CHAPTER 1

General Concepts

Civil Code
Article 1732. Common carriers are persons, corporations, firms or associations engaged in the
business of carrying or transporting passengers or goods or both, by land, water, or air, for
compensation, offering their services to the public.

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 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.

CHAPTER 2
Obligations of the Parties

Code of Commerce
ARTICLE 356. Carriers may refuse packages which appear unfit for transportation; and if the
carriage is to be made by railway, and the shipment is insisted upon, the company shall transport
them, being exempt from all responsibility if its objections, is made to appear in the bill of lading.

ARTICLE 357. If by reason of well-founded suspicion of falsity in the declaration as to the contents
of a package the carrier should decide to examine it, he shall proceed with his investigation in the
presence of witnesses, with the shipper or consignee in attendance.
If the shipper or consignee who has to be cited does not attend, the examination shall be
made before a notary, who shall prepare a memorandum of the result of the investigation, for such
purposes as may be proper.
If the declaration of the shipper should be true, the expense occasioned by the examination
and that of carefully repacking the packages shall be for the account of the carrier and in a contrary
case for the account of the shipper.

ARTICLE 358. If there is no period fixed for the delivery of the goods the carrier shall be bound to
forward them in the first shipment of the same or similar goods which he may make point where he
must deliver them; and should he not do so, the damages caused by the delay should be for his
account.

ARTICLE 359. If there is an agreement between the shipper and the carrier as to the road over
which the conveyance is to be made, the carrier may not change the route, unless it be by reason of
force majeure; and should he do so without this cause, he shall be liable for all the losses which the
goods he transports may suffer from any other cause, beside paying the sum which may have been
stipulated for such case.
When on account of said cause of force majeure, the carrier had to take another route which
produced an increase in transportation charges, he shall be reimbursed for such increase upon
formal proof thereof.

ARTICLE 360. The shipper, without changing the place where the delivery is to be made, may
change the consignment of the goods which he delivered to the carrier, provided that at the time of
ordering the change of consignee the bill of lading signed by the carrier, if one has been issued, be
returned to him, in exchange for another wherein the novation of the contract appears.
The expenses which this change of consignment occasions shall be for the account of the
shipper.
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ARTICLE 361. [The merchandise shall be transported at the risk and venture of the shipper, if the
contrary has not been expressly stipulated. As a consequence, all the losses and deteriorations which
the goods may suffer during the transportation by reason of fortuitous event, force majeure, or the
inherent nature and defect of the goods, shall be for the account and risk of the shipper. cdta
Proof of these accidents is incumbent upon the carrier.]

ARTICLE 362. Nevertheless, the carrier shall be liable for the losses and damages resulting from
the causes mentioned in the preceding article if it is proved, as against him, that they arose through
his negligence or by reason of his having failed to take the precautions which usage has established
among careful persons, unless the shipper has committed fraud in the bill of lading, representing the
goods to be of a kind or quality different from what they really were.
If, notwithstanding the precautions referred to in this article, the goods transported run the risk
of being lost, on account of their nature or by reason of unavoidable accident, there being no time for
their owners to dispose of them, the carrier may proceed to sell them, placing them for this purpose at
the disposal of the judicial authority or of the officials designated by special provisions.

ARTICLE 363. Outside of the cases mentioned in the second paragraph of Article 361, the carrier
shall be obliged to deliver the goods shipped in the same condition in which, according to the bill of
lading, they were found at the time they were received, without any damage or impairment, and failing
to do so, to pay the value which those not delivered may have at the point and at the time at which
their delivery should have been made.
If those not delivered form part of the goods transported, the consignee may refuse to receive
the latter, when he proves that he cannot make use of them independently of the others.

ARTICLE 364. If the effect of the damage referred to in Article 361 is merely a diminution in the
value of the goods, the obligation of the carrier shall be reduced to the payment of the amount which,
in the judgment of experts, constitutes such difference in value.

ARTICLE 365. If, in consequence of the damage, the goods are rendered useless for sale and
consumption for the purposes for which they are properly destined, the consignee shall not be bound
to receive them, and he may have them in the hands of the carrier, demanding of the latter their value
at the current price on that day.
If among the damaged goods there should be some pieces in good condition and without any
defect, the foregoing provision shall be applicable with respect to those damaged and the consignee
shall receive those which are sound, this segregation to be made by distinct and separate pieces and
without dividing a single object, unless the consignee proves the impossibility of conveniently making
use of them in this form.
The same rule shall be applied to merchandise in bales or packages, separating those parcels
which appear sound.

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.

ARTICLE 367. If doubts and disputes should arise between the consignee and the carrier with
respect

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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.

ARTICLE 368. The carrier must deliver to the consignee, without any delay or obstruction, the
goods which he may have received, by the mere fact of being named in the bill of lading to receive
them; and if he does not do so, he shall be liable for the damages which may be caused thereby.

ARTICLE 369. If the consignee cannot be found at the residence indicated in the bill of lading, or if
he refuses to pay the transportation charges and expenses, or if he refuses to receive the goods, the
municipal judge, where there is none of the first instance, shall provide for their deposit at the
disposal of the shipper, this deposit producing all the effects of delivery without prejudice to third
parties with a better right.

ARTICLE 370. If a period has been fixed for the delivery of the goods, it must be made within such
time, and, for failure to do so, the carrier shall pay the indemnity stipulated in the bill of lading, neither
the shipper nor the consignee being entitled to anything else.
If no indemnity has been stipulated and the delay exceeds the time fixed in the bill of lading, the
carrier shall be liable for the damages which the delay may have caused.

ARTICLE 371. In case of delay through the fault of the carrier, referred to in the preceding articles,
the consignee may leave the goods transported in the hands of the former, advising him thereof in
writing before their arrival at the point of destination.
When this abandonment takes place, the carrier shall pay the full value of the goods as if they had
been lost or mislaid.
If the abandonment is not made, the indemnification for losses and damages by reason of the
delay cannot exceed the current price which the goods transported would have had on the day and at
the place in which they should have been delivered; this same rule is to be observed in all other
cases in which this indemnity may be due.

ARTICLE 372. The value of the goods which the carrier must pay in cases if loss or misplacement
shall be determined in accordance with that declared in the bill of lading, the shipper not being
allowed to present proof that among the goods declared therein there were articles of greater value
and money.
Horses, vehicles, vessels, equipment and all other principal and accessory means of transportation
shall be especially bound in favor of the shipper, although with respect to railroads said liability shall
be subordinated to the provisions of the laws of concession with respect to the property, and to what
this Code established as to the manner and form of effecting seizures and attachments against said
companies.

ARTICLE 373. The carrier who makes the delivery of the merchandise to the consignee by virtue of
combined agreements or services with other carriers shall assume the obligations of those who
preceded him in the conveyance, reserving his right to proceed against the latter if he was not the
party directly responsible for the fault which gave rise to the claim of the shipper or consignee.
The carrier who makes the delivery shall likewise acquire all the actions and rights of those
who preceded him in the conveyance.
The shipper and the consignee shall have an immediate right of action against the carrier who
executed the transportation contract, or against the other carriers who may have received the

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goods transported without reservation. However, the reservation made by the latter shall not relieve
them from the responsibilities which they may have incurred by their own acts.

ARTICLE 374. The consignees to whom the shipment was made may not defer the payment of the
expenses and transportation charges of the goods they receive after the lapse of twenty-four hours
following their delivery; and in case of delay in this payment, the carrier may demand the judicial sale
of the goods transported in an amount necessary to cover the cost of transportation and the
expenses incurred.

ARTICLE 375. The goods transported shall be especially bound to answer for the cost of
transportation and for the expenses and fees incurred for them during their conveyance and until the
moment of their delivery.
This special right shall prescribe eight days after the delivery has been made, and once
prescribed, the carrier shall have no other action than that corresponding to him as an ordinary
creditor.

ART. 698. In case of interruption of a voyage already begun, the passengers shall only be obliged to
pay the fare in proportion to the distance covered, without right to recover damages if the interruption
is due to fortuitous event or force majeure, but with a right to indemnity, if the interruption should have
been caused by the captain exclusively. If the interruption should be caused by the disability of the
vessel, and the passenger should agree to wait for her repairs, he may not be required to pay any
increased fare of passage, but his living expenses during the delay shall be for his own account.

Civil Code
ART. 1513. 1.Such title to the goods as the person negotiating the documents 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.

Article 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.

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.

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Article 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.

Article 1737. The common carriers 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.

Article 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.

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.

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

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.

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.

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.

Article 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;

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

Article 1746. An agreement limiting the common carriers 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.

Article 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 carriers liability cannot be
availed of in case of the loss, destruction, or deterioration of the goods.

Article 1748. An agreement limiting the common carriers liability for delay on account of strikes or
riots is valid.

Article 1749. A stipulation that the common carriers 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.

Article 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.

Article 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 carriers liability is reasonable, just and in consonance with
public policy.

Article 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.

Article 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.

Article 1754. The provisions of articles 1733 to 1753 shall apply to the passengers 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.

Article 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.

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.

Article 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.

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Article 1758. When a passenger is carried gratuitously, a stipulation limiting the common carriers
liability for negligence is valid, but not for willful acts or gross negligence.

The reduction of fare does not justify any limitation of the common carriers liability.

Article 1759. Common carriers are liable for the death of or injuries to passengers through the
negligence or willful acts of the formers 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.

Article 1760. The common carriers 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.

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.

Article 1763. 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 carriers employees
through the exercise of the diligence of a good father of a family could have prevented or stopped the
act or omission.

Art. 1998. The deposit of effects made by the travellers in hotels or inns shall also be regarded as
necessary. The keepers of hotels or inns shall be responsible for them as depositaries, provided that
notice was given to them, or to their employees, of the effects brought by the guests and that, on the
part of the latter, they take the precautions which said hotel-keepers or their substitutes advised
relative to the care and vigilance of their effects. (1783)

Art. 1999. The hotel-keeper is liable for the vehicles, animals and articles which have been
introduced or placed in the annexes of the hotel. (n)

Art. 2000. The responsibility referred to in the two preceding articles shall include the loss of, or injury
to the personal property of the guests caused by the servants or employees of the keepers of hotels
or inns as well as strangers; but not that which may proceed from any force majeure. The fact that
travellers are constrained to rely on the vigilance of the keeper of the hotels or inns shall be
considered in determining the degree of care required of him. (1784a)

Art. 2001. The act of a thief or robber, who has entered the hotel is not deemed force majeure, unless
it is done with the use of arms or through an irresistible force. (n)

Art. 2002. The hotel-keeper is not liable for compensation if the loss is due to the acts of the guest,
his family, servants or visitors, or if the loss arises from the character of the things brought into the
hotel. (n)

Art. 2003. The hotel-keeper cannot free himself from responsibility by posting notices to the effect
that he is not liable for the articles brought by the guest. Any stipulation between the hotel-keeper and

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the guest whereby the responsibility of the former as set forth in articles 1998 to 2001 is suppressed
or diminished shall be void. (n)

CHAPTER 3
Extraordinary Diligence

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.

Article 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.

Article 1758. When a passenger is carried gratuitously, a stipulation limiting the common carriers
liability for negligence is valid, but not for willful acts or gross negligence.

Insurance Code
Sec. 116. A warranty of seaworthiness extends not only to the condition of the structure of the ship
itself, but requires that it be properly laden, and provided with a competent master, a sufficient
number of competent officers and seamen, and the requisite appurtenances and equipment, such as
ballasts, cables and anchors, cordage and sails, food, water, fuel and lights, and other necessary or
proper stores and implements for the voyage.

Sec. 117. Where different portions of the voyage contemplated by a policy differ in respect to the
things requisite to make the ship seaworthy therefor, a warranty of seaworthiness is complied with if,
at the commencement of each portion, the ship is seaworthy with reference to that portion.

Sec. 118. When the ship becomes unseaworthy during the voyage to which an insurance relates, an
unreasonable delay in repairing the defect exonerates the insurer on ship or shipowner's interest from
liability from any loss arising therefrom.

Sec. 119. A ship which is seaworthy for the purpose of an insurance upon the ship may, nevertheless,
by reason of being unfitted to receive the cargo, be unseaworthy for the purpose of the insurance
upon the cargo.
Commonwealth Act 25- Carriage of Goods by Sea Act
(Responsibilities and Liabilities)

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.

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(2) The carrier shall properly and carefully load, handle, stow, carry, keep, care for, and discharge the
goods carried.

(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.

(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

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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.

(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.

(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.

Code of Commerce
ARTICLE 359. If there is an agreement between the shipper and the carrier as to the road over which
the conveyance is to be made, the carrier may not change the route, unless it be by reason of
force majeure; and should he do so without this cause, he shall be liable for all the losses which the goods
he transports may suffer from any other cause, beside paying the sum which may have been stipulated for
such case. When on account of said cause of force majeure, the carrier had to take another route which
produced an increase in transportation charges, he shall be reimbursed for such increase upon formal
proof thereof.

Traffic Code-RA 4136

AN ACT TO COMPILE THE LAWS RELATIVE TO LAND TRANSPORTATION AND TRAFFIC
RULES, TO CREATE A LAND TRANSPORTATION COMMISSION AND FOR OTHER PURPOSES

CHAPTER I-PRELIMINARY PROVISIONS ARTICLE

ARTICLE I-Title and Scope of Act

Section 1. Title of Act. - This Act shall be known as the "Land Transportation and Traffic Code."

Section 2. Scope of Act. - The provisions of this Act shall control, as far as they apply, the registration
and operation of motor vehicles and the licensing of owners, dealers, conductors, drivers, and similar
matters.

ARTICLE II-Definitions
Section 3. Words and phrases defined. - As used in this Act:

(a) "Motor Vehicle" shall mean any vehicle propelled by any power other than muscular power using
the public highways, but excepting road rollers, trolley cars, street-sweepers, sprinklers, lawn
mowers, bulldozers, graders, fork-lifts, amphibian trucks, and cranes if not used on public highways,
vehicles which run only on rails or tracks, and tractors, trailers and traction engines of all kinds used
exclusively for agricultural purposes.

