerce, an action for damages is barred if the goods arrived in damaged condition and the shipper files no claim within the following period: (1) The claim for damage must be filed immediately if the damage is apparent; or (2) The claim for damage must be made within 24 hours from receipt of the merchandise if the damage is not apparent, that is, the damage cannot be ascertained merely from the outside packaging of the cargo. (b) Notice of Claim Mandatory. Non-filing of the claim bars recovery. It is more accurate to state that the filing of a claim with the carrier within

the time limitation therefor under Article 366 actually constitutes a condition precedent to the accrual of a right of action against a carrier for damages caused to the merchandise. (c) Purpose. Government of the Philippine Islands vs Inchausti The whole purpose of the law according to the Code of Commerce is to give the carrier an opportunity to ascertain whether the claim is a well-founded one before the goods leave his hands with respect to damages which are observable upon the exterior of the goods or of the packages in which they are contained, and before the goods have been consumed or their identity destroyed in cases in which it is alleged that the damage has been discovered after the goods were received by the consignee. To impose upon the carrier the liability which plaintiff seeks to impose by this action would be to make the business of a common carrier a most hazardous one — so hazardous, indeed, that carriers would be obliged to charge much higher rates

(d) Commencement of Period. The period does not begin to run until the consignee has received possession of the merchandise that he may exercise over it the ordinary control pertinent to ownership. In other words, there must be delivery of the cargo by the carrier to the consignee at the place of destination. (e) Applicable to Coastwise Shipping. It was ruled in one case that the requirement under Article 366 of the Code of Commerce applies even to transportation by sea within the Philippines or coastwise shipping. For example, if the goods were shipped from Manila to Cebu and the goods were already damaged when they arrived in Cebu, a claim must be filed within the period prescribed under Article 366 of the Code of Commerce. (f) Not applicable to Misdelivery. Article 366 does not apply to misdelivery of goods. Article 366 is limited to cases of claims for damage to goods actually turned over by the carrier and received by the consignee, whether those damages be apparent from an examination of the packages in which the goods are delivered, or of such a character that the nature and extent of the damage is not apparent until the packages are opened and the contents examined. Clearly it has no application in cases wherein the goods entrusted to the carrier are not delivered by the carrier to the consignee. In such cases there can be no question of a claim for damages suffered by the goods while in transport, since the claim for damages arises exclusively out of the failure to make the delivery.

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(g) Effect of Stipulation. The period prescribed in Article 366 of the Code of Commerce may be subject to modification by agreement of the parties. The parties may stipulate in the bill of lading a period that is different from the period provided by Article 366. (h) Waiver. The carrier may waive the requirement that there must be a notice to claim. Thus, the notice of claim is deemed waived if the defendant failed to plead this defense in its answer to the complaint and the defense of absence of such notice cannot be raised for the first time at the trial or on appeal. (i) If there is doubt. Although the procedure on the notice of claim under Article 366 of the Code of Commerce is complied with, there may be cases when there is doubt regarding the condition of the goods. It is possible that the carrier does not accept the representation of the shipper. In these cases, the dispute between the parties shall be resolved in accordance with Article 367. Article 367 – If doubts and disputes should arise between the consignee and the carrier with respect to the condition of the goods transported at the time their delivery to the former is made, the goods shall be examined by experts appointed by the parties, and, in case of disagreement, by a third one appointed by the judicial authority, the results to be reduced to writing; and if the interested parties should not agree with the expert opinion and they do not settle their differences, the merchandise shall be deposited in a safe warehouse by order of the judicial authority, and they shall exercise their rights in the manner that may be proper.

NOTICE OF CLAIM IN INTERNATIONAL CARRIAGE OF GOODS BY SEA The provisions of the Carriage of Goods by Sea Act (COGSA) apply in international carriage. Section 3, paragraph 6 of the same law provides for the period within which a claim can be filed: (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.

