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PARTII

MARITIMELAW
CHAPTER6

GENERALCONCEPTS

l. llARlTlME LAW: DEFINED.


Maritime law is the systemof laws which "part,icularlyrelatesto the affairs
and business of the sea, to ships, their crews and navigation, and to marine
conveyance personsand property."t
of
This system of laws includes Book ill ot the Code of Commerceentitled
Maritime Commerce,Act l.Io. 2616 otherwise known as lhe "Salvage Law,'
Commonwealth Act No. 65 otherwise known as the "Carriage of Goodeby Sea
Act," Presidential DecreeNo. 1521known as the "Ship Mortgage Decreeof 1978"
$ and other apeciallaws relating to Maritirne Commerce.
*
$ However,the primary law on the maritime commerceis stiil the New Civil
E Code prtlvisions on common csrrisrs' The Cr-'deof ('irtmmerceanrl apmial lawe
F
apply only suppletorily.
rF
II. REAL AND HYPOTHECARYNATURE,
I
t

I
A. NATUREAilD RATIONALE.
t
3
The supreme court explained in one case that the spirit of the code of
i Commerceia accurately set forth in gltreat,iseof Madriaga on maritime law:t
t
'That,which dintingtliahes
the maritimtrfrom the civil law and even
I
I
lionr thc nrercantilelaw in genemlis the real undhypolhecary natureof the
andthe manysecuriticsof a real naturethat rnsritimecusfomsfrom
f

Il f,ormer,
tirne immemorial,the }aws,the c$des,ortd the lahr jurieprudence,have
!
t
t
t tFrancieco,p. 254.
,Philippine shipping company",el aJ. v. F ranciscoGarcia Vergara,No. 1600,June l, 1906,6
i* Phil.28r.

* ,l l9
I

t
1M NOTESANDCASESONTI{E.IAWONTRANSFORTATION
-
Ar,rDPUBUCUnurres
provided for the pnotection
ofthe
various aud connicting intereat
venturedand in naril;;-ery.did;";,;ffiil which are
veaeeland 'isked rhoJ;il: inrereetsof the shicb
{e" Tr"r, o*.*qor *r" .rgo andconeigneea,
*t q* "p""iie carso, u,*"oi ecir
ttrJ,:L'*?ffiH';F;*;l
conrtrnctor ae to repdir: made
their wagea, una1l,""u or
to d;#r:
"
"As evidence of tftis "reat" nature
rirnitaoooot3:-lt:o{'P,qtil of the maritime law we have (l)
the
frll" totheach;-""r"llr*," vegs€l
the freistt m,o,lev,and.(zrtfr"-ridil aad
de0entionof the vesser lgrrin tls lhe emba"goand
o-i*'_ rl:ry ""rs;;
etow morethan a.peruonar "tunaction s" ordinary civ' raw wourdnot
againstthe
bsobsorv€d tr,"tthl*ientJ debtoro, p".*r, liabre.It will ngE!
aS.nrcalrerempth'noeet*onr "*.ffir1u";; ;;;;;";.j; t, u"""r*,rrn" whicb
money'thug avoidingthe uruirityry
"i*'a-"ri"u,iit"*, andFeight
buaineea' eoseitili;voi ,i"kirrg rri.'*r,"i"" fortunein the
r'*.*T,:" il;tffi#lime lbg
ttreveaser ib.qF seculne c.eaito,-"v ror.iv nea'onanach
tri" ctaim-litr,""i *"ii,"J?#"?*r"_ent
rights by a final j.W""t, of his
prejudice of a thjrd person.
"";;;rh"
*n"*ft'1tr#tT:#S,$J;:l y e;te3t
th.t,incertain
caees,
rJ"i.,i,,""i,
nffill"|ff,""""i ;"rTfi#;ffifi:,fffi:$ilT
h:,tgf H#c!i'ftlsrffi g::J:fi#:i{{tj*::il",:,tr
and
carso
notclaim
;ilu1fti;1,,fi*:l:ffj r*"
"ri*,#.ishis",,Joi
tlhere
privi,egee,*#"illfil.lXltiil{;nru:,:f
8re twn Eoo^h- -,L-- :. ,

:"H;:l#li,lffi
.

rea' naturcof
* pg rrr, *aJirr,1e'au;fi;##ch
ofttrepartie"t:iilH theriab'*v
;;,h';;
asentieonlylialte withrheveGt ;ry+ y at merc!ofthewavee. rf the
thtougttt'e aeidents oln"igati;ilia Li a"igr,,Jr;;-,;;;"* ,,,r, belost
onlyju* that the maritime creditor
H':ffi ;il""ffi:t-ffif Hr*lTtil:urnarunorhicrishtar,ydetainins
tacit or legal,which may exist
or*t',#j"|;en'e' which a upo* the veseeland
thg,g
exisu*T;;"",11HSH *:ry* - inarrdition
! f ""a.u*gi,.
flTbd* ;;orA *,"r"*,-Ji|;ffJ'#,ffiS* ff :h';;:*lff
charger' the wageeof the
crew earn;rr;.,
the ragt voyage
articre646'of tn:-g-Tr ae provided in
"rc.--"t"r,1du"r" dueeunder-arricre
indemniricationdue kr-the g42,the
terminatedon aceorrnr the veeeerin casehis contract
"up;;;i
nr tne vol,intarj r"r,, orn"rr,iu ir
,reolvencyof
:|fi*"#;ilj":Hft1 ;3i*f ,#, andorher
r'"uiiru", from
",raing
""i'rr,"

, .Thu supreme t:* likewiee explained in another


h)othecarv nature case3that the real and
"lT:lT",ilil;d
in connection with lossee meansthattheliabilityofthecarrier
related to matitt" contracts is confined to the vessel,

,.,.,
.*;1?Jl'n;T::'tr,:;ru?fi:,; anrr
sflffilffit1i:!.1'* r.ifi,
A,.,,r'rnc,,
c,rporarion,
MAITITIMH IAlf {:n
[isnsrcl Conc*pta

which is hypothecated for such obligations or which stande


sB the guaranty for
their aettlernent. lt hae its origin by reason of the conditions
and rut atteniing
maritime trade in ite earliest years when such trade
wae replete witf,
innumerable and unhnown hazaids eince vess€ls hed ta go
throrgb laryety
uncharted waiera to ply their trada. It waa deeigned to
o"ffeetsuch adverro
conditionn nnd tn encorrrstrl,rpreiprerond r:ntitiei to vonturo
into rnrritimo
couunencsdorpite the rieke and the prohibitive coet of ahipbuilding.
Ttrus, tbo
liability of the versel owner nnd agent arieing from tha operation
of-euchvsercl
were confined to the vessel itsel{ its equipmlnt, freight, .nruranoe,
tnd if any,
which limitation e€rved to induce ."[it"li"t" into e'rJivJy *ag"ing t]reir
reaouroesagainst the consideration ofthe large profits attainaUte
io tlr"-t""d".
The High Court further explained:
'lt
n r i g h t t r . r ' t r , , * r r r t r r . r ' t r r : r r ri rt r
! r i l r { 1 1 l t' g
h u t d e u p i t et h e
modernization uf-the shipping in<iustry and the dJvelopment
of high_
tcchnolop rnfety device* rlexignrrltn rcckicr thr rinkr therein,
the limitation
ntt.l:t only pcruiotad, but is even practicaily absorute in weil-developed
maritime countriee auch as the united statee and England
where it *"*r"
almost all m*ritime eanualfiea.phirippine maritirne raw is ofAnglo-Americon
extraction, and ie gwerued by adherence to both inten:natioisl
maritime
converrtions end generally acr:eptcd prectices relative to maritime
hade and
travel. Thig is highligtrted by the fcrnowing excerpts on the limit€d
liabiuty
of vessel otrrers andlor agenta:
'sEcrIoN
lB3. Tbe riabitity of lhe owner of any vooser,whether
$u"i"et or foreigp., fm any embezzlement, !oes,or destruction hy any permn
ofony peruon dr eny property, go'da, or merchandira ahipped
onpot on tnara
ruch vear.l, or fm any ro*, drmage, or forfaiture, do"",
deeioaed, or
inc'rred, without the privity or knowledge of auch owner or oynen' gbsll
not
erceed tlre a-mount or value of the intereet of such owner
in s'cb veeaal, aad
!9r. !9ifht then penrling.' (Section 183 of the US Federal r.imitation of
UabilityAcr)

-and*
'1'
fiie owner of a aea-goingahip may rimit his riability in aeosrdanao
!*'ilh Article 3 of thir Convention in reepect sf gl6img arieiry
fom any of the
following occrurences, unlees the occurrence giving ri6e to
the clain reoulted
from the actual fault or privity df the owner;

ta) loes Me of, or pereonal injury to, aay perron being earrid
9f
in the ehip, and loes of, or dnmage to, any propcrty on board
the rhip.
(b) loas-of life of, or personal
injury to, aay other pereoa,
whether on lond or on water, Ioeeof or damage t o'tl.,e,jmperry or
infringement of any righte caused by t^he "oy
o*gi*t or iefaurt t&e
owner is responaible for, or any p€r$on not on".t,boarJ the
ahip for whose
act, neglect or default the owner io reeponrible:prouidcd,, I
holnuenT]hat
in regard to the act, neglect or default of thie laet class perron,
owner ahall only be entitted to lirrit his riability when tbo
of the $
I
aa, neglect
or default i.sone which occurs in the navigation or the rnanagpnent i
of
the ship or in the loading, carriage or driharge of ita '
ffor in the t
embarkation, carriage or diaembarkation of its paeeeryerrl
422 NOTE$ANn O.ltrCnS
ON ?HE LAw oN'IltAtis^I'{.rt(Ih,lloN
AND PUBI.JCUTruNNS

(o any obligation or liahility imposed by any law relating to


the removal of wreck and arieing from or in connection with the raidng,
. removai or destruction of any stup which is sunk, stranded or abandoned
tincluding anything which may be on board such ship) and any
obligation or liability ariaing out of damage caused to harbor *"rk",
basine and navigable waterways.'(section l, Article I of the Brussels
International Convention of 195?)
In this juriediction, on the cther ha.*d, it* application hae been well-
nigh constricted by the very $tatute from which ii irigina*s. The Limited
Liabilitv Rule in the Philippines is raken up in Book III of the code of
commerce,pnrtictrl;rrlvin Articlex 5gz. sg0, nnd gil?. hr.rr:underquotxrdi2
llto: x x x"

B. STATUTORYPROVISIONS.
The statuLory provisions that provide for the limited liability rule are
.
Articles 587,590,643 and E3T of the Code of Commerce rvhich provide
as follows:
AnrrcLE 587. The ship agent shall elso be civilly liabre for the
indemnities in favor of third persons which -ry from the
conduct oftho captrin in tho eero oftho gn'dr whlch""i"* ho l*aded on
the veceol; but be Inay oxempt himeelf therefrom by abandoning the
vess€l with all her equipments and the freight it rnay have earned
during the vo.yage.
AR'ncLu. 5tX).The co-own€re of the vesaerlshalr tre civi[y tiarrle
in the proportion of their contribution to the common fund for the
resulta of the acts of the captain, referred to in Articre 5g?.
' Each co'owner msy erempt hiraself from thi* riabirity by the
absndo;nment, before a norary, of that part of the vessel belonging
to him.
Aft'l'ICl"li {l'llt. If thr: vefaol .8nd her crrgo nhoukl lx. totally leret,
by roanon of capturt or wreck, alt rlghtr $h&ll bt t:xfingrrinh6cl,}oth
ae rugnrde thtr cr*w to demund any wlger whntnocver, and au regarde
the ahip agent to recover the advancec mnde.
rf a portion of the vesset or of the cargo, or 'f both, shourd be
eaved, the crew engaged on wagea, inctuding the capthin, ehall retain
d
their rights on the ealvage, eo far ae they go, on the remainder of the
vess€l ar well as on the nmount of ths freightage of lhe cargo ravod; a
but crllo*r wh. aro engaged on shsrea ghail not have any right t,
wbstso€ver on the salvage of tho hull, but only on the portion of the
frelghtage eaved. If they ehould have worked to- recoyer the
remainder of the ehipwnecked veesel they shall.be given ftom the
amount of the ealvage an award in proportion of the efforts made
gnd to the rieks, encountered in orrler to accomplieh
the ealvage.
ARTTCLE. 8{lz. The civil liability ineurred by the ehipownere
in ths cases preecribed in thir rection,ehall b€ understood as lirnited
to the vdue of the vesi€l with all her appurtonances and height
earrred during the voyage.
MARITliliE LA,I,V d23
C'eneralLloncr:ptr

C. COVERAGE
Article 837 applies the principle of limited liability in cae€sof collision
while Articles 587 and 590 emtxxly the univercal principle of limi64 Uability in
all cas€s.{However, it was explained in Aboitiz Shipping Coryoration u.C*ncrcl
Accident Fire and Life AssuronceCorporation Ltd.5 that taken together with
related articles, Articles 83?, 58? and 590 cover only: (1) liability to third
persons,{i(2) acts of the captain,? and {3) eollisions.8
In connection with Article 58?, the carrier cannot invoke Articlee 1?33
and I ?ill-rof thc Civil Code.While the pnnrary law governing the inetant caa€i8
tlrt'(livil (lodr, irr rrll mattcrn not rr:gululcdby rrricl(]rde, tho Codeof Commarce
and other special laws ehall govern. Since the Oivil Codecontains no proviEion
regulatinglinbility of rhipownersor agt:nLr in lhc eveni of total lossor deetruc"tion
of the vessel,it is the provisions of the Code of Commertn, particularlyArticle
587, thaL governs.e
The principle has not been rendered obsoleteby the advancesin modern
technologrywhich considerably lessen the risks involved in maritime trade.ro
The liupreme Court further explained in Monorch Insurance Co:,Ine u. Court
of Appeals:tI
''No veaml,no liubiliry,'expr{}see$ rn a nut*hell the timitad liability
rule. 'l'he ahipownerr'sot agent'aliability ia mcrcly cq-extensive with his
intcrest in the veaselsuchthat a total loguthereofreaultEin il,sextinction.
The total destructionof the veeoelextingrrieheernarititrle liengbecaue€there
is no longerany r?sto which it canattach.This doctrineis bassdon the resl
andh1'pothecary natureof maritimelaw whichhasite originin the prevailing
conditionsof the maritime trade and seavoyagesduring the rnedievalagea,
at.tlndedby innumerablehazardgand p'elrils. Tooffeetagainattheseadvenee i
conditirinsand to encourage shipbuildingand maritirnecommerce'it wag
deemednecea&arv to confinethe liability of the owneror agentarisingfmm
thc operulionol & nhipto l,h0vesscl,cquipnrcnt, urrdlreiglrt.or inuuranco,if
8ny.'

ln the case of Guison u. Philippine shipping campanyrz involving the


collision at the mouth of the Pasig river between the motor launches Martha
and Manila H in which the latter was found t6 be at fault, the $upreme Court,
applying Articie 83? of the Codeof Comrnercelimited the liabitity of the agent
to its value.

.Mr,narchIneuranceCo., lnc. v. (iourt ofAppeale,(i.R. Noe.92?36,S4867,95578,Jun*I'


2 0 0 0 , 3 3 3S C R A? 1 , 9 4 .
5No.100446,January 21, 1993,217 SCRA359,36i1.
6Article587, Codeof Commerce.
:Article 590. Code of Commerce.
iArticle flil7, Code of Commerce.
,chua Yek Hong v. Intermediate Appellate court. G.R. No. L7,181l, December14, 1988.
t0Supra.,at pages95-96.
ttlbi.d.,at page 95.
r169Phil. 536.
424 NOTASAND C.LSESON'ITIE LAW ON TXTANSPORTATTON
AND PUSLICI.JTILI'TII]S

ln the case of Yongca us. L<,-wrnatj which invulved the steamera ss "Negms"
belonging to Yangco which after two hours of sailing fxrm Romblon to nnanita
encnuntered rough seag aB a result r.rfwhich it capsted such that many of its
passengerg died in the mishap, scveral actions fnr damageg wene filed againet
Yangco for the death nf the paest^ngr-,rnin thc flourt, of First Inatance of 6apiz.
Alter rendition of the judgment for danruges against yangco, by a veriied
pleading, he sought to abandon the vessel to the plaintiffs in the three
caees
together with all the equiprnent without prejudice to the right to appeal. The
Supreme Court in resolving the i.esue held as follows:

"In the light of all the foregoing, we therefore hold that if the ahipowner
or agent may in any way be hetd civilry liable at all for irdury to or death of
pa8sengersarising from lhe negligenceofthe captain in cagesofcollisiongor
ehipwrechs, his liability is merely co-extensiverrith his intereet in the veseel
such that a total loes thereof results in its extinction. In arziving at thie
conilusion, we have not been unmindful of the fact that the ill-fat€d stiamahip
Negme, as a vesselengagedin interisland trade, is a common carr:ier(De
villata v. stanely, gz phil. 541), and that the relaiionahip between the
petitioner and the pasaeng€rswha died in the mishap reste on a contract of
carriage. But assuming that petitioner ie liable for a breach ofcontraet of
carriage, the ercluaively 'real and hypothecary nature' of maritime law
operatea to limif auch liabfity to the value of t]re veeoel,or to the insurance
thereon, if any. In the ingta.nt caee it doee not appear that the veas€l was
ingured.
whether the abandonmentof the vesael mught by the petitioner in ttre
inetant cas€ wa8 in ac-cordaneewith law or not,*ia immaterial. Ttre vessol
having toially perished, any act of abandonment would be an idle ceremony.,

D. ,EXCEpltOlts.
Ther,e are exceptions to the limited liability rule, nnmely: (l) wb-erethe
tnjury or death to a passenger is due either to the fault of the shipowner, or to
the concurring negligence of the shipowner and the captain;ra (2) where the
vesE€lia innursd; and (B) in workmen's compeneatjsa slairnn.rs

the High Court added another the exception thereto by-staUng that while tire
total deatruction of the veseelextinguishes a maritime lien, ae there is no longer
any risk to which it can attach, but the total destruction ofthe vesE€ldoesiot
ttr*! the liability of the owner for repairs of the veeeel completed before its
losa'The Court interpreted the provision ofArticle 591 of the Code of Conamerce
in relation with the other Articles of the same Code.

,r78 Phil. 330.


r'Manila $teamahip v. Abdulhnman,
l0O phil. g2 [9561.
rrAbuegv San Diogn,?? Phil. ?90
t1946l.
r{{6 Phil. SOl-r.
--try'

ii
MASI?IME T"AW 4?5
General Conccpts

n. Negligence.
The lim.iteeiliability rule applies il'the captain or the crew
cauged the
. damageor iqjury. Iror instance,the ehiprwner's orsbip&gen[,sriability
is limit€d
to the value of the vesselif the danragu,nu, causedby the
unseaworthineesof
the vesselcausedb.vthe negligenceoithe captain or crew
during the voyege.r?
However,if the failure to rnaintain the seaworthinessof the vesset
can be ascriH
to the shipovi'neralone or the shipowner concurrently with
the captain, then
the limited liability principlecannot be invoked.r" "
The carrier isliabre for the damage.s to the furr exfent and not up to the
vnlrrf of th0 vt'sselif it wns r'.qt$blishcd
fhrrl thc r.rrrrierwas grrilty of negligence
in allowing the captain and crew to pray mahjr:ngduring
th'evoyage,in rii[ng
to maintain thc ship aH-.{(,nwort}ry rrrrdin i,rr,,ro,il,g
tiie ship-tri,,"."y *uri
pa$setrgers than it was allowedLocarry.11,
A sintilttrcrrnclusion
wasreachedin unothercase,'whereit was estabtished
that the sinking of !he vesselwas cluetri its un,,ieaworthiness
evenat the time of
its departure lrecauseit was top heavy;an exccssive
amount .;;g;;;; i;;;
o-nd-eck,closer supervision of the part nf fhe shipowner "f
could ha-,repreventeJ
the fatal miscalculation.ac such, the shipownercannot
escapeiiability n*ogb
the expedientof filing a notice of abandonmentof the vessel
by virtue ofArf.icle
587 of the Codeof Commerce.
Fnilur0 io mnintnin the tit'tiworthirruisof the vessetwas
also one tlf the
rea8onswhy the invocationof the limited liability rule was
rejectedin another
cqnr'.2rAdrlition:lll3',it wns ll;r;r,rr,etl
in llir, ,r,,rtr".r.,*tharlauthorizing the
voyagenotwithstanding its knowledgeof a t1,pho.nis tantanrount
to negligince"
that exempts the casefrom the opeiation orin* limited
lt;tililt;;i;.'-'-"*
The caseot'Mantla steamshipc'ompany, Inc.u. InsaAbdurhaman
and Lint
Hong Tbu is a caseof colrisionof ihe ML "coir.s'er"v";;tMS *Bowline
K"o;;
as R rerult rlf which tlro M[, "(lorrlrtr,loV" t:rr;xiztrllrrrdwtts lor[
whorelnino (g)
pa'r!{ongrr$ dit'd or wert' nriesingand ull ifs cargoeswere lost. In the action
for
drmeges,.risingfrom the coilision,appryingArticrc8J? of
the cJe;ib;;*;
the court heid that in such .u"" *i"rL the collisionwas
imputable to both of
them, eachvesselshall suffer her own darnagcsand both
shall irc solidarily liable
for the damagesoccasionedto their ."rg*". rhus, the
su;;;;" court held:
"In fact,it is a generarprincipie,weil estabrished maritimelaw and
custom.that shiJrowners andshipagcnts:rrecivill.yliablefrrrtheacrsof the

r;Alirttie Shlpping
Corlxrration v. (irrreral A,ccitl+:nt l'irc nn6 l,ifc,AssuranceCorporation,
LlA., supra. :
rnMonrrclrlnrsuralrce
Oo.,inc. l: Court of App.lalx,sapra.
'!No. I 10J98,lriovember
7, LS1T, Z8l SCRA S34,S44.
mPhilippineAmerican
c'enera!Insuranceco.. Inc. v. court d'Appeals,No. 116940,June
199?,273SriRA 262,271-2i2. 11,
2 r l .1
i r J 1 : 1-iS| ;h r l p i n (r ':, r . ,
i n c .r ' .r ' o u ; . t . i f . , \ p y r a r o , . l\ i.J. or {. j 2 r , S c p r e r n b e r 2r IgJg, g , 3 r s s c R A
339,346
r:Supra.
NC)TESAND CASESONTIItr trq,w ON TRANSPORTATION
AND PUBLICUTII,ITIES

cttptain ((lrxlr'of (:(rmnl{"rc{r,


Artir:}r f-rll{i)rrrirlfirr lhr, intlr:rnnitiurclue tht
third ;reruonr{Article 58?);so that injured partregnrny imrnedistely look for
reimhurnomentkr fhc owoorof th$.nhip,ii lxrirrgrrnivcrnollyre*og#esl thnt
llro nlrrgrrrrnrtcr ur cuptsrrr rn prrmarily the reprr.ncntative of tlte ownsr
(standard oil co. v. lnpr castato,42 Phil. 206, t60)" Thia
direct liability,
moderatrd and limited by the owner'u right of abandonrnent of the vc*eel
and earned freighUArticle 58?) hae been declared to exiat not only in caseof
breached contracts, but also in casesof bortious negligence(yu Biao sontua
v. Osorio,43 Phil. 511: 515):

It iri ea.svto se.ethat tn adrnit the dr:{cnscof r.luediligencenf a bonus


paterfamilias,(in the selection and vigilance of the oflicere and crew) as
erempting thc ahipowner from any liabitity lbr thr:ir fnults, would render
nugatory the solidary liability established by Article g2? of the code of
commence for the greater protcction of injured parties. shipowners would
b,e
$le to eacape liability in practically every caee, considering that the
qualiscations and licensing of ship masters and offrcere are detcrrrined by
the Statc, and that vigilance is practically impossible to exerciEeover oflieera
and crew of veaseleat sea. To c,ompelthe partiea prejudiced to look to the
flrw for indemnity and rcdrcss would b€ an illusory remedy for almost always
its members are, finomcaptains down, mere w&ge earnera.
we, therefore, find no reversible err'or in the refusal of the court of
Appealeto conrsider t}te defenanof the Maniln StrrnmnhipCo.,that il ir erempl
from liability for the eollieion with the M/L "coneuelo v- due to the abaence
ofnegligence on its part in the eelection and superviaion ofthe officere and
crew of the lr|rS "Bowline Knot."

The supreme court ruled, however, that insofar as respondent I.im Hong
To, owner of M/L "consuelo v," is concerned, liability was rnotti-it*a becaug€
he w-hoadmittedly employed an rrnlicensedmaet€r and engineer and who in his
application for permission to operate expreasly aseumed full risk snd
responsibility. The Court ss.id:
*rhe international
rule is to the effectthat the right of abandonment
of veeeelu,
ae a legal limitat'lon of a shipwner's liabiliiy, doegnot apply to
caseewherethe iqiury or the averageis dueto shipowne/eownfault. Farina
(DerechocommarrcialMaritimo,vol. I, pp. lzz-Lzu, on the authority of
judicial preeedentsfrom variousnstions,eetsthe rule to be as follows:"

b. Ineuranee
?he limited liability rule does not apply to insurance claime. Thus, in
vasqucz u. court of Appealszxthe suprenne court found that while typhoon was
"an inevitable uccurrence, yet, having been kept posted on the course of the
typhoon by weather bulletins at intervale of six hours, the captain and crew
were well aware of the risk they were taking as they hopped from island to
-"'**il!t-."*"--

}1.,1,RiT'IMELAW 427
(ierreralConcepts

island {i,rn ftomblonup to'l'anguingui.They held conferences, and ohliviouscf


the utlrrust.diligencerequirerlof'very r:nutirruspersong,they decided
to take a
calculaledrisk." Unfortunately.[hr: vessellater stmck a reef,eustainedleaks
*ud elvt'ntrrnllysunk causingthe d.'r h L' r<.rnre
rf its passengere.The supreme
Court explained that the to[al loss of rhe vesseldid nlt extiriguish the liability
of the carrier'sinsurcr."Dcspit.cthe lossof thc vessel,therefire, its insurance
answe.s for the damagesthat a uhipowner *rr age't, may be rreid uable
for by
reasonofthe death ofits passengers..2i

e" Workey's eompensaticln.


1l'lrocir.seol'Abttegrr"son L)it:go,a'ilrvolveda claim {br compensation
under
the Workmc'n'sCompensntionAct lor the decenserlmemtrersoithe crew
of the
MS "$*n lliegrrIl" rrntl,l\lli"ljsrt,lome" which were caughtby a typhoon
in the
vrcinit.vof lttindoro Island and as a consequenceof which they were eunk
and
totall.v'krst.The SupremeCourt held as follows:

"(lotrnsel
f'r the appt'lrantcireArricre5gz of the codeof commerce
*hich pr.vidcs that if t.her.essr:ltogether with all her tackle and
freight
nri,rlr'.\'earned during thc'voyagear* abandonecl, the agent's}iability to th;rd
pers()nsfor tortiou.qacr-qof the captain in the care oithe goodswhich
the
ship carried is extinguishedlYsor.o r,.Laserna, TBphil. 3llOt.erticle g3?
of
tiie same code r'r'hichprovides that in casesof collision, the shipownera,
liability ir limited to the valueof the vt-q.rel with all her equipment
e'arrrr'd d.trringth. voyegetphilippine .shippingctiurpany'v.Garcia, "nJr*igr,t
6 phil.
261,r;and Article 648 of the sanrecode which prrvid". tt if the vesseland
{ r r : i g h t a r e t o t a l l y ' r o s t , t h e a g e n r ' s l i a h i r i t y f r r r w a g"te * o f t h e c r e w
is
. . x t i n g u i s h t ' d .F r ' n r t h c r * p r e n r i s * sc o u n s e l, l r a w t h e c o n c l u s i o n
o that
.t' appellant'sliahility, as owner of the rwo motor ships l6st or eunk as a result
of th. t-vphoonthar iashe.dthe island rf IlIindoro on october l, lg4l, wae
e x t i n g usi h e d
d
T'he rt'al and hypothee.ry nature t-rfthe riability of the shipor+,neror
agent embodied in the pro'isidns of the Maritime Law, Book IIi,
code of
commerce, had it8 origin in the prevairing conditionaof ihe naaritimetrade
a'd s.a voyagesduring the me<iievalages,attended by innumerable hazards
a'd perils. To offset against these adveree conditions arr{l'to enco'rage
shipbuilding and maritime comnlerceit was deemed neceooaryto confine
rhe liability of the owner or ngenr arising from the operalion of a ehip the
to
vessel,equipment, and freight, or insurance,ifany, so that ifthe shipowner
o. agcnr,aband'ned the ship, equipment anri freight, his liability was
extinguished
tlr
But the proviaions of the code of commerce invoked by appellant have
r.lS no room in the application of the w'rkmen's c.mpensation Aci which geeks
he bo rmprove, and aims at the anre.lioration of, the condition of laborem aad
rmplovct's.It in not the liability frr the dunrageor loseof the cargoor iqiury
.
t{)

taIhtd.
ESupra
r28 NOTS$AND CASESON THS T,AWON TTr$,NSI\ONTATTON
. AI{D PUBLICIJTILITIAS

to, or death of, a paseengerby or through the mieeonduct ofthe captain or


mastsr of the ehip: nor the liability tor rhe logx of'tfte ohip aB a result of
collisron;nor the rerponailriliLyfor wager of'l,hecrew.but,s iialtitity *eatod
by a *t'atut*rto compcnnatet'mplii.vr','s
rrrrdltlxrrrrs in csxesof injury rr-"ceived
l r . i , t i t t f l t r ' I t i i r i l x r t t t . l r , ' t l , w ] r i l l l r , p ; , , 5 1 , .rrri i { l r r ,
; N . r l u r r r r r u r c r ' o lt l r r : i r w u r k o r
ernpkr-y1nent,or t,hehr_,irs
nnd dr,p*rrdorrt..;ol such lulrcrersand employeesin
the event of death cnusedhv thr.,irr:fnplolnl{rnt.. Such r:ompensatignhae
nolhing to do w"iththe provirsi<irr.s
oi the (.lodcr-rf{)ornrnerce
r.egardingmaritime
commerce.It is an item in t.heccislof'prudrrctron rvhichmu.stbe includedin
the budgetof any well-nranagedinduslry
Appellant's assertion that in the cilse of linciso u. Dy-Liaco {S? Phil.
4461'and lf& rillo t'. llendo;a (ti6 Phil. 6Fg' rhr' qur.stionof the extinctionof
the shipo$'ner'slinbilit"r' dur' ttr ;rlrulrrir.runrrnt lf tht' ship b-vhinr was not
firll-v disrus$ed,as in the case of lrrngr,,r;.. Ln.serna,supra,i* not entircly
cornect'In the lnni mentinnedcnsr.I h{,lirrrjf ltion ,rfthc lhipxrwn*rrrliabrlity
to thtovnlue of t-ht ship, tr;ulprrrtrrt, I'r't.rght, rrrrrlilrsurancre, lf ony,was tlts /rs
m a t a . r n t h e c a s e o f S r r c i . s ru: ^D y - L i u c o , : i r p r o , t h e a p p l i c a t i o no f
the
workmen'e compensationAct kr a na.ster or patron who perishedas a result
of the sinking of the motorboat of which hc was the maeter, was the
contrcveruy subrnitted to the court for decision. This Cr:urt held in that cage
that'It has been repeatedly stated that the workrnenh compensation Act
was enacted to abrogatethe comrnonlaw arrd our ci'iJ code upon culpable
acta and omiasions,and that the ernprovcrneed not be guilty of neglect or
fault, in order that reeponsibility may artach to him'rpp."++s-rsol; that
the shipownerwas liable to pay cornpensationprovidedhrr in the wnrkmen's "',d
CompenaationAct, notwithntnnding llrr: lirr:t.thut the motrrrkrat waa totally
lost,.ln the caeeof Murilb rt.MenrrtLzu, supra,t.hiscourt held that The rights
and re*poneibilitiesdefined in said At:t mrr*t be governedby ita own peculiar
! provisions in completedisregard oi'other similar provisions
1S
of the Civil ag
?a:
well as the mercantilelaw.If an accidentis compensableunder the Workrnen'e
I
compe*sation Act, it rn.st tre compensatedeveri when the workman,sright
rs not reco8-r'lized b-vrir is in eonflirt n'it.iruLherlrrovisionsof the Civil Codeor
o f t h e c o d e o f ' c n m m e r c e .T h e r r : a s i , r bn e h r n d t h i s p r i ' c i p l e i s i . h a t t h e
ll-rrrk:nen'-q Co:xp',r:n.cat.ir,n..{ci 14i.ii.r..:r:r-ii.-.,i.i:i,i,..Ci$1..:ilri.in gf,rrrg:rt:ir:n
r,t ti,* rrthererislrng,l.rx.s.',L};sqi.irlurjp::r: ,.,t. lhe decrjronis jn ans$er to
the contenbonthat it waanet.the intr,.ntiurrof trrc Le:gisl;ltunrto,epeal A*iclee
643 find ftiJTof the Codeof (.lorrrtttcrt:r, witlr tlr,,,,nlctnx,nt of thc Worknren'ri
CompensationAct."

In said case!6 the Court reiteratertr that the liability of the


shiiowner on
under the provision of .{rticles 5gi ancl g3? of the code of cornmerce
Sgent is
limited to the vaiue of the vessel with all her equivalent and
freight earned
during the voyage if the shipowner .or agent abandoned the
ship o,itu ,u tt *
equipment and freight. However, it does not appl1, to the liability
under the
workmen's compensation Act where even as in said case the oessel
waa loet,
the liability thereunder is still enforceabie against the employer
or shipowner.

wlhid
^\f"'r.lil'llMg l-{!\ 429
CreneralCtlnePts

E. ABANDONMENT.
of the vesct,l,its uppurLl.'tlurlcclr
Ab.rptl,,rrnrerrt and Lhe freightageis an
indispcnsablerequirement before lhe shigrwner or shipagent can eqioy the
of
lnnefitn thc limited liability princrplo.If the carrier does not wsnt lo abandon
the ves.*el,then he is still liable even beyond the value of the vessel.