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Trailers having any number of wheels, when propelled or intended to be propelled by attachment to a
motor vehicle, shall be classified as separate motor vehicle with no power rating.

(b) "Passenger automobiles" shall mean all pneumatic-tire vehicles of types similar to those usually
known under the following terms: touring car, command car, speedster, sports car, roadster, jeep,
cycle, car (except motor wheel and similar small outfits which are classified with motorcycles), coupe,
landaulet, closed car, limousine, cabriolet, and sedan.

Motor vehicles with changed or rebuilt bodies, such as jeepneys, jitneys, or station wagons, using a
chassis of the usual pneumatic-tire passenger automobile type, shall also be classified as passenger
automobile, if their net allowable carrying capacity, as determined by the Commissioner of Land
Transportation, does not exceed nine passengers and if they are not used primarily for carrying
freight or merchandise.

The distinction between "passenger truck" and "passenger automobile" shall be that of common
usage: Provided, That a motor vehicle registered for more than nine passengers shall be classified as
"truck": And Provided, further, That a "truck with seating compartments at the back not used for hire
shall be registered under special "S" classifications. In case of dispute, the Commissioner of Land
Transportation shall determine the classification to which any special type of motor vehicle belongs.

(c) "Articulated vehicle" shall mean any motor vehicle with a trailer having no front axle and so
attached that part of the trailer rests upon motor vehicle and a substantial part of the weight of the
trailer and of its load is borne by the motor vehicle. Such a trailer shall be called as "semi-trailer."

(d) "Driver" shall mean every and any licensed operator of a motor vehicle.

(e) "Professional driver" shall mean every and any driver hired or paid for driving or operating a motor
vehicle, whether for private use or for hire to the public.

Any person driving his own motor vehicle for hire is a professional driver.

(f) "Owner" shall mean the actual legal owner of a motor vehicle, in whose name such vehicle is duly
registered with the Land Transportation Commission.

The "owner" of a government-owned motor vehicle is the head of the office or the chief of the Bureau
to which the said motor vehicle belongs.

(g) "Dealer" shall mean every person, association, partnership, or corporation making, manufacturing,
constructing, assembling, remodeling, rebuilding, or setting up motor vehicles; and every such entity
acting as agent for the sale of one or more makes, styles, or kinds of motor vehicles, dealing in motor
vehicles, keeping the same in stock or selling same or handling with a view to trading same.

(h) "Garage" shall mean any building in which two or more motor vehicles, either with or without
drivers, are kept ready for hire to the public, but shall not include street stands, public service
stations, or other public places designated by proper authority as parking spaces for motor vehicles
for hire while awaiting or soliciting business.

(i) "Gross weight" shall mean the measured weight of a motor vehicle plus the maximum allowable
carrying capacity in merchandise, freight and/or passenger, as determined by the Commissioner of
Land Transportation.

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(j) "Highways" shall mean every public thoroughfare, public boulevard, driveway, avenue, park, alley
and callejon, but shall not include roadway upon grounds owned by private persons, colleges,
universities, or other similar institutions.

(k) "The Commissioner of Land Transportation or his deputies" shall mean the actual or acting chief of
the Land Transportation Commission or such representatives, deputies, or assistants as he may, with
the approval of the Secretary of Public Works and Communications, appoint or designate in writing
for the purpose contemplated by this Act.

(l) "Parking or parked", for the purposes of this Act, shall mean that a motor vehicle is "parked" or
"parking" if it has been brought to a stop on the shoulder or proper edge of a highway, and remains
inactive in that place or close thereto for an appreciable period of time. A motor vehicle which properly
stops merely to discharge a passenger or to take in a waiting passenger, or to load or unload a small
quantity of freight with reasonable dispatch shall not be considered as "parked", if the motor vehicle
again moves away without delay.

(m) "Tourist" shall mean a foreigner who travels from place to place for pleasure or culture.

ARTICLE III-Administration of Act

Section 4. Creation of the Commission. -

(a) There is created under the Department of Public Works and Communications an office which shall
be designated and known as the Land Transportation Commission, composed of one Commissioner
and one Deputy Commissioner, who shall be vested with the powers and duties hereafter specified.
Whenever the word "Commission" is used in this Act, it shall be deemed to mean the Land
Transportation Commission, and whenever the word "Commissioner" is used in this Act, it shall be
taken to mean the Commissioner or Deputy Commissioner.

The Commissioner and the Deputy Commissioner shall be natural-born citizens and residents of the
Philippines, and they shall be appointed by the President of the Philippines, with the consent of the
Commission on Appointments of the Congress of the Philippines: Provided, however, That the
present Administrator, Assistant Administrator and the personnel of the Motor Vehicles Office shall
continue in office without the necessity of reappointment.

(b) The Commissioner and Deputy Commissioner shall hold office until removed in accordance with
the provisions of the Revised Administrative Code.

(c) The Commissioner shall receive an annual compensation of twelve thousand pesos and the
Deputy Commissioner, an annual compensation of ten thousand four hundred pesos. The
Commissioner shall be assisted by one head executive assistant (MV regulation adviser or chief), one
administrative officer, one registration regulation chief, one inspection, examination and licensing
regulation chief, one law and traffic enforcement regulation chief, one provincial regulation chief, one
utility and property regulation chief, one accounting officer, one internal chief auditor, and one
personnel officer, who shall receive an annual compensation of nine thousand pesos each; eight land
transportation regional directors who shall receive an annual compensation of eight thousand four
hundred pesos each and eight land transportation assistant regional directors, who shall receive an
annual compensation of seven thousand pesos each and ten assistant regulation chiefs, who shall
receive an annual compensation of seven thousand pesos each.

(d) The Commission shall have its offices in Quezon City where the present Motor Vehicle Office is
located, and shall establish a regional branch office each in Tuguegarao (Cagayan), Baguio City,

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Pasig (Rizal), Lipa City, San Fernando (La Union), Naga City, Cebu City, Iloilo City, Cagayan de Oro
City, and Davao City, to be headed by a regional director who will have immediate administration,
supervision and control over activities and administration of the Commission in the respective
regions.

The Commissioner shall be responsible for the administration of this Act and shall have, in connection
therewith, the following powers and duties, in addition to those mentioned elsewhere in this Act:

(1) With the approval of the Secretary of Public Works and Communications, to issue rules and
regulations not in conflict with the provisions of this Act, prescribing the procedure for the
examination, licensing and bonding of drivers; the registration and re-registration of motor vehicles,
transfer of ownership, change of status; the replacement of lost certificates, licenses, badges, permits
or number plates; and to prescribe the minimum standards and specifications including allowable
gross weight, allowable length, width and height or motor vehicles, distribution of loads, allowable
loads on tires, change of tire sizes, body design or carrying capacity subsequent to registration and
all other special cases which may arise for which no specific provision is otherwise made in this Act.

(2) To compile and arrange all applications, certificates, permits, licenses, and to enter, note and
record thereon transfers, notifications, suspensions, revocations, or judgments of conviction rendered
by competent courts concerning violations of this Act, with the end in view of preserving and making
easily available such documents and records to public officers and private persons properly and
legitimately interested therein.

(3) To give public notice of the certificates, permits, licenses and badges issued, suspended or
revoked and/or motor vehicles transferred and/or drivers bonded under the provisions of this Act.

(4) The Commissioner of Land Transportation, with the approval of the Secretary of Public Works and
Communications, may designate as his deputy and agent any employee of the Land Transportation
Commission, or such other government employees as he may deem expedient to assist in the
carrying out the provisions of this Act.

(5) The Commissioner of Land Transportation and his deputies are hereby authorized to make arrest
for violations of the provisions of this Act in so far as motor vehicles are concerned; to issue
subpoena and subpoena duces tecum to compel the appearance of motor vehicle operators and
divers and/or other persons or conductors; and to use all reasonable means within their powers to
secure enforcement of the provisions of this Act.

(6) The Commissioner of Land Transportation or his deputies may at any time examine and inspect
any motor vehicle to determine whether such motor vehicle is registered, or is unsightly, unsafe,
overloaded, improperly marked or equipped, or otherwise unfit to be operated because of possible
excessive damage to highways, bridges and/or culverts.

(7) The Philippine Constabulary and the city and municipal police forces are hereby given the
authority and the primary responsibility and duty to prevent violations of this Act, and to carry out the
police provisions hereof within their respective jurisdiction: Provided, That all apprehensions made
shall be submitted for final disposition to the Commissioner and his deputies within twenty-four hours
from the date of apprehension.

(8) All cases involving violations of this Act shall be endorsed immediately by the apprehending officer
to the Land Transportation Commission. Where such violations necessitate immediate action, the
same shall be endorsed to the traffic court, city or municipal court for summary investigation, hearing
and disposition, but in all such cases, appropriate notices of the apprehensions and the dispositions

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thereof shall be given to the Commissioner of Land Transportation by the law-enforcement agency
and the court concerned.

Notation of all such dispositions shall be entered in the records, and copy shall be mailed to the
owner and to the driver concerned.

CHAPTER II-REGISTRATION OF MOTOR VEHICLES

ARTICLE I-Duty to Register, Reports, Applications, Classifications

Section 5. All motor vehicles and other vehicles must be registered.

(a) No motor vehicle shall be used or operated on or upon any public highway of the Philippines
unless the same is properly registered for the current year in accordance with the provisions of this
Act.

(b) Any registration of motor vehicles not renewed on or before the date fixed for different
classifications, as provided hereunder shall become delinquent and invalid:

1. For hire motor vehicles - on or before the last working day of February
2. Privately-owned motor vehicles - from March one to the last working day of May.
3. All other motor vehicles - from June one to the last working day of June; except when the plates of
such motor vehicles are returned to the Commission in Quezon City or to the Office of the Motor
Vehicles Registrar in the provincial or city agency of the Commission on or before the last working
day of December of the year of issue.

(c) Dealer's reports - The Commissioner of Land Transportation shall require dealers to furnish him
with such information and reports concerning the sale, importation, manufacture, number of stocks,
transfer or other transactions affecting motor vehicles as may be necessary for the effective
enforcement of the provisions of this Act.

(d) Change of motor number prohibited. - No repair or change in the motor vehicle involving the
exchange, elimination, effacing, or replacing of the original or registered serial or motor number as
stamped or imprinted, shall be allowed, and any motor vehicle with a trace of having its motor number
altered or tampered with shall be refused registration or re-registration, unless such is satisfactorily
explained and approved by the Commissioner.

(e) Encumbrances of motor vehicles. - Mortgages, attachments, and other encumbrances of motor
vehicles, in order to be valid, must be recorded in the Land Transportation Commission and must be
properly recorded on the face of all outstanding copies of the certificates of registration of the vehicle
concerned.

Cancellation or foreclosure of such mortgages, attachments, and other encumbrances shall likewise
be recorded, and in the absence of such cancellation, no certificate of registration shall be issued
without the corresponding notation of mortgage, attachment and/or other encumbrances.

Records of encumbrances of motor vehicles shall be kept by the Land Transportation Commission in
chronological sequence and shall contain, among other things, the time, date and number of the entry
in a "Book of Motor Vehicles" referring to the creation, cancellation or foreclosure of the aforesaid
mortgages, attachments or to other encumbrances.

The Land Transportation Commission shall collect a fee of five pesos for every annotation of a
mortgage, attachment and/or other encumbrances, or cancellation thereof.

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Section 6. Application and payments for registration. - Applications and payments for registration
shall be made either personally or by registered mail, and the date of the cancellation of the postage
stamps of envelopes containing money order or check shall be taken as the date of the application
and/or payment for registration: Provided, That the application is properly prepared and the payment
for registration is sufficient as required by law.

Section 7. Registration Classification. - Every motor vehicle shall be registered under one of the
following described classifications:

(a) private passenger automobiles; (b) private trucks; and (c) private motorcycles, scooters, or motor
wheel attachments. Motor vehicles registered under these classifications shall not be used for hire
under any circumstances and shall not be used to solicit, accept, or be used to transport passengers
or freight for pay.

Laborers necessary to handle freight on board private trucks may ride on such trucks: Provided, That
seats shall not be installed in the rear compartment thereof and that only such number of laborers,
not exceeding ten, as may be needed to handle the kind of freight carried, shall ride on the truck:
Provided, further, That the combined weight of cargo and passengers does not exceed the registered
net capacity of the truck.

For the purpose of this section, a vehicle habitually used to carry freight not belonging to the
registered owner thereof, or passengers not related by consanguinity or affinity within the fourth civil
degree to such owner, shall be conclusively presumed to be "for hire."

No person shall be allowed to register as private truck any truck not actually and reasonably
necessary to carry out his duly licensed business or legitimate occupation or industry regularly paying
taxes.

(d) Public utility automobiles; e) public utility trucks; (f) taxis and auto-calesas; (g) garage
automobiles; (h) garage trucks; (i) hire trucks: and (j) trucks owned by contractors and customs
brokers and customs agents. Application for registration under these classifications shall be
accompanied by a certificate of public convenience or a special permit issued by the Public Service
Commission, and motor vehicles registered under these classifications shall be subject to the Public
Service Law, rules and regulations, as well as the provisions of this Act.

(k) Undertakes

(l) Dealers - Registrations under this classification are intended to cover generally and successively
all the motor vehicles imported or handled by dealers for sale. Motor vehicles registered under the
dealer's classification shall, under no circumstances, be employed to carry passengers or freight in
the dealer's business, or for hire. Such vehicles shall be operated under this classification only for the
purpose of transporting the vehicle itself from the pier or factory to the warehouse or sales room or for
delivery to a prospective purchaser or for test or demonstration.

(m) Government automobiles; (n) government trucks; and (o) government motorcycles. Motor
vehicles owned by the Government of the Philippines or any of its political subdivisions shall be
registered under these classifications. Motor vehicles owned by government corporations, by
government employees or by foreign governments shall not be registered under this classification.

