TRANSPO LAW - IV. PROVISIONS OF THE C ODE OF COMMERCE ON OVERLAND TRANSPORTATION

Question 1

Nature of contract under Code of Commerce

Answer 1

Article 349, Code of Commerce

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.

Question 2

What is the effect of Civil Code?

Answer 2

Effect of Civil Code
Article 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.

Article 2270. The following laws and regulations are hereby repealed:
(1) Those parts and provisions of the Civil Code of 1889 which are in force on the date when this new Civil Code becomes effective:
(2) The provisions of the Code of Commerce governing sales, partnership, agency, loan, deposit and guaranty;
(3) The provisions of the Code of Civil Procedure on prescription as far as inconsistent with this Code; and
(4) All laws, Acts, parts of Acts, rules of court, executive orders, and administrative regulations which are inconsistent with this Code. (n)

Question 3

Meaning of Bill of Lading

Answer 3

Article 352, Code of Commerce.
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.

Question 4

Form and contents of Bill of Lading

Answer 4

Article 350 and 351, Code of Commerce.
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.

Question 5

Functions of bill of lading

Answer 5

Article 353, Code of Commerce.

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.

Question 6

Right of carrier to refuse transportation

Answer 6

Article 356, Code of Commerce.
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.

Question 7

Rule when there is doubtful declaration of contents

Answer 7

Article 357, Code of Commerce.
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.

Question 8

Rule when there is no bill of lading

Answer 8

Articles 51 and 354, Code of Commerce.
Commercial contracts shall be valid and create an obligation and cause of action in suits, whatever may be the form or in whatever language they may be executed, the class to which they correspond, and the amount involved, provided their existence is proved by some of the means established by the civil law. However, the testimony of witnesses shall not in itself be sufficient to prove the existence of a contract wherein the amount involved exceeds 1,500 pesetas unless supported by other evidence.
Telegraphic correspondence shall only be the basis of an obligation between contracting parties who have previously admitted this medium in a written contract, and provided the telegrams fulfill the conventional conditions or conventional signs which may have been previously fixed and agreed to by the contracting parties.

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.

Question 9

When does responsibility of common carrier commence

Answer 9

When it commences
Article 355, Code of Commerce.
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.

Question 10

Rule on route of common carrier

Answer 10

Article 359, Code of Commerce.
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.

Question 11

Rules on care of goods

Answer 11

Articles 361 and 362, Code of Commerce.
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.
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.

Articles 1734 and 1735, Civil Code.
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;
(5) Order or act of competent public authority.

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.

Question 12

Rule on delivery - condition of goods

Answer 12

Condition of goods
Articles 363 to 367, Code of Commerce.
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.
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.
The same provision shall be applied to merchandise in bales or packages, with distinction of the packages which appear sound.
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.

Question 13

Rule on delivery - to whom delivery made

Answer 13

To whom delivery made
Article 358 and 370, Code of Commerce.
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 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.

Question 14

Rule on delivery - observe formalities of law

Answer 14

Observe formalities of law
Article 377, Code of Commerce
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.

Question 15

Rights and obligations of the shipper and/or consignee - right to damages

Answer 15

Right to damages
a. Condition imposed on the right
Articles 357 and 366, 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.

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.

Question 16

Rights and obligations of the shipper and/or consignee - Amount of damages or loss

Answer 16

b. Amount of damages for loss
Article 372, Code of Commerce.
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.
Article 1744, Civil Code.
Article 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.

Question 17

Rights and obligations of the shipper and/or consignee - Amount of damages for delay

Answer 17

Article 371(3), Code of Commerce.
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.

Question 18

Rights and obligations of the shipper and/or consignee - Right to abandon

Answer 18

Articles 363, 365, 370, 371, Code of Commerce.

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.

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

Question 19

Rights and obligations of the shipper and/or consignee - Right to change consignment

Answer 19

Right to change consignment
Article 360, Code of Commerce.
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.

Question 20

Rights and obligations of the shipper and/or consignee - Obligation to pay transportation charges

Answer 20

Obligation to pay transportation charges
Articles 374 to 376, Code of Commerce.
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 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 2241(9), Civil Code.
Article 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;

Question 21

Rights and obligations of the shipper and/or consignee - Obligation to return bill of lading

Answer 21

Obligation to return bill of lading
Article 353(2), Code of Commerce
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.

Question 22

Applicability of provisions

Answer 22

Article 379, Code of Commerce
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.