In the caseofPhilippirle shipping company u. Garcin,n which ig an action


for damages instituted by the Philippine Shipping Company for the loss of
Steamship'Ntra. Sra. de Lnurdes"as a result of the collicionwith the Stesrnnhip
*Navarra" was reeponsiblefor the
"N&varra" of Garcia, it was found that the
collision.The clairn of the Philippine Shipping is that the defendantahould pay
P18,000.00,the va-lueof the "Navarra" at the tine of its loee,in accordnncewith
the provision ofArticle 83? of the Code of Commerc€,and th^atit was immaterisl
thnt the -Nav&rr8'had been enhrely lort, pnrvided the value could be ascert&in€d
einc€ the extent of liability of the owner of the colliding vesael resulting from
the collision ie to be determined by its value. The Supreme C,ourt speaking
through the then Chief Juetice Arellano held that the rule i8 that in the cas€of
collision, abandonment of the vessel ia neceeearyin order to limit the liability of
the shipowner or the agent to the value of the veeeel, its appurtenancss and
freightage earned in th; voyage in accordancewith Article 8it? of the Code of
Cornmerce. fire only instance where such abandonment ia diepenoed with is
vrhen the veEsel wae entirely lost. In such case, the obligation ia thereby
eltinguished.
'Pampeyw the pier sunk
In Ohta Developnunt Campany u. Steamship
and the merchandise waa loet due to the fault of the steanship "Pompeyt tbat
waa t}en docked at said pier. The Supreme Court ruied that the liability of the
owner of"Pompef may not be limited to its value underArticle 68? of the Code
of Commerce as there waE no abandonment of the ahip. The Court also held
tbat Article 837 cannot apply as it refers to collisione.

F. PROCEDUREFORENFORCEMENT.
The Supreme Court explained inAboitiz Shipping Corporation u. Gencral
Accident Fire and Life AssursnceCorporation, Ltd.n that the "righte of a veseel
owner or agent under the Limited Liability Rule are akin to thoee of the rights
of ehareholdersto limited liability under our corporation law. Both are privilegee
glanted by statute, and while not abeolute, must be swept aside only in the
established existenceof the most compelling of reasone."The Supreme Court
stat€d, however, that "more to the point, the r:ights of parties to claim agtinnt
an agent or owner of a vessel may be compared to those of creditors againrt an
insolvent corporation whose assetsare not enough to satis$ the totality of claims
ae against it. While each individual creditor may, and in fact ehall, b€ allowed

'6 Phil281.
?149Phil. ll?
PSuprt.
{30 NOTES
AhrDcAsESONIII! r.ql oN TIL{Nsr,()}{,.r,ATrOi;
A"YDru8LIC LTNLITIUS

t'o prove the uctuar arnounts


of their
respective crai*s, this doeenot
thevshaltat bea,owed*".u*r""?.rril,rir* mean that
theirctaimssoonerto trrep"ejuo*liir.r* flr*.;;;;;-*no ntuaandproved
suchcreditorstoowourd'n"l d* *h".;;il;;;. L r,r"haninstance,
individualsharehoiders, r. t" g"i"-r*-L'*,au as*etsof the
".ur"
l"t no,rstli-it their recoveryto what is left in the
name of the corporation''
Thus, tt* sup*me court
dtscussion in the ca* of Lipana appried by analogy the
u. Dei,etopmcnt Bank of Rizal&
held thar: where it was

"In the instant ca*e,the ctay ofexecution


th. fnct thnt r.slxrrrdentrruni ofjudgurcnt is warranted by
judgment would unduly ur-,"".runder receivcrslrip..I.rrex*cute t,he
aupl"t* "r"i
lirJ".r-"," of r*spo'dr:nt irrrnkto the
prejudic. of orhrr,t!ll;*.ik,;; r.rbr-iou.q
;;i'.r.T,rorr, si.cc, ;rs aprty srared
Bank u.Morfe t63 SCne f f Al, in Centrcl
iio Monot,n"vBoai,l has rteclared
bank is insorv.nr.oua n"* n"iurJi, "'n*. that a
*oou,"u operati,ns,the Boarri,ecomes
the trusttre ottr-"*":r: ro. ttru uq,roi benefit of ;t'ft;;;
ineolvency, onecannotobtain^. and after its
attachment, executionor otherqd; 'r prc'cre'ce o'er anotherby an
"ir""*ge
J

llt lxrl lr itts.l'r'ttt".v-rtI'rt


t'or";xrrirti.rrurrtl llr. sirrkirrg
'r cr*ditor*r ar* lintited i'thelr ,l'rr vr-.src,l,
1heclaima'Ls
t'thc r:nririnirrtrgv;rrue 'f
assetg' In the case or"an "o.ou*ry accessibltr
-"otuent co.poration, these
the corporationreft overl?om are tile residuai asset.sof
i;;G;;;"ns.
rhese In tr," .nr* ro", vesser,
lil:::TTH:"T",|'
;1,1 *' d ;;;;;; ;i,
* po,,
"in.
i,ur g";;
u.'uvu
i:":::
rromtheir,ru.anc"
proceeds
l* x
onthe;;:il:ilnT::?,jl llffi:il:?fl;:
time of its loss'No claimant
."r"'u- gr'ionpr*"*denceuu,,ir'rr,,
simpleexpedience of.havingrri;J t,thcrsb.vthr
Thus'executi'nof irrtlKrnttnirtt-"rrri",r it" u"ii,rn,,,,,t,o"ilra' ilre rcsr.
";;;preterr
i ttttrlr'11'1'111t't.r, ,',,*,.r,,,u,i,,i.irrrsr.rrrr*.ery
finrrt
I lri'st,rvuJp."rlir" "r,irrprr,t.,,,r
,,,,,n1 -.i,r;urcti,n'r.rrll.,,,,*u.n,r.,,n"ion*ti
'l'h.n
srrlrj.ctsirrkirrg' ll.yth.
ittrd,-ry irr"ir uii *u,*,crninrs to,*irrruti.,rnerusry srttled,
;;1Xfffrl; Tj1,., ill# i n",,." "r,l
n"-;."";;1.;'
andrre
igitug,,
ri
i;? ;*$;
I n t h e a b o v c - c i t e dA h n i t i , e A i - - . . * . - ^ ^ -
torhe,r.i,";;;;,;*"i,1?fi ,fiil'l,i:"r1T"::[r,,iii,:,1:X,ff
iifu,,!ffi
and pendingfreightag",*hu.,tJ
i]or"ir"a in trust. .fhe erainant
::
ustitute the necessary rimitation*il*trit.rtiur. shouid
adrniraltycourtandtltlt*"ft";;;;"iit1.T,r, o.ti"niiruro the proper
c()tl[)rln.y in,l*.prrx:t,.rrs
fi.'rrr,r., i'su*r'c.
rnd pcrrrrirrg
frt,ighhgeiu ura.],t'saf*gu*rd
resolutionof alr incidents,'iorf;""ip;;:;;ting the sar'e pendingfina!
and settrernenr 'hereof.3s

el54 SCRA
257 I 198?l
shipping corporation v General
,*., Accidenr F.ire and Life dssurance
corporation,
"rtflltt'z
eIbid.
slhttl.
IrAHlTl.Itti t-Aw 431
' l r , ' t r ' r r l l( ' , r t u . ' t , t :

lrR()BLF.tltS:

l. l ' a l r l , r l i s p a r a r J o n .r r d r r l r ' - l i r : t , n s r _
s l' r i p c n p t a i n o f t h e M / V l ) o n
'Iose was drunk r+.hile"irewas on dutv il-{ .iuch. und u.hilr: }lrl/ Don,Irrse was
sailing fr,nr llaniia to the Visayas. As a cunsequencethereof, the M.Ay'Don
.Ju.,L'Iirlirliitd ancitll(ir veii:iel ne;jr Corrirgrdor. ciiusrng both vessel to sink
'!'ht,
cornpletcli' ilrrd tlrrrs become total lossr:s. cargo owner of lxrth sunken
vesselssued the o*'ner of the lllrv Dtin Jose tor their l<;sses.Is the ship owner
of MrV I)orr ,Iosc liallle? l)xplain vour an.sr+r: r'.)
.l'hr.shipou'rrr,r,rf
A. No. \ { . , \ ' l ) o r r K r , s ci s n o l r . r r r g cl ri a b [ r .b e c a u s e
o f t h r , l o t i r l i r , s s , , f t h r . v t , q s c i .C e n r . r a l l y , t l r c s h i ; x r w n e r i s l i l l i l e [ r _ r tr] r e
t t | g l l g t ' t l t ' r ' i l l t h I c i t p t i r r r rr r ) c o l l r s t o l rc ; r s t , sl.l 0 w t , v e r ,t l l r l i r r b i l i t y i s l i m i k ' d
to the value of thr,' vessel. ln other words, the civil liability for collision is
merell c<.r-existcrrl with his interest in thc l.essc-,|;since there was lolal loes,
his liabilit-v is also extinguished. r l9?8)

Z. Toni, a copr,r dealer. loadcd l,tXl{} srrcks ol copra on }roard the


vessel IH/V T'onichi (a contnrun carrier cngage(l in cr;,astwisetrade owned by
lchit for shipment firom Puerto Galera to }Ianila. The cargo did not reach
lllanila becRusethe vessel capsized arrd srnk with all rts carg'. when Toni
sur:d lchi fbr damages based on breach 01'contract, the latter invoked the
'limitpd
l i a b i l i t v r u l e . ' a ) W h a t d o v r r u u r r d e r s t a n do f t h e n r l e i n v o k e d b v
l c h i ' l b r r \ r r , t h l r r , r . x r : r , p t i o ntso t h t r i i r r r r h . t lI r r l r r li t y r , rlrr " l
-
A: a) "l,imited liability mle" means that the liability of a shipowner
for dtrrnrtgt'sin cnse of lose ie limited to the value of hig vr:sriel.If the ehip is
totally lost. his liability is extinguished. If the ship or purt thereof is still
e x i s t i n g . h t , c a n e s c a p el i a b i l i t v b v a b a n d r , n i n gr h e v e s s e l .i t s a p p u r t e n a n c e s
'!'l:r"rli:r'r'J)ropr.rti1,s
" 1 1 ' li t s f i ' r ' i l : l r l ' , { ' t l r , . s i r i p o r v r r r t. :ri n r n l t t N .rrc a c h c d l i y
the persons entitled to danrages.

II b I \i's llrure anr t:rce pliorr.s.Tlu exceplions to the lirnittd liability


rule are: {l.i *'here the injury,r death to a passenger is due either to the
fault of the shipo'*'ner, or to the concurring negligence of the shipowner and
the captain: 12) l'r'herethe vessel is insured; {3) in workmen's compeneation
claims; and t4) expenses for repairs and provisioning of the ship prior to the
departure thr,reof. (1994, lr:e also 1985, lgf{2r

3. X, n rich trnder, txrardltl the MAr (lcbu, a snrull voslrel within a


value of P 3il{ and owned b_vY, plying thc rnutc (lotabuto to Pagadian City. X
had in his possession a dianond worth Ir5M. The vessel has a capacity of 40
paseengers. Near Pagadian, the vessel met squally weather and was hit by
nix foot waves every three seconds. Soon. water entered the engine room and
the hull ofthe vessel. The patron ofthe vessel ordered the distribution oflife
b€lts to the paseengerg. He told thern the vessel wae sinking and for them to
take care of themeelvee. The vessel lurned out tu be oyg;1u"4ud by Z0
paE8enger8and had no suflicient life belts. X (ailed to get a life belt and died
when the vessel totally sunk. The heir* of X sued Y for P lO$f damagee. Y
raiaed the defensc of limited liability. Decide.

A: Y eannot invoke the defense'of lirnited liability. The doctrine of


limited liabilit"v does not apply when death or injury or damage eustained ie
attributable to the fault or negligence of the ship owner or ship agent and
the capkrin (ctr patron) of the vessel. In thie calie, the shipnwnei appeera to
4i}2 N(/rEsANr)cAsu8oJ\frnEl,Alrr,l?Il;y*rpunrA?roN
.

be gu'tv t or negrigence
ll-{l ia
pasgengervessel .k"rr.ire !i{ nor make cerraie rhst rhe
not overloadedand he failed
belteon boardthe veesel.0gS9) to p-*a_ sulfisient life

4' Clntain Hook,the ehipcaptainaf peter pan, overloaded


I#V peter pan, ae a con'€qu€ncsofwhich MN the
tl,* ,"Jin the middreof
rhe suru so, ""r*i
.Td nothing'*hi*o*"*r-**';;;;;:
c,r'ii" iird ur""lr_",.:"r ii,e ownersor the
rri'the rh_ree
pas{$€nger*0f the ve'eel
dur'ageain the amountof p500,000 r,rodan action for
againetMr. wendy,the owuer.will the
actionprosper?Reasone.

0,.*o""lT;;t'!i,,:j:1ff
Hr#H*,trff
;;ffi;T"tTjf
li
collisionsand shipwrecLu"t in1iJiuttu.."".
643 and g3s' cod-eorco--",*"fH".*-1ia onr.vfor unpaidwagee(Arte.
' if the shipowneror ahipagent
knewor areexpected to knowthe overtoading,
clnnot
the'r ' ir---iir"ila
r'rv 'r"tu tiabirityrure
tx. applird.

CIASES:
t8

THE pHrl,lpt$m SHrpprNG CoMpAl{y, w


ET
FNANCISCOGARCIAVSRGARI_' AL v.
G.R No. l6{X),June l, lg0g.
Tho lth'ippir.:1lippiy cg*pryv, the owner of the et€amehip
Lourdea,claimsan rndemnifittion'oiii,0o0 Nuestra sra. de
p:noefirr rh* r.;;-;ir;e raid nhip nr
rnarrltof a collieion'Ynchurti a c"' a
-iaimod z,{,?06.6.1ptx'a ar an indomnillcetion
fur tho locr of tbo carryoof homp*a "L
*pt"i.*r,"a by the.eaidahipon her last trip. The
v;o*;;;,i" o*n",ortheat€a;ahip
Navana,
which
i1H#*,fffin::f,
hom .he judsment of the triat court the-plritippinc shipping compaay
defendant vergaraapp€ared, r"t tnuiritJrL f"il..i;ii;iliiil and the
eroeptionsor otherwis€.Th.eon! appeur"t appear
bya bilrof
*t o n* pr""*"Lalru."rppear now reduced
ite elsim to 18,000pesos,the
""iJ;ith;;iliding vessel.
The cpurt bqlowfoundas a matter
of fact that the atearnshiplourde' waa aailing the
in accordance with'law,but that th"-N";;waa
the collision'(B'r of exceptions,p. ?.tnt;; not, and wasthereforereaponaibre for bv ]
their respectivecargoeswereentircry areo foundru r-tJ tirrt -both shipawith 90t:
roar'construing articregs? ofthe code co,,,.,erce, fror
the cot't belowherd"th8t the defe"i;l;;;"t
of the steamshiplourdea, rirh th" responeibre ro the praintifffor trrevarue
;; fri*r the tatter."tB'i oi**opuons, p. B.) the
But the appeltant,the Philippineshipping the
shouldpav to l8,0oo oesoa,the r"i", company,contendethat the defendant a8€t
oio!'llruarra ar tirf tj-" #it" roee;tbat
the eena€in which the prorieions thie is EAt
of artiere g3? of the code of commerce
underetood;that eaidcr:d: haaf"ilo*"d should be ofol
;;-p"irropru, of the Engriehtaw and not thoee
of the Anerican raw,and thar il ;";;;;ar
lost,providedher valueat the time ar* whetherth" N;; had beenentirery
** i*t couldbe ascertained,sincethe extent whir
the liabilitv of tre ownerof q- *tifing of
;;Liro, *,* darnagce reau.ltingftromthe colieion
is to b€ deterurinedin accordance *fi;;;*. l
Article 832 of the-code
emgeree prrvideo:"The eivir riability conrractedby the
ahipovners ia the caseEpreewibedin trrir g€;; JJ;'##l"fu ae tmited io the
IrlARtTIh{nIAW 436
(jt,rt(. lirl { l0ilccpt+i

valueof the vesselwith all her equipment*nd all the lreight moneyearnedduring the
voyage."
-This sectionis a necessaryconsequenceofthe right to abandonthe vesselgiven to
the ohipownerin articl* 587 of the ctxle,and it is ont,of tlrr: many aup:rfluities contained
in the code.(lorenzo Benito, "l-ecciones,'352.;
"Art. 587.The ngent*hall alnot.hr:civilly lilhk' frrrlht indr,mnitierin fnvorof third
p€rsonriwhich ariee from the conduct ol tlre captrlin rn thr. care of the goodswhieh the
but he rnay exempt himself therr,rfronrLryabarrdoningthe veeselwith all
vegrelcarrie-.d,
her equipmenlsand the freight he may have earnedrluring the trip. t
"ART. 590.The part ewners of a vesselshali be cir"iliy Labie, in the proportion of
to thc cornmrir,funC,fi,r thc rcsults r.,fihr,actsof the captainreferred
iht.ir eo.ntrilrutiorr
to in article 587. Each part owner may exempt himself frnm this liability by the
ebandonment,beforea notary, of the part of the vcsselbelongingto him."
'Ihe "Exposicionde -The
motivos- of the Codeof Commercecontainsthe following:
pres€nt code { 1829t does not determine the juridical status of the agent where such
agcnt is not himself Lheowner of the vessr-'I. This onrissionis suppliud by the prripoaed
code,which providesin accordancew'ith the principles of maritime law that by agent it
ia to be underet{x}dthe personentnrsted with the provisioning of the vessel,or the one
who repreaenteher in the port in which she happerrsto be. This perconis !.heonly one
who represents the veesel- tliat ie to say, the only one who r€pre$ents the intereet of
the owner ofthe veseel.This provision has thereforeciearcd the doubt which existed as
t{, the extent ofthe liability, both nf the agent and lbr Lhe owner of.the veesel.Such
liability is limited by the proposedcode to the value of the vessel and other things
nppertainingthereto."
lrrr. ile
pasa There is no doubt that ifthe Navarra haclnot beenentirely lost, the agent, having
Cil!l(,ll held liable for the negligenceofthe captain ofthe vessei,could have abandonedher with
p. l'lre ull her equipnrcntand the freight moneyeamed tluring tlrc voyuge,thtr; hringing himeelf
n hrch within the pmvisions of the article 837 in so fir as the subsidiary civil liability is concernd.
Thir nbandonmentwhich would hnve amountt,rlto ln ofTi'rof t,lrevalue of the veesel,of
her equipnrent,and freight mone.yearned could not have becn refueed,and the agent
nri the could not have been pereonallycornpelled,under such circumslances,kl pay the 18,0,00
r t'tll of ryrson,the estinrntedvalue of the vetlselat thc t,ilnrrrl'thecollision.
,*l ,1sP4l
I'Lusis the ditTerencewhieh exisl Lretweenthe lawlul acts and lawful obligation of
the caplain and lhe liability which he incurs on accourrlof any unlawful act conrmittcd
s.irI ng by him. ln the 6rst case,the lawfrrl acte and oliligations of the captain beneficialto the
ihie for vesselmay be enforcedas againet the agent fbr the reason that such obligatinns arise
ps * ith from the contract of agency (pror.ided,however,thlt thr: captain does not gxeeedhis
lnrt'l'CC. authority), while as tr.rany liability incurrod by' thc captuin through his unlawful ac[a,
ie value the ehip agent ie simply subeidiarily civilly iiable. T'hisliability of the agent is limited t,o
P 8) the veeseland it doesnot ertend further. Fbr this rca${)nthe Codeof Commercomaket
agent liable to the extent of the value of the vessel, as to the codes of the principal
frndant maritime nntionsprovidod,$rith the vesiiel,rrndrtot inriividrrnlli.Suclrin also the npirit
t this itr of our crrde.
,ould be
st thr()$e The apirit of our code is accurafely sr,t lirrth in a treatise on mnritirrte law, fium
entirelY which we deem proper to quote the following as the basie of thie decision:
.rtent of
[See quotationaboueJ
c,'lli.ion
We accord.inglyhold that the defendant is linble for the indemnification to which
d bv the the plaintiff is entitled by r"eaeonof the collision, but he is not required to pay uuch
'd to the
,li|. NO1ESAI{D CASESON THE I"AWON TRANST'ORTATION
AND PUBLIC TXTILTTIES

indemnification of the noaaonihat the obligalion thuu incqrred haa been extinguiehed
on accoun[ of the loairof the thing bouyrdfrrr the paynrent lhereof, and in this r*epoct tlre
judgment tlf the court btlow is alfrrrred except in so far as it requires the plaintiffto pay
the costs of thig action, which is not eractly proper. After the expiration of twenty daya
let judgment be entered in accordanceherewith and ten days thereaft,er the reeord be
remanded to the Court ofl'irst Inetance for execution.So ordered"

THE COVERNMEITIT OF THA I'HU,IpptNE IBI",.{NDS v.


TTIE INSUIIIR IUARITTIWE CO.
(i.IL No. 21406,lltnrrh l,t, llf14.

1'hoOovernmentof the Philippine Islanduseokntry this action kr recuverfrom 'lhe


Inorrl:,rMrritim" (lrnrpnn.vtht,rrunrrrf lril0.4ll?.lll for repirirsnradoby the lJureauof
L.omnrerceand Induetry on the motor ship The Insular Maritime Company was organized
with a capital of P150,000.It becamethe or,r'nerqf one vesselonly,the Insular, valued at
P150,000.on october 29, 1s19, The Insular ll{aritime company asked the Bureau of
Commerce and Industry to perfbrm certain repairs on the Insular. The Government
consentedand terminated said repairs on Novemher 29 of the same year. Subsequent
thereto,on April 15,.1920,the Insular suffereda tolrrl losshy.fire.
The bill preparedby the chicf accountsntof tlrc llurr:iru,rf(bmmcrce and Induritry
for wcrk d{,tt.!cfl llttt rtrotornhip lnr<ulurrr tlrc uurotrrrlol lrli{i,4iJ
/.91, wns datedJuly 31,
1920. Collect.ionof the claim was attempted prrrsuant to lbrntal denrand made by the
Acting Ineular Auditor of datue April 30, lg2l.
It will thus be noted,as wns emphasizctihy the dt,fi,nst: irndby His Honor,the trial
judge, that no steps were taken by the Governmerntr,o-cecurepayment for the repairs
until aft,erthe loesof the ves$elInsular.The l-rrstenrrr :rssignr,dby the Att"orney-(ieneral
addrees€dto this finding of fact ie accr:rdingly without nrerit.
The trialjudge further found in effect, as a i"grl conclusion,that, the logs ofthe
veseel Ingular extinguished the obligation. The Attorney -General challenges the
conectneeg of thie view
The decisionotthe trial5udge was predicated on his understanding ofthe provisions
of article 591 of the Codeof Commercein relation with other articles of the seme Code,
and witlr the decisionof this court in the caseof Philippine Shipping Co.u.GsrciaVergara
([i9O6]' 6 Phil.,281). As Lothe applicability of article 59I of the Codeof Commerce,there
ie nothing in the language to denote that the liability of the owners of a vessel ie wiped
out by the loss ofthat vessel.As to the applicability of the decisionin the eaeeof Philipjine
Shipping Co. u. Garei^tvergara, supra,the lacts are not the same.There, the owners and
agents of a vessel causing the loils of another vesscl by collision were held "not liable
beyond the vessel itself causing the collision," but were "not required to pay such
indemnification for the reaeonthat the obligation thus incurred has been extinguished
on account of the loss of the thing bound for the paynicnt thereof,."Here, there ia a
contractual relation which remains unaffected by the loss of the thing concernedin the
contract and which is governed principalty by the provisions ofthe civil code.
The rights and liabi[ties ofowners ofships are in rnany respectseseentiallythe
same as in the caseof other ownere of things. Arr a gcneral rule, the owners of a vesn€l
nnd the vesnelitsclf are linble for nerengrrryrepuirs.Nltrrrinlly the lotal dentructioriof
the vessel extinguishes a maritime lien, as there is no longer any re$ to which it can
attach. But the total deetnrction of the vrgsel docs no! lfft:ct thc liability of lhe owners
for repeira on the vesaelcclmpletedbeforeits lose"
MAItlTllli: l-\W
(i.rrr.ral{ i,nr{,pti {il6

.il.ir,'d I t i s l , r r t l a i r [ o s a y t ] r t t . n . h a . th. : r ^ l x , r . r r- t i r t l d
r r r t h r s r l r : c i t i r o lrrn o r o a c 4 u r g t e l y
r\ I I ll{' ('xl)rt'sll('8Lh0 t:ottst'nrrtt$ ol'{,lrtlr()n llr Llr.(r,lr!'t tirrrrrit rIa,a l}tr.:viowg of
t(' i,.t.V tlre writeq who
Eec'stnore in the upprllee'c case tharr dti his
cr.,ili,uguesln the cou;.
V ti:''::
,'r,iI'tr The trial court v"{ts.noc()rrlinglyright irr rrs
t.rlxrsitirn of thc lac|.s but not in it,s
appiicution of the larv' Judgment mulit, th.,rq,l',r.t,
lrc a.sit is herebjieversed, and in lieu
of the judgment appealed lrom. anot.hpr shall
lx't,ntcred here ii iauor of the plaintiff
nnd against the defendant for the sum of'1r3rt,437.91
u,ith lr:gal interest fromJuly 20,
1921, when the compraint was presented,
until payment. witt out speciar finding ae to
coets in either inetsnce, it is so ordered.

,l,i l llc TEOD0RO R.YANGCO, ET.AI,. v. MT\NUEL


't.j\l t)t
T-ASERNA. ETAL
G"IL Nos. 474dZ-471.19,
October 20, l$41.
Stitlr'rl
Itt,,l ,lt At *lNrut'ne ''clrrck in thr .ftcrrrr,(,rlr,f May
26, lgz?, the ste&mers"$. Negroe,
'(.,rtl of' to-petitioner here, TeodoroR. yangco,lcft lhe port
llonnlg of Romblon on its r"turn
n lll r'nf,
trip to lvtranila.Typhoon signal Nc. 2 wns rhr:n trp,
of whlch firct the captain wae duly
{'{lllt'tll
advist'<'l
nnd his ntttntirln thcrcL' tallr'tl b,vtlrt. y-iirsst.ngr:rs
thcnrsclves6fore the veaeel
sel sail' The Lxratwas overloadedas indicaterl by
the foadline which was 6 to z inches
hclow the srrrfacr:of rhe-*"atcr. Rrrggirge,tr.unk.s
anrr ,ther cquipments were heapedon
:tirirlru the upper deck, t'he hold being pa.lud-tn capacirl,.In
addition, ihe carried thirty
ulr J1, eacks of crushed marble and afuut one huntlred "ess€l
sacks of eopra and some lumber. The
lrv i he pas8engers'nurnbering about 1g0,were overcrowded,
the u"rllb capacrry buirrs tinite;
t'o only 123 pasnengers.After t,wo hnurs of sailing,
the boat *n*Jt*r*a strong winda
ht' t riill
and rough seaa between the ielands of llianbn ond
sirnur", and as the waves eplaehed
r r ' [ ] ;l r s
the ladier' dre88eg,the awninga wr,re 'rd.rr.rl l.wr:r.d"
nn ilro,uu u*.*** rncreasingly
^i ^ r u ' r ; t l violent, thc captarn ordered the vesselto turn iel[,
evidently boreturn to po,1, but iu the
maneuver'the vesselwaa caught sidewiseby n big
,n*u., *iri*h *"u*o it to capsizoand
rink. Many of ihe paaeengeradied in the miniap, ilmong
them beingAntolinAldnf,a and
, ,,f lhe hie Bonvictorioso, husband and sun, respectively,
of Enriria Bienienida who, together
qt'r the with her other children and a brother- in-law,are
respondentsin G.B.No. 4?44?;cariana
?TTr,the daughterof respondenrsMa'uer L;;;;; p.l;;L**"
47448;and Genaro Bagaia, son of Fi!'meno Basafra, in G.R.No.
)\'lSl0nS r""po"a".rlt G.R. No. 4?449.
Theserespondentsinstituted in the court nf First
.t'('rde, In"tr"ru n?c"piz eeparatc civit actions
againat petitioner here to-rylovel damagesf,r rhe
VtrErro death orfte pailng;r* aforcmmtioned.
'e.there The c'ourt awarded the heirs of Antorin and victorioso
Aldana tr,Jro* of p?,(x)0; the
heira of casiann Laaernr, p5g0; und fhone of (ilnurg
ir witxld Baeaia, algo p5g0. After the
rendition of the judguent-to thirr effect, petitioner,
tlttrt7t1n4 by a verified plbading, sought to
abandon the vee8€lto the plaintiffe in the th.*u
rer$:rnd together with au ite equipmente,
without prejudice to his right to app€ar.The abandon**r,ihr'ing
"rnu*,
rt lilble ue"n aerriea,an appeat i
wss taken lo the court ofAppealn,wherein .I
,t\ NU(:h the judgm.nu *l*-urnrrned oxcept.that
which awarded to the Aldaf,ne the sum of rr2,000,
wrrich sum wae increasedt6 p4,000. il:
{uisired
crt ls a
C in the
P.tition.r, no*'rleceased, appearerJ o'd is r*rr, r;;r-;;;;;J;rt*","*,
Brushing aside the incidental issues,tht, lrrndanrental
representative.
question here raised is:
s
Ma1'the shi;xrwneror agrtnt,n'twit.hntnrylirrgthr,
trtirl l,ns uf ino u,*"ui'r"
the.negligenceofits captain, h, propcrry ht rtr iiabk,in "*rri, "i
,allvthe damagesfor the conne4uent death
of itr pacnengers? We nre nf the opinion unrl ro lrolrl t,hnt ttri* qunrtion
a vr's*ttl in controlled 6y
tlre pr,vini,n of article bttz.f the iiode ot'cr:rrrrncrcr..
l c t i t ) t t0 l - fiaid article reads:
h rt r:nn "The agent shall als{i b{j civilly liable tbr
r,\\ Il('fS - , the indemnitiesin l'avorrif
third personswhich arise frorn thc clrnduct. of'thr-,.r:aptain
in the careof the
gu'o* whrch thc ves;er carrit,d;but. lrc rrray
r:xerntrrt
hinrsell thererrom bv
{,it6 NO{ESAND CASSSONfiM I..AWONTRANSPOR?AIION
AND FT'ELIS T,I"fTLTTIDS

. abandoning the vesgelldth sll her equipmenis and the lieight he may have
earned during the voYage."