(p) Tourists bringing their own motor vehicles to the Philippines may, without registering such motor
vehicles, use the same during but not after ninety days of their sojourn: Provided, That the motor

15
vehicle displays the number plates for the current year of some other country or state, and said
number plates as well as the name and address (permanent and temporary) of the owner thereof are
registered in the Land Transportation Commission prior to the operation of the motor vehicle.

If such tourist remain in the Philippines longer than ninety days, the motor vehicle shall not be
operated unless registered in accordance with this Act and the corresponding registration fees paid.

(q) Special. The Commissioner of Land Transportation may, in his discretion, allow the registration
under this classification of motor vehicles which do not conform to the foregoing described regular
classification.

ARTICLE II-Registration Fees

Section 8. Schedule of registration fees. - Except as otherwise specifically provided in this Act, each
application for renewal of registration of motor vehicles shall be accompanied by an annual
registration fee in accordance with the following schedule:

(a) Private automobiles with pneumatic rubber tires, an amount based on their respective shipping
weight or factory weight as indicated in the following schedule:

1,000 kilos or less P75.00

1,000 to 1,500 kilos 100.00
1,501 to 2,000 kilos 135.00
2,001 kilos and above 180.00

The factory or shipping weight of a private automobile shall be obtained from the Red Book edited by
the National Market Report, Inc., of the United States of America: Provided, further, That in the case
of automobiles with altered, changed or rebuilt bodies, the weight as obtained: by actual weighing
shall be considered the vehicles weight: Provided, furthermore, That the increase registration fees
herein prescribed shall not apply to jeeps and jeepneys for private use or for hire and the fees hereof
shall be those prescribed for them before the approval of this Act.

The registered passenger capacity of passenger automobiles operated for hire or for private use shall
be determined as follows:

1. For each adult passenger, a horizontal rectangular area, including seat and feet space, not less
than thirty-five centimeters wide and sixty centimeters long, except in the front seat, which shall allow
an area fifty centimeters wide for the operator.

2. For each half passenger, a horizontal rectangular area, including seat and feet spaces, not less
that seventeen and a half centimeters wide by sixty centimeters long, provided, that each continuous
row of seats shall not be allowed to have more that one-half passenger.

(b) Private motor trucks, passenger buses and trailers with pneumatic rubber tires, the sum of five
pesos for every hundred kilograms of maximum allowable gross weight or fraction thereof.

(c) Private motor trucks, passenger buses and trailers with solid rubber tires or with part-solid and
part-pneumatic rubber tires, the sum of seven pesos for every hundred kilograms of maximum
allowable gross weight or fraction thereof.

(d) Private motorcycles and scooters of two or three wheels and bicycles with motor attachments, the
sum of thirty pesos.

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(e) The fee for registration of motor vehicles for hire shall be sixty percent more than the fee
prescribed for private motor vehicles of the same category.

(f) The fee for registration of diesel-consuming vehicles shall be fifty percent more than that of
vehicles using motor fuel other than diesel oil. The fee for registration of motor vehicles for hire shall
be sixty percent more than the fees prescribed for private motor vehicles.

(g) No regular registration fees shall be charged for the general registration of motor vehicles
contemplated under the dealer's classification: Provided, That the Commissioner of Land
Transportation shall provide appropriate dealer's number plates corresponding to the classification of
vehicles hereinbelow described, and registration fee for every set of such dealer's number plates shall
be in accordance with the following schedule of rates;

Two hundred pesos for each truck or trailer;

One hundred pesos for each passenger automobile; and
Twenty pesos for each motorcycle and the like.

(h) Registration under the "Government Motor Vehicle" classification shall be free of charge, upon
request of the chief of bureau or office concerned.

(i) Motor vehicles not intended to be operated or used upon any public highway, or which are
operated on highways not constructed or maintained by the Government, or are intended not to be
used or operated at all, shall be exempt from payment of the registration fees provided in this Act, but
shall each pay an annual recording and service fee of fifteen pesos: Provided, however, That no
refund, credit for, or reimbursement of registration fees or part thereof shall be made to any owner on
account of the discontinuance of the use or operation of a motor vehicle subsequent to the payment
of such registration fees: Provided, further, That in the event motor vehicles exempted under this
section shall be found operated on any public highways, the regular registration fees and surcharges
shall be collected in addition to whatever penalties may be imposed for violation of this Act. The
Commissioner of Land Transportation shall provide distinctive number plates for vehicles exempted
from payment of regular registration fees, and the owner of the vehicles concerned shall pay four
pesos for each set of such number plates.

(j) The maximum allowable gross weight of a motor truck, passenger bus, or trailer, upon which to
compute the registration fee thereof, shall be determined by the Commissioner of Land
Transportation. He shall, from time to time as the need of the service may require, prepare, subject to
the approval of the Secretary of Public Works and Communications, suitable tables of maximum
allowable loads per wheel for different sizes kinds of tires.

(k) The registration fees provided in this Act for trucks may be payable in two equal installment, the
first to be paid on or before the last working day of February if for hire, and in March if private; and the
second to be paid on or before the last working day of August: Provided, That the fifty per cent
penalty shall apply only to the unpaid balance of the remaining period of delinquency.

Section 9. Permissible weights and dimensions of vehicles in highways traffic.

(a) The maximum gross weight and measurement of motor vehicles, unladen or with load,
permissible on public highways shall be as specified hereunder, subject to such regulations as the
Commissioner with the approval of the Secretary of Public Works and Communications, may
promulgate, from time to time, as the conditions of the public highways may warrant and the needs of
the service may require.

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Permissible maximum weights:
1. Per most heavily loaded wheel three thousand six hundred kilograms;
2. Per most heavily loaded axle eight thousand kilograms;
3. Per most heavily loaded axle group (the two axles of the group being at least one meter and less
than two meters apart) fourteen thousand five hundred kilograms.
An axle weight shall be the total weight transmitted to the road by all the wheels the centers of
which can be included between the parallel transverse vertical planes one meter apart extending
across the full width of the vehicles.

No provincial, city or municipal authority shall enact or enforce any ordinance or resolution
regulating or prescribing the maximum gross weight of any motor vehicle.

(b) No motor vehicle operating as a single unit shall exceed the following dimensions:

Overall width two and five-tenths meters

Overall height four meters
Overall length:
Freight vehicles with two axles ten meters
Passenger vehicles with two axles eleven meters
Vehicles with three or more axles fourteen meters

(c) No motor vehicle and/or trailer combination shall exceed eighteen meters in overall projected
length, including any load carried on such vehicle and trailer.

(d) No articulated vehicles shall be allowed to draw or pull a trailer and no vehicle already drawing a
trailer shall draw another.

Section 10. Special permits, fees for. - The Commissioner with the approval of the Secretary of Public
Works and Communications, shall issue regulations and schedules of additional fees under which
special permits may be issued in the discretion of the Commissioner or his deputies for each of the
following special cases, without which special permit no vehicles shall be operated on the public
highways:

(a) To operate a motor vehicle or trailer outfit with wheel, axle, or axle group loads in excess of the
limits fixed in subsection (a) of Section nine hereof or in any regulation issued by the Commissioner.
(b) To operate a motor vehicle the size of which exceeds the limit of permissible dimensions specified
in paragraph (b) of Section nine hereof.
(c) To operate a motor vehicle with any part of the load extending beyond the projected width of the
vehicle.
(d) To pull two trailers behind a motor vehicle.
(e) For any other special authority relating to the use of vehicles, not otherwise specifically provided
herein.

Section 11. Additional fees. - In addition to the fees elsewhere provided in this Act, for each change
of registration, from private to for hire or vice-versa; revision of gross weight rating, change of tire
size; transfer of ownership; replacement of a lost registration certificate, number plate, driver's license
or permit; badge; preparation of affidavit or certified copy of records, or for any similar circumstances
requiring the issue, revision, or reissue of a certificate of registration, driver's license, badge, permit,
or other document, a fee of two pesos shall be collected.
The replacement of a lost or utterly spoiled certificate, number plate, license, badge or permit
shall render the original invalid.

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 In case of request in writing for certification of data or facts involving two or more vehicles, a
fee of five pesos a page or part thereof shall be collected for each certification.

Section 12. Fee for original registration for part of year. - If any application for the original registration
is made during the first quarter of a calendar year, the total annual fee for the year shall be paid, if
made during the second quarter, three-fourths of the annual fee for that year shall be paid, if made
during the third quarter, one half of the annual fee shall be paid, and if made during the fourth quarter,
one-fourth of the annual fee shall be paid.
Nothing in this section shall be construed as allowing quarterly renewals of registrations in
order to avoid payment of fees in advance for the entire year.

Section 13. Payment of taxes upon registration. - No original registration of motor vehicles subject to
payment of taxes, customs duties or other charges shall be accepted unless proof of payment of the
taxes due thereon has been presented to the Commission.

ARTICLE III-Registration Certificates, Records, Number Plates

Section 14. Issuance of certificates of registration. - A properly numbered certificate of registration

shall be issued for each separate motor vehicle after due inspection and payment of corresponding
registration fees.

Section 15. Use and authority of certificate of registration.

(a) The said certificate shall be preserved and carried in the car by the owner as evidence of the
registration of the motor vehicle described therein, and shall be presented with subsequent
applications for re-registration, transfer of ownership, or recording of encumbrances: Provided, That
in lieu of the certificate of registration a true copy or photostat thereof may be carried in the motor
vehicle.
(b) The certificate of registration issued under the provisions of this Act for any motor vehicle shall,
while the same is valid and effective and has not been suspended or revoked, be the authority for the
operation of such motor vehicle.

(c) No motor vehicle shall be operated on the public highways in a manner which would place it under
a classification requiring the payment of a larger registration fee than that stated in the certificate of
registration.

Section 16. Suspension of registration certificate. - If on inspection, as provided in paragraph (6) of

Section four hereof, any motor vehicle is found to be unsightly, unsafe, overloaded, improperly
marked or equipped, or otherwise unfit to be operated, or capable of causing excessive damage to
the highways, or not conforming to minimum standards and specifications, the Commissioner may
refuse to register the said motor vehicle, or if already registered, may require the number plates
thereof to be surrendered to him, and upon seventy-two hours notice to the owner of the motor
vehicle, suspend such registration until the defects of the vehicle are corrected and/or the minimum
standards and specifications fully complied with.
Whenever it shall appear from the records of the Commission that during any twelve-month
period more than three warnings for violations of this Act have been given to the owner of a motor
vehicle, or that the said owner has been convicted by a competent court more than once for violation
of such laws, the Commissioner may, in his discretion, suspend the certificate of registration for a
period not exceeding ninety days and, thereupon, shall require the immediate surrender of the
number plates.
Whenever a motor vehicle is found to be underweight the owner thereof shall pay the
difference in the registration fees corresponding to the shortage in weight plus a fifty per cent

19
surcharge, and until such payment is made, the certificate of registration of the motor vehicle
concerned shall be suspended by the Commissioner.
After two such suspension, re-registration of the vehicle concerned for one year may be
denied.
The Commissioner shall notify the owner of the motor vehicle of any action taken by him
under this section.

Section 17. Number plates, preparation, preparation and issuance of . -

(a) The Commissioner shall cause number plates to be prepared and issued to owners of motor
vehicles and trailers registered under this Act, charging a fee of four pesos for each pair including the
numerals indicating the year of registry: Provided, however, That in case no number plates are
available, the Commissioner or his deputies may issue, without charge, a written permit temporarily
authorizing the operation of any motor vehicles with other means of identification: Provided, further,
That all motor vehicles exempted from payment of registration fees, motor vehicles for hire, and
privately-owned motor vehicles shall bear plates so designed and painted with different colors to
distinguish one class from another: Provided, furthermore, That the plates of motor vehicles
exempted from payment of registration fees shall be permanently assigned to such motor vehicles
during their entire lifetime while exempted from payment of the fees: And, provided, finally, That the
owner thereof shall return such plates to the Land Transportation Commission within a period of
seven working days after such owner has lost his exemption privilege or has transferred the vehicle to
a non-exempt owner.

(b) In case the design of the number plate is such that the numerals indicating the year of registry are
on a detachable tag, the Commissioner or his deputies may, in their discretion, issue the said tag only
for subsequent re-registration charging a fee of one peso for each tag issued.

Section 18. Use of number plates. - At all times, every motor vehicle shall display in conspicuous
places, one in front and one in the rear thereof, the said number plates.

The number plates shall be kept clean and cared for, and shall be firmly affixed to the motor vehicle in
such a manner as will make it entirely visible and always legible.

Except in the case of dealer's number plates which may be used successively on various motor
vehicles in stock, no person shall transfer number plates from motor vehicle to another.

No dealer's number plate shall be used on any motor vehicle after said vehicle has been sold and
delivered to a purchaser, and no dealer shall allow such dealer's number plates to be used on any
motor vehicle after its sale and delivery to a purchaser.

CHAPTER III-OPERATION OF MOTOR VEHICLE

ARTICLE I-License to Drive Motor Vehicles

Section 19. Duty to procure license. - Except as otherwise specifically provided in this Act, no person
shall operate any motor vehicle without first procuring a license to drive a motor vehicle for the current
year, nor while such license is delinquent, invalid, suspended or revoked.
The license shall be carried by the driver at all times when operating a motor vehicle, and
shall be shown and/or surrendered for cause and upon demand to any person with authority under
this Act to confiscate the same.

20
Section 20. License for enlisted men operating Government motor vehicles. - Enlisted men operating
a motor vehicle owned by the Government of the Philippines shall be licensed in accordance with the
provisions of this Act, but no license or delinquency fees shall be collected therefrom. All licenses so
issued shall bear the words "For Government Vehicles Only" plainly marked or stamped in red ink
across the face thereof.
A license so marked or stamped shall authorize the holder thereof to operate a private-owned
motor vehicle.

