Bar Q and A #13

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1.) Procopio purchased an Isuzu passenger jeepney from Enteng, a holder of certificate of public convenience for the operation of public utility plying the Calamba-Los Baños route. While Procopio continued offering the jeepney for public transport services, he did not have the registration of the vehicle transferred in his name. Neither did he secure for himself a certificate of public convenience for its operation. Thus, per the records of the Land Transportation Franchising and Regulatory Board, Enteng remained its registered owner and operator. One day, while the jeepney was traveling southbound, it collided with a ten- wheeler truck owned by Emmanuel. The driver of the truck admitted responsibility for the accident, explaining that the truck lost its brakes. Procopio sued Emmanuel for damages, but the latter moved to dismiss the case on the ground that Procopio is not the real party in interest since he is not the registered owner of the jeepney. Resolve the motion with reasons.

The motion to dismiss should be denied. In the case of Lim vs. Court of Appeals, G.R. No. 125817, January 16, 2002, the Supreme Court held that Procopio may sue for damages against Emmanuel despite the existence of kabit system because, (a) neither parties to the kabit system is being held liable for damages; (b) the case arose from the negligence of another vehicle using the public road to whom no representation, or misrepresentation, as regards ownership and operation of the passenger jeepney was made to whom such representation, or misrepresentation was necessary (Villanueva, Commercial Law Reviewer, 2009 ed.)

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2.) Fil-Asia Air Flight 9I6 was on a scheduled passenger flight from Manila when it crashed as it landed at the Cagayan de Oro airport; the pilot miscalculated the plane's approach and undershot the runway. Of the I50 people on board, ten (10) passengers died at the crash scene. Of the ten who died, one was a passenger who managed to leave the plane but was run over by an ambulance coming to the rescue. Another was an airline employee who hitched a free ride to Cagayan de Oro and who was not in the passenger manifest. It appears from the Civil Aeronautics Authority investigation that the co-pilot who had control of the plane's landing had less than the required flying and landing time experience, and should not have been in control of the plane at the time. He was allowed to fly as a co-pilot because of the scarcity of pilots - Philippine pilots have been recruited by foreign airlines under vastly improved flying terms and wages so that newer and less trained pilots are being locally deployed. The main pilot, on the other hand, had a very high level of blood alcohol at the time of the crash. You are part of the team that the victims hired to handle the case for them as a group. In your case conference, the following questions came up: a. Explain the causes of action legally possible under the given facts against the airline and the pilots; whom will you specifically implead in these causes of action? b. How will you handle the cases of the passenger run over by the ambulance and the airline employee allowed to hitch a free ride to Cagayan de Oro?

a. A complaint for breach of contract of carriage can be filed against Fil-Asia Air for failure to exercise extraordinary diligence in transporting the passengers safely from their point of embarkation to their destination. (Article 1755, Civil Code)
A complaint based on a quasi-delict can be filed against the pilots because of their fault and negligence. (Article 2176, Civil Code) Fil-Asia Air can be included for negligence in the selection and supervision of the pilots. (Article 2180, Civil Code)
A third cause of action may be a criminal prosecution for the reckless imprudence resulting in homicide against two pilots. The airline will be subsidiary liable for the civil liability only after the pilots are convicted and found to be insolvent.

b. It is the driver of the ambulance and his employer who should be held liable for damages, because a passenger was run over. This is in accordance with Articles 2176 and 2180 of the Civil Code. There could also be a criminal prosecution for reckless imprudence resulting in homicide against the ambulance driver and the consequent civil liability.
Since the airline employee was being transported gratuitously, Fil-Asia Air was not required to exercise extraordinary diligence for his safety and only ordinary care. (Lara v. Valencia, 104 Phil. 65, 1958)

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3.) Discuss the three-fold character of a bill of lading.

A bill of lading is considered a receipt for the goods shipped to the common carrier. It also serves as the contract by which three parties, namely, the shipper, the carrier and the consignee undertake specific responsibilities and assumed stipulated obligations. Third, it is the evidence of the existence of the contract of carriage providing for the terms and conditions thereof. (Keng Hua Paper Products vs. Court of Appeals, 286 SCRA 257)

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4.) a. What do you understand by a “bill of lading”? b. Explain the two-fold character of a “bill of lading.”

a. A bill of lading may be defined as written acknowledgment of the receipt of goods and an agreement to transport and to deliver them at a specified place to a person named therein or on his order.

b. A bill of lading has two-fold character, namely, (a) it is a receipt of goods to be transported; and (b) it constitutes a contract of carriage of the goods.