The proviaion aceod8 a shipowner or agent the right of abandonment; and by


necessalyimplication, hiu liability is confinad to thaf whictr he is entitled ar of right to
abandon - "the vesselwith all her equipmente and the freight it may have earned during
tho voyRgc,'
It is true that the nrticle nppearsto denl only with the linrited liability of shipnwners
or agentsfor damagesarising from the misconductof the captainin the careof the goode
.,r'hichthe vesselcrrrrit's,brrtthis is a mercdeficienc.v of'lnnguageand in no way indicates
the true extent of such liability. The consensusof authorities is lo the effect that
notwithstanding the languageof the aforequntedprorision, the benefit of limited liability
therein provided for, applies in all caseswherein the shipowner or agent may properly
be held ii"bl" fot the negligent or illicit acts of the captain. Dr. Jose Ma. Gonzalezde
Echavarriy Vivanco,commentingon said aflicle, said:
x x.x
n i l l r l i s c l o $ rl rl r r r t l l r r . p r r n t ' r p l oo f ' l i r r t t t r : dl i n b i l i l y o f o
A ' t : r r r r . , r .ry. x : r r r r i r r l t i ow
shipowner or agent is provrded f<rrin but thn:e articlcs of the (lode of Commerce-
article 58? aforequoted and articles 590 and Bil?. Art.icki 590 merely reiterates the
principle embodied in article 587, where the vessel is owned by several persone.Article
b3? applies the saure principle in casesofcollision, and it has been observed that gaid
article is but "a necessary consequenceofthe right lo abandon the vessel given to the
ahipowner in article 58? of the Code, and it is one of the many superfluities contained in
the Code." (l,orenzo Benito, kxciones 352, quoted in Philippine Shipping Co. vs. Garcia,
6 Phil., 28'1,,282.) In effect, therefore,.only articles 587 and 590 are the provisions
contained in our Code of Commerce on the matter, and lhe framers of said code had
intended those provisions to embody lhe universal principle of limiled liability in all
cases.
Thus, in the "Exposicionde Motivos' of the Codeof Crlmmerce,we read:
-The present code(1829)doesnot determine thejuridical status ofthe
agent where such agent is not himself the orvnerof the vessel.This omiseion
ia supplied by the proposedcode, which provides iq accordancewith the
principles of nnaritime law that by agent it is to bc understoodthe person
intrusted with the provisioning ofthe vcssel,or the one who representsher
in the port in which ehe happens to be. Thi.g person is the only one who
representE the vessel - that is to say, the only one who repreeenta the
interegte of the owner of the vees€I.This provision has therefore cleared the
doubt which exiated ae to the extent ofthe liability, both ofthe agent and of
the owner of the vese€I.such liability is limit€d by the proposedcode to the
value of the vegeeland other thingn appertaining thereto."

ln Phitippine shipping ca u. Garcio (6 Phil., 28L,284-286), we have expreased


ourgelves in such a compreheneive manner as to leave no room for doubt on the
applicability of our ratio decidendi not only to cases of collision but also to thoee of
ahipwrecke, etc. We said:
xxx
We are ehared in thia cancluaionby the enrinent conrmentatorson the subject.
Agustin Vicente y Gella, aseerting,in hie "Introduccion al DerechoMercantil Cornparadoz
MARITIMS I.AW t!?
f.ieneral(hnceptr

in
1929 (pagee 374-37$, the lihe principlo ,rf limited liability of ehipownera or' a3pnt
cancsof accidente,collisions, thipwrcckg, et{., said:

xxx
(Derocho
The yiews of these learned corilnentatora, iocludrag t'booe of Estal6n
to
Mercantil, Vol. 4, p. 259i and Supino (Derecho llfercantil, pp' 4&3-l&{), have not'hing
ba desired and nothing to be doubtcd on th€ principle. It only rcmriss to be notad thet
is
the rule of limited UaUiUty provided for in our Code of Commerw rell€(tE merely, or
buL a reetatement, imperfoct tltough it is, of the alsront univereal principlc on tho eubjtxt"
tbe
While previouely under the civil f,1 6e--oo laq the owner of a vegoel was liable to
full amaunt for d"*g* caured by the misconduct of the master, by tbe general maritine
to hY
law of rnoderu Europe, the liabiitv of the ahipowner wa6 aubsequeatly umjted
(Norrich & N. Y. Trans. co. v. wrigbi,80 u.s. 104,20 Law. ed'
interest in the vessel"
A rirnilar tirnitation wae placed by the British Parliament upon tle liability of
6s6.)
gnsiisn ahipownera through a scries of ctatutas beginning il with the Acr' st 7
-1i1
of l!-laesachusetts &nd Maine a9{_t1
C"o.S" II, chapter 15. Th; Iegialatures fotlow9d
l8r8"and iert, a"a 6nally, coisress enacted the Limited LiabilityAct of March 3, 1861,
(aoe2d R C' L' pp'
embodying moet of the p*"itio"u cont*ined in the Britieh Statutes
138?-l:i89). Section 428i1of the Rsvis€d Statutea {eec. 183, fit. 46, Code of Lawe of U' S'
A., reada:
_ ThE
"I.IABII,ITY OF OWNNR NOT TO NXCEED INTNREST'
linbilir; of tlre orynerof an;'vessel, fc,rany loec'
embezzlernent, or deetnretion,
by any person, qf any ProP€rty, gtxda, or merchandige, shipped or put on
board c,fsuch veesel,or ior any loes, dsmage, or iqiury by collision, or for any
act, mntt€r or thing, loss,damap, or forfeiture, donc, occarionod,or incuned
without the privity, or knowledge of such owner or olrlners, rhnll in Do caae
exceedthe nmount or value of the interrrst <lfsrrchowner in ruCh veseel,and
her freight then Pending."
The policy which the rule in denignedtn promntein the encoureSement
of ahipbuiltting'and invegtment in maritime commeFoe.(vide: l'{orwich & N.
Y.TYana.co.v,wrigirt,supra;TheMainv.Williame,lS2U.S'1.22i68c.J.
I^imitod
634.) And it is iD thit spirit that the Arnerican courte conrtnred the
Liability Act of Congreeswhereby the isrmunit^ieeof the Act wene applied to
claims not only for lost goodabut aleo for injuries and "loss oflife-ofpassengers,
whether arioing undei the genoral law of admirnlty, or "ndai Federel or
Srate statutss." (The City oi Columbus, 22 l-6d. 460; The Longfslloq lgd
Fed. 360; Butler v. Bostot & Savaonah flteamsbip co., q9 Law. ed. 101?;
of
craig v. continental Insurane co., 35 Law. ed. 836.) Thc supreme court g0
tne u*teu states in Norwich & N. Y. Tran8. Co. v. Wridt 80 u. s. 104'
Law. ed. 585, 6.89-690, accounting for the hietory of the principla, clinchee
our expoaition of the rupporting authoritiee:
-fhe history of the limitation of liability of ahipownerr is mlttsr of
l#ar.e in ths case of the
common knowledgs. Ths laarned opinion of Judgp
Iebecca, I Ware, ibZ-tg+,leaves liti.le to be deaired on the subi€c{. He ahowr
thst it originated in the maritime law of rnodern Europe; tbat shitrst the
civil, as *ull ar the common law, made drs owner reeponrible to tbs whola
or
extant of damage caused by the wrongful act or negligelco 9f tbe mestsr
crew, the maritime law only made them liable (ilparaolally fr€o e'oD blsn€)
bjcct
rirdo'
to the amount of tbeir interest i.n the ship. so that, if they suFendei€d the.
ehip, they were discbarged.
$
:!

NOTI{SIAND Ci\.SESON T}tS LAW ON !.RAN..jI}OITTATION


ANO PUBLIC LTTII,ITIES

"Grotius, in hie law ofwar and peace,says that men would be deterred
from investing in ships if they thereby incurred the apprehensionof
being
rendered liable to an indefinitc arnount b"yt.he acts nf the master
and,
therefore,in llolland, thel,had neverobst,n'r'dthe lkurian Law on that
subject,
but had a regulationthat the:hip ownerssirlr;lrl br: lxlund no farther than
lhe valuc of therirship ancllreight. Ilis worclsiirc: lVaur.sel eorum
euerctn
n c u i s u n l , " t h e s h i p a n d g r x d s t h t r r . i n ' l l r r t h i , i s s p r : a k i n go f t h e o w n e r , s
in{.erert;and this',nr.rto thr,qrrtr1o, is thr' {iligrrt.r.[l{1r(-.r,n, and in thqt sensehe
is undersk)odby the commentqtors.Borrlay lraty, l)roit Maritime, tit.
J, sec.
I' p. 276 Book ltr' c. xI, scc. XIII. Thc maririme iaw, as codified
in the
celebratedFrench ordonance de la Marine, in r6gr, expressedthe
'The proprietors rule thug;
of vesselsshall be respon.sible for the acts of the master,but
they shall be dischargedb-vabancroningthe ship and freight.'varin,
in his
commentary on this passage,lib Z, tit. g, art. 2, after specifying
certain
engagementsof the master which are binding r.rnlhe onun"r*,without
any
linrit of rcsprtnsibilitl', such rrscoltrnr:ls firr thr lx:rr*fit 9f the vgsnel,madc
during the voyageiexeeptcontractsof bottomry) says:'with theseexeeptions
it iajuet that the owner ghotrldnot lxr txrrrntlfirr t.hcncts of the mnate
r, except
to the umount of the ship und frright. ()thtrwist. lrr: would run the
risk of
being ruined by the bad faith or n.gligence of his captain,
and the
appreheneionof this would bc fatal to thtr intcrestsof navigation.lt quitc
is
sufRcientthat he be exposedto the lossot'his ship a'd of the freight,
to make
it his interest, independently ofany goodshe may haoe nn board
to s€lecta
reliable captain.' Pardessus oays: 'The o*n", is bound civilly
for all
delinquenciescommitted by the captain within the scopeof his authority,
but he may dischargehimself therefrom by abandoningtire ship and
freighi;
and, if they are lost, ir sufficesfor his discharge,to surrenderail
claims in
respectof the ship and ils freight,'suchas insurancc,etc.I)roit
Commercial.
p a r t l i , t i t . 2 , c . 3 , s e c .2 .
"Th{i sanle generai croctrinr.islrii<idtrwn iry many other writers
on
maritime law.So that it is evidentthat, by this r:rw,lhc owner'sliabirity
was
coextensivewith his interest in the vesserand its freight, and ceased
by his
- abandonmentand eurrender of these to the parties sustaining loss."

In the light +rfall the foregoing,we therefore hold that if the shipowner
or agent
may in sny qray be held civilly liable at all for injury to or death paseengera
of aneing
from 'the negligence of the captain in cases of colhslons or shipwrecks,
t is tiaUitity ii
merely co'extensive with his interest in the vessel such that a total loge
thereof resultg
in ite extinction. In arriving at thie conclusion,we have not been unminclful
of the fact
that the ill-fated steamship Negms, ag a vesselengagedin interieland
trade, ie a cornmon c
carrier (De villata v. stanely, g2 phil., b41l, and that the relationship
between the u
petitioner and the Passengerswho died in the rnishap rescs
on a contract ofcarriage. d
But aesuming that petitioner is liable for a breach of contract ofcarriage,
the exclusivily
"real and hypothecary natuten df maritime law operates to Umit such
liability to the tt
value ofthe vessel,or to the insurance thereon, ifany.
In the instant case it.do€s not appear that the vessel was insured.
Whether the abandonmenl of the veesel sought by the petitioner in the
instant tl
caeewae in accordancewith law or not, is immaterial. The vesselhavingtotally perished,
any act of ahnndonrn*ntwould tx, trrritllc c(,r(!frro,l,1.. *

H
-.qf.

}IARI'II}{E I-\\V 4it9


{ i t , r y . 1 r l ( ' , } , , , . ,I , t "

Judgment i:; reversetl ,ultl p+,tiIiurrrr is llr.t.ul)\ .rl,sc,lvcdr,l' all the cornplaints,
without costs.

LUZON STEVTDORING C'ORI,O[L\t t()\ r.. C()URT OF APPEAI^S.


HIJOS DE l'. ESC.{liO,INC., and DOtltESTrC INSURANCE
COMPANry OF TIIL PHILIPPINES
G.R No. L5889?, I)e.cember g, lg8?.

On May it0, l9fi8 at pa.rt 6:00 in [hc nrr,rrrrrrgrr rrrirriLirnrrrxrllitrionoccurred within


t h c v i < : i n i t 1 ' r , l ' t l l t 't ' t t l r r t t t c t 't o t h r . N o r t h I l , r r l r r r r ,I t : r r r r l ; r l x . l w ( . ( , nt h e t a n k e r I - S C O
"Cavite" owrred b-v Luzon Stcvedoring Corporatiorr anri lllV "Fernando Escano" a
pass€nt{ornhip owlrr'rl b.v llijr,s dt' t'. Esr:rrrrr,,lrrr'. irs ir 11,s'rltof w}rich xaid panaenger
ehip eunk. r\tt itctiott in rrdmiralty was filed b-r lli3os dt l'. Escano, lnc. and Domestic
Innurancer'Cr)ml)rtn t t)f' t h e P h i l i p p i n t s r r g a i l r s tl l r r . [ , u z o n S t . c v r , d o r i r rC go m p a n y ( I ^ S C )
r n t h r ( l o r r r t o l l " r r s t l r r s t ; r r r t .ocl ' ( j t : b u .I h l l r r , c o r r r - r r. ; f t l r t . l . r n r l ,t l r e t r i a l c o u r t a p p o i n t c d
t w o c o n l n i l b s i t t n t : r r. it ' p r r : s ( , n t r n gt h c p l a i n t i f l i . ,l i r r l r i r , l i ' r r r l i r ntto d e t e r m i n e t h e v a l u e n f
t h e I l i ( l ( ) " O i \ \ ' l ' l F l . " S r r i r lc o n t n r t s s i o r r r , r{ci r r r r r rIi. l r r . r ' r r l r r t , t h t , r r .tor rf l r I r l ! t 0 , 0 O 0 . f i ) .

lThc trial courl rettdered a rlecision findirtg that LS('O "(:(11'ite'u.as solely to blnme for
the collision. The follou'ing is.sue.su'ere presentrrl ht:fire lht: srtprenrc court.l

"1. whether ahandonment is requirr.rdunder Articre gr? of the code


o f C o m m e r c r ' .T l r c d e c i g i o n go f t h i s l l o n o r i r h l r , ( l o r r r t i ' i t t d b y t h e p n r t i c s i n
support oI t]reir respective prlsil.iunsurrlr. ir:rpl,r,thr.rirnsrver to the question,
a n d t h e i n i g r l i e rrdt n s w { , r si i r e c o n l . r i r d r c t o r t , .

2. If' aba'donment is *'quired u.d.r Articl e IJBTof the code of


Cornmercr',when shor-rldit be rnadei'Tht'(ltrdl ol(.lrnrrnr:rcg is silent on the
matter. Thc dccision of this Honorable ('.urt in )'rtngt,, r'.l.aserna, ?:l phil.
3ll0' lell the question open and no other clecision,as lar as petitioner can
ascertain, has resolved the question.
jl l x t l r l l k ' t ' l s i o t t n fl . l r r n l l r r r l r r r l r l r . ( ' i i r r r l ut r l t t r t i l t t s ! u t m s h r p ( ) t . ,
I n r . t . l h t l t t l l i t l t t ! t t t t . l{ X }} } h i l . i l ! , r l ' h t . r t , i rrrt r v l s h t . l r lt h r r t ' f i , ) h ei r r t e r n a t i o n a l
n t l r ' l o I l t t t ' f J l t ' tt . l t t r t l r r r r g l r t , r f: r l , r r r r r l , , r i r r i to. rf rvl r , s s r . l s: r, si r l t g a l l i m i t g t i o n
o l ' a s h i t r r o u ' l r ( ' r(' )s$ : nf a u l t , ' i n r . o k e d b - vp r i v l r t r , r l s p o n d e n t s a r i { a p p a r e n t l y
a ntn.jorconsidlrlrl.ion in thr. rllrri;rl t,f llir, rlol.ron for rtconsideration,
npplic:rhlr:to petitioncr under thr, cirr:r:rnsl.lrrrt:r,s of t.lrecilse at bar?.
I

'l'lt('r't'sl)()llrli'lltb
$ ( ' f 1 ' r t ' r l u i r r . t lt i ) c u n l n l ( . r r t( l r r . r r . t rirr r r r ti t l t t . r s a i d c o m m e n t w a e
subnritted petitioners subnrillcd a rcpl-1,Lhr.rt,krto r.r'hichlhl rcspondcnLs hled a rejoinder.

,'l on Nnvember 28, 1g83, the court gave due c(,urse to the petition for review and
ll
considered the rt,spondente'comment thort,t.6ns llrr.Answr.r. The pnrtiel were required
lo file their briefs. tsolh p&dieg having filed their lrriclh the caee ie now submitted for
decinion.

IA portion of tlw decisian is quoted aboue..J

- From the foregoing,it is clear that in caseofcollision ofvessels,in order to avail of


the benefits ofArticle 837 of the Codeof Commercethe shipowner or agent must abandon
the veeeel'In euch ca8€the civil liability shall be lirnited io the valuJof the vea6elwith
4& NO/TESAND CASESON fHS I,AW CN TRANSPORTATION
ANI} PUELIC UIILITIES

all the appurtenanoer and freight earn+:dduring thei voyagc.


llowever, where the rqiury
or &verageis due io the shiJr'owner'efiru.ll a.r in sr.iclca-rr,
the shipowner may not avail
of hia right to timitfd liability by abandoning the veasel.
We reiterate what-'lHc eaid in previoue decisiona that the
real and hypothecary
nature of the liability of the ahipowner or agent is embodied
in the proviaions of the
Maritime Law, Book III, Codeof bommrrce. A.ti.l"" Sg?,690
and g3? of tie ;;;;
are precisely intended to limit the liability of the ahipowner
or agent to the value of the
vees€I,its appurtenances and freightagc carned in t^tre,royage,
agent abandons tlre vegs€!.Although it is not specificalty fmvided that owner or
-p.i"i,i"a
for in Article g3? of
t'be sane oodethat in cas€of colligion there should be s,.ch
abandonment to oqjoy euch
timitedtiability, raid article on colli*ion of veanelrie a *"*
r*plificauon of tho provieione
ofArticler 687 and 590 of sa.ne code srhere abandonment
of tle o""*l iu r po-*ndition.
Even without said article, t}re partiee may avail th*;;;;;"
oierti.rrr 6g? and 690
of same code in caae of collirion. This ie ihe rearon"f why
^{rticle git? of the eane code is
considered a auperfluity.
Hence Lhe ru.le ia that in caee of collicion Lhere ehould
be abandonment of t"he
vryal by the ehipowner or agent in order to enjoy the limited
liabilily provided for under
aaid Article 83?.
The erception t1 thie rule is when the vesselis f,otally loet in
which cae€ther€ ie no
vessel to tbandon eo abandonment ie not required. Because
of such t trl t;tbJ;;ttt;
of tbe ahipowner-9r gry?t fe1 drmag€s ia eitinguiatred.
Neverthelms, the shipowner or
i" liable for chirng under thJ Workmen'a C.-*LU'"
"8o"1 n'roonalty Act and for
repaira ofthe veaselbefore its loss.
In csf of illegd or tortiou* acte of the capLain the liability
of tle abiporrner and
agent ie aubeidiary. In ruch instance the ahipowner or
agent -"y,"urt orth" p-"ialorrr
of Article tlitT of tbe Code by abandoning tbe veasel.
However, if the rqiury or damage ie caused by tlre shipowne/a
faurt ar wbsre he
engaget the eeririceEof an inorperienced and unliceneed
captain or engineer, he cauot
avail oftie provirionaofArticle ttit? of the Code by abandoningtt
evu*c€t. Xe ieporaonally
liable for the damng€s aricing thereby"
In the ca'B€now beforrethe Court there ie no queetioa that
the action alrse firon a
colliaioo and t}re fault is.laid at the dmrstep or tsio 'c."itc"
or p.tii.io'Ji. u"a"itau-1,
petitioner hae not abandoned the veaael.Hence petitioner
can not invoke tUe Uuneeiof
the prervieioneof Article 8it? of the Code of Commerce
io limit its liability to the valuo of
t'ho veasol, all the appurt€n&ncea and freightage
i""iq;th;;;y"s-.
"u,oJ
CIIUA YEX HONG v. INIIf,RIiEDIATE ApptrtLJXIE COUBI:
MAruANO GUNO, snd DOMINADOA OLIT
G.R. No. 74E11, Septenber $0, l0tg.
In thin lt't'it'ion for Rrpvit'wun oer-tionri pxrtitioncr sooke get
to esido tho Docieion
of respxrrrdnntAppellate Court inA0-O.R. No. 0137bentitled .Chuayeh Hong u.Marbt*
Gunotetel','promulgatedonSAprit l0s6,revereingtheTrialCourtandrelievingprivate
reegniletrts (defendante below) of any liability for'dauragea
for lose of cargo.
The bagic facte are not diaprrted:
Petitioner ie s duly liceneed copra dealer baced at Rrerts Galera,
oriental Mindorc,
while private reapondents are the owrrera of the vessel,
"lllA/ Luzviminda I," a oo6non
MARI'tlMki l-r\\r' ul
('rinccpts
Li'..neral

ca'rrrer tiiKagod in coaslr*'ise tradr: lionl rhe drllbrs.nr ports of Orjentel


r.\ Mjndoro to ibe
Port rrf .\lanilrr.
ul
l n O c t o b c r 1 9 ? 7 ,p c t i t r o n t r l r , u d , , dl . { i { j t }- i i ( k . - .- i f c , ) p r r r \, ' a l u r c i p 1 0 1 , 2 2 7 . 4 0 ,
-51'V at on
l x ' ; r r dt ' l r ev | s r o l L u z v i n i i l t r i i tI - l i r r t ' r t n r ] , r r i . r t i r( i a k , r ; r ,( ) n c n l a l M i n d o r n ,
"hiplrri,rI
to ltarrrl;r, Saicl ctrrgo,h<.rwcvt.,r, tlitl riot rr:it(.L]!iuril.r lxl:.lrtsr riollr:$.here l_rel,ween
It
Cape
Santiag'.rand Calatagan, Bahng;r.s, the r"esseI caprizrd iind sank il:ith
t_ all ils cargo.
O n i J ON { [ r r h 1 9 7 9 ,p a t i t i o n + r i n s l . r { u t l r il x , f , r r r , r h r , t . l r efn. ] o r r r t
l{' o[First IngLnnceof
or Ont'rrtal Mindorn, a Complaint ftlr damages basr:dorr brr:ach of r'ontract
of carriage againgt
p r i v a t o r f ' q p o n d o n t sr C i y i l C n s r .) l , r 1 1 - l l 2 6 i r )
.l'
' In their An.-q*'er.private resprlndenr.s;rt.(,rredthat e,venassuming t.hat the
fl:
allege<i
cargo was trulv loacledaboard their ve*sol, their liabrlity'had bt'en extinguiehed
rfl
by reason
of the trrtal loss of said vebsel.
ql l

i.
lThe trial (('ur! rul('(l tn f(rt (,r t.t!'tht,plrttttltlIttntl rrrtt,rrtl the ,!eft,nt!arftsto pay damages.
On up|xal, rtsltttnrltnl .'\tpt'llatt o,rttrl rulcr! ttt tltt, tttrttrrrryu,lrcn il
applitd. Arttcle Sg7
h, of the code of contmerce unrJ the croctrine inyartgc, r. L.s,irra /7,7ph;[.
fio Irg4Il) and
It'r heltl that prirttlr ri,spttwlt,nts,ltahility. os shiSxttt,n,,r::, 7fip ltss of
{rt7 thr,cttrgo is nrerely
ut'exlensiL'eutith their interest in tht uesselsuch that o total toss
ihereaf iesults in iis
ettinrtian-Tht supreme court affirnted the c.urt rtf Apsxn|s decisirtn,!.
O,l

It)
xxx
(\r
'lhe
fi.r ba.qicissue fbr resolution is w.hr,,thr:r()r n()t respondent Appellate
Court erred
in applying Lhe doctrine of limited liability under Article dgi of thu
iode of Co*merce ag
explounded in Y\ngt'o u. L<tserna, r;upr(r.
nrl
)r;s rlrtre lc litt? of tlrc (iodt, of ( jonrrrrr.rcrpruvrdcs:

xxx
ht'
The term "shipagent" aB used in the foregoing provision is broad
liot - enough to include
the shipowner (St:rndard Oit Co. v. Inpez (jastelo, ai t,t,,t. ?56
lll r llgllJ). pureuant to gaid
piuvirit'tt, l')tut'e
fore, b"th tlrtr ship.rwner anci shipag*nt ure cirilly and
direclly liable for
the indenrnities in favor of third persona, which may arise frorn thl
conduct of the capts.itr
:na in the care of goods transported, as well as for the safety of passengerg
transported
rbl.v tYrlqco Laserna, suprq: Manila sfeamnhip c'., Inc. v. AMuriram
-v an, et or., r00 phil.
to[ 32[956]).
cof
Ilclwfver' under the same Article, this rlirr.ct hability ig moderated
and limited by
the ehipagent'eor shipowner'eright of abandonment of ihe veeeeland earned
'lhie expreseea froighi.
the univereal principle of limired liability under rnaritime law' The
Jost
fundamental effect of abandonment ie the cessationof the responsibility .f
tlr" rfriprg"iy
owner(swiLzerlandGeneratIncurance co., Ltcl. r,.Ramirez, L-+szu,r,el*ary
zi, i"sao,
96 scRA 297). lt has thus been held rhat by necessaryimplication, the shijagent,s
or
ehipowner'sliability is confined to that which he is entitled as of right
'the veeselwith to abandon -
r!on all her equipm-entand the freiglrt it may haveearnediu"ing the voyage,"
4lll+, and "to the insurlnce th-ere<lfif any" (ynngco v. l,arernu, supro).In other *o.du,ihu
/at€ ehripowner's or agent'sliability ie merely co-extensivewith hin interest in the veneel
such
tlrnt a krtal lonntht'rcof rtsrtll,rrin il.r crlinction 'N. vr,rscl,n. lilrtrility'-;p.;;;;
i;;
nutlholl Lht Inritrrtl linbilitv rule. Thc total tlestnrclionof the velu{clextinguiehea
meritime
Itcnn-nstlrtre in tto lottgerlln.yra.st0 which it can nitach (tinvt, Insular
Maritime Co.v,
ktnr, T h e l n e u L r rM a r i t i n r e , 4 bp h i l . g 0 5 ,S { J ?[ l g 2 4 i . r .
trltlIl
442 NT}TE!iAND CA$E$ON TH}: t.AWON TITANIIFORfATION
ANI} I'UBLIC UTILITIES

[The SupremeCourt then quated Yanrnu. Laserna.J

The limited liahility nrle, howtver, is not.xirhr.rutexceptionx,namely:(1) where


t'htlirrjrrr.vor dt'*th to ;t pu$s(,ngcris dut: r,ithcr to rlrr:{iiult of tlre ehipowner,or to the
concurringnegligenceof the thipowner and the captain(Manila StearnshipCo.,Inc. vs.
Abdulhaman,ttupra);(2)whcn' thc vr.rxelis inrurcdi arrd(jl) in workmen'ucirrnponeation
cluims (Abrregvs" San Diego,suprn ). I n thiu case,there ix nothing in the recordsto ehow
that the loss ofthe cargowas duc to the fault ofthe private respondent*aa ehipownera,
or to their concurrentnegligencewith the captainofthe vesseL
What about the provisionsof the Civil Codeon comrnoncarriers?Consideringthe
'real and hypothecary
nature" of liabrlitl, unrl:r nriiritinrelaw,theeeprovisionsw.ould
not hdvc an-vefTecton the pr.incipleof linrrtcrlliairility lirr shipox"nersor shipagents.
As
was exp'tiundedby this Court:
'In
arriving at this conclusion,tlir fiic[ is nol ignoredthat the ill-fated,
S . S .N r , g r o st,r s t v r . s s r 1
. l . n 1 1 : r gi rn, ri lr r l . r , r i l ; l i r r r r l . t l . i lrlrri rt ,r," r t t n n t orl:t: r r r i c r ,
und llrat [ltr,'rt:lutiuttrrltrp llt'twct,nthr: pe[it.ionerand thc pascengerewho
died in lhe mishaprest{ion & conlracl of *rrriage. IJut assurningthat petitioner
i " l i a l , l e I u r l b r e a c h u f c o r r L r u cot ,{ c i r r r i ; . r g et ., h ec x c l u e i v e l y; r e a i a n d
hypothecary nature' of maritimc law operatesto limit such liability to the
value ofthe ve$sel,or to the insurance thereon,ifany. In the inetant caseit
doesnotappearthat.thevesnelwRsi'sr.rrrd."(yringcov.Laeerna,ef al.,supra).
Moreover,Article 1766of the Civ'jlCridcprovrdes:
-Art.
lTtiti. In all r.at[ers not regulatr.dlry'this code, the rights and
obligationsof commoncarriersshall be govr:rncrlbv the Codeof Commerce
a n d l n , s p t ' t ' i r rl :l r w s . "

' In other words,the primary law is thc Civil Crirlr{Arts. 1732-1?66)and in default
thereof, the Codeof Commerceand other special laws are applied. Since the Civil Code
containe no pm\risiongregulating liabilit.y of shipog'nergor agentein the event of tatal
t'
loes or deetruction of the vessel, il is lhe prcvisions of lhe Code of Commerce,more
l{j
particuiarly Articie 587, that govern in this case.

In num,it will haveto be held that sincethe shipagcnt'sor shipowne/eliability is


merely co-extenaivewith hie interest in the vessel such that a tntalloes thereof reeults
in its extinction (Yangco v. Laserna, supra), and none of the exceptione to the rule on
limited liability being present, the liability of privare respondentsfor the loss of the
cargo of copra must be deemed to have been extinguiehed. There is no showing rhot the
veesel wae insured in this caEe.

HEIRS OFAMI'ARO DE LOS SANTOS, RTAL. v.IIONORABIJ


COURT OF APPEALS ANI} COMPANIA MARITIMA
G.R. No.51165, June 21, 19O0.

This petition for revierv on certiarari seeksto set aside the decieion of the Court of
Appeals in CA-G.R.No. 58118-R afifrrmingthe decisionin Civil CaeeN9. 74J98 of the
then court of First Instance (now Regionar rriar court), Branch xJ, Manila which
diemiesedthe petitioners'claim for damager*against CompaniaMaritirna for the injury
MAHJ'ilut.:I-\vl 4{tt
( i r , l r r " r l r(iL r r c r . I r t r

l " or r l r r l d r . r r t h o l t t r r , v r r ' h r n r r r s n r t s r r l t o l
[ l r t . r l r r k r r r t ] i i f .l l ; V Mrrrdoro on Novembcr 4,

'fhr,
t . r i ; t i r , r r r r r l{. i r r r r r r il l l l t r r r t r . r . i i r . r r l l ; r t ! . .
l . r 1 , , .. 1 1l., , l l o u , . q
-'llll5
l$ac()ttlplalntorigrilitll.l'lilr,,iorrotLrrl,r.rl.l
, tl,rjrjrp. l"rec.)a'd
. t t n ( , n { l r . ( io n ( ) c ' o b c r ? . 1 , l g i i ' r p . l { i
rrc.; lr,} !irl irrir.s rrf l)clrrs santos and
trtlrers 's pauper litigants agdinst
t h e t - . ( , , : . ' p l l r r l a. \ l a r . r t i n r a , f " . d ; ; ; ; ; ;
t<'rthe death of sever_ar
po*r".,go., a$ a r.rlil! of thc.ri'kirig ofitre vessel
defcndant,rhe Il,V,llindoro', on Novenrber{, l96?. of

" T h e r ei s n o d i s p u t r i-r r t h r r t . c o r rtih ; r t r l r r ] L \ , . I l r r r d o r o , s a i l e d


pior ll North IIsrhor, lltanirt, on Nr.rvcrrrrx-.r fronr
2, lrj6?;rt ar.rouIz:00 (strould
har,e been 6:00 p.m.) in the .fter'txrn bountl ftrr
New W,ashi'glon,Aklan,
w i t h n r a n . r ' p a s s r n g c rasb r a r d . I l r r ' p r . r r r .t l ' t t
'wt'lrrri.g'.. s : r i d , . " . u r , ,,1i o t t l . p h o o n
t l r t , s i b t r t r ' . ns , , i r ,r \ k l a ^ , l r t r r l ; r u t5 . 0 0 i n t h c ,
m r _ r r n i nogf
N.vemtrer 4, l96z.causingthe death rrf man-v'of
- rpa.ssengers,
it.s - ' - ' - " " G v ' v arthough
a l x r u t 1 1 1 6* u u r v i v e d .