Section 21. Operation of motor vehicles by tourists. - Bona fide tourist and similar transients who are
duly licensed to operate motor vehicles in their respective countries may be allowed to operate motor
vehicles during but not after ninety days of their sojourn in the Philippines.
If any accident involving such tourist or transient occurs, which upon investigation by the
Commissioner or his deputies indicates that the said tourist or transient is incompetent to operate
motor vehicles, the Commissioner shall immediately inform the said tourist or transient in writing that
he shall no longer be permitted to operate a motor vehicle.
After ninety days, any tourist or transient desiring to operate motor vehicles shall pay fees and
obtain and carry a license as hereinafter provided.

Section 22. Driver's license, fees, examination. - Every person who desires personally to operate any
motor vehicle shall file an application to the Commissioner or his deputies for a license to drive motor
vehicles: Provided, however, That no person shall be issued a professional driver's license who is
suffering from highly contagious diseases, such as, advanced tuberculosis, gonorrhea, syphilis, and
the like.
Each such application except in the case of enlisted men operating government-owned
vehicles, shall be accompanied by a fee of five pesos, and shall contain such information respecting
the applicant and his ability to operate motor vehicles, as may be required by the Commission.
The Commissioner or his deputies shall also ascertain that the applicant's sight and hearing
are normal, and may in their discretion, require a certificate to that effect, signed by a reputable
physician.
An examination or demonstration to show any applicant's ability to operate motor vehicles
may also be required in the discretion of the Commissioner or his deputies.

Section 23. Issuance of driver's license. - If, after such examination, the Commissioner or his deputy
believes that the applicant possesses the necessary qualifications and is proficient in the operation of
motor vehicles, a license shall be issued to such applicant upon payment of five pesos, but prior to
the issuance of said license, the applicant shall furnish three copies of his recent photograph to be
securely attached to the license, and two copies to be filed and kept as provided by this Act. All
driver's licenses shall bear the signature and right-hand thumb print of the licensee.

Section 24. Use of driver's license and badge. - Every license issued under the provisions of this Act
to any driver shall entitle the holder thereof, while the same is valid and effective and not suspended
or revoked, to operate the motor vehicles described in such license: Provided, however, That every
licensed professional driver, before operating a public service motor vehicle registered under
classifications (d) to (j) inclusive of Section seven hereof, shall secure from the Commissioner, upon
payment of the sum of one peso, a driver's badge which he shall, at all times while so operating a
motor vehicle, display in plain sight on the band of his cap or on his coat or shirt. Such driver's badge
shall be of metal with a plainly readable number assigned to the licensee stamped thereon.
It shall be unlawful for any duly licensed driver to transfer, lend or otherwise allow any person
to use his license for the purpose of enabling such person to operate a motor vehicle.
No owner of a motor vehicle shall engage, employ, or hire any person to operate such motor
vehicle, unless the person sought to be employed is a duly licensed professional driver.

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Section 25. Driver's records. - Any driver who changes his address shall, within fifteen days, notify
the Commissioner in writing of his new address, name and address of his new employer, the number
of the motor vehicle he is employed to operate, and such other information as the Commissioner may
require.

Section 26. Renewal of license. - Any license not renewed on or before the last working day of the
month when the applicant was born shall become delinquent and invalid, except when the license is
surrendered to the Commissioner or his deputies before the last working day of the month of his birth
in order to avoid payment of the delinquency fees.
The fee for renewal of delinquent license shall be five pesos in addition to the basic fee as
hereinabove prescribed.
Every applicant for renewal of license to operate any motor vehicle shall present to the
Commissioner, in person or by mail or messenger, the license issued to the applicant for the previous
year, together with the proper fee of five pesos and, in the case of professional chauffeurs, three
copies of a readily-recognized photograph of the applicant, which photograph shall have been taken
not exceeding three years prior to the date of applicant for renewal.
Lost license. - In case the license for the previous year has been lost or cannot be produced,
the applicant shall obtain a duplicate in accord with Section eleven of this Act, on penalty of refusal,
by the Commissioner or his deputies, to renew the license: Provided, however, That the
Commissioner or his deputies may, in their discretion accept in lieu of the previous years license, the
duly signed and sworn statement of an operator to the effect that he has not operated any motor
vehicle in the Philippines during the year or years to which no license was issued in his name.
The Commissioner and his deputies are hereby authorized to administer the oath in
connection with such affidavit.

Section 27. Suspension, revocation of driver's license.

(a) The Commissioner may suspend for a period not exceeding three months or, after hearing, revoke
any driver's license issued under the provisions of this Act, and may order any such license to be
delivered to him whenever he has reason to believe that the holder thereof is an improper person to
operate motor vehicles, or in operating or using a motor vehicle in, or as an accessory to, the
commission of any crime or act which endangers the public. Any deputy of the Commissioner may, for
the same cause, suspend for a period not exceeding three months any driver's license issued under
the provisions of this Act: Provided, That such suspension may be appealed to the Commissioner
who may, after reviewing the case, confirm, reverse or modify the action taken by such deputy.

(b) Whenever during any twelve-month period a driver shall have been convicted at least three times
for the violations of any provisions of this Act or of any regulation issued by the Commissioner or any
municipal or city ordinance relating to motor vehicle traffic not in conflict with any of the provisions of
this Act, the Commissioner may, in his discretion, revoke or suspend the license of such driver for a
period not exceeding two years.

(c) The license suspended or revoked under the provisions of subsections (a) and (b) of this section
shall not be reinstated unless the driver has furnished a bond in accordance with Section twenty-nine
of this Act and only after the Commissioner has satisfied himself that such driver may again safely be
permitted to operate a motor vehicle.

(d) A decision of the Commissioner revoking or refusing the reinstatement of a license under the
provisions of this Section may be appealed to the Secretary of Public Works and Communications.

Section 28. Driver's bond. - The Commissioner before reinstating any driver's license which has been
suspended or revoked under the provisions of the preceding section or of any provisions of this Act,

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may require such driver to post a bond in the sum of one thousand pesos conditioned upon the
satisfaction and payment of any claim which may be filed or of any execution which may be issued
against such driver in any case wherein said driver may be held answerable while operating motor
vehicles. The bond required in this section shall be in such form as to render sureties liable at least
for a period of not less than one year nor more than three years: Provided, however, That upon
written application to the Commissioner for release from such a bond, the Commissioner may after
revoking or suspending the driver's license, authorize the release of the bondsmen from further
responsibility thereunder: Provided, further, That should the Commissioner decide not to revoke the
license of a driver who has been convicted of homicide through reckless imprudence, or of the
violation of the speed limit or of reckless driving at least three times within a twelve-month period, the
said driver shall post a bond in the sum of not less than two thousand pesos, conditioned upon the
payment of any claim which may be filed or any execution which may be issued against him in any
case wherein said driver may be held answerable while operating motor vehicles.

Section 29. Confiscation of driver's licenses. - Law enforcement and peace officers duly designated
by the Commissioner shall, in apprehending any driver for violations of this Act or of any regulations
issued pursuant thereto, or of local traffic rules and regulations, confiscate the license of the driver
concerned and issue a receipt prescribed and issued by the Commission therefor which shall
authorize the driver to operate a motor vehicle for a period not exceeding seventy-two hours from the
time and date of issue of said receipt. The period so fixed in the receipt shall not be extended, and
shall become invalid thereafter. Failure of the driver to settle his case within fifteen days from the date
of apprehension will cause suspension and revocation of his license.

Section 30. Student-driver's permit. - Upon proper application and the payment of three pesos, the
Commissioner or his deputy may issue student-driver's permits, valid for six months to persons not
under eighteen years of age, who desire to learn to operate motor vehicles. No application for driver's
license shall be received unless the applicant has undergone instruction in the operation of motor
vehicles for at least a month and has a valid student-driver's permit: Provided, however, That any
person who has a license to operate vehicles in other countries may, upon presentation of
appropriate evidence of such license, be allowed to pay for a driver's license without presenting a
student driver's permit.
A student driver who fails in the examination shall continue as a student driver for at least one
additional month. No student driver shall operate a motor vehicle unless accompanied by a duly
licensed driver.
The licensed driver acting as instructor to the student driver shall likewise be responsible and
liable for any violation of the provisions of this Act and for any injury or damage done by the motor
vehicle on account or as a result of its operation by a student under his direction.

ARTICLE II-Illegal Use of Licenses, Number Plates, Etc.

Section 31. Imitation and false representations. - No person shall make or use attempt to make or
use a driver's license, badge, certificate of registration, number plate, tag, or permit in imitation or
similitude of those issued under this Act, or intended to be used as or for a legal license, badge,
certificate, plate, tag or permit, or with intent to sell or otherwise dispose of the same to another. No
person shall falsely or fraudulently represent as valid and in force any driver's license, badge,
certificate, plate, tag or permit issued under this Act which is delinquent or which has been revoked or
suspended.
No person shall, knowingly and with intent to deceive, make one or more false or fraudulent
statements in an application for the registration of vehicles, or for a driver's license.

ARTICLE III-Passenger and Freight

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Section 32. Exceeding registered capacity. - No person operating any vehicle shall allow more
passenger or more freight or cargo in his vehicle than its registered carrying capacity. In the case of
public utility trucks or buses, the conductor shall be exclusively liable for violations of this section or of
Section thirty-two, letter (c) hereof: Provided, That the conductor, before being employed by any
public service operator, shall get a permit or license from the Commission and pay five pesos
annually for said license or permit issued in his favor, and the same is renewable on or before the last
working day of the month of his birth, attaching a readily recognizable photograph and after
presentation of a medical certificate of fitness of applicant.
Passenger trucks may be allowed to construct any cargo carrying device at the rear or at the
side of the truck, subject to the approval of the Commissioner: Provided, however, That the total
weight of the device, including the cargo, shall not exceed one hundred kilos.

(b) Carrying of passengers and freight on top of vehicles. - No person operating a motor vehicle shall
allow any passenger to ride on the cover or top of such vehicles: Provided, however, That subject to
such conditions as may be contained in permits that may be issued by the Commissioner, baggage or
freight may be carried on the top of a truck provided the weight thereof does not exceed twenty kilos
per square meter and is distributed in such a manner as not to endanger the passengers or stability
of the truck.

(c) Riding on running boards. - No driver shall permit any person to ride on the running board, step
board, or mudguard of his motor vehicle for any purpose except to make repair or adjustment in the
motor or to collect fares.

Section 33. Passenger or freight capacity marked on vehicle. - All passengers automobiles for hire
shall have the registered passenger capacity plainly and conspicuously marked on both sides thereof,
in letters and numerals not less than five centimeters in height.
All motor trucks, whether for passenger or freight, private, or for hire, shall have the registered
passenger gross and net weight capacities plainly and conspicuously marked on both sides thereof,
in letters and numerals not less than five centimeters in height.

ARTICLE IV-Accessories of Motor Vehicles

Section 34.
(a) Tires of motor vehicles. - No motor vehicle with metallic tires shall be operated upon any public
highway, and solid tires whenever used shall be of sufficient thickness to prevent the metal rims
thereof from coming in direct contact with the road.

(b) Brakes - Every motor vehicle with four or more wheels shall be provided with dual hydraulic brake
system so that in case of hydraulic line failure affecting the braking efficiency of any of the four wheels
at least either the front or rear wheels shall retain normal braking capabilities. In the absence of such
dual braking system every motor vehicle with four or more wheels shall be provided with safety valve
devices of such design and make so that failure of the hydraulic braking system of the vehicle
because of leakage in the line of other parts of the system will not affect all wheels but rather render
at all times effective the braking power of either the two front wheels or the two rear wheels when
brakes are applied. This requirement, however, does not apply to motor vehicles equipped with
pneumatic braking system.

(b-1) Horns. - Every motor vehicle shall be provided with a horn or signalling devise in good working
order: Provided, however, That no horn or signalling device emitting an exceptionally loud, startling,
or disagreeable sound shall be installed or used on any motor vehicle.

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 All authorized emergency vehicles, such as ambulance and police cars and fire wagons used
for emergency calls shall be equipped with a bell, siren, or exhaust whistle of a type approved by the
Commissioner, and no such device shall be installed or used in any other vehicle.
No vehicle not classified as a motor vehicle under this Act shall be equipped with a horn or
signaling device similar to the horn customarily used on motor vehicles.

(c) Headlights. - Every motor vehicle of more than one meter of projected width, while in use on any
public highway shall bear two headlights, one on each side, with white or yellowish light visible from
the front, which, not later than one-half hour after sunset and until at least one-half four before sunrise
and whenever weather conditions so require, shall both be lighted.
Additional lamps and light may be carried, but no red lights shall be visible forward or ahead of
the vehicle. Trucks, buses, trailers, and other similar vehicles must carry, while in use on any public
highway during night-time, colored riding lights on each of the four corners not more than ten
centimeters from the top.
All motor vehicles shall be equipped with devices for varying the intensity of light, and the
driver must dim the headlights or tilt the beams downward whenever the vehicle is being operated on
well-lighted streets within the limits of cities, municipalities, and thickly populated barrios or districts,
or whenever such vehicle meets another vehicle on any public highway.

(d) Taillights. - Every motor vehicle and trailer shall, during the above-mentioned hours, also bear on
each side in the rear a lamp showing a red light visible at least one hundred meters from the rear of
the vehicle and a lamp throwing a white light upon the number plate issued for such vehicle.

(e) Stop lights. - Every motor vehicle shall be equipped at the rear with at least one lamp which shall
throw a sustained bright red light visible under all conditions, even under bright sunlight, when the
brakes are applied. Each bus, truck, trailer or similar vehicle shall be equipped, as its stop light at or
near its rear center, with a lamp at least twelve centimeters in diameter with the word "stop" inscribed
in the center.

(f) Motorcycle and other vehicle lights. - Every motor vehicle of less than one meter of projected width
shall be subject to the preceding provisions of this section, except that one headlight and one taillight
shall be required. No signal light shall be necessary.
Additional lamps may be carried provided they comply with the preceding provisions of this
section.
Every motor vehicle, or whatever style, kind, make, character, or nature, when upon a
highway during the hours above-mentioned, whether in motion or not, shall have one or more lights
so arranged that the same shall be visible at least fifty meters from the front and the rear of such
vehicle.