(a) Period to File Claim. Consequently, a claim for damages must be filed with the carrier within the following period: (1) If the damage is apparent, the claim should be filed immediately upon discharge of the goods. (2) The claim must be made within three days from delivery if the damage is not apparent. (b) Period Not Mandatory. Failure to file a notice of claim within the given period will not bar recovery. Hence, failure to file a notice of claim is not a defense that is available to a common carrier in international carriage of goods by sea. PRESCRIPTION IN OVERLAND TRANSPORTATION AND COASTWISE SHIPPING There being no special rules with respect to the contract of carriage involving overland transportation and coastwise shipping of goods, the general rule under the Civil Code on extinctive prescription applies. PRESCIPTION IN INTERNATIONAL CARRAIGE OF GOODS The action for damages under the COGSA for international carriage of goods must be filed within a period of one year from discharge of the goods. In other words, the prescription period of one year commences from discharge. For example, the case filed within the prescriptive period if the insurance company subrogee filed the case 8 months after all the packages were delivered. (a) Who Can Invoke. “The carrier and the ship may put up the defense of prescription if the action for damages is not brought within one year after the delivery of the goods or the date when the goods should have been delivered.” It has been

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(b)

(c)

(d)

(e)

(f)

(g)

held that not only the shipper, but also the consignee or legal holder of the bill may invoke the prescriptive period. It is noted that the term “carriage of goods” covers the period from the time when the goods are loaded to the time when they are discharged from the ship. It can be inferred that the period of time when the goods have been discharged from the ship and given to the custody of the arrastre operator is not covered by the COGSA. The COGSA does not mention that an arrastre operator may invoke the prescriptive period of one year; hence, it does not cover the arrastre operator. Effect of Demand. The period is not suspended by an extra-judicial demand. Article 1155 of the Civil Code cannot be applied because matters affecting transportation of goods by sea should be decided in as short a time as possible. The application of the provision of Article 1155 of the Civil Code would unnecessarily extend the period and permit delays in the settlement of questions affecting transportation, contrary to the clear intent and purpose of the law. Conversion or Misdelivery. The period does not apply to conversion or misdelivery. The one-year period provided for the Section 3 (6) of the COGSA refers to loss of the cargo and not to misdelivery. The Civil Law concept of “loss” is applicable. It is understood that a thing is lost when it perishes, or goes out of commerce, or disappears in such a wat that its existence is unknown or it cannot be recovered. Delay. Similarly, damage arising from delay or late delivery is not the damage or loss contemplated under the COGSA. The goods are not actually lost or damaged. The applicable period is 10 years. Collision Cases. The rule applies in collision cases. However, the one year period starts not from the date of the collision but when the goods should have been delivered, had the cargoes been saved. Extension by Agreement. The one-year prescriptive period can be extended by agreement of the parties. There is nothing in COGSA that prohibits such agreement extending the period within which to file the case.

belonging to the shipper/insured. Hence, any defense available against the shipper is available against the insurer. However, it does not apply to the claim against the insurer for the insurance proceeds is based on contract that prescribes in 10 years. NOTICE OF CLAIM AND PRESCRIPTION IN AIR TRANSPORTATION There is no specific requirement for a notice of claim under the New Civil Code with respect to air transportation. The applicable rule on international air transportation can be found in the Warsaw Convention. RULES UNDER WARSAW CONVENTION Under the Warsaw Convention, the complaint or claim with the carrier must be filed within 3 days from receipt of the baggage and 7 days in case of goods. In case of delay, 14 days after the baggage was placed at the disposal of the passenger. However, under the provisions of the Warsaw Convention, the notice of claim is a condition precedent, hence, the notice must precede a suit for enforcement. On the other hand, the prescriptive period under the Warsaw Convention is two years form the date of arrival at the destination, or from the date the aircraft ought to have arrived or from the date on which the transportation stopped. LIMITING STIPULATIONS The carrier can also, in proper cases, invoke a partial defense in the form of a limiting stipulation. For example, the parties may expressly stipulate a fixed amount that may be recovered by the shipper or owner of the goods which requires that: (a) It is reasonable and just under the circumstances and (b) It is fairly and freely agreed upon. Hence, as a defense, the carrier will claim that the liability, if any, is not for the full amount that the shipper or owner is claiming but only up to the maximum amount fixed under the contract.

PRESCRIPTION AND SUBROGATION The insurer who is exercising its right of subrogation is also bound by the one year prescriptive period. This is understandable because the insurer, in the exercise of the right of subrogation, is pursuing the cause of action

9 Stephen Michael Ben AUSL

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