" M a u r i c i o d e l o s S a n t o s d e c l a r e dt h a t o n
NovemberZ, 1g62,he
accompaniedhis c.rnrnr:n-lawwife, :{nrprrrodel.s
santos, .rrira"".,
namely:Rnrne.,Josie,Herna.i, who was l0 ""iiyears old,
-vearsuld, eb.ff a,
l'{aria Lemia, b years gl{ ga N{e!any.5 rnonths old,
to pier g, North Harbor,
b.ar<].the
M/V,Ntrindor,,'lu,und
forAklan. rr ;ppu;;;tl,arAmparo
llf:ll-ry
(r('rr)d
l\iilrrrrs:rrrrJ
tlrr:afirn.riairJ
childrlrr brouglrtll! tlrt,irl*iongings,including
hounr.'lrrld ut*''sirn varuednt pr,O{x).il),wit}r t.hr,rrrr,t,nti.'"firdnx
in Aklan
ltr.rltrrrrrr,rrllv
H s l l r t . l r l y s t a t c d ,t l r c t x r : r tt n l t L v l l l ) ( i l r n , W c l r n i r r g , r r n d
duc to thr.
Etrongwavesit n*'k causirg thc drun''i'g'r-r'urry
por*.,r,gora amongwhom
were Ampar' delos sanbs and alr the aforesaid
.t.,ita..,i. ll a-ppearsal"o
tlrat Teresa parnatian and Diego salinr, who were
p*rJigurs areo
drowned. Plaintiff Ruben Reyeaiun nn* of the survivors. "rro
"The plainuiffs preaentedthe birth
and death certificates of Amparo
d e l n s. S a n k ras n d t h e e h j l d r e nt l l x h n . I , l _ l , J , . I - l ,
K, K,l, L, l,_l,O kr S, pp.
lfl{} trr lt)"1|cc') 'llrrytlao proactttetlcopics,l'thc
rnunifeet of paseengera of
tho MiV 'Mindoro'on NovemberZ, tgei r nxhs B
& C, pp. 16.3to 16l rec.).
"filiaclora orisostomo de Jusfo, one of the
su.rivors, corrobora0edthe
testimony of Mauricio delossantos that he acc'nrpanied
Amparo deloesantos
and her children to tlre port to board $e Irw Mindoro.
she is a couein of
Amparo delossantne'hrrshancrAecnrdingto h*_,r, whcrron* rroriauarhe aeeo'd
deck ofthe vessel,she aaw about 200 perJonetherein.
she tried to seewhether
she c€uld be accommodatedrn the thirct deck or first
deck becaueethe eecond
deck
,wae very crowded. she admitted that she was not incruded in the
manifeet becauaeshe boarded rhe hrar wir.hour ri"k-;;;;;J!"ur.rrru"a
one in tho veueel.she teot^ifrecr further that the Lroar "
was nol"able ti reach its
deetination due to its einking. During the ryphoon
,batsi., before the veseel sunk,
ehe was able lo board a
"Ruben Reyes,
_theother sun'ivor, declareclthat he paid for his ticket
before bsarding rhe M/rr' Mindoro. er ihat time he h"d ;i;h hi; perrorr.r
belongingsand cash alr in the ainount of p2,900.00.
It appeare iliat Felix
Ileyes Jakusale'r, Teresa.pamatianand Amparo
delossantos drowned during
the sinking rf the veseer.He was abreto sro,im,rnrsic)
an ierandand wae
ftOTESAND CASESOI.ITHE LAW ON TRA}{SPORTA'ITON
. AND l.rtrlllf(:IrTIt,tT'tI.;s

* r t h l . l r r ' i l t l r { ' r :r {l s, r " t r r .lrili r l . ro r ri r r i <llr r n r i g l rlt. oi l : t :h u u p i t g l,.l ' h e


BurvivrrrS
$ e r r :t h { i n t a k r n a s h o r er t i x h . M , p . l g f i " r c c .r .
''Ii,,rrn.(lor
s . l i m d r c r r r r t ,tdh a t ' l ' er er a l r . r r r a L r a nh ,i g a u n t a n d D i e g o
salim. his tather,drownedar'ng with the sinking of the rrl,v Mindoro.
Thie
witrr,.'rsd*clared that he accornp'niecllxrth iris fattrcr and
his aunt t{} lhe
pier t, board the boat and at the lirne Teresa franratian
was bringlng caeh
p250.00 worr,h.Hie father broright
3ld !:T,o""l belongingsof about with
him P200 00 in cashplus sonrebelongings.Headnritted that when
hlc father
boardedrhe vesselhe did not have.yeta ticket.
*The plaintiffa
further submitted in evidencea copy of a Radir-gram
stating amongother thinge that the M / Mindoro was loaded
aleowith 8,000
casesof beer,one dump tmck and 292 various gocd,s(Exha.D
and D_1,p. 162
r('cl.
alleging negligenceon the part ofthe veseel,praintiffs introduced
. . lI"
in evidencea letter srnt to the Departmentof'srrcialwelfare
concerningthe
resurvev of the r{.'Y'tr{indoro'victims (Exh. F, p. 16g rec.)
t t"g.* to
the sncial welfare Adminirrtration(Exh. c, p. izo rec.), ""a "
are Burveyoithe Ml
V'l{inrl'r.'r'ictims{F)xh i l ., p . l ? l r e c . i , a c . n r p l c tl ti r, t o f t h e M r v . M i n d o . o '
'ictinrs iFixhs.H-l to H-8, pp.l7}-l7g rec.),a certifiedtrue
copyofthe Special
P . r : m i tt ' t h r ' ( l n m p n n i a l \ { * r i t i n r ai s s u r . rbi y t h o l } u r r : ' u o f c u o t r , m s
limiting
t l r r 'v r , s s t rt il r o n l y I g 3 p a s s e n g e r{gE x h .X , p . 3 t S r e c . t .
'lt lrppr';rrx
t h n t i n * d r . r : i r + i o fnt h t , r r ' r r r d , f M . n r r * I n q u i r v ,d a t c d
Fr'lrrrrrr.r' 'J, 1970,
it wus frrr.rrrd t]rut rhc ctpt.,irrnlrd sonroofficorgofthe crew
w.re n*gligcnt in operatingthe veseera'd imposedupon
them a euspeneion
nndi''r r.r'rr'irti.n 'f thr:ir licensecertificrrtes. trtappcrrn,however,tiat this
dr:cisi.rruan'ot lxr executedagainst the captain who periahed
with Lheveeeel
( E x h s .E , E - 1 ,E - 1 - A ,E - 2 t o
E - 9 ,p p . t O 3 . i e Sr e c . ) .
"Upon agreement of the parties, the praintiffe
also introduced in
evidence transcriptof stcnographicnotes of the testimony of *aneqee
^the
Prado before Branch I of this Court (Exh. lJ, pp.2A3-220)
and that of Felimon
Rebafroin the ssme branch (Exh. V pp. ZZE-ieOrec.).
-fhe
defendant alleges thgt no negligencewas ever eetabrishedand,
in
fact, the ship owneraand their officerstooft all the neceeaaryp*".rtro.r"
in
vessel.Furthermore, the loesof lives as a reeu.ltoltt e d-*,ning
lflil-gtlp
or some pas'engers' including t}'e relativee of the herein plaintiffe,
wae due
tn force majeure becaueeof the strong typhoon ,Welmini.'
It appeare aleo
that there wae a note of marine p"ot"af rn connection witlithe sinlrng
orthe
veeeelas subetantiated by affidavits (Exhe. g, B_A,S_8,g_C,g-n,
i]g, a-f
and 3'G rec.). on thie acore Erner saur, member of the i,C Judge
Advocate
General'e offrce, brought to court records of this casewhich
were referred to
lnerr ottice by the Board of Marine Inquiry. According to him
the desision
referred to by the plaintifre was the Deiartmuot oir.tutior,"t
Defenee,although he did not know"pp"ar"d'to tlhe reeult of the appeal. At aij,it ne
knew-th-atthe Department of National Defenaerernandedthe.caee ,
to the
rtlne Inquiry for further inveerigation. In the e€;nd inaok'."nr
Y""d.qf
rigned bv Efren L Plana,.undernecretaryirf Nationar llofenre,
it ie ststsd,
arnnngother thinga, that the hearings of the B'ard of Marine
lnq"iry
the Fhilippine coaet Guard made the decisionrackedthe neceeraf "'t "*ii
qun**
aa required by section 82? of the Tariff and cuetorns code.
Moreover. the
' MARITIIV{EI.AW
GeneralCancepta

decieionof the conrmandant of the phirippine coant Guard reried principalry


on the findingr reachedby the Board of (*cers nfter an ar-;rarte in",e.etigation
ec[x'ciaily in those sspects unfavorable to the captain (Exh. l,
folder of
exhibits).
"It appeara nlgo thst there were fiodiqgs and rocomsrendations
Ead€
by the Board of Marine Inquiry, datcd Marcht, 196g,recomrnen<ting
amoog
other thinge that the captain of the M/v'Min{oro,'Felicito lrineo,glould
be
exoneratpd.Morrover, captain lrineo went down wit} the veeeeland
hie lipa
are fiorever Beded aad courd no ronger defend himserf. This body arso
foond
that.the ahip's compliment (sicl and were ail complete ani the verscl
wnn in "r"*'Mind'r'' aank,
r:-*grth-y -oondirion.lf the MA/ it war thm.rgh forre
majt:urz (Erhs. 2 & 2-A, folder of exbibits),
"Defendant aleo introduced in eridc'ce the tr:rnscripts
of stenographic
notee of the testimony of Francieco punzalan, nrarine offior, as well
aa of
Abelar'! F. Garcia, llarbor F'rrot in Zamboanga city, in civii cas€
No.e-
124?3ofBranch)O(VIII, court of Fi,*t InstancelrRi;, g'ezon cityBranch
(E*s. 3-H & rGH, folder of erhibits), snd ofArturo
fiagan, boat caitain, in
civil caee No. Q-rb962 of Branch v, of the same court (Exh. g folder
of
erhibits).
"It appearethat five other veeseleleft t"hepier at Manila on November
2' 1967,aside from the lr{/v Mindoro' {Exhs 4 & 4-A).A certification
of tbe
weat'her Bureau indigtrd the prace of typhoon lffermingf on November
(Exh.6). 2,
1967 A certification of the shrpyaid rramedEl Varaderode Manila
statedamongother things that the M.{.r'Mind'rr,'*.asdry-drx,ked
fromAug'et
25 to september 6, 196? and wac found to be in a seaworthy condition (Exh.
5), snd that the said It{A/ Mindoro' wae dury inspected by the Bureau
of
cuctoms (Erhe. ?, ?-A & ?-B). Another certificari'n wae intrcduced stating
trolg other thingo thar the Bureau of cirrstomsg&v{)a clearance to the IvIA/
t'Minrlom'nflrrrinap"ction(lhh. fl firkh,r,,fr.rhihitir . (Cl.l Drririorr,llrrx,rrh,
pp. {8tl-4? I i

{The trial couri sustained the position of priuate respondenrco,mpania Maritimo


l
tMarilinn, for skorl) ond istued a dccuinn tlisnLssin4 thecomplain and.thc countcrcloim,J
t

{orthwith, the petitioners'heirs and Reyee brought an appeal to the csurt of


Appeals'As earber mentioned, the appellate court afErmed the decigion
;l on appeal.While
it found that there wes concur:ring negligence on the part of the captain wtr.ictr
must be
imputable to Maritima, the Court ofCppeatr ruted thgt Maritinta ca;ot be
!r held tiable
in damagee bas€d on the principle of-limited liability of the shipowner
or ahip agmt
under Article 68? of t"}reCodo of Cosnnrerce.
a
J The heire and Reyeenow come to us with the foilowing aseignment
of ermrs:
:l

:l
4ERROR
e I
e
- IF! HONORABLE RESPONDEI.TTCOURT CIF APPEALS ERRED
;t IN Nor CONCENTR.ATING To {sic) THE pRovISIoN oF LAw IN
TI{E
I, NI]W CTVIL CODE AS TTKPITESSED [N:
'An.
n 1766. In all rnatters not regurated by thie code, the right€ and
ohllgationr of commoncarrierr xhalt tx, g,ru,,rr,,,ilbv thg co6o of
commorcc
and by ap+reiallawe.'
448 N()TTJ,S,IND
CASESON THD I,AWON TRANSPORTATION
AND PL'BLIC I.TTII,ITI T'S

H}TR0RII
RESP( })iDT.]IIT
COIIITT0FAI)T'F]AI,SF]ItRF:DI}i I\i()'f I.IiV$trLSING
'l'llE t)ccISt0ti (Jr'rHL L0wtrftL:ouR'i'(.)t'0lrtGtN Al-rERI."INDING
A SERIESOI' T'AI"JLTSAND
NEGLIGEN(JHA}JI) IN N()'r (}HDI]IIIN$ ITS
qg-Jr,x$p()N
DHNTCOMPAN MA'r'o l,Ay .r'lru I)AM,AOltrj
tA MARr.r'r IN
ACCOIIDANCE WITHT}TEI."AW.

ERRORIII.
T}{E HONORABLE RESPONDENT COURT O}'APPEAI,S
ERRI]D
TO NOTE,OBSERVEAND COMPREHENI]THA?ART
58? OFTHE CODE
OF COMMERCE IS ONIJ FOR THE GOODS WHICH
THE YESSEL
CARRIED AND D0 NOT II|CLUDE PERSONS."ittoilo. p. Si.

The petition hae merit. At the outset, We note that there


is no diepute as to tht:
findingof the captain'snegligencein the mishap.1"hepresent
controversycenterson the
queetions'ofMaritima's negligenceand of the applicarion
of Article bg? of the Code of
Commerce.The eaid article prorides:

"Art' 587' The ship agent shall also be civiliy liable


frir inciemnitiesin
favorof third per$on8*hici -"v arir;efronrthe r:rrnduct ol thc captarnin tht:
care of the gurds which he loadedon the vesser,hur he nray
exempthimserf
therefrom by abandoningthe vesselwith all hcr cquipmeni'*
ancrthe fieight
it nray lravc carncd durin;g lhe voylgc."

U n d e r t h i s p r r l v i s i o n , .-as h i p o w n cor r a g ' n t h a s t h r .r i g h t , , f , r l x r n r l r r n n r e n t ;


1 r r 6h 1 ,
n c ( ' ( ' 8 s a ri n
y p l i c t t i r u , h i s l i a b i l i t v i s e i l r ri fr r t ' dt o l l r ; r l * l r i , : l r
l r r . i . sc n t i l l r : cal r o f r i g h t L o
abandon'the vesselwith all her cquipment'sand the freighr
it.may have earned during
the voyage"(Yangcov. Laserna.et-al.',78 phil. gg0, :l:lL).
Notwithstandingthe pasrsage of-the Nerv (_'ir,,jl
(todc,Ar.riclc5g? of the Code of
Uommerceis still good law. The reasonlies in the pcculiar ,,i
trrrc of maritime law is
which ie "exclusively real and hypothecary that operate.s
to linrit rrt.r, rt"lijji, t'rn"
value of the veseel,or to the insurancethereon,if on1,,yn,r*;,;;,-i,ur"*^,,bid.).
Ag
correctly stated by the appellate court, "(t)his rule is found
neces.,iary io oflset against
the innumerable hazarde and perils of a sea voyageand to..,.o,.."gu.hipb;il;il;;;
marine commerce.(Decieion,Rollo, p. 29). contrary to the petitione-rs'supposition,
the
limited liability doctrine applieanot-only to the grx-rdsbut also in all casesfitu a"ujn oi
inju-ryto p{rssengerswherein the shipowner or agent,may properly
be held liable for the
negligent or illicit acts of the captain (Yangcou. 1,""*-L, i tial.
it must be etreesedat
this point that Article 587 speraksonly of iituations whcre
the firuft 9r negligenceis
c'ommittedsolelyby the captain.In caseswhererhe shipowner
is likewiseto bef,lamed,
Article 587 does not nppl-y{seeMnnila Stearns}rip(-'o.,
lrrr:.v. Alxiul}ranrin,el a/., 100
Phil' 32,3t1).Such a situati.n *'ill bc coveredby th* provisions
of the New Civit Codeon
i O m m o n( ; a r n e r s .

Owing to the nature of lheir businessand for reasonsof public policy,


common
carriers are tasked lo observeextraord.inarydiligence ln
tf,e uigilance over the goods
and for the safety of its passengers(Article l?38, New civil
co"de).Further, they are
bound to carry the passengers far ari huruan caru and foreuight can provide,
using the utmost diligerrce of "ofoly ""
very cautioua persons, with a due regard for all the
clrcumatanceg(Article 1755,New Civit Code).Whenever
dcath or injury ur a pagnenger
occurs'commoncarrierg are preeumedto have beena[ f'ault
or to have acted negligenily
MARITIME IAW
Ctnt'rtl (lorrrlpls

unlcss they prove that they observedextraordinary diligenceas prescribedby Articlee


1733and 1755rArticle l?56, New Ciril Code,.
Guided by the above legai proviriions,We painstakingly reviewed the recordeof
lhe caseand found imprints of Maritimn'B noglrg{.ncewhich compel Ua to revers€the
cr.,nclu.sion
of the appellatecourt.
l l t r r r i l i l n nc l u i r n n[ ] r n t r t r l i i l r r o l l. r r r v tr u r . yi l r l i r r n r i r t i o r trx r u t t , v p ] r r n n , W c l m i n g /
until afler the hrat was alreud,val $ea.Modr.rntechnologybelie nuchcontention.The
W t r r l . h l ,Irl t t r t . r t titt rt t o w1 r 1 u i 1 1 gwx r. rt h i r r r o r l r r -; n
t p p l r r a t r rwr h i i : l re n H b l e ist t o d n t e c tn n y
rnconlirlgatrno*phericdiaturirance..i. ln his summaryreF)rt on troprcalcycloneWelming,
which trccurredwithin the Philippine -lrr:a of ResponsibilityDr. Roman L. Kintanar,
weather liureau Direetor, stated that during the periode of November l-s, lg6?, the
IJureauissueda leitalof seventeenrl?iwarnings or advisorieaof typhoonlilelmint' to
rhipping companies.AddiLionally,he rurpeirted rhat:
,r i I
'lty I t:15
lt lli,' d.rn.ol Noveml'*nlst, .)r rt le.h Lhun!w{-.ntyibur hours,the
rlL ! st'rnr inlcnrr,ified It was by then lmstcd at g.? N l3?.3 E with
into a t-vphoon.
ccalevelpressureof g?8 nillibar$, an eyediameterof about Lg.b3kilometera
and I maximum surface wind of 139 kilomerers per hnur.
"As it moved along in the open sea,it intensified further and by l1:0?
a.m. of November2, when its cenrerwa$ at 10J N Ia1.4 E, it had attained
.rurfacewinds of about 240 kilometers per hour . . ." (Exn. z, p. l}l,Index of
t j x h i b i t s ,p . I l 5 ) .

Considt'rrng thc ahovere;xrrt rnd tlrt cvitlrncr:orrrcclrrdxhowingthe late departure


oltlrt'ship tt ti:00 p.m. (inatcadol"theschcduled2:00 p.m. departure)on Ngvember2,
I 1967,lVe hnd rt highly improbable that the Weather flureau had not yet iseued any
typhrnn bulletin at any time during the day to the shipping conpanies. Maritima
f; eubmitt€d uo convincingevidenceto show this omission.It's evidenceehowingthe Weather
h : i , i
Ilureau'sforecastofNovember 3, 1967is not persuasive.It rnerelyindicatcd the weather
i:*r is
bulletin of that day. Nowhere could We find any statement iherein Fom the Weather
ir''(llt'
Bureau that it had not issued any fcrrecaston November 1 and 2, 1967(Exh. 6, Records,
p.257).Signihcantly,the appellatecourt firundthat the ship'r captainthroughhis action
. .,.,i
ghuwcdprior klrowledgeof the typhcun.'I'hecourt sard:
ll r ilrr

'tr i ll'
"..tIr'tttlnollxri'rutt]rrrt.]rr:wrr]rrr[]l]rrxr.rlufIlrr.typlrrxlrrortlyutnlxrut
llilr trt'
I l:0o o'cLnkthe f<rllowing morning on NovernbcrJ, l96? when the Weather
lr,rt :t,' report was tranemitteci kr him from thc Wealher llureau at which time he
. s ,r l ' r t
plotted its poaition.For in hie radiograrn3ent to c{efendant-appellee's office
. ' t ) .( ' i s
in Manila as early ae 8:07 in the morning of Novembbr3, lg6? (Exh. D) he
l i tl r t , ' d .
states in the concludingportion 'still observingweather condition.,thereby
/ i rltl
'i implicitl,vsuggestingthat he had known evenbeforedepartureof the unusual
Ll,'r)l)
weathercondition. . ." (Decision,Rollo,p. 26i

r l l i i I I ()I I
If'thl crrptrrirtkncu'of [lit: typhtxrr befrrrehand, it rs inconceivable forMarilima to
' , hu:ttrtally in tht dark of 'Welrning.'In allowing t.ht.ship to depart late from Manila
" ril;
li \ .rlI r h ' x l t i l ct l t r t . y p l t t x r trt t l v i x o r r r , xM, r r r r L i r r rrrlri H l r l r r " y lrr:rrcl ko l ' f r r r r : a i g hut n d m i n i m u m
qrrlcerll lor the ual'etyof its paesengerstaking irr0oaccount the surounding circumsta.nces
frr\ ! lt'.

sil I llt' ofthe case.


.!,1'll ilt|r
lvhile we agree with the appellate court that the captain wae negligent for
lg. n t l.\' overloedingthe ship, We,however.rule that Maritima shares equatly in hia negligence.
r
I
T

448 AND CA.sESON THB t-{lv Obi TRANSPORTATION


NCTTES
I
ANI} PI'BLICTtrf II.tT'ES

We find that while MAr Mindoro was already cleared by the Bureau of Custons and the
Coast Gunrcl ftrr {lpurture nt 2:(i0 l).m. t}rr: xhip'n dr'pnrtlrr.r wlrfirhowever,delayedfor
four houra. Maritima could not accountfor thc dela-ybr:causeit ncither eheckedfrom the
n{rr $*rlt its ttpresctttative to inquire into the
callt.ain Lhe.rcasonglxrhrnd tlrr rfu,lir,r'
causeof such delay.It was due to this inl,crim that thc appcllatr court noted thgt"{i)ndeed
there is ;l great probability that unmanil'estedcargo(auchae dump truck,3 Toyotacan,
st€el bars, and 6,000 beer casesranr-ipassengers{atnut 241 more than t}re authorized
193 paesengers)were loadedduring the four {4t hour interval" (Decieion,p. 13,Rollo, p.
26t. Perchance,a closer supervisroncould have prevented the overloadjngofthe ehip'
Maritima could have directed rhe ship's captain to irnmediately depart in view of the
fact that as of I l;0? in the morning of November 2, 1967,the typhoOnhad alre;adyattained
aurf,ace*.inde of about 240 kilnmetcrs p:r hour.As lhe appellalecourt stat€d,"(vlerily,if
it were not fer this delay, the vetsel could have reached(itel deetination 8nd thereby
haye avoided the effecte of the storm" (I)ecieion, Rollo p. 26). this oonclusion wae
buttressedby evidencethat another ship, MA/ Mangaren, ao int€r ieland vessel,eailed
for New Waehington, Aklan on November 2, 1967,ahcad of M/V Mindors and took the
E&meroute ae the latter but it urri,red eafely ( Exh. llB-2, Index of Erhibits, pp. 143-l'14
and Exh. +A,ibid., p.254).
Maritima presents evidence of the seaworthy condition of the ehip prior to its
departure to prove thai it cxercised extraordinary diligence in thie caee. h/[{ Mindoro
was dry-docked for about I month. Necessaryrepaiis were made on the ahip' Life oaving
equipment and navigational inelnrmcntr were inntslled.
While indeed it is tme that all theee things were done on the veosel,Maritima,
however, could not preeent evidencc that it specilically inetelled a radar which could
heve allowed the vessel to naviga.tesafely for shelter during a Etonn'
Conaequently,the veaselwae lefb at the mercy of Welmingf in the open eeabecause
although it waa aiready in the vicinity of the Aklan river, it wae unable to enter the
mouth of eflan River to get into New Waehington, Aklan due to darkneas and the Floripon
Lighthcuee at the entrance of the Aklan River was not functioning or could not be seeD
at ail (nxn. 3-H,Inder of Exhibitn,p. 192-195;neealaoExh. 2-A, ibid.,9.160).storms
and typh@ns are not strange occurrences.In 196? alone before tllelming,'there were-
aUoui if typhoons that hit the country (Exh. M, Index of Erhibite, p. 116), the latest of
which waalyphoon Uring which occrrrredon October 20-25, which cost 80 much damage
'lilelming,' an important device
to livee and prope*ies. With the impending threat of
such as the ridar could have enabled the ship to pase through the river and to eafeW.
The foregoing clearly demonstrat€s that Maritima's lack of extraordinary diligence
coupled with th; negligence of the captain as found by the appellatc court were the
proximate caueegof tire-einking of M/V Mindoro. flence, Maritima is liable for the deaths
and iqiury of the viEtims.

l'l'ht Sultn't1r,( irur.l n.r,r.rs.tl tht rtltp<tltt!.ltrrlgrrr:trlrtrul tttk'r.lcl tho maptfunl kt pay
the heira of the uictima.l

ilt. PROTESTS.
Protest is the written statement by the master of a veeselor any authorized
officer, atteet€d by proper officer or a notary to the effect that damagee has
been suffered by the ship. P"oto"t is required under the Code of Commercein
the following cases:
I

MARITI$IE I.,AW '148


General Concepte

i) When the vesselmakes an arrival under stress.s


I thc
I for 2) Where the vesselis shipwrecked,3s
r thl
, thr :J) where the vesseI has gonethnrugh a hurricane or the captain
believee
dr^td that the cargo has sufferecidamagesor averages.J6
$trs
4t Maritimecollisions.r;
ii:ed
lo, p.
'l''-
IIJ. AD[IIRALTYJURISOICTTON.
i'tht'
.llrtd Sectionl9(3 i of Bataspanrbans:r BIg. l 29 rnsamendedtotherwieeknown
rlr,t!' lrs lhr'"'lrrrlicilrrvILrot'lJrrrrilrrrlion
r\r'tol'!{ft{(}'w}rir:hlrxrkrilTrr<t
on Augual 14,
1,.b-\: I provirlesthut tlrt, ll,rgronal.l'riirl( turrrllrusjurisdiction:
l1)l'l
h.tt{

lrrlr:d (3/ In all actionsin adnriraltyancl jurisdictionwherethe


msiritirne
( tn(l dr:rnand or claimexcceds
one hundri,<j tlr'rrsanrip**" tpioo,006.fi))
or,in
, t t{ lvlctrolltu1111a,
whcresuclr<ienrantr
or c,laimr:xceedg Trvohundredthousand
peeostP200,0O0.00r.

O lt$ This meansthat all other caseswhere the amount of


the demandor claim
idoro is lessthan thejurisdictional amount in the llegional
rvlng
Trial C;"tt, thejuriodiction
glut."9*llulty and maritime ca$(.sar(| witf, the h,fetroprrlitanTrial court,
Mu.iciprrl 'I'ri,l court ur Murriciparloircuit'l.riul court
as the casemay be.

'&use
r the
npon
8r\en

$ (lrg
est of
m'B8e
i€\'lce
iely.

{('nce
e dre
estlts

oN!

rArticle 612,
Codeof Commerce.
$Articles 612,
624 and 8.,13,Code of Commerce.
sArticle 624,
Code of Commerce.
rArticle 835,
Codeof Commerce.
i
i

CHAPTER7

VESSELS

I. GENERALCONCEPTS.
A. DEFINITTOI{S.
A vesselor watercraft is defined under presrdentiarljecree No.
4?4r as
"any barge, lighter, bulk carrier, pa'Benger ship freighter,
tanker, container
ship, fiehing boats,or other artificiar contrivance utilizing ur.ry
*o,r."" of motive
puwer, designed,used or capable of being used as n *"ir,,,
of transportation
operating either as a common contract carrier, including fishing vessels
covered
under Preside*tial 4J, except: (i) those owned *i/o. operated by
the Arnned Forcee of?T"T-{".
the Philippines and by foreign governments for military
purpose8' and (ii) bancas, sailboats and other *utu.bon*
contrivance of less
than three groustons capacity and not motorizeil." I'h,, obuu"lquoted
definition
is important-{or nurggseeof applying the laws and rtg,ulation.s
that are lxing
inrplcmcnkrtlby tlrt. Mrrri[imerIndrrsir.yAuthorit.-v.
In cttnnection
with thc provisiorrsof thc (lrx.k.ol()ornrrrr,rr:r,
tlrc Supnurnc
court had an 'ccasion to cxplain the rneaning,t'Lhe Lerr' ."vessel" yu
in con u. *
IpiI:2 t

t
"For legalpurposes,thal is, for the determinalionof the nat,ureand
effectof the relationscreat€dbetweenthe plaintiff, as owner of the $
?:
merchandiee t
ladenon eaidcraft,and of the moneythat wasdeliveredto the
m&8taElpit, and the dcferrtlantLrurrrn,ulrowrr(,ro[tllc erlrfl,lllo l$l,Ler .
wug *
t
a ue'rsel,accordingto the meaning und conxtructiongivcn tr; the wgrd vsssel D
in the Mtrcrurtrlr:code, in treating of nr:rririurtr.r,.,r,,r,r,'r,r.,,
undcr'l'itre l, tI
Book 3. i

i
The word uesselserres to designate every kincr of craft by whatever I
p a r t i c u l a r o r t e c h n i c a ln a m e i t m a y n o w h e k n o w n o r w h i c h
nautical
advancemenls nay give it iu the future, (commentariee on the code I
of
cornmerce,in the General Reviewof Legialationand Jurisprudence,founded !
by D. JoeeRers y Garcia, Vol. 2, p. 186.) t
I
I
l
rSection3tb), Decree g
Providing for the Reorganraatronul Maritrme l'unctiona in the
Philippines'Creating thc s{antirnc Indiictry Aut}rority,arrdfor ()lhr:r I
t,rrgr,r*,";srJ ib; s"". ilg';i {
R.A. No. 9295,Appendrx 8. s
!

r4l Phil. 770.


f
I
e
450 {
s*!
f

$
4
M A R I T I M EI " A W ,t6l
V.rry.lr

A c c n r d i n gt o t h r : t ) i c i i , , r r a r yo f L r . ; 1 i s l ; r t i r lnnn ( l . J r r r i a p r u d e n cbey
Egcriche,a uesselis any kind of craft, conriideringsolely the hull.
B l a n c o , t h e c o r n m e n L a t o or n n i e r c a n t i l e l a w , i n r e f e r r i n g t o t h e
grammatical meaning oi the word 'rhip" and 'vessels,"Bay8,in hie work
aforecited, that theee terrue designat€ every kind of craft,, large or Bma.ll,
whether belongrngto the mrrchrint,nr{rrin{ior lo the navy.And refening to
lher.r.luridicalmeanilg, he adds: "'l'hia doesnlrt differ eaeentiallyfrom the
grammalical meaning;the wordn "rhip" and "vcigel'aleo deeigrrateevery
crtft, ln16r'ornnrnll,oo long nn iI lx, lrot trr rt:(cnilrryirfntrtrther,ruch t! tho
srnall boat of a ve*uel,of great€r or lees lonnage.This definition compriees
lxrth thr crlft intended firr rrcc;rnor frrr coirxlwinr navigation, as well er the
floating dtrks, mud lighters, dredges,dumpecowsor any other floating
apparatuatr.qedin the serviceof an industry nr in that uf roaritime commerc€.
. . " ( V o l .l , p . 3 8 9 . i
&.i
However, the Supreme Court clanfied in Lopez u. Duruelo!
er
'As a generalground
of demurrer rr is assignedby the defendantsthat
()Il the complaint doea not Bhow a right of action, and in the eouree of the
('{| nrlfltnrontarrbrnitte<l
with thr.dorrrru'rr.r
rrtl.r,lrl.rrrr
ir*dirr.ctodto the fnetthet
trr lhe cornplnirrt doec not allege thut a protelit had lxen presenled by tho
tr-!' plaintiff, withirr iwenty-four hours afler tlre txcurrence, to the competent
,ti$ authority at the port where the accidentrxcurred. It is accordinglyineis0ed
that, under article 835 of the Codeof Commerce,the plaintiff has ehowu no
causeofaction.
?lrr
,dssumingthat the nr[icle crfthe Codeof Commercerelied upon states
a conditionprecedentto the maintenanceof an action in a cas€where proteet
IliL' in required and that the nraking of protest rnust bc allegedin the complaint
I l'. in order to ehow I good caus€ of &ction - sn aariumptionthat in poeeibly
witlrout btsin, for thr, renxonLlrlrtlrrr:kof'prol,r,at
irr lr t:ltslrwh*ro proto*t ia
ns'ce$$ary would s€enrto rupply $l&tter ofdefense prop€r to be s€t up in the
answer,-- we neverthelees&re of t"heopinion that proteet web not necessarJ
in the cae€ now before us. I'he article in question (835, Code of Com.) in
found in the section dealing with collisions,and the context ehowathe
collisionsintended are collisionsofsea-goingveesele.Said article cannot be
applied to small boalr engagedin riven and bay traffic. The Third Book of
the Codeof Commerre, dealing with Maritime Commerre, of qfiieh the rcstion
on Collieiona forms a part, wae evidently intended to define the law relative
to merchant veeselsand marine shipping; and, aB appears hom eaid Code,
the veeseleintended in that Book are euch as are run by maatera having
epecial training, with the elaborate apparatus of crew and equipmont
indicated in the Code.The word \eeeel" (Spanish, "buque," "nave"), trsed in
the section referred to was not intended to include all ahipa, craft or floating
stmctur€s of every kind without limitation, and the provisions of that s€ction
should not be held to include minor craft engagedonly in river and bay traffEc.
Veeeelewhich are licensed to engagein maritime commerce,or commeroeby
e€a, whether in foreign or coaetwise trade, are no doubt regulated by Book
III of the Code of Co-merce. Other veeeeleof a minor nalure not engagedin

i52 Phil.229.232-235

f
tf
I

i i;.
I
s8 NOTESANT,CASESONTTIE IAW ONTRANSPORTATION
AND PI,'BLIC UTILITMS
,ii
marilimo cammerco,BuchIr rivsr boats and thoet carrying paroengem from
ahip to ehorc, mult be governe4 a* to their liabilit_v to passengers,by tbe
proviaionsof the Civil Code or other appropriate epecial;rrovirioneof lqw.
;.1
Thie conclusion is eubstantiated by the writer Estasen who makes
lh

comment upon the word "vegsel"to the foliowing effect:


,i "llten the mercantile codesspeak of vesscls, Lhey refer solely and
e x c l u s i v e l yt o m e r c h a n t s h i p s , a s t h e y d o n o t i n c l u d e w a r s h i p s , a n d
furthermorc, the,yalmost alwayn refer to craft whir:h nrr. not acreaa()ry to
another as is the ca.geof launches,lifeboats,etc. Morer.rver, the mercantile
laws, in nluking use of thc wordsship, veRscl, boat, cnrlrarkirt,ion, rrtc.,rbfcr
excluaively[o those which are engagedin the transportation of passcngers
and freight from one port to another or Fom one place to another; in a word,
they refer to nrerchant veeselsand in no way cari they or should they be
understood as referr-ingto pleasure craft. yachts. pontoons,.healthseruice
and harbor police vessels,floating storehouses,warships or patrol veseels,
coast guard vessels.fishing vessel-q, towboaLc,and other craft destined to
other uses,such as for instance coast and geodeticsurvey,those engagedin
scientificrenearchand exploration,craftengagedin the loadingand dincharge
of vr.moh fronl nrln(, l.onlrorcordtrkr, nr in trnnshillrrr.trtrrrrrll.ll+prr nrnnll
craft whiclr irt harlxrru, along shoro, balu,,inlc"t*,covcsur)d urrchorageaare
engagedin transporting passengeraand baggage."(Flslaserr,l)er. Mer., vol.
IY p. 195.t
InYu Con t'.Ipil @l Phil. 770),this court held thar a smali vesselused
for the transportation of merchandiseby sea and for the making of voyages
from one port to another of these Islands, equipped and victualed for lhis
purpoeeby its owner, is a vessel,within the purview of the Codenf Comrnerce,
for the determinatitln of the character and effect of the relations created
betweenthe owners of the merchairdiseladen on it.and iLsowner.In the caee
tx'fnrcun tho,Iison,irgwr.nrc inforrnr.din the,r:onrplrrurt. wnr propelledby a
aecond-hand'nlotor, origrnall_vused for a traclor plor.r';and it had a capacity
for only eight pornons.Tho rrrret,owhich it rvantx,ingl'nrLwls lhrr earryingof
pasBengers and lrrggngebetweenthe landirig at Silay and slripnin t"heharbor.
Thie wa.snot such a lxrat as is conlemplated.inarticlc lt:lS.ofthe Codeclf
Commerce,requiring proteet in caseof collision.
In Yu Con u. Ipit, $upra, the author of the opinion quotee a passage
from the treatiee on Mercantile Law by Blanco, We now have be{'oreue the
latest edition of Blanco,and we reproducehere, in both Spaniuhand Engliah,
not only the passagethue quoted but aleothe sentenceirnmediately following
aaid paesagelnnd this lattcr part of the quot,ationin quiLc pr:rtinent lo the
point now under consideration.
Saye Blanco:
xxx
-Itre words 'ehip' (nave)
and tessel' {buque),in their grammatical sense,
are applied to deaignateevorl kind of crafL.large or smnll, nterchant vessels
or w&r ve*sels, a srgnrhcatronwhich does not differ essentially trom ito
juridical meaning, accordingto which vesselsfor thc purfx)sesof the Code
and Regulations for the organization of the Mercantile Regiatry, are
conaidercdnot only thoee engagedin navigation, whether coautwi{reor on
MARITIMRIAW 46II
V.xru,lr

the high seas,but also floatrngdoelc'r,


glrrtoons,dredges,B€owsand any oth€r
floating apparatuE destined for the sen ice of the induatry or maritime
commerce.
"Yet,nolwithstancling these princrplcs fronr which it would c€em thst
any floating apparatus which aervesdirectly far the traneportation ofthingr
rrr por8onAor which indinrctl-vin retntedto thir induntrf, owht to bo rubjected
to thr. principloa of thr' (lode u,ilh refercncet., owneruhip,trarufer, righ&r, {
t
roginlrntion,cl,r,,wn ngn* witlr llsnilrr (rr*rnrcit Jand it xl hoppanrin practiaa $
tltul tlrey rrn trut applrcabh' la rrrrnll t'rnfl wlrich o16 {rnly lubjoct to $
udrrrinirtrativtr(cusbo$la)regulationairr the mat0erof port sorvic€and in tho {{
fishing induntry."
We may add that the word "nave" in Spaniah, which ia ueed
interchangeably with "buque" in the Code of Commerce,me&ns,aoeordingto
the Spanieh-Engliah Dictionary compiled by Edwad R. Beaeley and publiehed
at Parie in the year 1896, "Ship, a veaselwith deckg and Bails." Partiarlarly
nignilicant in this definition is the use of the word "decka,"aince a del is aot
a feature of the e&allest typee of waLer craft.
In t.lrir *rlrnoction n rnoal inrtructivr. r:lxl from a Fodlrnl Court in tlro
tlrrrt,td $tllteic is that. of The il{nmls (5 fed., tltS), w}rcroin it was held tbat,
only veeseleengagedin what ie ordinarily known as maritirre commerqeane
within the provisionsof law conferring limited liability on the owner ia cage
of maritime disaster. In the course of the opinion in that ca.s€the author
ciles the analogous provisione in the lawg of foreigrr maritime natioae,
especially the provisions of the Commersial Codeof France; and it ie observed
that the word "vees€I"in theeecodesis limited to ships and other eea-going
vtnst:ls.'ltr proviaionr{ &r('notapplicahlr,," saidthe court,"lo vesaelsin inland
navigation, which are especiallydeeignlted by the name of boats."Quoting
fronr the French author Dufour (l Droit Mer. l2l), the writar of the opinion
l r t h { . r u i r l , : r-:T i r i _ r s , : rt s g c r r e r u rl u l e , i l e p p e a r gt o m e
i . r l h r . i ' r r r i t ' c i { i , (f u
clcarly, both by the lettcr and spirit of the law, that the provieionaof the
SecondBook of the CommercialCodeIFrench] relate exclusivelyto mirritime
and not fo flurrial navigation; and that consequentlythe word'ehip,'when it
is found in these provisions,ought to be underetoodin the aeneeofa veas€l
sen'ing the purpose of maritime navigation or eeagoingveaa€I,and pot in
the senseofa veaseldevotedlo the navigation ofrivere."