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5.) JRT, Inc. entered into a contract with C. Co. of Japan to export anahaw fans valued at $23,000. As payment thereof, a letter of credit was issued to JR, Inc. by the buyer. The letter of credit required was issued to JR, Inc. by the buyer. The letter of credit required the issuance of an on-board bill of lading and prohibited the transshipment. The President of JRT, Inc. then contracted a shipping agent to ship the anahaw fans through O Containers Lines, specifying the requirements of the letter of credit. However, the bill of lading issued by the shipping lines bore the notation “received for shipment” and contained an entry indicating transshipment in Hongkong. The President of JRT, Inc, personally received and signed the bill of lading and despite the entries, he delivered the corresponding check in payment of the freight. The shipment was delivered at the port of discharge but the buyer refused to accept the anahaw fans because there was no on- board bill of lading, and there was transshipment since the goods were transferred in Hongkong from MV Pacific, the feeder vessel, to MV Oriental, a mother vessel. The same cannot be considered transshipment because both vessels belong to the same shipping company. a. Was there transshipment? Explain. b. JRT, Inc. further argued that assuming there was transshipment, it cannot be deemed to have agreed thereto even if it signed the bill of lading containing such entry because it has made known to the shipping lines from the start that transshipment was prohibited under the letter of credit and that, therefore, it had no intention to allow transshipment of the subject cargo. Is the argument tenable? Reason.

a. YES. Transshipment is the act of taking cargo out of one ship and loading it in another. It is immaterial whether or not the same person, firm or entity owns the 2 vessels.

b. No. JRT is bound by the terms of the bill of lading when it accepted the bill of lading with full knowledge of its contents which included transshipment in Hongkong Acceptance under such circumstances makes the bill of lading binding contract.

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6.) X shipped thru M/V Kalayaan, spare parts worth P500,000. The bill of lading limits the liability of the carrier to P50,000 and contains a notation indicating the amount of the letter of credit (i.e. P500,000) which X obtained from a bank to import the spare parts. The spare parts were not delivered to X, so X sued the carrier for P500,000. Decide.

The limit of liability stipulated in the bill of lading is subordinated to a declaration therein of the actual value of the goods. Since the bill of lading itself contains a notation indicating the true value of the goods shipped (supported by the letter of credit), X can sue the carrier on the basis of such true value.

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7.) Star Shipping Lines accepted 100 cartons of sardines from Master to be delivered to 555 Company of Manila. Only 88 cartons were delivered, however, these were in bad condition. 555 Company claimed from Star Shipping Lines the value of the missing goods, as well as the damaged goods. Star Shipping Lines refused because the former failed to present a bill of lading. Resolve with reasons the claim of 555 Company.

Star Shipping Lines should pay the claim of 555 Company. The mere fact that some cartons were lost and the 88 cartons were damaged is sufficient proof of the fault of Star Shipping Lines. The fact that 555 Company failed to present a bill of lading makes no difference, because it was the actual consignee. Moreover, under Art. 353 of the Code of Commerce, the surrender of the original bill of lading is not a condition precedent for a common carrier to be discharged of its obligation. If surrender of the original bill of lading is not possible, acknowledgment of delivery by signing the delivery receipt suffices.

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8.) For a cargo of machinery shipped from abroad to a sugar central in Dumaguete, Negros Oriental, the Bill of Lading (B/L) stipulated “To Shipper’s Order,” with notice of arrival to be addressed to the Central. The cargo arrived at its destination and was released to the Central without surrender of the B/L on the basis of the latter’s undertaking to hold the carrier free and harmless from any liability. Subsequently, a Bank to whom the Central was indebted, claimed the cargo and presented the original of the B/L stating that the Central had failed to settle its obligations with the Bank. Was there misdelivery by the carrier to the sugar central considering the non- surrender of the B/L? Why?

There was no misdelivery to the carrier since the cargo was consigned to the sugar central per the “Shipper’s Order”.

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9.) X owns the ship M/V Aguinaldo. He bareboat chartered the ship to Y who appointed all its crew members from the captain down to its last official. Y then transported a shipment of 10,000 bags of sugar belonging to Z. Thru the negligence of the ship captain, half of the sugar was damaged due to sea water. Since Y is bankrupt, Z sued the captain and X. Will the suit prosper?

The action could prosper against the ship captain whose negligence caused the damage but not against X who merely was a lessor of the vessel and who was neither a party to the contract for the shipment of the goods nor an employer of the ship captain.

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10.) The Saad Dev Co enters into a voyage charter with XYZ over the latter’s vessel, the MV LadyLove. Before the Saad could load it, XYZ sold LadyLove to Oslob Maritime Co which decided to load it for its own account. a. May XYZ Shipping Co validly ask for the rescission of the charter party? If so, can Saad recover damages? To what extent? b. If Oslob did not load it for its own account, is it bound by the charter party? c. Explain the meaning of “owner pro hac vice of the vessel.” In what kind of charter party does this obtain?

a. YES. XYZ may ask for the rescission of the charter party if, as in this case, it sold the vessel before the charterer has begun to load the vessel and the purchaser loads it for his own account. Saad may recover damages to the extent of its losses. (Art. 689 Code of Commerce)

b. If Oslob did not load Lady Love for its own account, it would be bound by the charter party, but XYZ would have to indemnify Oslob if it was not informed of the Charter Party at the time of sale. (Art. 689 Code of Commerce)

c. The term “Owner Pro Hac Vice of the Vessel,” is generally understood to be the charterer of the vessel in the case of bareboat or demise charter whereby the shipowner turns over possession of his vessel to the charterer, who then undertakes to provide a crew and victuals and supplies and fuel for her during the term of the charter. (Litonjua Shipping Co v. National Seamen’s Board GR 51910, Aug 10, 1989)

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