(g) Lights when parked or disabled. - Appropriate parking lights or flares visible one hundred meters
away shall be displayed at a corner of the vehicle whenever such vehicle is parked on highways or in
places that are not well-lighted or is placed in such manner as to endanger passing traffic.

(h) Windshield wiper. - Every motor vehicle shall be equipped with a mechanically or electrically
operated device for wiping off raindrops or other moisture from its front windshield.

(i) Use of red flag. - Whenever the load of any vehicle extends more than one meter beyond the bed
or body thereof, there shall be displayed at every projecting end of such load a red flag not less than
thirty centimeters both in length and width, except that during the hours fixed under subsection (c),
there shall be displayed, in lieu of the required red flags, red lights visible at least fifty meters away.

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(j) Mufflers. - Every motor vehicle propelled by an internal combustion engine shall be equipped with
a muffler, and whenever said motor vehicle passes through a street of any city, municipality, or thickly
populated district or barrio, the muffler shall not be cut out or disconnected. No motor vehicle shall be
operated in such a manner as to cause it to emit or make any unnecessary or disagreeable odor,
smoke or noise.

CHAPTER IV-TRAFFIC RULES

ARTICLE I-Speed Limit and Keeping to the Right

Section 35. Restriction as to speed. -

(a) Any person driving a motor vehicle on a highway shall drive the same at a careful and prudent
speed, not greater nor less than is reasonable and proper, having due regard for the traffic, the width
of the highway, and of any other condition then and there existing; and no person shall drive any
motor vehicle upon a highway at such a speed as to endanger the life, limb and property of any
person, nor at a speed greater than will permit him to bring the vehicle to a stop within the assured
clear distance ahead.

(b) Subject to the provisions of the preceding paragraph, the rate of speed of any motor vehicle shall
not exceed the following:

MAXIMUM ALLOWABLE SPEEDS Passengers

Cars and Motorcycle Motor trucks and buses
1. On open country roads, with no "blinds corners" not closely bordered by habitations. 80 km. per
hour 50 km. per hour
2. On "through streets" or boulevards, clear of traffic, with no " blind corners," when so designated.
40 km. per hour 30 km. per hour
3. On city and municipal streets, with light traffic, when not designated "through streets". 30 km. per
hour 30 km. per hour
4. Through crowded streets, approaching intersections at "blind corners," passing school zones,
passing other vehicles which are stationery, or for similar dangerous circumstances. 20 km. per
hour 20 km. per hour

(c) The rates of speed hereinabove prescribed shall not apply to the following:

(1) A physician or his driver when the former responds to emergency calls;
(2) The driver of a hospital ambulance on the way to and from the place of accident or other
emergency;
(3) Any driver bringing a wounded or sick person for emergency treatment to a hospital, clinic, or any
other similar place;
(4) The driver of a motor vehicle belonging to the Armed Forces while in use for official purposes in
times of riot, insurrection or invasion;
(5) The driver of a vehicle, when he or his passengers are in pursuit of a criminal;
(6) A law-enforcement officer who is trying to overtake a violator of traffic laws; and
(7) The driver officially operating a motor vehicle of any fire department, provided that exemption shall
not be construed to allow unless or unnecessary fast driving of drivers aforementioned.

Section 36. Speed limits uniform throughout the Philippines. - No provincial, city or municipal
authority shall enact or enforce any ordinance or resolution specifying maximum allowable speeds
other than those provided in this Act.

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Section 37. Driving on right side of highway. - Unless a different course of action is required in the
interest of the safety and the security of life, person or property, or because of unreasonable difficulty
of operation in compliance herewith, every person operating a motor vehicle or an animal-drawn
vehicle on a highway shall pass to the right when meeting persons or vehicles coming toward him,
and to the left when overtaking persons or vehicles going the same direction, and when turning to the
left in going from one highway to another, every vehicle shall be conducted to the right of the center of
the intersection of the highway.

Section 38. Classification of highways. - Public highways shall be properly classified for traffic
purposes by the provincial board, municipal board or city council having jurisdiction over them, and
said provincial board, municipal board or city council shall provide appropriate signs therefor, subject
to the approval of the Commissioner. It shall be the duty of every provincial, city and municipal
secretary to certify to the Commissioner the names, locations, and limits of all "through streets"
designated as such by the provincial board, municipal board or council.

ARTICLE II-Overtaking and Passing a Vehicle, and Turning at Intersections

Section 39. Overtaking a vehicle. - The driver of any motor vehicle overtaking another vehicle
proceeding in the same direction shall pass at a safe distance to the left thereof, and shall not again
drive to the right side of the highway until safety clear of such overtaken vehicle except that on a
highway, within a business or residential district, having two or more lanes for the movement of traffic
in one direction, the driver of a vehicle may overtake and pass another vehicle on the right. Nothing in
this section shall be construed to prohibit a driver overtaking and passing, upon the right, another
vehicle which is making or about to make a left turn.

Section 40. Driver to give way to overtaking vehicle. - The driver of a vehicle about to be overtaken
and passed by another vehicle approaching from the rear shall give way to the overtaking vehicle on
suitable and audible signal being given by the driver of the overtaking vehicle, and shall not increase
the speed of his vehicle until completely passed by the overtaking vehicle.

Section 41. Restrictions on overtaking and passing.

(a) The driver of a vehicle shall not drive to the left side of the center line of a highway in overtaking or
passing another vehicle proceeding in the same direction, unless such left side is clearly visible, and
is free of oncoming traffic for a sufficient distance ahead to permit such overtaking or passing to be
made in safety.

(b) The driver of a vehicle shall not overtake or pass another vehicle proceeding in the same
direction, when approaching the crest of a grade, not upon a curve in the highway, where the driver's
view along the highway is obstructed within a distance of five hundred feet ahead, except on a
highway having two or more lanes for movement of traffic in one direction where the driver of a
vehicle may overtake or pass another vehicle: Provided, That on a highway within a business or
residential district, having two or more lanes for movement of traffic in one direction, the driver of a
vehicle may overtake or pass another vehicle on the right.

(c) The driver of a vehicle shall not overtake or pass any other vehicle proceeding in the same
direction, at any railway grade crossing, not at any intersection of highways unless such intersection
or crossing is controlled by traffic signal, or unless permitted to do so by a watchman or a peace
officer, except on a highway having two or more lanes for movement of traffic in one direction where
the driver of a vehicle may overtake or pass another vehicle on the right. Nothing in this section shall

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be construed to prohibit a driver overtaking or passing upon the right another vehicle which is making
or about to make a left turn.

(d) The driver of a vehicle shall not overtake or pass, or attempt to pass, any other vehicle,
proceeding in the same direction, between any points indicated by the placing of official temporary
warning or caution signs indicating that men are working on the highway.

(e) The driver of a vehicle shall not overtake or pass, or attempt to overtake or pass, any other vehicle
proceeding in the same direction in any "no-passing or overtaking zone."

ARTICLE III-Right of Way and Signals

Section 42. Right of way.

(a) When two vehicles approach or enter an intersection at approximately the same time, the driver of
the vehicle on the left shall yield the right of way to the vehicle on the right, except as otherwise
hereinafter provided. The driver of any vehicle traveling at an unlawful speed shall forfeit any right of
way which he might otherwise have hereunder.

(b) The driver of a vehicle approaching but not having entered an intersection, shall yield the right of
way to a vehicle within such intersection or turning therein to the left across the line of travel of such
first-mentioned vehicle, provided the driver of the vehicle turning left has given a plainly visible signal
of intention to turn as required in this Act.

(c) The driver of any vehicle upon a highway within a business or residential district shall yield the
right of way to a pedestrian crossing such highway within a crosswalk, except at intersections where
the movement of traffic is being regulated by a peace officer or by traffic signal. Every pedestrian
crossing a highway within a business or residential district, at any point other than a crosswalk shall
yield the right of way to vehicles upon the highway.

(d) The driver of a vehicle upon a highway shall bring to a full stop such vehicle before traversing any
"through highway" or railroad crossing: Provided, That when it is apparent that no hazard exists, the
vehicle may be slowed down to five miles per hour instead of bringing it to a full stop.

Section 43. Exception to the right of way rule.

(a) The driver of a vehicle entering a highway from a private road or drive shall yield the right of way
to all vehicles approaching on such highway.

(b) The driver of a vehicle upon a highway shall yield the right of way to police or fire department
vehicles and ambulances when such vehicles are operated on official business and the drivers
thereof sound audible signal of their approach.

(c) The driver of a vehicle entering a "through highway" or a "stop intersection" shall yield the right of
way to all vehicles approaching to either direction on such "through highway": Provided, That nothing
in this subsection shall be construed as relieving the driver of any vehicle being operated on a
"through highway" from the duty of driving with due regard for the safety of vehicles entering such
"through highway" nor as protecting the said driver from the consequence of an arbitrary exercise off
such right of way.

Section 44. Signals on starting, stopping or turning. -

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(a) The driver of any vehicle upon a highway, before starting, stopping or turning from a direct line,
shall first see that such movement can be made in safety, and if any pedestrian may be affected by
such movement, shall give a clearly audible signal by sounding the horn, and whenever the operation
of any other vehicle approaching or following may be affected by such movement, shall give a signal
plainly visible to the driver of such other vehicles of the intention to make such movement.

(b) The signal herein required shall be given by means of extending the hand and arm beyond the left
side of the vehicle, or by an approved mechanical or electrical signal device.

ARTICLE IV-Turning and Parking

Section 45. Turning at intersections. -

(a) The drive of a vehicle intending to run to the right at an intersection shall approach such
intersection in the lane for traffic nearest to the right-hand side of the highway and, in turning, shall
keep as close as possible to the right-hand curb or edge of the highway.

(b) The driver of a vehicle intending to turn to the left shall approach such intersection in the lane for
traffic to the right of and nearest to the center line of the highway, and, in turning, shall pass to the left
of the center of the intersection, except that, upon highways laned for traffic and upon one-way
highways, a left turn shall be made from the left lane of traffic in the direction in which the vehicle is
proceeding.

(c) For the purpose of this section, the center of the intersection shall mean the meeting point of the
medial lines of the highways intersecting one another, except when it is occupied by a monument,
grass plot or any permanent structure, other than traffic control device.

Section 46. Parking prohibited in specified places. - No driver shall park a vehicle, or permit it to
stand, whether attended or unattended, upon a highway in any of the following places:

(a) Within an intersection

(b) On a crosswalk
(c) Within six meters of the intersection of curb lines.
(d) Within four meters of the driveway entrance to and fire station.
(e) Within four meters of fire hydrant

(f) In front of a private driveway

(g) On the roadway side of any vehicle stopped or parked at the curb or edge of the highway

(h) At any place where official signs have been erected prohibiting parking.

Section 47. Parked vehicle. - Whenever a motor vehicle is parked unattended on any highway, the
driver thereof must turn off the ignition switch and stop the motor and notch effectively the hand
brake.

ARTICLE V-Miscellaneous Traffic Rules

Section 48. Reckless driving. - No person shall operate a motor vehicle on any highway recklessly or
without reasonable caution considering the width, traffic, grades, crossing, curvatures, visibility and
other conditions of the highway and the conditions of the atmosphere and weather, or so as to

29
endanger the property or the safety or rights of any person or so as to cause excessive or
unreasonable damage to the highway.

Section 49. Right of way for police and other emergency vehicles. - Upon the approach of any police
or fire department vehicle, or of an ambulance giving audible signal, the driver of every other vehicle
shall immediately drive the same to a position as near as possible and parallel to the right-hand edge
or curb of the highway, clear of any intersection of highways, and shall stop and remain in such
position, unless otherwise directed by a peace officer, until such vehicle shall have passed.

Section 50. Tampering with vehicles. - No unauthorized person shall sound the horn, handle the
levers or set in motion or in any way tamper with a damage or deface any motor vehicle.

Section 51. Hitching to a vehicle. - No person shall hang on to, ride on, the outside or the rear end of
any vehicle, and no person on a bicycle, roller skate or other similar device, shall hold fast to or hitch
on to any moving vehicle, and no driver shall knowingly permit any person to hang on to or ride, the
outside or rear end of his vehicle or allow any person on a bicycle, roller skate or other similar device
to hold fast or hitch to his vehicle.

Section 52. Driving or parking on sidewalk. - No person shall drive or park a motor vehicle upon or
along any sidewalk, path or alley not intended for vehicular traffic or parking.

Section 53. Driving while under the influence of liquor or narcotic drug. - No person shall drive a
motor vehicle while under the influence of liquor or narcotic drug.

Section 54. Obstruction of traffic. - No person shall drive his motor vehicle in such a manner as to
obstruct or impede the passage of any vehicle, nor, while discharging or taking on passengers or
loading or unloading freight, obstruct the free passage of other vehicles on the highway.

Section 55. Duty of driver in case of accident. - In the event that any accident should occur as a
result of the operation of a motor vehicle upon a highway, the driver present, shall show his driver's
license, give his true name and address and also the true name and address of the owner of the
motor vehicle.

No driver of a motor vehicle concerned in a vehicular accident shall leave the scene of the accident
without aiding the victim, except under any of the following circumstances:

1. If he is in imminent danger of being seriously harmed by any person or persons by reason of the
accident;
2. If he reports the accident to the nearest officer of the law; or
3. If he has to summon a physician or nurse to aid the victim.

CHAPTER V-PENAL AND OTHER PROVISIONS

ARTICLE I-Penalties

Section 56. Penalty for violation. - The following penalties shall be imposed for violations of this Act:

(a) For registering later than seven days after acquiring title to an unregistered motor vehicle or after
conversion of a registered motor vehicle requiring larger registration fee than that for which it was
originally registered, or for renewal of a delinquent registration, the penalty shall be a fine fifty per
cent of the registration fees corresponding to the portion of the year for which the vehicle is registered
for use.

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(b) For failure to sign driver's license or to carry same while driving, twenty pesos fine.

(c) Driving a vehicle with a delinquent or invalid driver's license, fifty pesos fine.