CASE:

AUGUSTO LOPEZ v.JUAN DURUELO, ruTAL


G.R- No. ml88,Octotrer 22"l.Y2f."

This action was instituted in the Court of First Instance of OceidentalNegros by


Augusto l,<spez,for the purpose of recovering damagea for personal injuriea inflicted
upon him by reasonof the negligenceof the defendante,Juan Duruelo and Albino Jison.
The defendanLsdemurred to tlre complaint, and the demurrer having been suatained,
the plaintiffelected to etand up'nnhie complaint, which was acrordingly dismissed; and
the plaintrlTappealed.
The facts necessaryto an underetanding of the caaeaa e€t out i! the complaint are
briefly these: On February 10, 192?, the plaintiff, who is a resident of the municipality
1& NCIIES AND CASESON T}TEI.AW ON TRANSFORTATION
AND PI,tslJC UTIT,ITIES

nf Siluy, Occid0ntll Ncgroe, wac derirouc of emburking


upr-rrrlhe in[erialend steamer
San Jecinto in order to go to lloilo. Thie boat was at rhe';im; in
ihe *ncrrorlng ground of
the.portof Silay'somehalf a mile dietant from thc
5xrrt.The pt.irrtirrtnn.ufore embarked
at the landing in the motor boat Jieon, which *", ih"n engaged
in conveying passengers
and luggageback and forth from the tanding to lxrats ut'"n"t
n., sna *iricfr ;;;;;
and operatedby the defenrlantAlbino Jieon,with Juan l)rrrueto patron.
(maquinista) aboard on thie trip was as T11eengineer
one Rodolin Duruelo, a boy of only 16 years ir"s".
I{e is alleged to have been a mere novice without experience
in the nrnning of motor
boats;and the day ofthe occu.rrence nov/ in contemplationis said to have been the third
day ofhis apprenticeshipin this capacity.It is allegedthat the
Jison, upon this trip, was
grosaly overladen,having aboard fourteen pa$si.,ngers,
rvhile its capacity was only for
eight or nine.
As the motor bnat approachedthe San Jacinto in a per{ectlyquiet
sea,it came too
near to the stern ofthe.ship, and as the propeller ofthe
slip r,aaiot yet ceaeedto turn,
the bladeaof the propeller struck the motorhrat and sank it
at once. It is allegedin the
compldintthal the approachof the Jison to this dangerousproximity
with the propeller
of the San Jacinto was due to the fault, negligenceand lack
of skilt of the defendant
'Iuan f)unrolo,as patron of the .Iiaon.Arrth; .Iiron r.rank,
thc plnintilTwaa thmwn into
thc wnter rtgninst the propeller,and the revolving blades
inflit'ted vanous injuries upon
him, consistingof a bruise in the breast, two geriouafractureg
of the hronee of the left ieg,
and a compoundfracture of thc left fenrur.As a consequence
of theeein3uriesthe plainliff
was kcpt in be,di' a hosp,italin the ciiy of Manila
from the 2gth of Febnrary until
October 19 of the year 1927,or approximately eight
rnonthe. In the conclueionof hie
complaint tlre plainti-ffsetoout tlre vanous items of Jamagewhich
ie;;fib;J;;;;;
in all tp something more than p120,000. Theee damales
he seeks to recover of the
defendantsin this actron.
As ageneral ground ofdemurrer it is assignedby the defendants
. that the cornplaint
cloesnot show a right of action, and in the courseof the
argument eubmitted with the
dcmurrer attcntion is clirectedto the fact that the compraint
d.oeenot ailege ;;;;;;;;
had been preeented by the plaintiff, within twenty-four
houre after the occu*ence, to
the compe0ontauthority at thc port where the accidentoccurred.
It ie accordinglyineietrd
that, under article 835 of the code of commerce, the praintiff
has shown no cauee of
action.
Assuming that the article of the Code of Commercerelied
upon states a condition
precedentto the maintenanceofan action in a case
where protest is required and that
the making of protest muet be allegedin the complaint i., uia",
toJn* goodcauaeof
actisn - an aasumption that ie poseibly ri'ithout basis, for
the reaeon that"lick of proteet
in a case where protest is necessarywould seem to suppty
matter of defeneepmper to tre
set up in the answer,- we nevertheless aReofthe oplnion
that protest was not neeessary
in the case now before ug. The article in question (g35,
Code of Com.) in firund in the
srrtion dealing with collieions,and the coniext shows the
collieiongintended arc collieions
of eea-goingveeeele'Said-article c_agnotbe applied to emall
boate engaged in river and
bay traffic. The Third Brxrkof the Codeaf Commercer, dealing with Maritime eommeice,
of which the eection on collisions forms a part, wae evidently
intended to define the raw
relative to merchant vesselsand marine shlpping; and,
&8appearsfrom eaid code, the
vesEelsintended in that Book are such ae *" by maatcre having apecial training,
".u
with the olabornte appnrntue of crow rrnd oqrripnurnt ,
'vosdol" (Spanich,'buquc," indicokrd in Lha C1;alc. The w{rrd
"nave"), uesd in the seclion referred to rvosnot intended to
include all ahips, craft or floating structures of every kind without
limitation, and the
provieions of that section should not be held
to include minor cra(t eng"ged only in river

, .*-!i;sr&d$$s*drir*..dia;iiilkseear;@i*w,.u,

,
MAftIl'I"V}. IA\\' 455
Vcssclr

and biiy tru{hc. \"eeselewhich Bre licensedto engdgein maritime cornffierce,or commeroe
by s€a, *'hcther in foreign or coaat{.ise trade. are no doubt regulat€d by Bmk III of the
{lrxlc of Oonrmerce.Other vensglrof a minor naturr rxrt englrgedin marilimo @ilrnletuP,
auch as river boats and those carrying pe$seng€rBfrom ship trr ehore, muet be governed'
as trr their liahility to pasnengtrr,by the provisionnofth€ Civil Codeor other approPriste
special provieioneof law.
This conclusionis substantiatedb.vtherwriter Eslasen who makes commentuPon
the word "vessel"to the following effect:
"When the mercantile cdes speak of vess€ls,they refer solely and exclusively to
merchant ahipn,ar they do not include wlrr nhips.and furthermore, they almoot alwayr
refer to craft which are not eccessoryto another as is the cas€ofl&unchea, lifeboats, et '
More<iver.the merncantilelaws, in making urleof the worde ehip, veesel,boat, embarkation'
etc., rofer r.rclutively to those which nre eng;rgedin lhe tranrportation of parccngen
and foeight from one port to another or from one place to anolher; in a word, they rofer to
trrerchant vesrcls an{ in no \N,aycan they or should they tre underrtrrcd as referring to
pleasure craft, yachte, pontoons, health gervice and harbor police veneele,flOating
storehouses,warehip6 or patrol veee€ls,coast guard vessels,Fehing vessels,towboats'
and other craft deetined to other uees, such as for instance coast and geodetic survey'
thoee engaged in ecientific research and exploration, crafb engaged in the loading and
discharge,if uesselefrom same to shore or docks,or in transshipment and thoee small
crnft which in hnr|1ore,al6ng rhore, bays, irilels, covt'gnnd nnchnragesare engagedin
transfxrrttng pa$sengere Der. Mer., vol' IV, p' f95')
"nJ'b"gg"g".'(Egtasen,
ln )i, C<,,rry. lpil t41,Phil. ?70), lhis court held that I small vesselused for the
transportation of mlrchandise by sea and for the making of voyagesfrom one port to
another 6f thesc Islan<ls,equippedand victualed for this purposeby ite owner,is a ve8$el'
within the purview of the Codeof Commerce,for lhe determination ofthe characterand
efl'ectof the relations createdbetweenlhe owners of the merchandiseladen on it and its
owner.In the casebeforeus the Jison,a$ we are informed in the complaint,was propelled
hy a uecglrl-handmolor.originally used frrra traclor plow;and it had a capacityfor only
'Ihe
eight per..,,rs une to Jtrictrlt *un being put was the carrying of paseengcru-and
in I.lrr'hlrrlxrr.Thin wns not nucha boa!
l,igg,,i,,lrr.tw|r,rrtlro lllnding nt Silfiy nnrl rrlrilrr,
6* is.cr,rrt,.urplgtrtl i1 urticlc flJb ol'the Otxh. ut (.iuttttttttcc,requlrlllg protr:xtin casoof
collision.
XXX

In Yu Con u, Ipil, supra,the author ofthe opinion quotes a pasEagefrom the treatise
on Mercantile l,awby Blanco. We now have before us the latest editinn of Blanco, and we
reproduoe here, in both spanish and English, not only the passage thue quoted but also
the, ssntence immtxliately fnllnwing snid passagtl :rnd this latter part of the quotation is
tluitr: perlilre nt to t.hc point now utrrl*r cottsidt'rittitttt.

lrL.ll.. rn tircirgrammaticat
:H::hip'\nnvr:iancl'vcssel'rbuqtr*), areapplied
senge,
to <lcsignafet,very kind of craft, llrgc trr 'sln1ll, nterchant vesselsor war vegsele,a
sigrrification whicir does npt d.iffer essentially from its juridical meaning, according to
*hich uesselsfor the purposes of the Code and Regrrlat.ionsfor the organization of
the Mercantile Registry are considerednot only those engagedin navigation, whether
coastwiee<lr on the hilh seas, but also floating docks; ponbona, dredgee,scows antl
any other {loating apfaratus destined for the service of the industry or maritime
fomm(.rce.
{6€ NOINS AI{D CASESON 1I{A I.AW ON TRAN$PORTATION
AI{D PI.JBUCUTTLITIES

"Yot notwithstanding thosc prineiplec from which it would sesm t6at any {loating
lpparatut which scrves tlirectlyrfor tho traruportatron of thrrg* or perrruna which
or
indirectly ie t?letpd to ttris industry, 6r'gfrt to bc aubjected ta the principlea
of tlre Csde
witl reforence to ownenship, traneferi .lsht", regiairalion, etc., we agr,ee
witS geniro
(wSrc cil-) and it ao happens in practioe tti*t tb.yitu
not applicable to smsll sraft, which
are only eubjecd to administrative (crlstoms) reguiationr i" ttu matter of port
aervice
and in tbe fishing induat4r.,

- {e may add thajlhe word "nave" in spsnieh, which ia ueed interchangeably with
'brrque"
in the Code of Commerce, meana, according to the Spaniah-Engliailnictionary
compiledby Edwrrd R.Sennley and pubrietrodnt pirir in thc yenr l Bgq .Bhip,
,
with decks and sailg.'Particularly aigrrificant in thie definition in tht "*""J1
'deckr," aince ure oithe word
a deck is not a feature of the smallest types ,f water craft.
In thig connection a most instructive case from a Fedeial Court in the
United
staten ie that of rhe Mamie (5 Fed.,gls), wherein it was herd that only veesels
engaged
in what is-ordinarily known as maritime commerce are r*'ithin the provrsions
of law
conferring limited liability on ihe tiwner in cae€of maririme digaster. rri ti-
*"iL
opinion in that case tl'te author citeg the :analogousprovisions in the "rlf."
laws of foreign
maritime natione, eepcially the provieionsof the CommercialCodeof France;
and itls
observed that the word "veagel" in these codes is limited to ships and other
eea-going
veesele."Ita provirionnare not npplicable,"raid thercourt,,"to ves*elsin
inland norrigitinnl
yhlcb are glpecially deuigrratedby the name of boate.' Quoting frorn the !'rcnch authgr
Dufour 0 f)mit Mer. l2l), the writer of tlre opinion in the caeecited further ralz: -Ihus,
qp a general rule, it appear8to me clearly,
both by the letter and spirit ofthe law, that
the provisions of the SecondBook of the Commersial Code
fFrench I relate exclusively to
maritime and not tp fluvial navigation; and that consequentlythe word.ship,'when
it is
found in these provisions,ought to be understood in the senseof a vessefserving
the
purposeof maritime navigation or seagoingvessel,and not in the
senseof a vesseldevotcd
to the navigation ofrivers."
It is tlerefore clear that a pessengeron a boat like the Jison, in the casebefore
us,
ie.not required to make protest as a condition precedentto his right of
action for the
iqiqry suffered by him in the collieion deecribed in the complaint. ln other
wordeoarticle
835 of the Codeof Comnerce doeenot,apply.But even if said provision had becn
conEidered
applicable to the casein hand, a fair interpretation of rhe allegations of the
complaint
indicates, ive think, that the ir{uries sulfered by the plaintitrin this case were
of such a
natwe ag to excuseprotest; for, under article 836, it is provided that want
of protest
cqnnot preiudice a person not in a condition to make known
his wishes.An individual
who has sulfered a cornpoundfracture of the femur and received olher physical
injuries
;uflicient to keep him in a hospital for many monthn,cannnt be supposedto
have beenin
a-condition [o make prtrtcsl within twenty-four hours of suel, *.,u.."n.,l.
It follows l,hat
the demurrer in this casewas not well taken and ehould have beenovermled.

-In their brief in this court the attorneyg for the defendant have criticized thc
complaint for a general lack of certainty and precieion in more nrn un"i".p".i.
ii;;;;,
wl.have read the document attentively and, in our opininn, it states good
a cause of
action upon a civil liability arieing from tort under ailicles 1902 and
190"3of the Civil
Code,and our attention has not been drarn to any provision of law which would constitute
nn obatacleto the maintenanceof the action.
lVe have repeatedly called the sttention of trial courts to the general
mle that a
cas€ghould not be diamissed ou demurrer when, under any reaxonable interpreiation
of
the complaint, a cause of aetion can be made out; and the fact
that a cornplaint is
ITARI'I'ti\{g Il{W 467
Ver se,l.q

i n t r r t i f i c r n l i dv r r r * , n . o irn a c { . r t a i nr l e g r l t ,l : i r , k r r rIgn" l r r , ( . r s , r ,rn, , u r s t i t r r t rn. o


s sr.rfficient
. reils(lnlirr drsntissingit. In passinguJ)ona dlrnurrcr. cr'trv reasr.llable intendmentis to
he uken in favor of the pleader.In this corrrit,ctiorr rt should be tmrne in rnind that if a
conrplninltlrns not show rt guld cnuil{,uflrr:trorr, t}rl lction can be disminnedat a later
stage of the proceedings;and even where no objectionhas been previouely made, the
plint can be raiscd in the StrpremeCourt under sectiorr93 cf the Codeof Civil Procedure
tAbiera v. Orin,8 Phil. lg3t. Little or no apprecialileprrludice to the defendantwill
therelbre ordinaril.v result from overruling a demumer.and no herm is done to anyone
hy requiring the defendant to answer.on t,hecontrnry grave pre.iudicemay reeuliio a
plaintilf fronr the erroneous sustaining of a deniu.rrer.tpcause of the delay and evin
expensenecessar)'toset the matter right upon appeal.
Thejudgment appealedfronr is reversed,the demun'erove'nrled,and the defendant
is required to answer the cornplaint wiuhin five days after nolification of the return of
this decisionto the court olorigln. So orderr'.d,
with costsagainstthe appellee.

B. C O N S T R U C T I O N ,E Q U I P M E N TA N D M A N N I N G ,
The conslruction, equiprnent and manning of vessels are subject to the
rules issuetl by the Maritime Indu.s[ry Authority. This rule ie also consistent
with the provisions of Code of Commerce particularly Article 574 thereof which
provides:

ARTICLE 574. Builders of veesellrmay employ 1fusmsfsrieln


and follow, with respect to thei,r construction and rigging, the
eycteme mciat euitable to their iatererts. ship ownere and aeamen
ehall be subject to what the laws and regulations of the public
adminictratiern on navigation, cu*tomr, health, eafety of veeaeln,and
other similar mattcm.

C. PERSONALPROPERTY.
Vessels are personal property under Arricle 416 of the civil code. The
same nrle can be found in Article 585 of the Code of Commerce which providea:

ARTICLE 686. For aU purpores of lnw not mndified or rsstrictsd


by the provi.rionr of thie code, vessels ahall continue to.be mnridersd
ae pereonal prop€rty.

rn Philippine Refining company u. Jarq*ea Justice Malcorm gave the


f o l l o w i n g e x p ! a n a t i o n:

"vesselsare connideredpersonalproperly under the civir raw.(code of


Comrnerce,article b8E.)Similarly under the commonlaw, veeselaaro personal
property under the common law, vesaelsar* grersonnlproperty although
oceaeionallyreferred to as a pecuiiar kind ofpersonal property. (Reynoldeva.
NielrronI I C0Jl,96 Aur. fup., lfiXl;Atlarrric Mrrritinrt,Co.vs.Ciiy of Glouo",ntar
tl9l7l' I l7 N' 8., 924.)Sincethe terrtr"personalproperty"includeeves*ele,
the.vnre subject-to mortgngt' agreeahlyto thr, provisiongof the chattr:l

r f J o . , { 1 5 ( ) t iI .{ a r c h
?5. lg35
F!
iil
fil
ri *i

4S8 NOTESANDCASE.SONTHS T.AWONTRANSPORTATION


AI{D PIIBIJC I.rNLITIES

Mortgage Law (Act No. 1508, section 2. r Indeed, it has heretofore been
accepted witlout dis&rssion that a mortgage on a veeEelie in naturc a ehsttal
mortgage(McMicking v. Banca Espaflol-l'ilipino [1909], fg Phil.429;Arroyo
v. Yu de Sane [1930j, 54 Phil. 511.). The nnly diffcrence between a ctratlel
mortgsg? of a vemel and a chettal mortgnge of tther poraeinrlity is that it ir
not, now nocersar? for a chatt€l mr.rrigageof a veds€tto be noted in the ragistry
of the regieter of deodr, but it, ie eec€ntial that a record of drruments afiecting
the titl* to n vec6{rlbe entrred in the rrcord ol tire ("lollectorof CurLomaat,tho
port of entr.v(Rubieoand Ge[to v. Rivera 11917),3?Phil. ?2;Arroyo v. Yu de
Sane,euprb.). Otherwiee a mortgage on a vesselis generally like otherchattel
mortgagesas to its requisitesand validity (58 C. J., 92.)."

The Code of Commerce likewise expressly acknowledgee the apecial natune


ofa vessel as personal property. Article 585 provides that a veas€l is a pereonal
.
property'for all purposes not modified or restricted" by the Code of Commerce.
This indicates that there are rulea that are applicable to Common Carriers
which are similar to the rules that apply to real eetate. The Supreme Court
explained in Bublso und Cati"xto u.Riueras that "ships or vessels, whether moved
by steam or by sail, partake, to a certain extent, ofthe nature and conditions of
real property, on account of their value and importance in the world commetrse.o
For instance, under Article 5?3 of the Code of Comurerce, tranefer of vess€I8
ehould be in writing and must be recorded in the appropriate regrstry"

ll. owr{€RSHtP.
A. ACOU|SIT|ON.
Vessels may be acquired or transferred by any means recognized by law.c
Thus, veseels may be sold, donated and may even be acquired through
prescription. Under.the present laws, vesselsthat are under the jurisdiction of
the Maritime Induatry Authority can be transferred only with notice to said
administrative agency.

a. PRESCRIPIION.
ARTICL&f78" Mcrchrnt vosscli conrtitute proporty whlch mey
be acquirod and trensfenod by auy of tho mearu nDcognizod by l,rr.
The acguieition of e veceel nuet ap;rear in a written iuetnrmenf
whlch she,ll not pnoduce rny ofiect wlth respect to third poreonr lf
not inccribed ln the rcgfutry of vees€le.
'The
ownerehip of a veesel ehall lil'ewise be acquired by
pocseasion in good fait\ continued for three years, with a jurt titla
duly recorded
In the abence of any of thee€ requisitca, continuour pfis€rcioa
for tcn years ehall be neeeesar5r i.n order to acquire ownenbip.

1 3 ?P h i t .? 2 .
'Articlt' 573, 0ode of Commerre.
!
n

$ lerlnfixnrAw {6e

A captaln nay uot rcqreire by preecriptlon the vssl of rhtch


he ie in 66anrnn{.

ARTTCLE 5?6. Co-o*"!rcr:e of veceela shall hgve the rtght of


repurcbaee and r.edemption in sales made to etrangeru, but they nay
ererciee ths rarne onlX within tho ninc drya following the lnrcrtptlon
of the eale in the regirtry, and by depoeitlag tho prico et tbc sano
ti-re.

b. SAIJ.

ARTICLE 678. In the aale of a veeeel it shall alwnyr be


undentood ar included the rigging, martr, storu and eagtae of r
rtrcamer eppurtcmnt thereto, which at the time bolorrye to tbe
vendon
The armr, mnnitione of war, provisiont and fuel shrll not bs
congidered *e includad in the aale.
The vendor ahall be under the obligation to deliver to the
purehreor a cnrtiJled copy of thc record ghe€t of ths vela€l in the
regrstrT up to the detc of the eale.
ABTICLE 6n. U the alienation of the versol should bc nade
rhile it ir on r voyage, the fretghtage whlch it earsr fbom the ttno lt
receives ltr lert caqto thdl pertatn ontiroly to tba purrhucr, end
the peyment ol tho crcw aDd other peraonr wbo meko up ltr
complement for thc fan€ voya*e ehatt be for hla eecount-
If the aala is rnnde afiber tbe veesel has arrived at tho port of lte
deetinetionn the lbeightaga ehall pertain to tba ycndor, ead the
payment of the crew nnd other individuals who neke up lte
cbmplement shall b€ for hir acccunf unls€g the contrary ie rtipuletad
in either cace.

ASfiCLE 6?& If the vessol boing on a voyrg€ ot in fonefu


port, its os/n€r or orrn€nr cbould voluntarily allenate lt, "either to
Fillplnor or to forelgn*re domiclled ln the capltal or ln r port of
aaother eountr5r, the btlt of sste rhrll gs erecutad belone tbe oonaul
of the Republtc of tbo Philipplnoc at the port whro t61tr alnqtcr ttt
voyage and satd lnstrarrneut ahall produce no effect wlth reepoct to
third peraons if lt ir aot tnacribod in the rogictry of the con:stata.
the consul gbqll |-rmodlatoly fon n'ard a tnre copy of the irrtnrment
of purchaee and sdo of the verrs€l to the regfutry oi vmcel,s of ths
port where said vessel is inecribed end regietered.

ln evory care the elienetion sf trhe veesel rnurtbe ma& to appoer


wlth a etstenent of whethor the vendor reeelvs; ite prlce ln whole
or in par{ or whethgr he prcoer:t'ea in whole or ln part any clelm on
eaid veecel In eaeo the eale ir made to a Filipino, thir faea thell b€
ctrt€d ln the cc'rtlflcate of navlgatlon.
lVhen a veeaeln being on I voyage, ehqll be rendered ucelsss lor
navigation, the captein rhsll apply to the competentjudge ou court
of the port of errival, ehould it be in the Phitippinee; and should it
dCIO NOTESAND Cr{SESOt{ TI{E l,j\!V ON
TRANSPC}RT,ET|ON
AND PUNUC LTfILI?IES

be in e forelEo
-e-olotoy, to the co-nsul of t,!re Republie of tha
Ph i I rppiaee, thorrld- thene b. oou, o", *h:ry there ie
or courr or to the rocar nuthoritv: .""., ; ;;;;
a'er tltu
court, chell order on ereninntion "rrrr*.rt, ".iu" Judge nr
of the L *"C_.
lf *ho oonrrgtloa or trra Inrunnr ""*"i1.
*h'ur* rtrrcrs ut aald por*o or
rhould hevo ilpro.€ntatrver
til"*, *r.y munt bc cii{d In ord*r
part in thrt
rho pi"..*Jr'"sx on treharfor *lr,**,u"
:|]:ff1j:k* mey bo

B. REGTSTRATION.
vesselsarenowregisteredtiuough
the.r\IaritimeIndusrryAuthority.It is
a long standingrute thai th" p;;;;io
pre''rned to be the ownerorihe * ttu*registeredownerof the vesserie
ueuseriMc,.eovJ., iilrl;il*le a ectdednrre
that the ealerrrtransferor *ru
i* n't binding'n third per'onsunreeethe
"u*o*r
ffi;:fi?T"?,:*ff,t*ua"c c',*t,*sco&st't*e
li* uu*i"
il;i#;
SE'FION 8lo- h:rv*egea coufe*ed.by
nsdrbrv" - A c*{ificatc cerrincate of ,*ltipptne
therisbt to ensesl eonrjrtcnilf;
"?Fhttip;;regietrv confera upon thc varre!
tradeandeatitrer to.lhep*i*rrt th ffi; il;ilil;;fi: coastyise
of,the Philippinss lt
of the thettrg
in pfu;il;;
eil ""tnJtTt,ird
&c high roaa, and at tho
tlnc rec.ms to it.the.eana rame
il;"r* and rubjoctl it to the r.,ns
dtnabilitiff il, undsr rhr [;;;f--tl;'i,rr*ippr-".r",
bultt vcreorr trenrfornod p*]t iJto ror"tgn-
i.r-"itt"o* 'f the ph,rpprnar.
"t;;;
(a) MARTNA RULES ON
REGTSTRATION.

MEMORANDUM CIRCUI*An' NO" OT)


TMPI,EMENNNC GUIDULI..ES
FOR VESSNL REGISTR"ATION
AND D(rcUHEilTATION
The MaritimernduotryAuthority Board
l$9rl har appiovodu1.t p.ontniifo-*a*ir,* in ira meetingo' 0? *ctobar
implerno'rarion of veas€rs tutuwi,g guiderinoein ,,ro
Tqp!4;;;Jrru*r
order No.l2E, ae amended;Doic ro rhe pmvisionsof'x,ecutive
&;;;;""dum dared? Soprembert9s4
and rIIARINA Memorandumct*"d
N"a, s. 94 approvedby the *IARINA
Board on l5 September1994.

I. OB.'ECTT\/E
Thiecircul&r 8e.r'e8to provides con.eoridated
t'hatehallgovernrhe regiarrauort impremenringguidolinoe
una ao.,irnenrati.nof vcg$ers to entitleit
t, the prot'ecti'n of ph'ippia" ruror
eubject torheobrigations"and to ny rh; iilrippine ftag
""J**.nrh1
o""urrrtLi"a"i *,- l"i,
"iii"-i#iuooir*.
?Martiaez v.
Martinez.
[ubiso v. Rivera, cupru.
Y
'i:

MA!$TI,ME I,AW {61


VesselB

IT. COVERAGE
'Ihie
Guidelines shell Bpply ro:

_ I l. All typea of veas€lsof donresticownership and of more thaa 15


GRT;

2. All vessels engaged in tlwing/puahing or carrying goods and/or


pese€ngersfor hire regardleae oftonnage; and

3. All veacolsacquired undor pl)s 76(t/t)Ulfi7ll


Registration of ves,€le 15 GRT and berowunder thie circular ahall b€
upliorurl,I'It()Vltll.;l) tlrnl.nrrdrvr"nn..lrr
rr:rnrr:rurtr.nterr:din tho philippino
rcgrstcr of ehipe ahall bc roquired ts $ecure s vescel identity certificate
(Certifi cale of Numberr.

The following veeaelnshall not be covered:


1. \l'arships and naval vessels;
2. All veeselsof foreign registry temporarily used in the phitippine
watera for lesathan one year;
3. N o n - m o t o r i z e d , b a n c a s ,e a i l b o a t e , a n d o t h e r w a t e r b o r n e
contrivunccor lensthnn thrtg grom torrnr:rr;rrrcil.y.

NI. DEFINTTTON OF ,IIERJIIS


1. Vessal-Any watercrgfl used for water transportation, delivery
ofseruicesand thoeeueed for scientific,educationaland iee€archpurpo'€E,
including fi nhing vessels.
2. I)omestic Ownerehip * Ownership vested in sitizens of the
Philippinesor corFrrationror nssrx:irrt.iorra orgruriz.r,d
rrnrh.rthe lawe of the
Philippinea at leagr sirty per c:entum'l'the capital stoek or capital of which
in wholly-ownedby citizennof tho phrlippirrcri.
'i
llonreport - firi purt rvheretlic vcssrl is regisLeredor enr<llled
provided, registration ehell be effected at the port where the pr.ilcipal office
of the shipowner/operator is located and,/orat the terminat qo,{tof the vee€el.
4. Domeetic Trade - The carriage of pasoengers and/or cargoe;
belween two or more porto and places in the philippines by the use of veesel'
either ae common or contract carr-ier or for exclusive company/own ua€
including operations within baye and rivers and otheir inland-*aL*uyr.
5. overaeasTlade -The traruport of goodsandlor paseengersand/
or vessel operationa otrtside ofPhilippine territorial watcrs, including those
calla at Philippine porta frorn fcrreignports and vice veraa.

TV. GENENALPROVISION

The Maririme Induatry Authoriry (MARINA) ie the exclusive authority


in matiera of regietration and documunt ,tiun.f philippine vesaelsincluding,
but not limit€d to, the iesuance of certificates, licenses,or other documents
incident thereto.
*
1', 162 I{OTES AND CASE$ON T1IE IAW ON TRANSPOR?ATTON
PLIBLICUTII,ITIES

V. SPECIFIC GUTDEIJhIES
A Regieter of Vessela
1' The MARTNA ahail m"intain a registry'f veas€lsto be known
"REcIsrnR oF plllt,tpplNn vESsELc" as
w'hict*rtrnrth;pr open ro fr*e
inslxr'ii'n by the pubric_<luring regurar rrTiceh<lursn. ,"ho' ihe exigencyof
the,sarviecrrrtrt'<;uitt's.sk'lrlrrritoigixtr,rr:rlrrrll lx. ,rr,,irrili,,",li,r overntr,{
rtrttlrlotttr..strc
vt,sstls.
2 The Registerof phirippine vesserssh', c'nL.in
the foilowing
particulars in such forrn and detail as the IIIARINA
*"y pi*rrriu*,
a. Name of vessel
b. Former namesand registr-v(if appliclblcr
Type of vessel
rl. ( ' r r l l. v i g r r
(1. Official Nurnlnr
f. Material of Hull
P r i r r c i p r rDl i m c n s i o n s
h. Tonnage{Gros*NeLrDeadweightr
i. ('lassificatirin
j Spr.rxl
k. J\f;rirrongine
I Ilrrrklerr/I'lucr.of'lluilt
m. Y e a rb u i l t
. ll. Name, nationality and businessadctres.Vresidency
ofowner/
op€rator
o. Date of issuanceof Certificate or V:ssel Registry
p. Any uraterial change of condition in respect to any
of the
preccding items including recorcl.s
of encunrbrancr:s.
3' Thc registration of a veesetfor domesrictrade shail
. be effectedat its
homeport as herein defined while registration of a veriser
for trua*
shall br effectedonly at the MARTNA Central O{Iice. ""*.*u*
B" Requirements For Registration of Vessels
fr: following requirements shall have been complied
. . with prior to
registration of a veseel,if applicable:
1. Existing veesels
. a. plans approval
b. Adrneasurement
c' Presentationof phokxopi*s of'v^rid tr'ding certiricnten
2. New buildings
a. MARINA appmval to acquire vessel
b. Approval of completeplans of hull and machineries
l

f;
MARTTIMET.AW
Vce*els

c.Authorrtyigluedt'oac|rrrrli|rcation$ocietytoincpoc|/
supervis€ the constnrction.of the veseel'

A Trancfer of fughtu and llncunrbran(ela

afiecting the vee*el or the owoorehip therelf shsn b€


Any rights
p-"id-S the came ia
registcrei inlhe Boot of iYansfer and Encumbrarcea
of Vess€l Regiatry of Philippi:ne Vessels'
annotated in the Ceftificatc
B. Deletion of Vessels
the
Vesseleregietered under t'he Philippine flag shaU be deleted from
l6gist+r of Philippine vesselsunder any of the following circ'mttancea:

l Bareboat cbartaring out to foreign nationals, unleasthe chart€rer


optrrto fly the PhiliPPineflng
2.Pre-termrnation'/t€rminationofcharteragreementunderPDg
760/86€/17I 1
3. Sale offoreign buYers
4. Scrapping/Decomminsioningofvessel
5. Constnrctive or total loss of vessel

\II. VALIDTTY
l.A(jertificntr.uf'V:rrgcll{egistry{CVRIghal|trevaliduntilthere
is a change in ownership or the vess€i is decommi'Eioned or conetnrctively
or.totally lost.
2.Certificateof\'esselRegistrytCVR)forvees€lsacqrriredunder
PD 760i866t171I shall be co-terminus wilh t'hecharter party'

VtI. PENALIYISANCTIONS
violatiorr ofany ofthe provisionsofthis circular ehall bc governedby
eristing lawe and regulations.

VIIL SAVING CI./\USE


Thepmviaionn'oftheRevigedPhilippineMerchantMarineRulesand
ere
regulatione as amended which at.e nol inconeiatent with thia Ciranlar
hereby adopted by reference'

LlL RAPEALING CI.AUSE


and
Any provision of existing MARINA rules and regulationt' circrrlar;
are inconsist€;t with thie Circular are hereby repealed or
orders which
modified accordinglY.

)L EFFECTNTTY
of
This Memorandum circuiar shall tre published oncein a newapaper
general circulation in the Philippines and shall teke effect on 16 october
199,{.
{&{ N(yTESAND OASESON rH}] I.r'1WON TR.4,NSI}ORTATION
,'ri.ilj i'u bltc l.r,tILil'tFi$

MT]MOITANDUMCIROUI.Aft NO. r82


tiER"tEs oF 3003

Rr.rLESrN THE.A,CQLnSTnONoF sHlpg T NDEA


PRESIDENTIAL DECR*S (PD) ?8O,AS AI}IEND8O,
AND PROVIDING HAR.EWITH l"HE IMPI,EME}rIING N,ULE8
UNDER CIIAPTER XV OF THE T9O?PHILIPPNYE
MERCHANT
MARIhIE RULES AND REGUI.ATIONS (PMMAR) ON
RTGISTRATION, DOCUMENTATION AND LICENSING
OF SHIPS FOR TNTERNATIONAL VOTACF,S

The Maritime Industry Bnarddrrringitc l62nd RogularMoetingheld


on 22January2003oduptodthe f'llowirrgrulcr in rheimplementation
of pD
760,aeamendodand whichshall form part of the implementingruleeunder
RcgularionXV/t.g.l of the t99? plt{MRtt.
L OB.'ECTTVE
This Circular aims to:
i. rationalizethe ruleein the shipsunderthe philippineflag;and
2. achieve.
maximumbenefitsas envisionrdunder pD ?60. as
amended.
lI" c()wlLrcE
Thiscircrrlarshaltapplytn rrllshippingcompanienthar,ehallscquire
andregietershipefor intemationalvo.yagen
pursuentto pD ?60,asamended.
IU. DE}'INITIONOFTERI}TS
l'or purposesofthis Circular;
I' Admlnistratlon refcrr&i
to th* I\fnritirnelndurtrv Aurhoritv
(MARINA).
l'l ( lcmf lrtfryr'r,fi
'rn to t.lr,;x,r.lnrr
or r.rrlll y wlrrr.lrlrrrarlunlifirrdrirtdr,r
Mrrntorrtnrlttm (irn.ulnr No. l6l urrticorrrplrrxl wrllr tll,rt,"r;uirementra of thin
circular to burr.boalclrorter a ahip kr nrgrstrationunclerlhe lrhilippine flag.
3. Shipowning eompany refers to a company which, at the time
of application rrnder tbig circular, shall have at leaet one (1) permanently
registered ship under Philippine flag.
4. Bareboat charter refers to a contract for the leaeeofa ship for
n stiprrl;rtedpcriod not lese than one (li ycar, by vir{.ueof which the lessee
haa complete grseession and control of the ship including the obligation to
appoint the Mast€r and the other crew nf the ship for the duration of the
laaae.
5. Crew refers to the oflicers and ratings ofthe ehip.
6. Phtttppine natioaal refers to a citizen of the philippines or a
partnerehip or aesociation wholly owned by and comp<lsedof citizens of the
Phrlippinesor of which at least sixty percenL$o?o),f the capital stock
-*ry-*

MARITTMST.AW dO6
Veff€lr

outstanding and entitled to vote ia owned and held by philippine citizens or


a trustee of funde for pensions or other employee retiremert or separation
benefits, where the trustee is a Philippine national and at leaot aixty perceot '
of the funds will accme to the trenefit of the philippine national: piui&d.,
that where a corporation nnd ita non-F'ilipinrrntrrckholder*own ehrck in nn
enterprioc, at leagt rirty pcrccnt of the menrber$of the governing board of
both corporationsmunt be Philippinenationals.
7. Supernunrerary refers to a personwho is not a crew ofthe ship
and whose pregenceonlxrard is firr u specificpur|x)$eother than to perform
navigatirrn, operation and rnanagementfunetions.
' 8. Principal Officers reler tt thc L'hiel'.Bxt:cur,ive Oflicer, Chief
c)peretirrgofficer (,r any othcr olfir:rr irrv.ll.d in tlrrr rnanagementand
o l t r . r r r L i u r t( ) f L l t ( ' ( . { l r ! l p itrr - \ ' .

tv. {:t,:Nt,:ltAt,trtt{}vttil(rNsi
l. A r r . yf r r r . i g t r - r w n r . .xr lr i p l r r r r . r . l r ' irt :l l r i r r t . r * r lh y * l r h i l l p p i n e
rrutrolruirrrn.y
lrt crrlcrttl urrder!hr:l)lrrlipprrr:lL.guttr r.rlshipu uponappr<lval
b_vthe Admi nistration.
2. The registration r.ifa ship unrJera lea.se-irrevocable purchase
arrangernent shall be governed by this circular. A ship subject of a leaee-
irrev<.,cable
purchasearrangement shall be i,reatedas a bareboatchartered
ship; it shall be eonsideredan ,wnr:d ship ,nly after thr: fuil purchaeeprice
had beenpaid.
3. The documcntstion{rflrhipsrrgistt,reduntler lrll 760,ac amended
shall be governedby the provisions of this circular and chapter xv of the
1997PMlltRR.
4. Cornpaniesn'ithout owned ships which qualif-vunder Rrgulation
vI shall be allowed to acquire and register ships pursuant to pD ?60, as
amended.up to a maximum of ten i10r ship..;rvhile shipowningcompanies
have no limit as to the number of ships to be chartered.
5. Ships registered under thc Philippine flag pursuant to ttris
Memorandum circular shall be issued a certificate of philippiue Begistry
( ( l l ) l t t < : o n s i x t o nwti t h R c g r r h r t i oxnv i r 2 r i f r h r , i l x l ? f , l r i l i p p i n rM
: err:hant
Marino liulec und lkgulatiuns {l}MMltlt).

V. CONDITIONS FOR SHIP RDGISTRATTON


1. r J n l y c o m p a n i e sw h i c h h a v e c o m p l i e d w i t h t h e f o l l o w i n g
requirements may tlareboateharter ships under PD ?60, as amended;
l.l The companyis accrcditedunder MemorandumCircular
No. 181,provided,that euih accrr:ditatirnshall be rnainfainedfor the
period that it has a bareboatchartered ship.
|.2 Shipowningcompanicsmust hav* a paid-upcapitalof Seven
Million Pesoe(P7 M.l and companieswith<.rutowned ships must have a
paid-upcapital of Ten Miilion PesosrPl0 M,t:

1.3 The companyshall have the foilowing managementprofi_le;


W
1ffi 468 NOTESANDCA-SES
s

ONT}TEI,AW ONTRANSPORTATION

ffi
ffi
AND PUBLIC TITILTNES

s. fire Chief Executive and Chief Operating0ffier(but


if he is one and the aarno,the nert ranking OporJting

# '
ahall be citiatn and reaidonlof tho lrhrlippinu*;
and
Ofllcor)

H
F
b.
-
Two €) principal olllccrs of the company *hall have
at leaet five (S, yeara experience.inship *unugu*urrt,
shipping
operations and/or chartering.
il 2' A ship shall be registeredunder this circular for a peri'd
.
I lessthan one (1) year.

3.
ofnot

Extensionof the registrationof th* sh.ipf'r le'n than nne(1)year


*
for the purposeoffinarizing documenrationfor
I the extensionofthe bareboat
chartcr party or the eventualderetionof the ship from
thc,.philippineRcgintry

$
$
shall be allowed fi' a g:riod n't t. exceednirrety ig0)
registration shall be under the same compan-v.

4'
days pr.vided that the

If the bareboat-charterparty is pre-terminated within


one {r)
f; ybar from date ofdelivery ofthe ehip, the cr,arterer
shall be ii,bre to pay the
f MARI{A-as penaltythc amount eiuivalent to si-r i6.r
# months wirhhording
tax or the balanceof tire withhording taxer*due f.r rhe whore
$ ie higher.For purpose' ofthis provision,a ship which
year,whichever
has continuouslybeen
* reginterodfor m.re than'ne (1) vear unrr*r thc lrhirippin.
$ n,,f ,,n,1,,,'
tt.,.,
'eam€lrroup of conrpanioeghalr rxr deerncdto rrave
f,

*, ,r,,rrl;rli,,.l
witli'ltegulation
*r, V.2 hereoL
ffi.

t Any.clrflr.rgt'in
rlrt'rtrrns un(lcrrn(rlt!()rrs
o[tlrc c]rartcrparty shall
*-. --
F' or,approvcdby ilre Administration.
F
$ by Filipino criw exceptin casesas may be determined
F by the Adminietration.
s'
&
For this.purpose,Filipino erew onbta.d philippine-rejstered
by prescribed shippingArticles which shalr rrciubmitted"r,ips"rratt
te
SvTed fur notation
&. by the Administration.

n
$
H
7.
-A
Philippine-registeredship may, under circumstances
dctermined by theAdminietration, haueon r"".a r,rp"-r-"r"J*
tlli tltnt shall nrt Frfiorm any rf th* funcri'nr
with the operation/manag€ment of the atup.

I'
lo be
o."ria"a
rf the,crr,w nor i'tcr{ero

crew onlxrard phirippine-regirt*rr..dxhipc 'rc requircd


to be
H
ffi
certificated in accordancewith thl tnternational
convention on $tandards
ofrlaining, certification and watchkeeping for seafarere,
rg?g as amended.
ships registered under thie cirelar shall, when cailing for
H I
firgt time at a Philippine port. ehail be inrpeeted hy
the
ts sUrv€yor8.
a,thorizea finnrNa

n
p
r.
.
Dy an
10
All ships regietered under thjs circurar must be clasemainta.ined
-rnternahonally recognized claesification society.Any change in the
claasification of a ph-ilippine-registered ship shall
re l--ldiut"ty
corn'nunicated to the Adminietration.
11' Philippine-regrstered ships shail comply with
the requirements
of the International safety Management (IsM) code for
the erte olrutio'or
ehipe and for pollution prevention.
MARITIME L.AW 8?
Veaela

L2' companiea and ahips covered by thia circurar ahall at all time
comply rith national rulee and regulatione as well as international
conventione, codes aad standards on safety aod marioe environment
protaction.
l3' the bareboat cbarterer shall enaure that payment of the 4.6%
withholding ta-xon groes charter hire ie remiried to thi bureau of Internal
Revcnue.
,)t
14 companies with bareboatchartered ehipe nhalr depoaitin favor
of the M^ri[ime Induetry Auth'nt.y with uny rcprrkrLlt,c'nrmercia!banl
the
:IT amount equivalent to one Hundred rhousand pesos(p100,00o.00)per ebip
.li
to answer for the paynent of the 4.5t? *'ithhrrding tar, finee and penaltiee
t-\
dur' thc govern.nrentin th. event that coopany faiL to settle tbe 8€u'e upon
h, a.etg!o3 of the ship from rhe philippine Regrstry.In addition, companiee
shall algo po*t a surety bond per ship in a' amount equivarent to the carh
b.nd. Afl,e-rthe deletiei'of thc ship frorn the Philippine Registerof sbipa,
the
ernourt of (PI00,000.00)may be withcrrawnprorided thalproof of paymenr
-1,"
of nll tarea/penaltiosdrl. kl thr, govr,rnnrr.nt ,"r,u*u1of ttin regirtration
of
ll!: tlre nhip under the llhilipprnc fl'g hari l*crr subrnrt.tr:d.
shrpwning companies
, {r ehali be erempted from thig rr.qui'emcnt lor their bare]xratctrariered'ahipa.
a i,

tt , , . --1.1, All ships registeredu'der this uircurrarghail noi be deretedFom


the Philippine Registry/revertr:<it. its frrrr:iin flag or regielry without the
l()il prior approval of the Adrninistration.
16. The companl',shail cornply with all laws, rules and regulationr
liiil pertaining to Philippine flag ship.s.

I l r ' ,i
vI. PROCEI}UR"ES I'OR REGIS1'IIA1'IOI.i
irri, L
. -()nly applicutronrwirlr conr;rlrtl drx:urnult*lryr$,quirenlentsahall
ll', be accepted.
:L ],

by the Adminisiration.
.I l)('
3. The applicantshall pay the followrngfees:
rdt rl
a. Baretrrat ('harter - pItJ,TZ(t.(rrr
for the first three years
plus F4,000.00f<rreverl'ye&r thereafter,
b. phihppine ttegistry {CI,R)
Certificare r_rf
J hr'
,rt,l. i. Initial (good for three (jl) monlhs) * p2,000.00 for
.d.tl the first, 500 gt plus p0.U0 for every gt thereaRer or a fraction
thereof
r tht:
il\-".\ ii. Full Terrn _- p1,200.00
iii. - p1,200.00
Re-issuance
.titrltl
vlr. DOCUMENTARY REQUIRUMENTIi:
n the
. l t( ' l v 1. The fotrlowirrgdocunrentashalr txr rubrnittr:d upnn firing of an
up;rliculion:
{ l r ' l l tI a. letter of lntenh
I r ) r to l
b. Duly eigned Bareboat Charter Contract (with namee
printed below the signaturea), provided that the document
dulv
r68 NO'TESAND CASESON THE LAWON'I'I{AN$I)ORTATION
AND PUBLIC UTILI?IES

notarized in the state where it was executcd and authenticated by the


Philippine Embasey/consulate concerned shall be gubmitt€d within
sirty (60t days hom approval of the applicatron;
c. CopyofacertificateofDeletionorSuepenrionoftheoriginal
regist,ry or consent to the Bareboat Charter regietration in the
Philippinea by the etate of original registry provided, that the original
copy of the document shall be gubmittcd within thirty (80,tdaye from
approval of the application;
d. Copvof certificatcof GotxlStandingof the registeredowners
recently issued hy the State of Regrstry provided, that the original
copl' of the document shall be submitted *.ithin thirty (30) days frorn
approvalof the application;
e. P o w e r o f A t t o r n e y / B o a r d R e s o l u t i o na u t h o r i z i n g t h e
signator.r'tothe baretroatcharter party to act as such in behalf of the
registered olr'ners,provided that the document duly notarized in the
State where it u'as executedand authenticated by the philippine
EnrbnssyiConsulnte conccrnr.tl shall lx.srrbnrittrr<l within sixty {60)davs
from approvalofthc application;
f" Copyof the ship'ssubsistingr:ertilicatcof Original Regrsrry,
provided that the document duly cerlified tr-rbc a true copyof the original
by the State of Original Registry or b,v the philippine Embassyr
Consulaleconcernedshall be subnrittr,drvithin rixly (fi0) days from
approvalof the application;
g. Board ResolutiorvSecrr:tary'.sOrrrtificatc duly notarized,
certified by the Board secretary authorizing the filing of the application
and designating the oflicials/authorizedrepresentativesto represent
thc rrgrplicant.fl)rnl)an-v:
h. Assignmentof tsank Dopositrcashirond of One llundred
T l r o t r . q n nl )rlll s o )s; r rr t r l
i. Builders Certilicate(l'or New l3uilding.ri.
2. F o r h a r e b o a st u b - c h a r t ear p p l i c a t i o n st .h e f b l l o w i n ga d d i t i o n a l
d o c u m e n t s h a l lb e s u b m i t t e d :

a. Copy of the consentof RegisteredOwners to the Baretroat


Sub-Charter Agreement enLeredinto by and b€tween the disponent
owners and bareboatsub-charterers,prrsuided,thatthe documentduly
ttotrtriztdin thc Stnte wht'rc it.wa.,tirsrrcrl,/cxr.cullrl
nnd urrth*nticated
hy the l'hilippine Embaae.ylConsulate concernedshall be submittcd
within eixty (60) dayafrom approvalofthe applicltion;
b. Power of Attorney or Board Resolution authorizing the
personwho issued the conaentto act as euch in behalfofthe bareboat
charterers, provided that the document duly notarized in the Statc
where it wae issued,/executedand authenticated by the philippine
EmbassylConsulateconcernedshall be submitted within sixty (60idays
from approval ofthe application; and
c. A copy ofthe certificat€ ofGood Standing ofthe bareboat
sub-charterers recently issued by the State of I;iegisLry,prouided,that
f
MJ\RIT.II\{.8
I.r\W ,t69

the orighal copyof the d.curnenrshalrrie


surrmittedwithin thirty /30)
d a r . sf r o m a p p r o v a ol f t h o a p p l i e r r t r , , r r .
3. The follo,wilrgpost_approval drrcuments,if applicableshall be
s u b n r i t t e dw i t h i n t h e p r t : s c r i b . l , i
1 r , , . i , , ,ar s . r t . i l r r r l a t eirni t h e r r r A I i l l I A
:rppr0r.al:

a. C o l o r e dp h o k r g r a p hrsr l i i l i , r r r rat n g l r : sor l . t h e


s h i ps h o w i n g
the place of registry in the aiitnrri ptsrt.irttt;
b certifieci true copl *l'thr: s'rp's prorricorof
Derilery and
Acceptance:
c. Sworn etat€rnentof,crewsalariesand wages(on
i r ; r r r i)s. i n d i c n t i n g t h e r e i n t h * ' r r r r r r . xr f an annual
r i l c r . w n l r : m l r r . r s$, i e i r
r('slx.ct.l vr. lxlurtions a rrrlcurrr..upnrndirrg sularic#wagrs;
rl.
Shrp'sdryd<xkingrit:hetiulturld ltxt of survcy
sltrlus;
e' r'rtxr{'ofmonthly payment o{ the 4.5%withholding
tax wrth
' breakd'w' of payments t y *l,ip r()riginnl ,r,py
of ni* oeipt-r rhall
bt prcse.ntedfr-rrverification purposes,i;and
f. Origrnal c<lpyof a dr:cumenti_ssued b5,theState of onginal
regrstryprorridingdetails of the'ship'snanle,(|wnership
and regrste!.ed
mortgngos

trTIII. ISSTJR0F CRRTII.,I{JA't,E.q


I A s l t t pr l p l r r o v . du r t x ' r i i g t d l ( . 1 rr.r(rl r r l t t. lrr r
l , h i l i p p i r r rR: c g i s t r .or f
ships prrrsrrrrntto this circurar stratttx,
issrr*da f.lertificateof phirippine
llegrrrtrl tL'PR) valid for perio<rof three r3l
nronths which may be extended
for another ninety (9O)days.
2' upon submission of the protocol of Delivery
and the approved
ship plans, a full r,ermcpR shau u" isr,r"J'.o-terminus
with the approved
duration of the bareboat charrer p""ty. N;;-;"bmission
of theao documenr.g
after six (6) months from the date of issua;ce
of the first cpR shall result in
the outright cancellationof the authority
' tn' regisrer
r v h r " r \ ' ' the
u"L oahip under
'r'P u r'l the
Philippirrr'flrrg.

l'' 'l
yprgraphicarcorrectronsin rhe enrri*r ,r'a
. clprt eharlbe alrowed
through the ro"iasuanceof the crH, pruuiacd
trrat the original cFR being
crrrect'ed shall be surrendered wiilri. thirty
t30) days from the date of the
re-issuedCPR.

. 4' where materiar change in the entries of the


cpR ie to b€ effected
euch as in the caeeof altcrationoithr ship's specirications
or changeof n"me,
the Adminietration shall require *re *,is*i"*ion
of additionar documente
atteeting to the change
5. The period of varidity of therc'* of n nhip r*-isxuad
pRrttgrnphx3 nnd 4 of thirrltrgrrlntion..rhrrll purauant to
lx, r.rlrrivrrl,lrt
t9
-' thnt
*"" refleetodln
the t:Plt bern6replacad. "'"-

IIL SANCTIONS

- After due notice and hearing, the folrowing administrarive


-to fines shall
i"*ffa upon a company found have vi.ratedy'contravened
T any provision
of this Circuiar:
{?0 NOTRSAND CASE.SON THE I"AW ON TIIANSPORTATION
AND PUBLTCLTTILITIES

First offense P 25,Cn0.00


Secondoffense P 50,000.00
Third arrd succl'eriingoffenseswithr;ut
prejudice[o the cancellati,_rn
of the iJpR P 100,000.00
L REPAALING CI.AUSE
Any provinionof th* il)9? t',\rlililt rrndexistingMARTNARures
and Regulations and Orders *'hich are' incorisistcnt irere"*lth
are deemed
modifiedaccordingl-v.
Menrorandum(rircular Nos.3g, 42, lll,I6o and the
Rrrh,snnd }kgulationn lmfrllnlenting ?{i(),rrslrnlndod are treysby
reptak:d.

XI. EFFECTIVTTT
T'histrIemorandumcircurar shail bc oncein a newspaper.f
1;urrlished
generalcirculationand shall rake effrrcr.
fificen il5i daysaftcr publication.
trtanila.Philippines22 Januan, 200J.

tft. stilP's MANtFEST.


Vesselsare requiredto carry manifest..s rn coastwisetrade. Section906 of
the Tariff and Customs (loclepir-,r'ides thal "rnanifestsshall be required for
cargoand passengerstransportedfrorn olrc plirceor port in
the Philippinesto
atrr-rlhero'ly when or., or both .f such placesis * port oientry."This
requirement
i-qlikewise inrposedon evt.rv ves.scifiun, a firreignporr unier
section l00s of
thc sanrr,'("odc.
A manifest is i declarationof the entrre adrgo.The objectof
a rnanifestis
to furnish customs ofticers with a list to check a[ainst, tu lnform
the revenue
oJficerewhat goods are being brought into a port of the
country on a vessel.e
Hil*, the requirement thai a vessel must carry a manifest is not
complied
with evenif a bill of lading can be presenterl.
A biliof lading is just a declaration
of a specrfic cargo rather than t-he entire cargo. It is issued
as a matt€r of
convenieneeby virtue of a contract.r{,

CASE:

FAUsro FUBIso and BoNrFAcIo cEl,rro v. Fr.oRENnNo E. BrvanA


G.R No. L-l l{O?,Octobor.jO,l0l?.
This appealby bill of exeeptions warifiled by counselfor FlorentinoE. Rivera
as$nst the judgment of september6, 1915,in which the defendant
and appellantwar
orderedto placeat the dispoaalof the plaintiflFaustoRubisothe piloiuoat
in litigation.
No specialfinding was madefor coets.

oMacondray and
Company, [nc. v. Acting Commissioner of Curtoms,62 SCRA 427
tilbtd. tlgl|l.
t
t
l!

MARXTIMIJ I"AW 171


Vess€ls

On April 10, f 915,sunsel for plaintiffs brought suit in the Court of Firat
' of t'hia city and atleg"d in tlre eomptaint Instflne
that hin cliirnts were th€ ownerr of thG pilot boat,
osn€d Valentina, which had been in bad condiLrcnaince the yesr lgl4 and,
on the dats
of tlre complaint, war strsnd€d in the place caltcd Tingioy, of thc municipdity
of Bo1ran,
Batang*r; thal t]re dsfsodqn! Florentino H. Rivero t rli cbarge or pocsession
of aeid
vgss€l rit}|out the knowledge or consent of the plaintiffs anJrefus€d to deliver
it to
them, under claim that he was the owner thereof; and that ,u.t p.*"aur*;"
til
defendsnt'8 part caunethe plaintiffs to euffer damages,not only hecaus€they
could not
proeed to repair the veas€l,but aleo becausethe.ywere unable to derive p-frt
fro- th"
vayagel for which eaid pilot txrat was cuptom,aril_v rrsed;and that the net amount of arrch
uncollectedpmfit wae Pl,?b0. The complaint tr..rrrrinated with a petition that judgment
be rendered by ordering the defendant to drliver naid pilot txrat to the plaiitifa
anJ
indnmnify tltflnr in thr' arnounl.al?rrt.nr.rrti,n!.{!(,r rl ruuchnrrrnrnl ar rhould bo provon
at trial, and to pay the coeta. .
Counaelfor lhe defendantenlered a general and specificdenial ofall the facts
set
forth in the complainr, with the exeeption of thn"* admitted in the epecial d"fu;
;;
contisting in that eaid pilot boat belongedto the concernnamed"Gelit! & Co.,"Bonifacio
Gilito being a crpartner thereof to tbe ertent of two-thirds, and the chinaman
sy eui, to
that of one-third, of the value of said vessel; that aubsequently Bonifacio Celitosoid
his
share tb his copartnerSy Qui, as att€et€d by the inatrument dxhibitA, registered in
the
tfi ol
offict of t}e C,ollec.tor
of Customeand made a part o[hi* &nawer;that later said Chinaman,
tlre abaolut€ly owner ofthe vessel,sold it in turn to the defendant Rivera, according
I tlt' to
lho prrhlir^ innl.ntrnnnt,nllr.rntl-lrhr,rlt,rhin frrrf{w..r
nNHxlubit It;und Llrat,firr thir *uirn,
'tr t o
Itrvera turk gxrexuitln of t"beoaid pilot lxrat Valenlirra, ac its cole o1v-ner. He thereforc
1 1 ' nt . petilioned that the defendant be abeiolvefrom the complaint, with the coots
iit rtf againrt the
plaintiffe.
After the hearing of the case and the intrr-rduclion of tlocumentary evidence,
" the
:lt l- judgment of September6, 1915, was rendered, frdm which counsei for the defendant
.ntrt appaled and moved for a new tnal, This nr{Jlronwas denied and appellant excepted.
i{. I
The record showeit to have been firlly pr(,vcn that llonifacio Gelikr sotd his
rltr',j ehar€
in the pilot boat Valentina, consistingof a two-thirris interest therein, to the Chinaman
tlilIl
Sy Qrri,thf co-ownerof the othtr one-thirdintr.rr,stin xrrirlvr,xxcl;whon,forethis vendor
r ,,1 rr no Lirrgtr r.rrtrtk,rlkr r.xr,rcixr.
,tlty lr(.1.t(ll
*.lrrl.r.vr.rrrr rr,s1x.ctto thr: lxrtt in queetion.
(ielit'ow|rrrotreof tht parfnershipownr.rHo{'thcValtnt.inrr,
as in fact his name appearein
the cr'rtificatcof proteetionistued hy thc llurr:;ruof (lusLorns, und the rights he ireld are
evidencedby ihe ar'liclesof parinership; but, thc whole ownership in the vessel
having
beencttneolidatedln behalf of the Chinarnnn Sy Qui, thrs iatter, in the use of his right
ai
the eoleowner of the Valentina, eold this boat to l'lorentino E. Rivera for p2d, b60,
on
d January 4' 1915,which facte are Bel frrrth in a dccd rutifi",l on the aame date before
a
notary.This docurnentwas registered in the Burcarl of Customs on March l?th of the
6gmeyear.
ila.r t
On the 2ild rtf that year,thst ir. aftr,r lhr srrk.ofltrr.lxrat kr thc defendantRivere,
btn
ruit lr'fivingbt'r'ttlrrou{ht in llrr,junt,icr,
of't,hr:ptlcr. ururl agurnrt tlre OfuilanranSy eui
trr i'nf{}r('t'pit-}'ntt'ttl
of ucertuitr strrrrof rror}ry,llre lalkr's credilor FaualoRubieo,tbe
hereinplaintiff, acquiredsaid vesselat a publicauctionsaleand for the eum of p56.45.
The eertificateofsale and adjudication ofthe boat in question was issued by the aheriff
on behalf of Fausto Rubieo,in the office of the collector of custome, on Januar;r 2? of
the aame year and was also entered in the commercial registry on the l,tth of i{arch,
following:
472 NOTESAND CASES(}N T'I{E [.AW ONTI(ANIiI'ORTATION
AI.|D ITUBLICtR'ILITIES

So that lhe pilot boat Valenlina wnn twicc nnid: firat privately by itr nwner Sy Qui
to t.he defendnnt to the dcfnndant.Itlorpntinn E ltiverri, on .Innuery 4, l9lS, and
afterward.stry the aheriffat public auction in *rnl'ormity with the order mniained in the
judgmrn! rendered by the justicc nf the peacrlcourt, on JanuarT 23 of the csmc y*ar,
ltgair.slthc Cliiriunrrrrr
Sy Qui and in b*,,halfoit.hi: plaintiff, F'auetsRubiso.
l
It ia undeniable that, the defendant Rivers acquired by purchaaethe pllot bont
Valentina on behalf of the plaintiff Rubiso;but it is no leestrue that the sale of the veEsel
by Sy Qtn to l'lorentrno E. Rivera, on January 4, 1915, wae eotered in the cuntoms
regielry only on March 1?, 1915, whiie its oale ia public auction to Fatteto Rubiso on the
23d of Janua4r of the eame year, 1915, was rscorded in the oflice of the Collec-torof
Cuetoms on the 27lh of the eeme month, and in the commersial regratry on the 4tb of
March, following; that is, the eale on behalf of the defendanl Rivera was prior to that
made at public auction to Rubiso, but the regietration of this latter eale was prior by
may daye tn the eale ruade to the defendant.
Article 573 of the Codeof Commerceprovides,in its first paragraph:

"ilferchant vesselsconstitutr,'property which may be acquired nn


trarrsferredby any uf the nreansrrcr-,gnized by law.'fheacquisitionof a vessel
mu.stbe included in a written instrr-lment,.whichshall nnt produceany effect
wif h rtgartl t.othird [icrron!{if rxrl.rrlconltdilr tlrc <'orrrrnorcial
rurgirtry."

So that, pursuant to the above-quotcdarticle, inscription in the commercialregistry


was indispensable,in order that said acquisitionmight affect,and produceconeequencres
with respectto third persons.
However,sincethe enactmentof Ar-'tNo. 1900,on Mdv 18.1909,said articie of the
C n d e o f C c , m n l , , r c irr.. r s o m c n d r , d i. r : a l r p e a r sl r l s r . . c t i , r2r i o f t h a t A c t , h e r e b e l o w
transcribed.

"The documenting, registering, enrolling, and Iicensing of veseelein


nccordancewith lhc (luatomsAriminiet.rat.ivc i\ct nnrl crrsl.onttnrlea and
regulutions shull bc decliredto lru rr 1Xi0,orr SI.ry lfl, 1909,said articie of the
Code of Commerce was amended, as appears by section 2 of that Act,
herr,bclowtranscrilrcd.
-The documenting,
regietering, enrolling, and licensing of vesselsin
accor<iance with the CustomsAdnrinistrativeAct and custornsrules and
regulations shall be deemedto be a registry of vesselswilhin the meaning of
title two of the Codeof Commerce,unlessotherwi.qeprovidedin eaid Customs
Adrnini*trntive Act or in caid customenrler rrrrdrcgulations,and the lnnuler
Collector of Customs shall perform the duties of, commercial register
concerningthe regietering of vesaele,as defined in title two of the Code of
(lolnnre rct'.'