(d) Driving a motor vehicle with delinquent, suspended or invalid registration, or without registration or
without the proper license plate for the current year, three hundred pesos fine.

(e) Driving a motor vehicle without first securing a driver's license, three hundred pesos fine.

(f) Driving a motor vehicle while under the influence of liquor or narcotic drug, a fine of not less than
two hundred pesos nor more than five hundred pesos, or imprisonment of not more than three
months, or both, at the discretion of the Court.

(g) Violation of Section thirty-two, thirty-four (a), (b) and (b-1), thirty-five and forty-six a fine not
exceeding one hundred pesos: Provided, however, That in the case of violation of Section 34 (b) the
vehicle or vehicles affected may not be allowed to operate unless the requirements provided in this
section are complied with.

(h) Violations of Sections forty-nine, fifty and fifty-two, a fine not exceeding fifty pesos.

(i) For making, using or attempting to make or use a driver's license, badge, certificate or registration,
number plate, tag or permit in imitation or similitude of those issued under this Act, or intended to be
used as or for a legal license, badge, certificate, plate, tag or permit or with intent to sell or otherwise
dispose of the same to another, or false or fraudulently represent as valid and in force any driver's
license, badge, certificate, plate, tag or permit issued under this Act which is delinquent or which has
been suspended or revoked, a fine of not exceeding three hundred pesos.

(j) For using private passenger automobiles, private trucks, private motorcycles, and motor wheel
attachments for hire, in violation of Section seven, subsections (a), (b), and (c), of this Act, a fine of
two hundred pesos and suspension of driver's license for a period of three months for the first
conviction; a fine of three hundred pesos and six months imprisonment for the second conviction; and
an imprisonment of one year and permanent revocation of the driver's license for the third conviction.

(k) For permitting, allowing, consenting to, or tolerating the use of a privately-owned motor vehicle for
hire in violation of Section seven, subsections (a), (b), and (c), of this Act, there shall be imposed
upon the owner of the vehicle a fine of five hundred pesos and the certificate of registration shall be
suspended for a period of three months for the first conviction, and an increase of one hundred pesos
in the fine and one month's suspension of the registration for each subsequent conviction.

(l) For violation of any provisions of this Act or regulations promulgated pursuant hereto, not
hereinbefore specifically punished, a fine of not less than ten or more than fifty pesos shall be
imposed.

(m) In the event an offender cannot pay any fine imposed pursuant to the provisions of this Act, he
shall be made to undergo subsidiary imprisonment as provided for in the Revised Penal Code.

(n) If, as the result of negligence or reckless or unreasonable fast driving, any accident occurs
resulting in death or injury of any person, the motor vehicle operator at fault shall, upon conviction, be
punished under the provisions of the Revised Penal Code.

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Section 57. Punishment for other offenses. - The conviction of any person for any offense under this
Act shall not bar his prosecution for any other offense which may have been committed by such
person concurrently with the commission of the offense of which he was convicted or in doing the act
or series of acts which constituted the offense of which he was convicted.

Section 58. Duty of clerks of court. - It is hereby made the duty of clerks of the Court of First
Instance, the City Court of Municipal Court trying traffic violation cases to certify to the Commission
the result of any case, whether criminal or civil, involving violations of any provision of this Act or of
other laws and ordinances relating to motor vehicles. Said certificate shall specifically contain the
name of the driver or owner of the vehicle involved, his address, the number of his license and/or of
the certificate or registration of his vehicle, and the date thereof, and the offense of which he was
convicted or acquitted.

ARTICLE II-Collection of Fees, Taxes and Fines, Liens, Allotment of Funds

Section 59. (a) Collection of fees; national and local taxes; toll fees. - The collection of all fees, taxes,
and fines, under the provisions of this Act shall be made in accordance with regulations to be
prescribed by the Commissioner and approved jointly by the Auditor General.
(b) No taxes or fees other than those prescribed in this Act shall be imposed for the registration or
operation or on the ownership of any motor vehicle, or for the exercise of the profession of chauffeur,
by any municipal corporation, the provisions of any city charter to the contrary notwithstanding:
Provided, however, That any provincial board, city or municipal council or board or other competent
authority may enact and collect such reasonable and equitable toll fees for the use of such bridges
and ferries, within their respective jurisdiction, as may be authorized and approved by the Secretary
of Public Works and Communications, and also for the use of such public roads, as may be
authorized by the President of the Philippines upon recommendation of the Secretary of Public Works
and Communications, but in none of these cases shall any toll fees be charged or collected until and
unless the approved schedule of tolls has been posted legibly in a conspicuous place at such toll
station.

Section 60. The lien upon motor vehicles. - Any balance of fees for registration, re-registration or
delinquent registration of a motor vehicle, remaining unpaid and all fines imposed upon any vehicle
owner, shall constitute a first lien upon the motor vehicle concerned.
The Commission is hereby vested with authority to issue a warrant of constructive or actual
distraint or and levy to any owner of motor vehicle who has any balance of fees for registration, re-
registration or delinquent registration of a motor vehicle remaining unpaid, which upon demand by the
Commissioner of the Land Transportation Commission or any of his deputies executing such warrant,
the owner of the said vehicle shall surrender same at the time demanded, except when the
attachment or execution is under any judicial process. Any owner who fails or refuses to surrender
any of such property or vehicle not so surrendered shall be punished by a fine not exceeding the
amount of the fees (including penalties and interests, if any) for the collection of which such warrant
has been issued, together with the costs and interests, if any, from the time of such surrender. In
addition, such owner shall punished by a fine of not more than three hundred pesos or an
imprisonment not more than six months, or both.

Section 61. Disposal of monies collected. - Monies collected under the provisions of this Act shall be
deposited in a special trust account in the National Treasury to constitute the Highway Special Fund,
which shall be apportioned and expended in accordance with the provisions of the "Philippine
Highway Act of 1953": Provided, however, That the amount necessary to maintain and equip the Land
Transportation Commission but not to exceed fifteen per cent of the total collections during any one
year, shall be set aside for the purpose.

ARTICLE III-Final Provisions

32
Section 62. No provincial board, city or municipal board or council shall enact or enforce any
ordinance or resolution in conflict with the provisions of this Act, or prohibiting any deputy or agent of
the Commission to enforce this Act within their respective territorial jurisdiction and the provisions of
any charter to the contrary notwithstanding.

Section 63. Repeal of laws and ordinances. - Act Numbered Thirty-nine hundred ninety-two, as
amended, and all laws, executive orders, ordinances, resolutions, regulations, or parts thereof in
conflict with the provisions of this Act are repealed: Provided, however, That nothing contained in this
Act shall be construed as limiting or superseding any provisions of the Public Service Act, as
amended, with respect to the control by the Public Service Commission of motor vehicles operating
as public service, nor shall any provision of this Act be construed as limiting or abridging the powers
conferred upon and exercised by the Public Service Commission with regards to the control and
supervision of the operation of such motor vehicles as public service.

Section 64. Appropriation. - To carry out effectively the provisions of this Act, the amount of two
hundred fifty thousand pesos is hereby appropriated out of the fees collected under this Act, in
addition to the appropriations provided in the General Appropriations Act, for the expense of this
Commission for the fiscal year beginning July first, nineteen hundred and sixty-four, to June thirtieth,
nineteen hundred and sixty-five: Provided, however, That any savings in the appropriations of the
Motor Vehicles Office for the fiscal year beginning July first, nineteen hundred and sixty-three, to June
thirtieth, nineteen hundred and sixty-four shall likewise be available for this purpose.

Section 65. Separability. - If any provisions of this Act or the application thereof to any person or
circumstance is held invalid, the remainder of the Act, and the application of such provision to other
persons or circumstances, shall not be affected thereby.

Section 66. Effectivity. - This Act shall take effect upon its approval.

Approved: June 20, 1964

Civil Aviation RA 6235

AN ACT PROHIBITING CERTAIN ACTS INIMICAL TO CIVIL AVIATION, AND FOR OTHER
PURPOSES.

Section 1. It shall be unlawful for any person to compel a change in the course or destination of an
aircraft of Philippine registry, or to seize or usurp the control thereof, while it is in flight. An aircraft is in
flight from the moment all its external doors are closed following embarkation until any of such doors
is opened for disembarkation.
It shall likewise be unlawful for any person to compel an aircraft of foreign registry to land in
Philippine territory or to seize or usurp the control thereof while it is within the said territory.

Section 2. Any person violating any provision of the foregoing section shall be punished by an
imprisonment of not less than twelve years but not more than twenty years, or by a fine of not less
than twenty thousand pesos but not more than forty thousand pesos.
The penalty of imprisonment of fifteen years to death, or a fine of not less than twenty-five
thousand pesos but not more than fifty thousand pesos shall be imposed upon any person committing
such violation under any of the following circumstances:

1. Whenever he has fired upon the pilot, member of the crew or passenger of the aircraft;
2. Whenever he has exploded or attempted to explode any bomb or explosive to destroy the aircraft;
or

33
3. Whenever the crime is accompanied by murder, homicide, serious physical injuries or rape.

Section 3. It shall be unlawful for any person, natural or juridical, to ship, load or carry in any
passenger aircraft operating as a public utility within the Philippines, and explosive, flammable,
corrosive or poisonous substance or material.

Section 4. The shipping, loading or carrying of any substance or material mentioned in the preceding
section in any cargo aircraft operating as a public utility within the Philippines shall be in accordance
with regulations issued by the Civil Aeronautics Administration.

Section 5. As used in this Act

(1) "Explosive" shall mean any substance, either solid or liquid, mixture or single compound, which by
chemical reaction liberates heat and gas at high speed and causes tremendous pressure resulting in
explosion. The term shall include but not limited to dynamites, firecrackers, blasting caps, black
powders, bursters, percussions, cartridges and other explosive materials, except bullets for firearm.

(2) "Flammable" is any substance or material that is highly combustible and self-igniting by chemical
reaction and shall include but not limited to acrolein, allene, aluminum dyethyl monochloride, and
other aluminum compounds, ammonium chlorate and other ammonium mixtures and other similar
substances or materials.

(3) "Corrosive" is any substance or material, either liquid, solid or gaseous, which through chemical
reaction wears away, impairs or consumes any object. It shall include but not limited to alkaline
battery fluid packed with empty storage battery, allyl chloroformate, allytrichlorosilane, ammonium
dinitro-orthocresolate and other similar materials and substances.

(4) "Poisonous" is any substance or materials, except medicinal drug, either liquid, solid or gaseous,
which through chemical reactions kills, injuries or impairs a living organism or person, and shall
include but not limited to allyl isothiocyanate, ammunition (chemical, non-explosive but containing
Class A, B or poison), aniline oil, arsine, bromobenzyle cyanide, bromoacetone and other similar
substances or materials.

Section 6. Any violation of Section three hereof shall be punishable by an imprisonment of at least
five years but not more than ten years or by a fine of not less than ten thousand pesos but not more
than twenty thousand pesos: Provided, That if the violation is committed by a juridical person, the
penalty shall be imposed upon the manager, representative, director, agent or employee who
violated, or caused, directed, cooperated or participated in the violation thereof: Provided, further,
That in case the violation is committed in the interest of a foreign corporation legally doing business in
the Philippines, the penalty shall be imposed upon its resident agent, manager, representative or
director responsible for such violation and in addition thereto, the license of said corporation to do
business in the Philippines shall be revoked.

Any violation of Section four hereof shall be an offense punishable with the minimum of the penalty
provided in the next preceding paragraph.

Section 7. For any death or injury to persons or damage to property resulting from a violation of
Sections three and four hereof, the person responsible therefor may be held liable in accordance with
the applicable provisions of the Revised Penal Code.

Section 8. Aircraft companies which operate as public utilities or operators of aircraft which are for
hire are authorized to open and investigate suspicious packages and cargoes in the presence of the

34
owner or shipper, or his authorized representatives if present; in order to help the authorities in the
enforcement of the provisions of this Act: Provided, That if the owner, shipper or his representative
refuses to have the same opened and inspected, the airline or air carrier is authorized to refuse the
loading thereof.

Section 9. Every ticket issued to a passenger by the airline or air carrier concerned shall contain
among others the following condition printed thereon: "Holder hereof and his hand-carried luggage(s)
are subject to search for, and seizure of, prohibited materials or substances. Holder refusing to be
searched shall not be allowed to board the aircraft," which shall constitute a part of the contract
between the passenger and the air carrier.

Section 10. The Civil Aeronautics Administration is hereby directed to promulgate within one month
after the approval of this Act such regulations as are provided in Section four hereof and cause the
publication of such rules and regulations in the Official Gazette and in a newspaper of national
circulation for at least once a week for three consecutive weeks. Such regulations shall take effect
fifteen days after publication in the Official Gazette.

Section 11. This Act shall take effect after the publication mentioned in the preceding section.

Approved: June 19, 1971

REPUBLIC ACT No. 6235

AN ACT PROHIBITING CERTAIN ACTS INIMICAL TO CIVIL AVIATION, AND FOR OTHER
PURPOSES.
Section 1. It shall be unlawful for any person to compel a change in the course or destination of an
aircraft of Philippine registry, or to seize or usurp the control thereof, while it is in flight. An aircraft is in
flight from the moment all its external doors are closed following embarkation until any of such doors
is opened for disembarkation.
It shall likewise be unlawful for any person to compel an aircraft of foreign registry to land in Philippine
territory or to seize or usurp the control thereof while it is within the said territory.
Section 2. Any person violating any provision of the foregoing section shall be punished by an
imprisonment of not less than twelve years but not more than twenty years, or by a fine of not less
than twenty thousand pesos but not more than forty thousand pesos.
The penalty of imprisonment of fifteen years to death, or a fine of not less than twenty-five thousand
pesos but not more than fifty thousand pesos shall be imposed upon any person committing such
violation under any of the following circumstances:
1. Whenever he has fired upon the pilot, member of the crew or passenger of the aircraft;
2. Whenever he has exploded or attempted to explode any bomb or explosive to destroy the aircraft;
or
3. Whenever the crime is accompanied by murder, homicide, serious physical injuries or rape.
Section 3. It shall be unlawful for any person, natural or juridical, to ship, load or carry in any
passenger aircraft operating as a public utility within the Philippines, and explosive, flammable,
corrosive or poisonous substance or material.
Section 4. The shipping, loading or carrying of any substance or material mentioned in the preceding
section in any cargo aircraft operating as a public utility within the Philippines shall be in accordance
with regulations issued by the Civil Aeronautics Administration.
Section 5. As used in this Act
(1) "Explosive" shall mean any substance, either solid or liquid, mixture or single compound, which by
chemical reaction liberates heat and gas at high speed and causes tremendous pressure resulting in
explosion. The term shall include but not limited to dynamites, firecrackers, blasting caps, black
powders, bursters, percussions, cartridges and other explosive materials, except bullets for firearm.