The requisite ofregistration on the registry ofthe purchase ofa vessel,is necessary
and indiepensablein ordcr that lhe purchaeer'srights may be maintained againat a
claim filed by a third perslon.Such registration is required both by the Codeof Commerce
and by Act No. 1900.The amendment solely consistedin charging the Insular Colleclor aa
of Cuetome, ae at present, with the fulfillment of the duties of the commercial regiater IN
concerningthe registering ofveseele:Bothet the regietration ofa bill ofeale ofa vees€l M
shall be made in the office of the Ineular Collectorof Customs,who, einceMay 18, 1909, I
hae been performing the dutiee of ihe eommercial register in place of thie lattsr official.
f
41

$tAtrt't'tMl;i.A\4 {?8
\i'.."r'i
"

l r r v r r , wo f ' s l r i dl r ' g i r ll r r r , v r s r t , nlrl i l.s r i r r r l r : r r r i r l r l r , t tl ,r lrrrrlr,l t : l i r n d u ni t. l o r t n t i n oE .


l'\ { {ur Rtvera'srlgllts cannotprevall over tlruscacqurrt,db-y!'aust{lRubisoin the ownershipof
i5. rnd the pilol boat Valentina,inasrnuchas, though ther]atter',sacquisitionof the veesejat
'l rii tht' publicauc[ion,on January 2]], lgl5, v,,11c 11[.,i1.qurnt to it.i,prrchase by the defendant
It, \ r',itr, Rivera, nevcrthelesssaid sale at public aucti,in wa$ ant€c€dentlyrecord in the office of
lhe Collector of Customs,on January 27, and entered in the commercial regietryr An
unnecessaryprocecdingon llarch .lth; while the private and voluntary purchas€made
,ot i.oat, b-vRivera on a prior date was not recordedin the ofiice of the Collectorof Cuetomsuntil
,r. ,,.,"n1
r r r a r i vd a . ! sa f t r , r w a r d st,h a r i s , n c t -u r r t i l] ! I a r c hl Z , l g l 5 .
tusk)lll!i
J UI] thE T h e l e g a l r u l e s e t d o w n i n t h e ] ! { e r c a n t i l eC o d e s u b $ i s t g ,i n a s m u c h a F t h e
e( t()f ()f amendment snlely refers lo the oflicial r.r'hoshall rnake the entry; brut,with reepectto
e -ltrl ol' the righLsof tht' two purchart:s.wltichcvsr ol tlrt rn firsl registeredhis acquieitionof the
t,r thlt ve6-{elin the one entitled to enjoy fhe protection of the law, which congiderghim the
J! lor' l),\' abeoluteowner of the purchasedlrcat, an this latkrr t<.r be free of ail encumbranbeand alt
claims by strailgerri for, pursuant to article 5b2 af the said code,after the bill of the
judicial sale at auction has been executrd and rec<.,rded in the commercial regiatry all
the other liabilities of tj'revesselin favor of the creditors shall be consideredcaoceled.
iil The purchaser at public auction, Faus[o Rubiso, who was cerefu] to record hia
:l'l acquisitinn,opportunell' and on prior date, has,accordinglo the law, a better right than
rt thc defendani Rivera who subsequently recordedhis purchaee.The latter ie a third
person,who was directly;rffbct"edby therrrgistration which the plaintiffmade of the
acquisition.
rt,flstrr
'qur'1lc{rs ships or vessc,ls,
whether movedhy steamrrr hy eail, partnke,to a certainert€nt,
of the nalure and conditionsof real propert;.(rnacc(rur)t
of their valueand importancein
the world commerce;and fr:r this reason the prov'isionsof arrcicle5?3 of lhe Code of
'k' ot'the
Comrnerceare nearly identical *'ith articte l4?3 of the Civil Code.
'rt't','low
with respectto the indemnity for lossesand damages,requeat€dby the plaintitr,
ai;ide from the fact, ad shown by the errdence,rhat, subsequentto the date when the
jt:,lllrrerrt:lppt,ak'dfronr u'lrsrr,nder*d,tlru vr:s.ielin questionenrergedunharmed
from
the placewhere it was stranded, and was, at lhe time of the trial, anchorcdin the port of
M&ricnhnlt,the recordct'rtainlyrjrx,snol f urnish an.y;irrnitivr, cvidencenf the loas€sand
damagesirllt'gedto hnve treenoccusioned.On the other hand, it cennot be aflirmed that,
the defendant acted in bad faith specilically lxrcausehe acquired the vesselon a dat€
prior to that of its acquisitionat public auction by the plaintiff Rubiso,who, for the
i lll
reasonsaforestated.is trre and soleownlr of sai<ipilot boat.
rn(l
4u[ For the foregoing considerations,whcreby the errors aonignedto the judgment
nls appr{lcd front are'deemet{!o have trrr.rrrefutcd, it is our opinion thnt said judgment
li:r ehould be, ae it in hereby,a{lirmed, with r.hecostsagainat the appellant"so ordered.
I {'l'
, .'l
IV. TIORTGAGE.

l{{elL{ary*
Mortgage and other encumbrances over vessels are governed by the
pro\risions of Presidential Decree 1521, otherwise known aB the Ship Mori;gage
Uainst a
omr:ierce Decree of 1978. The same law as well as Section 12 of Executive Order llo. rgg
('ollcctor as amended ie being implemented with respect tn annotation/cancellation of
I reptster mortgages and transfer of rights and other encurnbrances of, vessels by
f s r essel Memorandum circular No. 100 which was issued by the MARINA in Aprii,
lh, 1909, 1995.
.r ofl,'tcitrl.
FT
471 NOTESAND CASESON THE T,AWON TITANSPORTATION
AND PUBLIC UTII,ITIES

PRESIDENTIAL DECREE NO. I52T


T}IH SHTP MORT1GAGE DECREE OF IffT8

WliltllllAS, it ir tho de'clnrad policy of the Stnte to rccelorete


indrrrtry;
tho 5rowth nnrl dovr:lcpnrenl cf the rhlppirrg
for ehip
WHEREAS, due to the heavy eapital requirement
ahipping indultry.hnp turned to
acquisition and'opernt'ion, the
flnnncial institutiont, both krcal and foreign' for aeeistunce;
not been
WIIEREAfI, Philippine laws on ship mortgage have
s. oftu*""I financing euch that it hag det€rrod
reaponeive to the o".dt
$. the ertcneione of needer! lcl*us to tbe industry;

I ,
wI{EnEAs,thereisgFecoguizedneedforextendingt.hebeaetltc
rccorded t(Do"r;l€* chipping under Fresidential Ilecrec No. 914 to
dornettlc rhlPPing.
Now,TIIEnEronr4LFERDINAM)E.It|ARcos,Procldontot
tbe Fhilippi""", Uy viriue of tbe powert v-eat-ef in rne by tbe
ao iru"*ty order thc enactment of n ahlp mor{gnge lnv

H
stl"
H,
C.o"titotioo"
rs foUos/s:
sEcTIoNLntb._Thiel}ecreeghrrllbeknownao"Tbesbip
Mortgage'Dccree of l9?8."

ffi SECTION ?- Who trwy Cotptitute a Ship Itlortgogre ' Any


of tlc Philippio.t' o.
"oy """o*itUoo
or corAoration
elxty per cent tl
-
organircd
th:
citizen
undcr
crpitrl of
thc lerr of rfa FiilfppLee' et lcut
fy en&cnr of thc Philipptnee n1f, for thc purpoo
rhtch 6 orrrod
of financing tne Lnctroctior, rcq.ieitionn purehaee of veesclt or
fnitiel opcretion ofvocel+ freely conrtitute a mortgegeoraayotlmr
err hir or it* veaeels 8[d itr equipnent wtth
lien or ctcrrnbralce
aly bcnt or othcr finrnciel irrtitutiooe' domestic or foreiSn'
l-e'
$ECTION 3. Xortgage of Veesel af Domeetic Ownerthlp;
cordt. -

il, (a) No mortgage, which at trhe tine such mortgage ie mcde


defined ia
includeo a veaeel of domcotic ownerehip as t'hic tcrn le
Precidential llecree No. ?01, or eny portion t'heroof, ae the wholc or
6ttrt 5" in rarpsct to such
sny Pert of t.he prnporty moi,S{ed" "t54
percon oilt" than the mor{gagor' hls belr ol
B againct'any
Ei
"#t' having aetual notice thereof' nntil ruch
n p"-oo
IA
acalSn, toa
"
is recorded in the of6"e of the philipplne Corst Guard of
-o"Ig"gu
the poJof documentation of euch veeael'
(b) The Coast Guard District or Station Commander ehall
B *oJ mortgegea delivered to him, in the order of t'hoir reception'
-
]i
in books to be fept for thst purpoc€ and indered to sbor
t,
E
I
(f ) lte nanre of the veaael
12, Tlle nanrer of tho partier tn the nortgsgc;
$,
l{ (3) Tbe time and date of reception of the inrtnrno'n$
F
Fl (4) The lnterest in the vesa€l eo mortgaged;
h
;il
g
h
&
s,
L'

Fi
ii

t
MARII'IME LAW
Vcuselr

(S) The mou.t arnd dnte of mat,urity of the mor{grg:r;


(8) Name, citizenrhip, nationelity and reeidence of
owner; and
(7) Aay materinl chenge of condition ia rcrpcct to *r1y
olthc prscodiug ltcur.
A copy of the inrtrarmetrt or mortgage ehsll be furniebod the
Centrd BanL of thc Pbilippinea
SECIION 1. Prcferzzd Mortgagea. -
te) A vetid mottgege which at the time it ie made includea
the whole olany vegcel of domestic ownership xhall have, in reepect
to euch veeeel arrd a^cof the date of recordation, the preferred etatua
given by the proviaione of S€ction l? hereof, if -
(f ) The mortgage ie recorded ae provided in Section B
T hereof;
9 (2) An &fttdatrit is filed w-ith the record of auch mortgago
t'th. cfi."t that tho m,rtg'gr. in nr'rtr. in gixxl firith r'd wrthout
any doaign to hinder, delay, or defraud any exicting or futurc
credltor of the morlg&gor ()r uny lien or nf l,h{, mortgagod vrro|;
(S) the mortgage doec not stipulate that the mortgagee
o
waiver tho pnofor-nod rtatuc thercof.
r &) Any mortgage which compliee with the above conditioae
f ir hareafter ealled e foreferred mortgage., For pur?oees of thir
€ I)ecnee, a voreel holding a Provieional Certlficaia of nnlUpptao
tf n€grstry ic considerod a vess€l of domeatic ownerohip ruch t-het rt
-)r caa bo cubject of preferred nortgage. Tbe philippino Cout Gusrd
b ie horeby euthorized to enter a veagel holdtag a provirlonal
Certlficate phitippine RCIgratry ir the n€gstry or ver.ols end to
"l
'€' nscord any mottgego rxocuted tbereon. Sucb nortgrgo lhdt [gs6
the prefer:red rtrtur es of the date of recordation upon'annplience
wittr the above condiiione.
ie (c) Itero sh*ll bc endors€d u1rcn the docunsnts of r vosal
i-u covered by a prefened nor*gage -
or jr_,
r:h (f ) Ttro namer of the mortgr.for and mortgtgeo;
(2) Tbe time and datc the endoreement ir mede;
cb
of (3) Tbe enount and datc of maturity of thc mortgnge;
and

itl (4) Any rmount required to be endoraed by tha


JN,
pnovleionr of paragrapha (e) or (fJ of thic Sectlon.
(d) Such ecdors€ment shall be nade (1) by the Coagt Gusd
Diatrict or station cornnandor of the port of doc+rnontatlon of the
mortgaged veseel, or (2) by the Coact Guard Dietrict or Statlon
Commander ol nny port in which the vrnnel lc found, lf *uch Coert
ouard Ilirtrlct or $tntion cnmnrnnder ig directod to naks tho
endoreement by the coaat Guard Dietrict or station comnandor of
tho port of docurnentation. The coast (iuard Dlatrict or gtatlon
178 NCTTES
AND CASBSON T}IE I.AW ON TRANSPORTATTON
AND PUBUC UTII,ITIES

Co*'npqder of tho port of docunsrt*tion shrrll glve guch dirsction


by wtre of lettsrst thc ruguatof tho modgago'e and upon thotcadcr
of the co.t of corrnunleqtlon of cuch dlnection. Tlhonever try n€xt
docurncnt io lseued for the vrtrel, euch radorsement lhall be
trancfiarrcd to aad endorr*d upon tho aes docurment by the Coeet
Gusrd Dletrict or Station Cornnnnder.
In the caee of a veesel holding a provincial certilicate .of
Philippine Registry, the endoraement shall be made by the Philipplao
eoneul abroad upon direction by wire or letter firoui the Maritine
Induntry Authority at tho requoet of the mortgngee and upon tendor
of the cost of communication of such diroction. A certlficate of cuch
endoraement, giving the place, time and deacription of tho
endoreeuent, ehall be recorded with the necorda of regiatration to
be uaintained at the Philippine Consulat€.
(e) A mortgage which includes property ottrer than a vesset
shall not be held a preferred mortgage ur-less the mortgage provideo
for the separate diecharge of such property by the payment of a
epecified portion of the mortgage indebtedness" If a preferred
mortgage so provides for the oeparate discharge, the amouat of the
portion of auch paSrment shall be endomed upon the documents of
tho ve*rel.
(O A preferred mortgage includes more than one veseel and
providee for the eeparate diecharge ofeach veasel by the payment
of a portion of mortgage indebtedness, the nmount of such portion
of such payment ehall be endoreed upo'n the dsrsrrms6[,sef the veeael.
In caee sueh mortgage doee not provide for the separate discharge
of a vessel and the veseel ie to bo sold upon the order of a dintrict
court of the Fhilippines in a euit in rem in admiralty, the court shall
deLtrnrinc the portion of tho mortgage indebteclneee incren^eed by
20 per centum ( I ) which, in the opinion of the court the approxinate
vnlue of nll the vsmols eovorcd by tbe mortgagc,'and (2) upon tho
pnymont of which the vereel shall b€ diocharged from the modgag€.
SECTION 5. Certifted Copiee of tlortgage; eshibition. - The
Coaat Gunrd District or Station Commonder upon the recording of
a preferred mortgage ehall deliver two certified copiea thereof to
the mor{gagor who ehall place, snd uee due diligence to retain, one
copy on boud the mortgaged vee€€l notice of which shell be poet*d
in a conapicuoue placo thereat and ceus€ euch copy and the
dscrrmoDta of the vere€l to be erhibitod by the naster to sny p€rsln
having bueineee with the veeeel which give rioe to a maritine lien
upon the vees€l or to the Bale, conveyance, or mortgage thereof.
The rnaeter ofthe vees€l ehall upon the requeet ofany tuch p€rson,
e-hibit tor hirn the docunente of the vcssel placod on boerd tbereof.
the requinement of this Section that a copy of a prefer:ned mortgage
be placed and retained oa borrd the mortgaged veaeel ehall not
npply in the caee of a mortgaged vessel which ig not eelf.propelled
(including but not limitod to, borger, sconea, lighten, and car floatr).

If the maet€rof the veesel willfully fnila to e-hibit the documente


of the veseel or the copy of any preferred mortgage thereof, the
Philippine Coast Guard may Bualr€nd or cancel the rnnetar,s lic€uas.
18,
t

]ILIRI'IIMT' LAW
{71
Vess€lg

SECTION & priar and Subdcqucnt Maitine


Lions on Nrfgagd
Vessel. - The mortgeg-or (l) shsli, utrcn nequest
of the mortgtNgos,
dincloee in writing to him prior to tle erecution
of any preferrod
nortgage, the exist€nee of any maritime lien, prior
a-oig"g, oo
otber obligatioa or tiability upon the vesrsr
to 'e mortgas;;" tr"t fu
known to the mortgagor, and (2) withnut
tuu .oi"lil of the
nortgage€, ehslt 6e1 incur, after the erecution
of euch moijageaaA
tho mortgagoe hsr hscl a rea'onabto tirne in
fforo whlch to record
t'he mortgage aad hsve iadorseorente in respect
thereto nade upon
the documentr of the veeeel, any contractual
nbtigation cpotlng a
llcn upon thc ve*el other than a ilen for wages
of,et€vedoro, when
employed directty b-yjhe owne&.operator, ,rra"ter,
ehiprr hnrband,
or agent of ths vecrcl, for wrgee of the crew
of the veecer, f<lr general
ev€rarre' or for salvage, incruding contract salvage,
in ree$t to the
veceelotonnage dues gnd ell <lther charges (not
to exceed p20rfiX)) of
the Philippine Goverz,ment in respect L tfr. vessel.
A mortgagor, who, with intent to defraud, violates
the above
provision and if the mortgagor is a corporation
or anaocistion, the
prercirlent or othr.r principaf txr"cutivr .rlTi.."
of the ..r"pooHoo o,
aeaociation, ehall bc prrni6[s4 by a fine of not,
more thaa p6,OO0or
impri*onment of no-t mor"e than two yoonr,
or boi.h. Tho rnortgage
indebi,edneee ghnlt thereupon beco-" immediately
v due
- - and
---- payable
r
nt the election of tbe mortgagee.
SECTION 7, Record of Notice ttf Cluint of l"ien
on Mortgaged
!'ed*el; diechurge of lien. -
(a) The coaet Guard Dietrict
or station commander of the
port of docurnentation ehall, upon the request
v of anypereon" record
notice of hir claim of a rien upon e vesner
o by a ireferrod
mor''gago, together with the nnture elnte of ert".ro*.od
o , nticrn, and auount of
the llen, and the name and :rclclreeeof thc p".*"".
erry [JJo *n
hae earrsod notlce of hie erarm of tien t' be e.
recorded shsll, upon a
le diecharge in whole or in part of the indebtedness,
for{hwith frie with
rf the coast Guard Dietrict or station commander
a certifieate of euch
t{} diecherge' The coagt Guard District or station
commander eh',rl
l8 thereupon record the eertificatc.
.d
(b) The mortgagor upon a dischnrge
t€ . in whole or in pert of
the mortgage indebtedne"", shr[ f<rrthwiilr fite
,n with the coart Guarrl
Distriet or station commander frrr tho p*rr of drrrrmr.nrntion
tll of the
verro!. a rortlflcnto of ruch dillr.hlrgo
{. duly r.rr,cutod iy lhc
m'rtgng.t+. srreh coart G*ard District or stati'n
,lr r L-ommrndop shrrr
theru upon r*cqrrd thi certrrrcate. In case of a veesel
i. covered by a
prcfercd mortgage, the coast Guard Dictrict
5e or sltation connandor
at the port of documentatioa ahall endoree ulxla
iot the docunentc of
the veecel,or direct tbe coact Guard DigtJ"t c"ilrra.,
od
r).
et any port ln whlch the vss€l ie found, to "ibltr",
ro ondoreo, tbc fast of
euch diecharge.
ata
A certifieate of.such endora€ment, giving the tirne, pLaoe
.be and
doocription of the andorecmen! ahalr rr"
r-6€. witu thofHlippim
corrt cuard. Ifhcna thc oadorromont ig "*to"a&
n'do by punloo oCI.ith.o
"
178 NOTESAND CAsE.SONIT{E I,AW ON TITANSPORTATION
AND PI,IBIJCUTII.JTII.:9

thc cor* f*rnrrd llirtrtct or Ebtion oocnnander such certific*tc thrlt


bo pronptly forvardod to tho philippine qosd Guard.
SECTION 8. Co:nditiont precedentlto Record,; intereet an
ht@Xodgege.-
(e) No mor{gage ehdt be rpcordsd rhl""r it states the intsrsct
of,the nortgagor in the vecccl" rnd tbe intfnest eo onrtgngod.

- &) No nortgego, notica of clain


{f lien, or certillcrto of
tberoo4 ahrll bc ruoodrd nnla
9thrrle froviou.rly ackaovlodgod
bdbrc tho corrt Gurd rlistrict or gtrtioJ corn-an6ur of tbe pot-tr
of documntrtion or a aoterT public or oth{r ofhccr euthorizedly a
Ler of tho Philippiaec to tel,e echostdrtpent of deds orbefore a
Philippiae consul or concular agcnL
(c) Incas€ofachqngeintheportof tation ofa vessel
of the Philippiaec, no mortgage ehalt b€ rr nt the new port of
documentation unlers there ic furnished tbe Coaat Guard District
or Station Conuender ol auch por! r with the copy of the
aortgage to be recorde4 a certifi"d *py the record of the vess€l
et tho fomer por{ of docurnentotion fun by the Coact Cuard
Ilictridor Stati6a f,ontnrnder of such Coast Ctrard District
or Station Conmander at the new t of documentation ia
nuthortzed and dlrectod to record such copy.
SECI|ION g.Intpeetion of thc Copice Recorda; feer. - Each
Cofft Gusrd Districi or Station Co-rnar r ehsll permit records
mede u-derthe prnvieiona of thie dccre€ to inspectcd duringoffice
houre, under euch rea.ronable rcgulation the Philippine Coect
Guard may etablielu Upon the nequert of pereon the Coaet Gqend
District or Station Commqn{sr ebnlt n11 him from the neconds
of the Coad Guard's otlFce:(l) a eetting forth the na.mea
of tbo ownem of eny veeeel" tho intercst by each owner, and the
m.rterial facte aa to any nnortgage coverig, or any lien or otber
encumhrenco utxrn, a lpreilfud vr.rrerl, (l
t nrrtifiotl r:opy of eny
mortgtr3o, nolics of claim of tiea, or ified copy diach*rge la
rerpect to euch veeael, or (S) a eortifi copy a3 required by
sub.€ction (c) ofSection E hereof. Tbe phi rine (Joast Guord ehall
collect the feec as provided for under lawe and regrriationa
lor 1ny mortgage rocorded, or aay certif or certified copy
tumiehed by iL
SECTION lA. Lien of preferred Morlgage; foreclozure;
j-uricdiction; prncedurc. - A preforred moftgr.ge
constituae a
lien ulrcn the mortgagod vessel in the "h"ti
of the outatancling
mortgage indebtedness rocured by euch"-b"otve[r'uol.up'n the defsult of
txy t€ro or condition of the mortgage rucli, lien may be enforced by
the.rnortgagec by euit irr rennfuiag aa'oirtalty, wherein the vess€l
itcelf nay bo made e partly defena'nt and bb arreeted in the rrrann€r
as provided in section 11 hereof. trginsl juriedictiol of nil gurS
auilq ir graated to the court of Firat Inetl'.ce of the philippine
e'rclurively. ln addition to eny aotice by pLbHcation, acf.rl notice
of connoncement of any tuch cuit ehnll direct, to: 0) the hn.ter,
other ranhing offic€& or caretaLer of the vfeeel, and (l) any persrn
MARI'I'IMEI..AW 479
\i.ssr.ls

* l r i i r . r . r . r e c o r d e da u u t i c c o f c l a i n r - f a r r u n d i r c h a r g e d l i e n u p o n
t,he verieel, sE provided io Section ? hcreof, unlecs aftor aearch by
the mortgege satirfactory to the court, $uch mortgagon msster,othGr
ranking officer, c&ret&ker, or clnimant ie noi found within the
Philippinea. Failure to give notice to any such pereon, ae requirod
by this Section, shall b€ linble to such perron for damagee in the
srrrou.nt of hie int€reet in the vessel terminated by ihe suiL

In caa€ ofjudicial foreclosure ae provided herein, the provisions


of Rule 88 of the New Rulan of Court, if not ineonoietant bererlttrr"
uhall apply.
'Ihe
lien of a preferred rhip mortgage may aleo be enforced by
a Euit in r.em in adnriralty or otberwiee in any foreign courtrT in
which the veesel uay be found purauant to the procedure nf aaid
countrSr for the enfortemeat of strip mortgageg conptitutirg maritirne
liens on vega€le docr"nentcd under the larpa of a&id corrntr-y.
SECTION ll.A'rtst of Vee*!a.- Upon the filing of the petition
for the judicial foreclosure of a Preferred Ship Morigage, or
immediately tbereafiter, the rpplieant may apply et-par.te for an
ordr.r frrr lho nrrsrt of tha mor{gl1g1,dvr.rrr"l or vr.rloli nnd (hoJudgo
rlrnll Inrmtrrllatoly l*uer thn $!rm{.,pnrvirk:rl thut it lc mado tn eppoar
by afliduvlt of tho applie&nt, rlr nf *ome other person who poreonally
knowri the fircts that a default in thc mortgagc has occun ed and
that applicant files a bond erecuted to t"he adverce party in en
amount to be fixed by the judge, not erceeding the applicant'e claim,
conditioned that the latter wilt pay sll the coets which may bo
a{iudged to t"he adveree party and all damages which he may eustein
by reaeon of euch arrest, if the court rhall finally a{iudge that tbe
applicant wN6 not entitled thereto.
SI:CTION 12. fltrcho,rge of Ord,or of Arrcil; Counter.hond. * At
any time r,iler an order of ams;t has been glnnCed, the party whocs
versel or voesch had boon er.reeted, or the p€rron appoarlng in his
behalf, mry, upon rea"nonable notice to the applican! apply to tbc
Judge who grantod the order, or to the judge o1 the court in which
the action ie pendin6 for an order diecharging the order of anect.
That judge ehall order the diacharge of the arest if a caah depoeit ir
made, or countorbond erecutrd to the cred.itor ir fitod, on bohalf ot
the adversc party, with the clerk or judge of the eourt vhere the
application ie 'nade in nn anouat double the value of the ckiin tor
o€curre the pa5rnent of any judgnent thst the creditor nay rtacorror
ln the action Upon the filing of euch counterbnn4 @py tb€roof 6hrl!
forthwith be s€rod on the creditoror hie lawyer. Upon dtecbarge of
the order of anest tbe property arn eated or aeized ehdl be delivered
to the party making the depoeit or giving the counterbondo or the
perEon appearing in his behalf, the deposit or countertrond afores&id
etanding in place of th'e vessel or vecsels releaeed. Should such
I
depoeit or counterbond for any reaaon be found to b€, or become
I
inaufficient, and the party furniehing the same faile to file an
additional co-countcrbond, the attaching creditor may apply for a
new order of aneet or seizure.
I
'Y--
I r
1 $tlry
NoTE
SAND

SnCnONi$.
t*fi?"oLff
lf,S}",?#'
;i** "'
RrArIoN

Dircftcrge af Order of Arrest far Impwpronlnt-


lctuo,rrce. - The party who8€ veeaeUe hac b€cu ar-rortcd ney
aleo, at eny time eitber before or affter the releac€ of tho rrrorted
fi,
F
vereel, or before an.y arreet or eeizure hae been effeeted upon
reacoDable notico to tJre creditor, apply to the judge who greltod
F
the order, or to the judge of the court in which the action ir pending;
F
$:
for r.n order to diecharge the order of ar-rest or s€izune or the gFoqsd
that the o-s lnpFoperly
or irregrdsrly ieeued. After bearing; the
&.
h Judge ehdl order the diecharge of the order of arreet or e€lzur€ it it
t app€art that it wae improperly or inegrrlarly iaeued and tbe defect
$
t
ie not eured forthwith.
SECflON V. Ertra,iudiciat Forecloeure. * The provitione of
the Chattel Mortgage Law nn the remedy of ertra-judieial forpclosune
of mortgages in so fa.r ee they are not inconsirtent herewlth chall
ettll apply. For the purpo.e of taking pooeeoeinn of the vocrol or
veeeele, the for,eclocing creditor may eecure from a judge o?tbe Court
of Firet rnitance of tho provlnce where the vess€l mey be fouad or
where the creditor or debtor reidee an order for the arroct or poizurs
ol the voecel Upon auch order of eeizure or arrest b€ing irusd, tbe
sf,sriffrhrll i'nnodiately tnke lrceeeseion of the veeel or vessGlt for
tbe puraoee of forecloeure and sale" TIle veas€l nay onlybernelorred
in eccord^snco with the proviaionr of S,ectioo l$ olthie Actorrhgn
the debtor payr t.hs outrtanding obligation.
SEC1IION f 6. FodSn Shtp NarCgagec. - Ar ussd ln Secttonr lO
to f8heruo{, tho te'rn"prefurrad mor{gage"rhetl lnoluderln eddldon
to e prefered nortgagc mnde prrrruant to the pnovidonr of thir
fberce, any nort3r5n, b;1potbs€tion, or rlnllrr cbarTlo crcctod ar
rocurity upon anlr dosnnented foreign veseol lf euch mortg!3B,
hypothecetton, or *lmiler chergo har boen duly end valldly cecutod
in eccordnnce wtth thc lnwa of the foreign natlon undar tho lann of
whicb the veseel is docruoented and hac been duly reglgtsred in
rooordanco with srcb lowr ln a publie regieter either at tho port d
regtctry of tbo veee€l or at a central ofl$ce; and tho term';preferred
nortgnge llon' ehall also includo the lien of ruch nortg8gor
h5ryothocatloa, or rlmilar charge: Proaided, houteoer, Tbet such
lpreforred nortgage lien' ln the cas€ of a forelgn voes€l rhdl be
aubordinqts to maritime liens for repaire, eupplieo, towago, usc of
drydoch or urrine railway, or other necessarlee, perforrned or
eupplied in the Philippinee.
SECTION l& Rcaeiuer in Forcclazune; pa$ession bt th,ertff. -
In any auit in rurn in admiralty for the enforconsnt of the profer:red
noftgl5o Uon, tha oeiurt ruy nppoirnt a roceivor and, ln itc dlrcratlon,
rutborire the recoiver to opornte the mortgeged vemel. Tbe eherilf
nry bo eutborlrcd rud dlncctod by tho court to takc poclooclou of
lbc roortgn3od vorol notrlthslandlng the fnct that thc vcercl ll ln
thc porreulon or undor ths cnntreil of nny poruon chlmlng I
poosoeeorT eommon law llen-
SECIION t7. Prcfertd l{srtfimc Lien, Prtoritioe, Ailer Lir,nr.
- {a) Upn tho eale of any mortgaged vesscl in any extra.judictal
gale or by order of a district cor.rrt of the Philippinec in any ruit Jn
{
,-t!
MARITTMET^AW
VeegeLs

I nerrl fur admirrlty for the enforcement ol a prefened mor{gngrr lien


thereon, all pne-exicting eleime in the vorsol, tnclu*ng any
pocdclror1r eorn'qon-law lion of which a lienor lr deprlvod undm tbe
proviaionr olSection l8 of thic Decroe, ehall be hetd tcro'inetod end
rhnll theneeltcr attech in lihe arnount and in accordahoe sith tbc
prioritiec estsbliehed herein to the proceede of the cale. Tho
prefened nortgage lien shall have priority over ntl claimg againrt
the veeeel, ercept the following claine in the ord€r atated: (l)
erpienaea and fees allowed and cost.B to*ed by the court and tarec
due to the Government (2) crew'6 wageg; (3) general aversgq (4)
ealvage; including contract ealvage; (5) maritime liene arioing prior
in time to the lsssr'.ling of the preferred mortgage; {6) danages
arieing out of tort; nnd (?) preferred mortgnge r.egietered prior in
tirne.
(b) If the pnrceedr of thr rnte llhoulcl not be rufflclont to pay
all creditom included in one numbc.r or grade, the rerridue uhall bs
dividsd among them prv rsta. All r:redits not puid, ryhether fully or
partially shall cubcirt aa ordinary credits enforceahle by penonal
action againat the debtor. The record ofjudicial nale or eale by public
.auction rhall be rocorded in the ltecord of Tranafsrt nnd
Encumbrancel of Veaeel,rin the port of documentation.
SECTION t8. Suff in Pereonain in Admirotty an Default. -
(s) Up<rn the defeult of nny term or condition of a preforrrod
mortgage upon a veeeel; the mortgagee may, in eddition to al! other
remedier grentod by thia Decrrrc, bring euit ln perronal la admtnlty
in a dietrict court of the Plilippinee, againat the mortgagor for trhe
n'nount of the outstending nortgage indebtednese eecured by auch
ve*sel or any dellcieney in the full payment tbereof.
(b) Thia Decree ehall not be conatrued, in the cace of a
mortgage covering, in addition to veeeele, rcdty or pereonality other
than veecel4 or botb to authorize the enforcement by euit in rom ia
admiralty of the rigbtc of the mortgage in rospect to *uch neelty or
pononallly othar tban vesrole.
SECTION 10. Surren der of Docamentc; terminatlvn of
morlgagee'c intcnil; ralc of mortgqed ue*el. -
(a) The documente of a vees€l of the Philippinea eovercd by a
preferred mortgaged may aot be eunendered (ercept in the cae€ of
the forfeitune of the vessel or its eale by the order of any court of tho ., I
s Philippinee or any foreign country) without the appnoval of thq/
I Maritime Inductry Authority. The Adminirtrator aha.ll not grant euch
j approval without the mortgagee'a conaent.
il
j (b) The inter$t of the morlgage in a veeset nltbe Phtllppinar
$
* covered by a mortgage, rh^all not be terminated by tha for{eiture ol
t
{ the veegel for a violation of any law erf the Philippinee, r'nleal ths
mortgage authorized, con*ented, or conepired to effect the illegal
act" fsilurc, or onriesion which conetituted euch violation Neither
$ shall the chance by the ehipomer in the uae or cbaracter of the
$
I
t vees€l or in the bueineeE of the mortgagor, without the cons€nt of
t
I
I
t

{
f
482 NOTESAND CASESON TTIE I.,AWON TRANSPORTATION
. AI{D PUBLIC LTNLffIUS

the mortgagee' nor the faitrure by the martgegorto


comply with the
pr.vieionr of ti*ction 5 hereof affect tt
e vaiiaitv o" fi*inr.o* oe
the prefemed ehip mortgage ae against third persons..
(c) Upon the cale of any vnrrnet
of the l)hitippinen covcred by
a prcfe*ed mortgage ln any ertrqJudiciar rate
or lly .rder of a district
court of the Philippiner in any euit in rem i"
for the
enlorcement of e maritime rien olher than a prcfe*ed "a*ir"iif
mariiime uen"
the vee.€l shall be sold-fr€€ fuom an pre-exieting
craims thereon; but
the court ehall, upon the requect of thu rnortgagee,
the plaiutiff, or
any intervenor, require the purchase at such
*t. to give and the
mortgagee to eccept a new mortgage of the vesser
for tlie balance of
tne ternr of the original mclrtgrge. The conditions
of such new
rrortgage ghall be t6e cnme, il; practicable, ar thoee of the
anortgage and aharr be""eubject to the approvar
3r8'1"l of the co'rt.
If ruch now mortgego ia givon, thlr irortgngr,* xlrlll
not lro Jralclfrnnr
llo proc'oodr 'l tho rrds &nd ther anreiunt payublc
'r trre lurr:hace
price ehall be hetd diminichod in the
smount of the new mortgnge
lndebtedness.
(d) No veecel of domestic ownerehip shall
be mortgaged, nor,
any righte under sai-d mortgage ehall be
aseigned, to not
a citizen of the Philippinee without the. npprovar "rryi"il,on
of the Maritime
Indurtry Authgrity. The penaltiee and provided for under
commonweolth Act No. sffiehatt appry ii"*rr"tioo"
cr,o,'f any virr.tion her.eof.
.k) The forecloeure aale of veesels m'rtgagecl
provinionx 0f tlris flecri.o-,whothr.rJulrir:inlr.y under the
,r, ..rt.r, j,r,ri,liirlv, ot r,rl
tr't r*quir. thr uppravur ,f trre Mnrrtrm*
tirdrrrtry Authoritv.
SI:CTION 20" Wfio Mo.1 Bid in the I'orealoeure
Sule.._ The
following p€rso'. are qualifred to bid in the forecrosure
oriiJ
mortgaged veeeel: ""r.
(a) citizeus of the phitippinee
or corporetions B09oof the
capltal of which is onrned by filiiiao citizene.

..-- drptonatic
Daa _,,,?,^l^lg*try 1aoragagee or foreign narional wlroco couotry
rolatiorc with the phitippinee or whose country
jfaati reciprocal righte to Filipino .iti"*.r".