35
(2) "Flammable" is any substance or material that is highly combustible and self-igniting by chemical
reaction and shall include but not limited to acrolein, allene, aluminum dyethyl monochloride, and
other aluminum compounds, ammonium chlorate and other ammonium mixtures and other similar
substances or materials.
(3) "Corrosive" is any substance or material, either liquid, solid or gaseous, which through chemical
reaction wears away, impairs or consumes any object. It shall include but not limited to alkaline
battery fluid packed with empty storage battery, allyl chloroformate, allytrichlorosilane, ammonium
dinitro-orthocresolate and other similar materials and substances.
(4) "Poisonous" is any substance or materials, except medicinal drug, either liquid, solid or gaseous,
which through chemical reactions kills, injuries or impairs a living organism or person, and shall
include but not limited to allyl isothiocyanate, ammunition (chemical, non-explosive but containing
Class A, B or poison), aniline oil, arsine, bromobenzyle cyanide, bromoacetone and other similar
substances or materials.
Section 6. Any violation of Section three hereof shall be punishable by an imprisonment of at least
five years but not more than ten years or by a fine of not less than ten thousand pesos but not more
than twenty thousand pesos: Provided, That if the violation is committed by a juridical person, the
penalty shall be imposed upon the manager, representative, director, agent or employee who
violated, or caused, directed, cooperated or participated in the violation thereof: Provided, further,
That in case the violation is committed in the interest of a foreign corporation legally doing business in
the Philippines, the penalty shall be imposed upon its resident agent, manager, representative or
director responsible for such violation and in addition thereto, the license of said corporation to do
business in the Philippines shall be revoked.
Any violation of Section four hereof shall be an offense punishable with the minimum of the penalty
provided in the next preceding paragraph.
Section 7. For any death or injury to persons or damage to property resulting from a violation of
Sections three and four hereof, the person responsible therefor may be held liable in accordance with
the applicable provisions of the Revised Penal Code.
Section 8. Aircraft companies which operate as public utilities or operators of aircraft which are for
hire are authorized to open and investigate suspicious packages and cargoes in the presence of the
owner or shipper, or his authorized representatives if present; in order to help the authorities in the
enforcement of the provisions of this Act: Provided, That if the owner, shipper or his representative
refuses to have the same opened and inspected, the airline or air carrier is authorized to refuse the
loading thereof.
Section 9. Every ticket issued to a passenger by the airline or air carrier concerned shall contain
among others the following condition printed thereon: "Holder hereof and his hand-carried luggage(s)
are subject to search for, and seizure of, prohibited materials or substances. Holder refusing to be
searched shall not be allowed to board the aircraft," which shall constitute a part of the contract
between the passenger and the air carrier.
Section 10. The Civil Aeronautics Administration is hereby directed to promulgate within one month
after the approval of this Act such regulations as are provided in Section four hereof and cause the
publication of such rules and regulations in the Official Gazette and in a newspaper of national
circulation for at least once a week for three consecutive weeks. Such regulations shall take effect
fifteen days after publication in the Official Gazette.
Section 11. This Act shall take effect after the publication mentioned in the preceding section.
Approved: June 19, 1971

CHAPTER 4
Bill of Lading
Code of Commerce

36
ARTICLE 349. A contract of transportation by land or water ways of any kind shall be considered
commercial:
1. When it has for its object merchandise or any article of commerce.
2. When, whatever its object may be, the carrier is a merchant or is habitually engaged in
transportation for the public.

ARTICLE 350. The shipper as well as the carrier of merchandise or goods may mutually demand
that a bill of lading be made, stating:
1. The name, surname and residence of the shipper.
2. The name, surname and residence of the carrier.
3. The name, surname and residence of the person to whom or to whose order the goods are to be
sent or whether they are to be delivered to the bearer of said bill.
4. The description of the goods, with a statement of their kind, of their weight, and of the external
marks or signs of the packages in which they are contained.
5. The cost of transportation.
6. The date on which shipment is made.
7. The place of delivery to the carrier.
8. The place and the time at which delivery to the consignee shall be made.
9. The indemnity to be paid by the carrier in case of delay, if there should be any agreement on this
matter.

ARTICLE 351. In transportation made by railroads or other enterprises subject to regulation rate
and time schedules, it shall be sufficient for the bills of lading or the declaration of shipment furnished
by the shipper to refer, with respect to the cost, time and special conditions of the carriage, to the
schedules and regulations the application of which he requests; and if the shipper does not determine
the schedule, the carrier must apply the rate of those which appear to be the lowest, with the
conditions inherent thereto, always including a statement or reference to in the bill of lading which he
delivers to the shipper.

ARTICLE 352. The bills of lading, or tickets in cases of transportation of passengers, may be
diverse, some for persons and others for baggage; but all of them shall bear the name of the carrier,
the date of shipment, the points of departure and arrival, the cost, and, with respect to the baggage,
the number and weight of the packages, with such other manifestations which may be considered
necessary for their easy identification.

ARTICLE 353. The legal evidence of the contract between the shipper and the carrier shall be the
bills of lading, by the contents of which the disputes which may arise regarding their execution and
performance shall be decided, no exceptions being admissible other than those of falsity and material
error in the drafting.
After the contract has been complied with, the bill of lading which the carrier has issued shall be
returned to him, and by virtue of the exchange of this title with the thing transported, the respective
obligations and actions shall be considered cancelled, unless in the same act the claim which the
parties may wish to reserve be reduced to writing, with the exception of that provided for in Article
366.
In case the consignee, upon receiving the goods, cannot return the bill of lading subscribed by the
carrier, because of its loss or of any other cause, he must give the latter 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, disputes shall be determined by the legal proofs
which the parties may present in support of their respective claims, according to the general
provisions established in this Code for commercial contracts.

37
ARTICLE 355. The responsibility of the carrier shall commence from the moment he receives the
merchandise, personally or through a person charged for the purpose, at the place indicated for
receiving them.

ARTICLE 706 Termination of use of know-how and distinctive marks

Without prejudice to the following article, after termination of a contract the franchisee cannot
continue to use the industrial and intellectual property rights or the know-how authorized in the
framework of the franchise contract.

ARTICLE 707 Termination of contract for reasons not imputable to franchisee

1. If a franchising contract is terminated for reasons not imputable to the franchisee, the franchiser is
obliged either:
a) to repurchase goods not sold by the end of the contract, for the price at which he sold them to the
franchisee, with the exception of those goods bought by the latter after having received a declaration
terminating the contract; or
b) to allow the franchisee to continue to use his industrial or intellectual property rights until the
exhaustion of the goods mentioned in the previous subparagraph.
2. The franchiser is also obliged to compensate the franchisee for expenses incurred, before the
communication of the declaration mentioned in subparagraph a) of the previous paragraph, in
promotional activities with effects continuing beyond termination of the contract, namely advertising.

TITLE IX BROKERAGE CONTRACT

ARTICLE 708 Broker
A broker is a person who places two or more interested parties in contact for the agreement of a
transaction, without being connected to any of such parties by way of a legal relation of collaboration,
dependence or representation.

ARTICLE 709 Commission

1. A broker has the right to be paid a commission by the parties, if a transaction is concluded as a
result of his intervention.
2. The amount of the commission and the proportion of it due from each of the parties shall be
determined, in the absence of agreement, professional fee schedules or usage, by the court, on an
equitable basis.

ARTICLE 710 Reimbursement of expenses

1. Except if there is an agreement to the contrary, a broker is entitled to reimbursement of expenses
he has incurred.
2. Reimbursement of expenses that a broker has incurred is due from the party for whose account
they were made, even if the transaction is not concluded.
ARTICLE 711 Commission in case of conditional or invalid contracts
1. If a contract is subject to a suspensive condition, the right to commission is created at the moment
when such condition is fulfilled.
2. If the contract is subject to a resolutory condition, the right to commission is not affected by the
fulfillment of the condition.
3. The previous paragraph applies to cases in which the contract is voidable, if the broker did not
know the cause of invalidity.

ARTICLE 712 Plurality of brokers

If a contract is agreed as a result of the intervention of more than one broker, each of them has the
right to a share of the commission.

38
ARTICLE 713 Obligation to communicate circumstances relating to transaction
A broker is obliged to communicate to the parties all facts known to him, related to the assessment
and security of the transaction, which may be of a nature to influence its conclusion.

ARTICLE 714 Obligations of professional brokers

A professional broker in contracts related to merchandise or securities shall:
a) retain samples of merchandise sold by sample, as long as a possibility of controversy about its
conformity remains;
b) record in a separate book the essential elements of contracts agreed with his intervention and give
to the parties a copy of every such record signed by him.

ARTICLE 715 Representation by broker

A broker can be charged by one of the parties with the task of representing him in acts relating to the
execution of a contract concluded with his intervention.

ARTICLE 716 Undisclosed contracting party

1. A broker who does not disclose to one of the contracting parties the name of the other shall be
liable for execution of the contract and, after performing it, is subrogated in the rights arising from the
contract against the undisclosed party.
2. If, after conclusion of the contract, the undisclosed party discloses his identity to the counterpart or
is named by the broker, any of the contracting parties can take action directly against the other, but
the liability of the broker is maintained.

ARTICLE 717 Bail by broker

A broker can post bail for one of the parties.

ARTICLE 718 Limitation of actions

The right of a broker to payment of commission is barred one year after the agreement of the
contract.

Civil code
ARTICLE 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 carriers 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.

ARTICLE 1746. An agreement limiting the common carriers 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.
ARTICLE 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 carriers liability cannot be
availed of in case of the loss, destruction, or deterioration of the goods.

39
ARTICLE 1748. An agreement limiting the common carriers liability for delay on account of strikes or
riots is valid.

ARTICLE 1749. A stipulation that the common carriers 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.

ARTICLE 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.

ARTICLE 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 carriers liability is reasonable, just and in consonance with
public policy.

ARTICLE 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.

ARTICLE 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.

ARTICLE 1754. The provisions of articles 1733 to 1753 shall apply to the passengers 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.

SUBSECTION 3. Safety of Passengers

ARTICLE 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.

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.

ARTICLE 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.

Warsaw Convention on Air Transport

Liability of the Carrier and Extent of Compensation for Damage

ARTICLE 17 Death and Injury of Passengers Damage to Baggage

1. The carrier is liable for damage sustained in case of death or bodily injury of a passenger upon
condition only that the accident which caused the death or injury took place on board the aircraft or in
the course of any of the operations of embarking or disembarking.
2. The carrier is liable for damage sustained in case of destruction or loss of, or of damage to,
checked baggage upon condition only that the event which caused the destruction, loss or damage
took place on board the aircraft or during any period within which the checked baggage was in the
charge of the carrier. However, the carrier is not liable if and to the extent that the damage resulted
from the inherent defect, quality or vice of the baggage. In the case of unchecked baggage, including

40
personal items, the carrier is liable if the damage resulted from its fault or that of its servants or
agents.
3. If the carrier admits the loss of the checked baggage, or if the checked baggage has not arrived at
the expiration of twenty-one days after the date on which it ought to have arrived, the passenger is
entitled to enforce against the carrier the rights which ow from the contract of carriage.
4. Unless otherwise specified, in this Convention the term baggage means both checked baggage
and unchecked baggage. 1.9 65 Instruments Relating to Liability for Carriage by Air 1

ARTICLE 18 Damage to Cargo 1. The carrier is liable for damage sustained in the event of the
destruction or loss of, or damage to, cargo upon condition only that the event which caused the
damage so sustained took place during the carriage by air. 2. However, the carrier is not liable if and
to the extent it proves that the destruction, or loss of, or damage to, the cargo resulted from one or
more of the following: a) inherent defect, quality or vice of that cargo; b) defective packing of that
cargo performed by a person other than the carrier or its servants or agents; c) an act of war or an
armed con ict; d) an act of public authority carried out in connection with the entry, exit or transit of
the cargo. 3. The carriage by air within the meaning of paragraph 1 of this Article comprises the
period during which the cargo is in the charge of the carrier. 4. The period of the carriage by air does
not extend to any carriage by land, by sea or by inland waterway performed outside an airport. If,
however, such carriage takes place in the performance of a contract for carriage by air, for the
purpose of loading, delivery or transhipment, any damage is presumed, subject to proof to the
contrary, to have been the result of an event which took place during the carriage by air. If a carrier,
without the consent of the consignor, substitutes carriage by another mode of transport for the whole
or part of a carriage intended by the agreement between the parties to be carriage by air, such
carriage by another mode of transport is deemed to be within the period of carriage by air.

ARTICLE 19 Delay The carrier is liable for damage occasioned by delay in the carriage by air of
passengers, baggage or cargo. Nevertheless, the carrier shall not be liable for damage occasioned
by delay if it proves that it and its servants and agents took all measures that could reasonably be
required to avoid the damage or that it was impossible for it or them to take such measures.

Code of Commerce
ARTICLE 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)

ARTICLE 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
indorsee 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 indorsement of such indorsee. (n)

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

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ARTICLE 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.

ARTICLE 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 indorsement of such a document gives the transferee no additional right.

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

(1) By the owner thereof; 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.

ARTICLE 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)

CHAPTER 5
Actions and Damages

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.

Carriage of Goods by Sea Act

RESPONSIBILITIES AND LIABILITIES
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.

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(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.
(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.

New Civil Code

Art. 2201. In contracts and quasi-contracts, the damages for which the obligor who acted in good
faith is liable shall be those that are the natural and probable consequences of the breach of the
obligation, and which the parties have foreseen or could have reasonably foreseen at the time the
obligation was constituted.
In case of fraud, bad faith, malice or wanton attitude, the obligor shall be responsible for all damages
which may be reasonably attributed to the non-performance of the obligation. (1107a)

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Art. 2202. In crimes and quasi-delicts, the defendant shall be liable for all damages which are the
natural and probable consequences of the act or omission complained of. It is not necessary that
such damages have been foreseen or could have reasonably been foreseen by the defendant.

Art. 2203. The party suffering loss or injury must exercise the diligence of a good father of a family to
minimize the damages resulting from the act or omission in question.

Art. 2204. In crimes, the damages to be adjudicated may be respectively increased or lessened
according to the aggravating or mitigating circumstances.

Art. 2205. Damages may be recovered:

(1) For loss or impairment of earning capacity in cases of temporary or permanent personal injury;
(2) For injury to the plaintiffs business standing or commercial credit.

Art. 2206. The amount of damages for death caused by a crime or quasi-delict shall be at least three
thousand pesos, even though there may have been mitigating circumstances. In addition:
(1) The defendant shall be liable for the loss of the earning capacity of the deceased, and the
indemnity shall be paid to the heirs of the latter; such indemnity shall in every case be assessed and
awarded by the court, unless the deceased on account of permanent physical disability not caused by
the defendant, had no earning capacity at the time of his death;
(2) If the deceased was obliged to give support according to the provisions of Article 291, the recipient
who is not an heir called to the decedents inheritance by the law of testate or intestate succession,
may demand support from the person causing the death, for a period not exceeding five years, the
exact duration to be fixed by the court;
(3) The spouse, legitimate and illegitimate descendants and ascendants of the deceased may
demand moral damages for mental anguish by reason of the death of the deceased.

Art. 2207. If the plaintiffs property has been insured, and he has received indemnity from the
insurance company for the injury or loss arising out of the wrong or breach of contract complained of,
the insurance company shall be subrogated to the rights of the insured against the wrongdoer or the
person who has violated the contract. If the amount paid by the insurance company does not fully
cover the injury or loss, the aggrieved party shall be entitled to recover the deficiency from the person
causing the loss or injury.

Art. 2208. In the absence of stipulation, attorneys fees and expenses of litigation, other than judicial
costs, cannot be recovered, except:
(1) When exemplary damages are awarded;
(2) When the defendants act or omission has compelled the plaintiff to litigate with third persons or to
incur expenses to protect his interest;
(3) In criminal cases of malicious prosecution against the plaintiff;
(4) In case of a clearly unfounded civil action or proceeding against the plaintiff;
(5) Where the defendant acted in gross and evident bad faith in refusing to satisfy the plaintiffs plainly
valid, just and demandable claim;
(6) In actions for legal support;
(7) In actions for the recovery of wages of household helpers, laborers and skilled workers;
(8) In actions for indemnity under workmens compensation and employers liability laws;
(9) In a separate civil action to recover civil liability arising from a crime;
(10) When at least double judicial costs are awarded;
(11) In any other case where the court deems it just and equitable that attorneys fees and expenses
of litigation should be recovered.
In all cases, the attorneys fees and expenses of litigation must be reasonable.

44
Art. 2209. If the obligation consists in the payment of a sum of money, and the debtor incurs in delay,
the indemnity for damages, there being no stipulation to the contrary, shall be the payment of the
interest agreed upon, and in the absence of stipulation, the legal interest, which is six per cent per
annum. (1108)

Art. 2210. Interest may, in the discretion of the court, be allowed upon damages awarded for breach
of contract.

Art. 2211. In crimes and quasi-delicts, interest as a part of the damages may, in a proper case, be
adjudicated in the discretion of the court.

Art. 2212. Interest due shall earn legal interest from the time it is judicially demanded, although the
obligation may be silent upon this point. (1109a)

Art. 2213. Interest cannot be recovered upon unliquidated claims or damages, except when the
demand can be established with reasonably certainty.

Art. 2214. In quasi-delicts, the contributory negligence of the plaintiff shall reduce the damages that
he may recover.

Art. 2215. In contracts, quasi-contracts, and quasi-delicts, the court may equitably mitigate the
damages under circumstances other than the case referred to in the preceding article, as in the
following instances:
(1) That the plaintiff himself has contravened the terms of the contract;
(2) That the plaintiff has derived some benefit as a result of the contract;
(3) In cases where exemplary damages are to be awarded, that the defendant acted upon the advice
of counsel;
(4) That the loss would have resulted in any event;
(5) That since the filing of the action, the defendant has done his best to lessen the plaintiffs loss or
injury.

CHAPTER 3 .OTHER KINDS OF DAMAGES

Art. 2216. No proof of pecuniary loss is necessary in order that moral, nominal, temperate, liquidated
or exemplary damages, may be adjudicated. The assessment of such damages, except liquidated
ones, is left to the discretion of the court, according to the circumstances of each case.

SECTION 1. Moral Damages

Art. 2217. Moral damages include physical suffering, mental anguish, fright, serious anxiety,
besmirched reputation, wounded feelings, moral shock, social humiliation, and similar injury. Though
incapable of pecuniary computation, moral damages may be recovered if they are the proximate
result of the defendants wrongful act for omission.

Art. 2218. In the adjudication of moral damages, the sentimental value of property, real or personal,
may be considered.

Art. 2219. Moral damages may be recovered in the following and analogous cases:
(1) A criminal offense resulting in physical injuries;
(2) Quasi-delicts causing physical injuries;
(3) Seduction, abduction, rape, or other lascivious acts;
(4) Adultery or concubinage;
(5) Illegal or arbitrary detention or arrest;
(6) Illegal search;

45
(7) Libel, slander or any other form of defamation;
(8) Malicious prosecution;
(9) Acts mentioned in Article 309;
(10) Acts and actions referred to in Articles 21, 26, 27, 28, 29, 30, 32, 34, and 35.
The parents of the female seduced, abducted, raped, or abused, referred to in No. 3 of this article,
may also recover moral damages.
The spouse, descendants, ascendants, and brothers and sisters may bring the action mentioned in
No. 9 of this article, in the order named.

Art. 2220. Willful injury to property may be a legal ground for awarding moral damages if the court
should find that, under the circumstances, such damages are justly due. The same rule applies to
breaches of contract where the defendant acted fraudulently or in bad faith.

SECTION 2. Nominal Damages

Art. 2221. Nominal damages are adjudicated in order that a right of the plaintiff, which has been
violated or invaded by the defendant, may be vindicated or recognized, and not for the purpose of
indemnifying the plaintiff for any loss suffered by him.

Art. 2222. The court may award nominal damages in every obligation arising from any source
enumerated in Article 1157, or in every case where any property right has been invaded.
Art. 2223. The adjudication of nominal damages shall preclude further contest upon the right involved
and all accessory questions, as between the parties to the suit, or their respective heirs and assigns.

SECTION 3. Temperate or Moderate Damages

Art. 2224. Temperate or moderate damages, which are more than nominal but less than
compensatory damages, may be recovered when the court finds that some pecuniary loss has been
suffered but its amount can not, from the nature of the case, be provided with certainty.

Art. 2225. Temperate damages must be reasonable under the circumstances.

SECTION 4. Liquidated Damages

Art. 2226. Liquidated damages are those agreed upon by the parties to a contract, to be paid in case
of breach thereof.

Art. 2227. Liquidated damages, whether intended as an indemnity or a penalty, shall be equitably
reduced if they are iniquitous or unconscionable.

Art. 2228. When the breach of the contract committed by the defendant is not the one contemplated
by the parties in agreeing upon the liquidated damages, the law shall determine the measure of
damages, and not the stipulation.

SECTION 5. Exemplary or Corrective Damages

Art. 2229. Exemplary or corrective damages are imposed, by way of example or correction for the
public good, in addition to the moral, temperate, liquidated or compensatory damages.

Art. 2230. In criminal offenses, exemplary damages as a part of the civil liability may be imposed
when the crime was committed with one or more aggravating circumstances. Such damages are
separate and distinct from fines and shall be paid to the offended party.

Art. 2231. In quasi-delicts, exemplary damages may be granted if the defendant acted with gross
negligence.

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Art. 2232. In contracts and quasi-contracts, the court may award exemplary damages if the
defendant acted in a wanton, fraudulent, reckless, oppressive, or malevolent manner.

Art. 2233. Exemplary damages cannot be recovered as a matter of right; the court will decide
whether or not they should be adjudicated.

Art. 2234. While the amount of the exemplary damages need not be proved, the plaintiff must show
that he is entitled to moral, temperate or compensatory damages before the court may consider the
question of whether or not exemplary damages should be awarded. In case liquidated damages have
been agreed upon, although no proof of loss is necessary in order that such liquidated damages may
be recovered, nevertheless, before the court may consider the question of granting exemplary in
addition to the liquidated damages, the plaintiff must show that he would be entitled to moral,
temperate or compensatory damages were it not for the stipulation for liquidated damages.

Art. 2235. A stipulation whereby exemplary damages are renounced in advance shall be null and
void.

PART II
MARITIME LAW

CHAPTER 6
General Concepts
Code of Commerce
ART. 587. The ship agent shall also be civilly liable for the indemnities in favor of third persons which
arise from the conduct of the captain in the vigilance over the goods which the vessel carried; but he
may exempt himself therefrom by abandoning the vessel with all her equipment and the freight he
may have earned during the voyage.

ART. 590. The co-owners of the 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 co-owner may exempt himself from this liability by the abandonment, before a notary, of that
part of the vessel belonging to him.

Art. 643. If the vessel and her cargo should be totally lost, by reason of capture or wreck, all rights
shall be extinguished, both as regards the crew to demand any wages whatsoever, and as regards
the ship agent to recover the advances made

ART. 837. The civil liability incurred by the shipowners in the cases prescribed in this section, shall be
understood as limited to the value of the vessel with all her appurtenances and freight earned during
the voyage

CHAPTER 7
Vessels
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 appear in a written instrument,
which shall not produce any effect with respect to third persons if not inscribed in the registry of
vessels.

The ownership of a vessel shall likewise be acquired by possession in good faith, continued for three
years, with a just title duly recorded. In the absence of any of these requisites, continuous possession

47
for ten years shall be necessary in order to acquire ownership.
A captain may not acquire by prescription the vessel of which he is in command.

ARTICLE 574. Builders of vessels may employ the materials and follow, with respect to their
construction and rigging, the systems most suitable to their interests. Ship owners and seamen shall
be subject to what the laws and regulations of the public administration on navigation, customs,
health, safety of vessels, and other similar matters.

ARTICLE 575. Co-owners of vessels shall have the right of repurchase and redemption in sales
made to strangers, but they may exercise the same only within the nine days following the inscription
of the sale in the registry, and by depositing the price at the same time.

ARTICLE 576. In the sale of a vessel it shall always be understood as included the rigging, masts,
stores and engine of a streamer appurtenant thereto, which at the time belongs to the vendor. 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 certified copy of the record
sheet of the vessel in the registry up to the date of the sale.

ARTICLE 577. If the alienation of the vessel should be made while it is on a voyage, the freightage
which it earns from the time it receives its last cargo shall pertain entirely to the purchaser, and the
payment of the crew and other persons who make up its complement for the same voyage shall be
for his account.
If the sale is made after the vessel has arrived at the port of its destination, the freightage shall
pertain to the vendor, and the payment of the crew and other individuals who make up its complement
shall be for his account, unless the contrary is stipulated in either case.

ARTICLE 578. If the vessel being on a voyage or in a foreign port, its owner or owners should
voluntarily alienate it, either to Filipinos 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 the Republic of the Philippines at the
port where it terminates its voyage and said instrument shall produce no effect with respect to third
persons if it is not inscribed in the registry of the consulate. The consul shall immediately forward a
true copy of the instrument of purchase and sale of the vessel to the registry of vessels of the port
where said vessel is inscribed and registered.
In every case the alienation of the vessel must be made to appear with a statement of whether
the vendor receives its price in whole or in part, or whether he preserves in whole or in part any claim
on said vessel. In case the sale is made to a Filipino, this fact shall be stated in the certificate of
navigation.
When a vessel, being on a voyage, shall be rendered useless for navigation, the captain shall
apply to the competent judge on court of the port of arrival, should it be in the Philippines; and should
it be in a foreign country, to the consul of the Republic of the Philippines, should there be one, or,
where there is none, to the judge or court or to the local authority; and the consul, or the judge or
court, shall order an examination of the vessel to be made.
If the consignee or the insurer should reside at said port, or should have representatives
there, they must be cited in order that they may take part in the proceedings on behalf of whoever
may be concerned.

ARTICLE 579. After the damage to the vessel and the impossibility of her being repaired, in order to
continue the voyage had been shown, its sale at public auction shall be ordered, subject to the
following rules:
1.The hull of the vessel, its rigging, engines, stores, and other articles shall be appraised, after
making an inventory, said proceedings to be brought to the notice of the persons who may wish to
take part in the auction.

48
2.The order or decree ordering the auction to be held shall be posted in the usual places, an
announcement thereof to be inserted in the Official Gazette and in two of the newspapers of the
largest circulation of the port where the auction is to be held, should there be any. The period which
may be fixed for the auction shall not be less than twenty days.
3. These announcements shall be repeated every ten days, and their publication shall be made to
appear in the records.
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 while the vessel is in a foreign country, the special provisions
governing such cases shall be observed.

CHAPTER 8
Persons who take Part in Maritime Commerce

CHAPTER 9
Charter Parties

CHAPTER 10
Loans on Bottomry

CHAPTER 11
Averages

CHAPTER 12
Collisions

CHAPTER 13
Arrival Under Stress

CHAPTER 14
Salvage

CHAPTER 15
Carriage of Goods by Sea

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