*. .-.Io."""u the purehn":r_i" e lorolgrr individual or entlty, tbe


Philippine coaet Guard chqtt, upon prisentatioo
or trr* .uiin."t*
of ealo, cnncel the r.egictrationof the and issue a certificate to
that efiect upon request. "u*"t
BEcl'IoN 2r. Maritit'e Lbn for Necewarice; pereons
entitl.cd to
t::? - Any per.aon-tunriehing repain,
!?f suppliec, aowage,uso of
o4;/ aocx or marine. railwag or other neeeeearies
to any veeeel,
whether foneign or domostlc, ,rpoo the order
of the own€r of aucb
veccef orof s p€rson authorized by the owner, ehan
have a maritime
lioa on the vearol, which may be oiforeed by eurt
in rer4and tt shrll
be nececcarlr to allege or pnovo that credit wao given
t tf"
"*""L
SECTION 22. Penons Authori*d ta procure Repoir*, Supplicc,
atd-N -Ihe following perrons ehall be prnsumea to Aave
-*eccartcq.
euthority ftom the owner to procure repaire,
towage, uoe
",rpili*r,
MARITIMF]I-AW
V.rxr,ll

of dry dock or mnrine reirn'at, and other nccesuariea


for the yescer:
The marlaging owner, ahip'e hueband, master or eny p€nnon
to whorn
the management of the ve"'er at the port of supply
L entnrrtd. No
ryrygn tortiously or u'rrwfully in poseeeaion br of a veeeal
shsll havo autbority to birxd the veesel. "u"rgr
SECfiON 23. Notiee to person Furni*hing Repairt,
Suppliet,
and Nececeariec. - The ofFrcers and afenta of a
vess€r ;pecifed in
section 22 of thie Decree ehau b€ take.ito incrude ruch
ificsre and
rgente when eppointcd by a character, by nn ownerpnD
hu olac,cr
b-v agreed purclraeer in poseeeeion-of the ves€€Liut
nothing rn
this"rDecree chall be construed to confer a rien when
the fur-nisher
F"1 orby ererciscof reafonabte diligence courd have escerteiue4
that because of the t€tes of a chrtei party, agreement for eale of
the veeeel, or for any other rcoeon, the pereon ondering
the repairg,
euppliee, or other necesaariee wae wiihout authoriti
to-uLa tn"
veesel therefor.
sEcrIoN L4.waiuer af Right to Lien. - Nothing in this
Decroe
shall be construed to preveni the furnieh." of
,rppfi"",
towage, use of dry dock or marine rairr*'ay, or othoineceenarirs,
".iri*,
or
the mortgagee, from waiving hic right to-a lien,
oiii-tfu ."""
p.referred mortg:age Iien, t, the preflrred status
of e.rchlien, at "f
any"
time by Rgleement or otherrrrise.
SECTION 25. Erieting Mor-tguges
"yot Affected erception._ Thif
Decree ah-all not apply (f ) to anylxieiing mortgage, or (2) to any
mortgage hercafter praced at any veasel rna"" rn"exr"iit
g -o"tg"g.,
. so long as eueh existingmortgage remains undiecharged."Trre Decree
shall, however, apply to mortgagee executecl prrr".r"oltb preeidenttal
Derree No. 214, provided, that no vested rights
of third p;t;-;
affected thereby.
SECTION 2G.Rulee and llegwlutiona by phitippine
Cwst Guard
and the ilIaritimc Indu*rv Authiatv.- Th; philiipine c;;t Guard
nn<ttho Maritlme Indurtry Auth'riiy'nr hereby euthorrzod to rrrka
cuch
-rules antl regulationn within their reepective epheree of
jurisdieti.n, as thr:y may crecmnccelrnaryfor the efficient execution
of thc ;rrovisions of this l)ecree.
SECTION 2'I; Part of Drcunwntatian. - rffhenever
in the Ship
Ill'rtgage Llecree of lgzS the words *prrt of docr.mentstinn,
are usedo
they ehal.l be deemed to meau the port of registry
of the veesel.
SECTION 2I!. Inetrumcnts ond Acte Validoted. - All
nortgagw
of any veesel of any part thereof, and all documenietione,
recordationq indorsementg and indeiing thereof,
;d;;*"g"
incidt'ntal theneto rnscre or done, prior t. tie effectivity
oitnis oecroe
are declared valid to the extencthey wourd have
bin valid if the
port or ports at which it ehould have been documented
in accordance
with law; and thig gection is doclared rctroactive eo
aa to eccomplich
euch validations: Proai&d, That nothing herein contained
ahall be
construod to deprive any p€raon ofauy vested righL
SECIION 29, Bepeating Ctauae. - The provislone
of the New
Civil Code, the Code of Con r.erce, the ChatLl M;ry;;
irl tf.
{aa NOTESAND CA.SES
ONTI{A LAW ON TRANSPORTATIC,N
AND PT'BUC I,'TIUTITS

n€vircd Rulec of court and of euch other rawe,


decreeq erecutive
orderr' nrlsc and noguretrou wbich ers in conflrct
or Inconrrrtant
rlth the ;rrovi*one of thrr Decma aro hereby op".t"4
nodilled accordlnslv, lI f_o1any nesson, any aectloa, L"oara oo
euboacdoa,
eentenco'claua€' or term of thia tLc"re is held to be'uconctitutionol
guch decision shal not afiect the
varid"ity pl"i"ioor or
thir lhrcr:ee. "ril- "tu",
SEgnON SO.Effeetivtt . _ this Decree ahall t.ke efiei:t upou
itc approval.
Done in the City of Manila, tbja l lth day
of June, in the yoar of
Our Lor4 nireteen hundred aad eeventy*iglrt

. -.Notg,however, that the Maritime Industry Authority (MARINA) now


handlee the annotati.n and/or cancellation of
any mortgage over veoaels.Thus,
the MARINA promulgated Memorandum circular
No. r00 concerning said
mortgages.

MEMONANDUM CINCUI.AR NO. rOO


GUINNI,INES FOR THE ANNOTATION / CANCHLIJ\TION
Otr
MORTGAGESAND TNA.NSFEBOF RIGHTSA.ND
OTHEN
ENCUMBRANCES OF VNS$NI^q
T, OBJECTI\TE,
This circuiar sha*.prescribe the guidelineslbr the annrtation/
cancellation
of morrgages
and transferofrights and otherencurnbrancee
of
. vessele.
II. COVEITAGE:
' Thirr()irculnrshnilnpptyto ail vcsse rrirrrrll.r.gisLcmxr
with thr.,r{aritime
IndustryAuthoritywith documents whicheviienceown.rshipor documents
dircctly/indirectl.y
affr*tingthe titlc ul.llrc vcsr+r:1.
III. SPECIFIC GUIDELINES:

A, DOCUME}.ITARYREQLTIREIITENTS

, - ^- _T" followingdocumentaryrequiremenrs,,--lr'itbe submittcdto the


MARINAcr-'ntralorficetir the N{aritinre}t"giunnrori,r-.t
*rr." for
the annotation./caneerration
of mortgag"*un*rtransferof rights "oorying
and other
encuntbrunccg
of vesscls:
1. L€ttei of IntenUi)uly AccompliahedApplication
Form:
2. Duly notarized mortgageconrract;
3. Proof of payment of documentary s[amp tax with
BIR; and
4' ()rigrnar certificate of ownership rco) and certificate of
!'essel Registrv ICVR); or Certificate of Nurnier,
if applicable.
B' ANNOTATION OF MORTGAGEANI)TITANSI,'ER
OI'RIGHTS
AND OTHER EI\TCUMBRANCES oF VESSEI,S
{

MARITIMI] LAW 4E5


Ven:ieln

The Maritime Induetry Authority ( MARINAJ shaUrecord all modgages,


transfer of rights and other eneumbrencesdul.ydeliveredto it in the order of
their reeeption in the book(e)to b€ kept for that purpose and ehall be indered
to show:
1. The nome of the vessel
2. The namedpostal address nf the parties to [he mortgage
3. The time and date of reception of irxtrument
4: The int*reat of the mnrtgagor in the vee*elbeing mortgagod
5. The date of the mortgage contract
6. The arnonnt and date of maturity of the mortgage
7. Name, nationality and residenceof the owner of the vees€l
8. Any material changeof condition in respectto any of the
preeedingitems.
Annotation of the mortgagesshall likewise be reflectedat the back of
the CVR and CO or CN. whenevcrapplicable.
C. CANCEI,I.ATION OF MORTGAGE
'\rurulaLiunui dre niurtg.rgt]o,Ltiltr,,fvt,rl'r'igirtsarid otlier encu.urbranccs
ghall l* cancelledfrnm the burk undr:rthe firllowingcircum$tancea:

i. t'ull payrnentof nrortgugt debt


ii. Totai loss or conlilructive tolal krss ofthe mortgaged veesel
iii. Foreclosure0rder
iv. Court Order to delefe all registeredmortgsges
W. }'TiBIt ANT} CHARGES
irrrrllr:rtrsfr.rof nghle and other
of rrrortf,irgr.ri
Iil,t'orrlin11/lrnnotttiorr
encumbranceeghall aubject kr pa.yrncntul' fces and chlrgen preseribedin
IvtARINA Menrorsndum flireulnr on tlre ltr:vised Schedulc of Fees and
( )lrargr..v.

V. SAWNG CI.AUSE
Arry provision of cxrsting llAltiNA cirr;rrlars, rulqre and regulatione
which arc inconsistent henrwith are hereb-vrepealt:d or modified accordingly.

VT. ET'FECTTVITY
T'hisMemorandum Circulirr shall t,akeeffrrctfiflccn { l5) dayefotlowing
its publicatrononcein a newspaperofgeneral circulation.
l\l ani l a, Phi li ppin es,O{ApltLJ9gfL

V. OTHERCODE OF COtllilERCE PROVISIONS.


ltre provisions of the Codeof Commerce reprduced hereunder are deemed
modified not only by the Civil Code trut also by special lawe. For example, in
ceffi of foreclosure of mortgage, $ection I ? cf the Ship Mortgage D€crsc applios
and notArticle 580 of the Code of Commerce.
486 NOTESANDCASESONTHA IAW ONTRANSPORTATION
AND PUBLICUTILITIES

ARTI.LE 5?9. After the.rnrnage to the vesr€r


and the impoaei-
bility of ber being repeire4 in oJer to continue
the voyage had
been shown itc es.lo at public auctinn rhall
be ordered, eubject to
tho following rrles:

t. ?te hult ofthe vaeel, its rfuUirg; €n*tneq etoreq


and othor
artlclea rhall be appraitod, aftei-naking
sn inventory, aeid
proceedrngr tobe brought to the noticc
of the !ereo"" *ro-"y wirn
to tale part iu the auction
2. lbe order,or decree ordering tbe auction
to be held eholl
be poeted in the'eual placee,
thereof tCIb€ inrertcd
"r two
in the Officinl Gaa,ette and in "rrrro*.,n].rment
of the newpapers
-be of the largeet
circulation of the port where the auetioa is
to held, tluo
be any. "fro,rla
'rhe
- period which may be fixed for the
auction shall not be leae
than twenty daye.
3. These &nnouneenrente ehall be repeated
every ten daye,
and their publication shalt be made to nppesr
in the record*.
_ 4. The auetion ehall be hetd on the day
fired, with the
fonrralitioa preecrihed in the eommon law
for judieial eales,
5. If the eale should take place while the veeeel
is in a foreign
country, the epecial provieione governing
eia'be
obecrved ",r.h """u"
ARTICLE 580' In an judicial ealea of any veasel
for the paynnent
of creditors, the fotlowing chalr have pneference
in th,, ,r"a.l"
",","a,
l. The credit in favorof the public treaxury prr)v(,n
hy meann
of an officiul cr.rtificate of eompef.cnt uuthority.

2. The judicial-c-oet1 of the proceeding*, ar:t:ordin g


to an
appraisement approved by thejudge or
court.
3-. The pilotage chargea, tonnage duea, and
the other a€B or
port chargee, provenby menna of proSr
certifieates of the oi-;;
intrunted with the collection thereerf.

4' The salaries ofthe deponitariec and keepers


ofthe veeser
and- any other expensee for ite preeeruation from
the time of arrival
at the port until the sale, which app€ar to have
been pai, o. L. arr"
by virtue ofan account verified ,pp"ored by thejudge or court.
"oi
6. The rent of the wsnebouse where the rigging
arid etores
of the veeeel have been taken care of, accorrling
to c-onlract.
S. The salaries due-_the captain n-d crew
during its last
voyage' which ehall be verified by meane
of the liquidation to be
made ln visw of ths lists snd of tho bookr
or account 'f the vceeol,
approved by the chief of the Buruau ofrferchnnt
rlrarine, -["* tuu*
ir ono, and in hie absence by the conrul orjudgg
or court.
7. The reimbursemeot for the goode of the freight
which the
captain may have sord in order to refair the
veseel, firo"iaua tu.t
MAlrft'tMlj l_Aw

thc sale has been ordered t!r*:ugh a judiciar prrrceedinga


hetd with
the forrrralitiea required in such.o"*"] and reeordea
in-[lce*iffeatc
of regietry of the veeeel.
8. The part of the priee which has not been paid to
- the said
.vgn-dor' the unpaid crudits for materiele and labor in tle construction
of the veesel, when it has not navignted, th;;;;i"g;,o_ th,
repair-and equipmont of the r**r*-ir and ""dfrum ir" prrr"i"lJ"iog rrttrr
vlctuala and fuel during the last voyage.
In'rder that the c..ditr pr.virrr.rt ftrr i' thrr eubdivirron
may
eqjoy this prefenence, they murt eppear by contracte-Jrt.a
io
the regietry of ve*selr, or iflhey *e.. contracted
f<lr the vaes€l whfie
on a voyage and said vessel bas not returned to
the port wiere it ir
regietered, tlrey murt be made wiih the authorizat,io.,
to,
such cas€s and snnotated in the certificate "*qoi""aor tne
or
veeael. "egirirslion
0. Ihe smount borrowed on trottomry on the hull,
koel,
tacklo, nnd rtornr of tho vo*eit brrf,n" it,t dr.Jrartr"i..,
p^ro"" rv rn*an,
of the contract orocuted aecording to rnw
and recordod in tbe
rogtrtry of voreerr; thoee borro*"J during tne rrth tha
rutborizrtion nentionod-in the precediag r.rilai.rt"tod "oieir
th"
r a m e r e q u i e i t e e ; a n d t h e i n s ! , r r a n e e p r e m i u m , p r o"iti*fyfo8
ven-bftbe
inturance policy or a eertifieate ta*en from the
books of the broker.
10. The inden'nity_d-ue the shipper for the value
of the goodt
ehipped which were not derivered to ihe eoneigrrees,
or for averagee
aufiered for which tho vose! ir liable, provided
that eithor rppoar
i"n a Judielal or arbltretion decie ion.
Atnrr:r^g [sr. tf tho prt,*oodr qrftho r*ro dr'urd n't
b.orurtloronl
to pey dl ther cndltorr Includod In ene numbor
or grrdo, thonocidus
rhall lrc dlvlded amonf lhom pnr rotc,
ARTICLE s82- Arter the bil! of the jud.icial eale at pubnc
hre been erecuted and inscribed auction
in tie regietry ofveaeelr, all the
other liabilities of the veeger in favor of the
creditorg shalr be
coneidered ertiaguiehed_
But if tbe ede ahould have been voluntary and
ehould have
been made while the veee€l w&a on a voyage,
the creditore shall
preaer:v€ their righta ageinet the vees€l .rrriit
il returnd to tt * po"t ot
her regietry. and three monthn aft*r th. inncripti*n
.f the Ll. ir.
the registry of veosel or the arrival"
ARTICLE 5el. If whiie on a voyage the captain
should find it
neceaaary to contract one or more of the obrigatione
mentioned in
subdivisione 8 and g of Articte 58O, he
;;ply;;;;l;lg*
eourt if he ie in Philippine territory, and"h"il
otherwiee to the consul "u of
the trlepublic of the phitippines, ehould tn*.u
fr*-oiu,-arra,l,, hic
ate€nce,_to the judge or court or proper local authority,
preeeating
the certificate of the regiatration treated of in Article 6lr and
"H""t contracted.
the instruments proving the obligation
The Judge or court, the coneul, or the local authority,
ae the
caae may be, in view of the result of the proceed"ings
institu#d, ehafi
NCIr[SAND E48ES ONTHE I,AW ONNTANSPORf,ATION
AND PUNLICUTILITIES

uale r-tsnporary memormd-rn of their nesulr in the cetafficate, in


order that it ney be rurdod in the registry rhsn the ve*cel notornc
fr to th€ port ol ite rogiatry, or ro thnt it &r he
a,r-ritted ,."i"g't
qrereTed obtfuation in csee of eate before itc returq by reLn "od
of
thc rsls of the vecrel on ncoonnt of a decreration
of u'aeaworthrneac.
Thc omileion of thicfortdity rbalt meLs the captainpereonally
t lhblo for tho crudita pnoJudiccd oa btr
+ ARTICLA g.
"*ou.a
1!. vecccl, eubJect to liability for the eredlrs
il nentlonod ln Artlcle {Ito an"y bo attrchod
r''q'rn.r preecribed in Artiele 619, in tlru
"oaiuai.i"uy
the port in which iuuv ""iii,*"v uu
.1. found, at the inatqnca of any of the but if ttrey eiloua uo
""edito*;
and ready to *a4 the attachment may not be effectea ercept
P{.a
for debtr eontracted to prepare and proviaion the veeeer
for the saee
vo5rege,and sveu then tho attachment shall b€ di'ook;;;y
p"*""
intenest€d in ifs rniring sfuourdgive a bouJfor the
rneturnof the veac€l
within_the period fired in the certific";
himself to pay the indebtedness insofar it "i;;;;;i-"rTioairrg
-"y be-legal, ,i"Ua it
fail to do ao, even if this failure be due to""fo*oitoo"
event.
.. of
To_".d"btc any_other hind whateoever not r:ompriced yithin
.the eaid Articte 660, the veer€l -"y U" *tt ody in tnu po* of
her regirtry. "f"A

VI. SAFETY REGULATIONS.


on February 29,200a, the Maritime Industry Authority
. directed ail
domeetic ehipowners and operators under Memorandum
circurar No. 184 to
$"i"tly comply with. exieting safety-Related policies, Guidelinee, Rules and
Regulations. The Authority reiteratea the rulee in
line *ith th* *rrgfulr,ing thrust
of t'he goverrrment to foater maritime oafety, eepecially
with the oneet of the
passenger peah season. Theee rules include:

1 MC No. 48 : Measuree to Control Overcrowding/


overloading and scalping of tickets in the Interisland vessels.
2. tvlCNo. ?2 - Guidelineson the Implementation
of at least
l0-Minute Film
-orrSafety Features of each specific passenger/
Paesenger-CargoVessels.As amended by M.C. Nf.
fSO.
3. MC No. 83 - Guidelines on the Issuanceof Endorsement
certificates in Accordance with the srcw 1g?g convention.
4. MC No. 8g - Implementing Guidelinee for Vees€l Safety
Rcgulatiun. As anrendcdby M.C. No. gg-8,
6. MC No. l 14 * preventive Safety Measures
and Other
Concerns.
6. MC No. 123*WearingofLifc.lacket*duringBoardingand/
or kior to Departure by ail pansenger vessers with
open Deck
Accommodation.
M.dfit'I'tMF;tJ\w {60
Itr.*urlr

7' MC No. lab - Ruleson the Inrplementationof voiceTape


on the Safety Featuresofa Vessel.
. 8. MC No. 143 -* Rrrk,rirrnri Rr.grrlat,innn to Intplementth'*
I rtt't'r'rr.tirural
.Safetylf'tatrug*nrurrt
t ISNt) ( lrrlu rrrljurnectic.Shipping.
The eame Circular providenthat all ve;eel owner*/nporatora
nro to mnLe
sure that all their veeselsbeing operated are in compliance with
the lgg?
Philippine Merehant Marine Ruies and Regtllations(pi\,IMRR),
M.c. No. l4g
(Amendmentsto ChapterXVIII of the PMMIiR
r99i on urri-"* Srf" li#;
in the DomesricT!ade), M.c. No. 6s/6b-A (Minimum service srrndards
!r !lit"
for Plrilippine RegisteredInterisland vessels),M.c. No. l84 (Minimum
service
Standards for Motorbancas Below 20 Gross Tons), and all other related
iesuance&
Monitoring of cornpliancesshail he u.dertaken by the Authority,
end itr
Maritrme Regional offices, together with the needed coord.ination
with the
Philippine CoastGuard. Venfied violationslnon-compliances ehall be dealt with
accordinglypurauant to existing laws, rules and.regulations.
section 9 of Republic Act No. 9295 passed in May, 2004 reiterat€B
the
requirement that nll vesselsinvolved in domesticshipping must be
maintained
and operated in accordance with the safery standards iirposed by
MARINA.
The MARINA shall have the power to inspect vesselsand all
equipment on
board to eneure compliance with safety stsndards.
CHAPTER8
PERSONS
WHOTAKEPARTIN MARTTIME
COTTIMERCE

l. SHIPOWI{ERS AHD SHtp AGEi,|TS.

the ahipowner is the peroon who in primarily liable for


dnmagee ar.rstained
in the operation of veesel. A perusal of the provisions
of the Code of Commerce
likervise i'dicares ilre evident intent ro place the primary
'com-u.* responsibility on the
owner of the vessel-t Neverthelesa, the code of
ut ti-u, usee the
term "navieroo to indicate the person who is liable.
The "naviero' has been
constmed to include the shipowner, ehip agent and
even the charterer who ie
considered a8 ownerprr hac aice. The supieme cor.rrt
i
*That the "rpi"inua,,
g*n:r of the ehip i* a pdrson to whom the plaintiff in thia
ca'e may immediately look for reimbursement to the extent
above atsted is
deduciblenot only from the generarqoctrinesof admirarty joJspr,rdence
but
from the provieions of the code of commerce applicabie to tire
caee.It is
universally recogni'ed that the captain is primarily tho
,"p.ur".,tative of
the owner; and article 586 of the code of com*.... u*p."*sly
declarenthat
both the owner ofthe vesseland the naviero, or charterer,,t"u
n" civilly
liable for lhe acts of the master. In this connection, it may
be noted that
there is a discrepancybetween the meaning ofnaviero, in
articte bB6 ofthe
Codeof Conrmerce'where the word ie used"incontradistinci.n
to the tenn
"owner of the veesel"(propietario), and in article bg7 where
it in uaed alone,
and apparently in a aens€broad enoughto incrudethe owner. ''r i
Fundamentally
the word "naviero" muet b€ understid to refer to the person
undertaking
the voyage,who in one casemay be the .wner and in another
the charterer.
But this is noL vital to tl'e present discussion. The real point
t' which we
direct attention is that, by the expners provioion of the iode,
tlru
the vesgel is civill.y liable for the ncts of ihe captain; and "*n"r'"i
he .rn orrly escape
from this civil liability by.abandoninghis property in the ship
and any freight
that he may have earned on the (arts. Sg?, bgg, Code of Comm.).,
"oy-"gu
A "ehip agenc" ig dr'fined in the Oode of Colnnrercc rlri,the peruon
. - entrusced
with provisioning of the vessel, or who represents her
in the io* in which ehe
happensto be.3From the above-quoted
explanation,it is
""id;;lih;ffi;;;
rstandardoil companyof
Newyork v.lapez, G.R.No.r369b,october1g,r9zr, 42 phil. zs6.
tlha.
r^A.rt.
595,lst paragraph,Codeof Commerce.
s;6
MARI?IME I"AW 491
Pergona
WhoTake Part in Maritime Commercc

of C0mmrnrr:e likr''wipt makes theriihitrragont joirrtly rlnrl eevernllyliabla with


the owner.The jerint and severalliability applies uot-hfor breachor.o"t** a"I
extra'contractual obligaticn guch as tort.. lndeed, the ship agent, even
though
he is not the owner, is-liablein every way to the creditor ror toJsesand damagJs,
without prejudie to hie right agninnt the owner, the vessel and its equipm"eni
and beight.s The liability ie however subject to the limited liability mle dj";""""d
in Chapter 6 of the work.

ARTTCLE688.Therhipownerand the rhip agant chalt be civilly


lialle for the actc of the captain and for the olulationc contrnctod
hy tho lettar to reprln Gguip, and pr*vreinn tho oLo"L provldod tha
cradltor provs thet the onrount ctainod wgc invactd iortls honefir
of the aerno.
By chtp rgent is understood the persou entrurtod sith
pnovieionins or ncpne'o''ting the voes€l in-the port rn whrcb it
may
be found-
ARTICLE 587. The ehip agent eha.ll also be civily liable for the
iadernnitiee ia favor of third p€r'oni which -"y nrio fron the
cond.ct oltho capteta ln the core cfthe goode whtch hs lord*d on
tho va.ol; but hr nNy Gronpt bin06olf th*.u!.rito by nbrndoning thr
vrrel rlth rll bar oqulpnontr rnd tho rrorlht, rt mny hnvo arrned
durtnf tlrc voyrgb.
AnTrcr^E 6E8.Nelthor the rhlpowner ror trre rhrp rgont rhen
bs liable for the obugetione contracted by the captain, tfibe l,attor
crs€€dc the powar..r and privilegca p*rtalning t<l htm by rouon of
hir pocition or conf,erred upon him by the former.
Never{heleae, if the a.mou.uteclairned were inveotcd for tbe
benefit of t'ho vemelnthe rerponcibility thersfor ahati dovolvs upon
Itr ownor or agonL

, A: PARTOWilrRS.
ARTTCLE 689. Iftwo or mone personc shcurd bo pert ownerr o(
a ssrqhnnl veecel, a pa'tnerrhip beprceumed.* otrru*.a
by the co-olwnera. "t"u
This parfnerehip ehall be governed by the resoiurio. of the
nrnjority of the members.

dieagreenent of viewq if any, ehalt b€ decided by the vote of tlhe


If the intereatr ele eoual, it

- The porson havtng the smaltest eharo in the ownerahip ehalr


have one vote; and proportionately the other part ownera * --y
votes ae they have prrtr equal to tbe emalleet one.

{-ctzrxr *rd Ruir v Lim, 46 phil. {t6; !vin6 l|*,:ev.gark'Monongahola,'4{ phil. {&r
r8ehn,Mryerv.lllcMiehlng;
rt o/., f l Fhil. gt0,
{s2 NOTIiSANCIcAsB{g0NTfini t.Aw
0N rnaNsnrntartoN
AND PUNUC L'TTLITISIJ

A vessel nay.aot be detained.


attached or levied upon in
erecution in its eatirnery, f", ;;;-;*"1,*
*ebk of a part owner, but
tbo proceedingr eh,.' d" fi-ir.a't"
,hu ;rra*"*rt which the debtor
nn*v bavo in the vr*oar, rBi*hout
i*t rrr*d",g *r*i,ili"?rtr**n.
Att?lcr'!; sgo" e(Hlsn€* of a voe**r shat h€ civ*y
ln tbr prnpor*tron otlhethoti ;";;;;;'rn *qbrr
rsrultr of tho rctr ol tho coprnli,"*f*oua tlr* *{}r$mon ftrnd" for rhs
t$ in Arilcte $S?"
Ecch c('.onrn-ermay ere'r$rt himccrf
ebsndonment" hfone ;"ta - - - J ' * - froru this liabiltty by tho
v, ;i thl"p""t
--'i of rhe ves"selbetngin.g to
him- "
ARTICLE 5gl. All the part owner"a
ehall b€ liable, in pro'ortioa
tn their 'espeetive o*'n*""hip,
for the exlrcfiaec for repairing
veecel, and for othor erpc"r"" the
*i;.1, are incuned' eq rrv
by virtue
vrr
rurolution of the mqiortty. nt n

They ehatt tilowiro bo tiabte ia


the Belno praportinn for tbc
oxp€nre. for t$o
veceel, neeeBsary lli*i"r:..,
oquipraent,
'-'- and jrorirtonrrrg of the
for navigatioo.
AftTICLE Sgp. The necolutlon
of the m4jority with regard to
t'e nepair' equipmen( a,,d pnovisioniagof
the veaser iu tbe port of
departure ehail bind th. Jirr"Jtv,Tot*""
renounce their intorecte, which the minority meaberu
-"rt u" acquired riitl ltu*, *o
owners; afrer a judieial appraieernent
portione accigned. of the;"il;id;*{*i"r, o"

The recolutr:"," the mntiority


relating to the d.ieeolution of
the pertnerrhipandcate
"{ of
th;;;;i"h.I;;ilffiffion
mhoritY.
s...'r srru rc ur..q'''f rhe
The eale of the.vecael muct
be made_at public auetionn eubJect
to the provisiona of t|3 law
of civU-piJedure, untees the co-ownerc
"nqnimouslvaryotl.e**, o"r# J*ry" lt, ,tgl*
andredemptionprovidror", io-iJtil "]*ilr*u"*
rz-s. o ii*r,yt * rF*L $4t&r0
ARTI'LE 698.Theownersof a veeger i-;;:
her chsrtar over other p"*"*, .t ^n nl.,eyfftFo{,enee in
iiu u.rrr" *onditions and price.
lf two or more of them shoJ;.f"i* "ra"" iil"
g"eat€r interent shalt b€ preferre'; the one having the
"rght, tlrerh"";
Interreato,the martor shatt il; ;;iJJ "rra oquel
ui fgl"n.r.ila
ARTICLE 5g4.Ihe c,eorrnero ehall
neprecentthem in the eapaci{r elect the manager who ia to
ofehip ngent.
The appointment of d'irector or
ship agent aha, be revocsbre
et the will of the menbers.

B. SHIPAGENT.
A8TICLE s9d. The ehip agent, whether
he ie at the aame time
11":.::::::l jl::"""1 ;" ;;;";;;l
eecociation of co-ownere, muat
ro,.*,, owneror ror aa
r'- -p.'orded in have th"e
the m"fqba&_;;;,*i-"Ir"" ,,!:ouinna
.|gs
peraone
*" rffiffit ffirme cornmerca

Ttro ahip rgent rshrll r*prmont tbe ownereblplf tn* **""l,.rnA


nny, in bir orn n&ne snd iu euch capecity, trko Judtcial nnd
ertrqfudlcial rtOpa in na&tara relatiag to commorca,

a. Poser*.
ARTICLE $$S" Tks uhip ageat rnay di*ahnrge the dstlsr cf,
eaptain of the vwrol, eubJeet in overy e*s€ to the provirioa of A#clc
809.
U two or rnone co-rrsynerg apply for tbe poeitlon of captlin, the
d.iengr*ement chqll be decidsd by a vote of the momt'tiiq dr& if the
voto rlrould rerult ln r tle, it phett be dsclded ln favor of tho m"
otwner having the larger tnterest in the veacel.
If the lntereotc of the npplicante aboutd be equ'I, and thsro
should be a tle, tfie rnatter shstl b€ decided by loL
ARTICI,E SS?.The ehip ageat ohall {siuate and corns to temr
with the captsin, rnd ehdl eontrect in the nqme of th* osuen" wbo
shs.ll br bound in gll thct refer to repaira, detaile of equipunent"
amnarnenf provlalonrof food nnd fuel, and frelghtof th*vwlnand"
ln gon*ral, ln nll i.hat relato to thc requiromentr cf nrvlgutloa,

b. Llrnlt*tlnn on lrolver.
ARTItlt-F 6O8.Ths rhip agent rnay not order & &er voyefcr or
make contractc lor n naw ehart+r, or inuurc tbc voesol, wlthnut thc
ruthorlzatlon of lte olirnsr or r.c;olutlon of the. m4Jerrtty of the oo-
own€r4 unless thece powerlr wene grrnted hlur-ln tba cfufrnto of
hia eppointrueaL
If he insurcs the vessal without aut"horizction thsrofonel he shell
bo rubcidiar{ly ltnble for the wolveney of thc inaunsr.

ek ,fi c. DUW trr Account


AntIeLn Sffi. tte rhip agent,r'onsgi4g for an aonociltlon r&all
rsnder to hb ccaociator atn cccount of thc re*ulta of cach vo3rrgu of,
the vecrel, wlthout prejudice to alwaye havin6 the boo&; aad
eorreclrcndence relating to the veecel nnd to ite vnyngar at tbe{r
dftrpo€d.

A Rcimbuncment and tiabilitiee.


AIITICLE gn Attar tho ac*oun{, of tho manrglng *gunt hr* bcm
approved by a Ee.latlvo mqiority, tho co,ownenr shsl! pcy thc cxpraa
iu proportion to thelr interesi, without prejudlce to tbc clvll or
crlninal actlonr which the minorlty nay deen flt to inrtltnt€
aftersardg.
In order to enforr:o the pnymen! the managing agent ahall bo
eutltled to an erecutor.5l ac.tlon (na,r.cion qjecutiaa,), which 6hnlt g6
lnstttuted by vlrtno of n reeolutlon of the mqtortty, snd wlthout
further proceedfungr ghrn th* a*howled"gment of the aignaturw of
thc ;rerxone whs votsd for tho res$lutiorL
T94 I\iOTE$ANDcAsEs ONTHs I,Aw $N TRA.I{si},OR"r.qTToT\r
AliD i,UllLlCU'TII.ft'tutt

ARTICI.E 0ol. ghourd tbene be nny pnrfite, ths co-ownonr Eey


dorsaud of lho menl3{.ng sfsnt ihe amount concc;ronettng to thcir
lntorerte by meanr of en execu0ory nction ("ocikn ejecutloa.),
without any other requirite than the ac&,nowredgu-eat
of the
oignaturec ou the inetrument approving tbe sccount"
ARTICLE EF. fr" rhlp ngent shall indernut$ the captnin for
nll the expeneee he mey ha+'s incuned with fund'.of bis own
or of
othene, for the benefit of the veesel.

e. Diecharge of Cnptain and Crew.


'l'ltr'
l i l l l r t * ' i t t 1 11 t t ' o v t r t i r t l rl :r {l ' t l t r , ( . l x h : o t ' ( l ' r r u l r l r r : r . o g
r l r s r : l r a r g 1o. l ' t h c
ca;ltain and thc crcn' i.s subjr:ct to rhe proyisions til' the
Labor code of the
Philippine.e frrnthose lvho are ernpLryed for dornestic transportation
or commerce
a's well a's the rules promurgated the philippine
uverseu" Enrpr;;;;;t
Admirristratir,rr {POF,Ar fur seamen who are hired tbr
"""r;;;;;pil;;""
Artrlclfi {i{}$. Befrrre the vee*el eets out to sea the ehip agent
mey at his di$ereti*n diecharge the capt*in nnd rnemrrera
' wh*g* co'rrllt:ts ure not of the crew
f*r * dcfinite lreri'd {rr voy$ge, paying thern
the salariee esrrred according 0o their eontra.tr] orr.t
witt orrt any
irrdr'nrnily r*,hlct$orovr.r" gilfurne llrrorl in *r, ,.r;rrrrn" 11rxtrltor:lflr:
rl$rrurnu.nt | 11rlrstrrtr1:
{ (htrr*riru
Ali'l'lcl,H {iM. tf the caprni* or nriy ur,hor mornbcr
bf the crew
shodd be diseh*rged during the voy*ge, thery $rrsrr
receive their
*1""y 'rrrtil theyrg-t"T to the port where the cnntract was made,
unle*s there shnulcl be juet cnr,"* f,rn the dirx:hargc, nl! in
acc6rtlgnce
with Artick, {tiKillnd frrllowing of thiu Oodc.
ART|(;LFI {ios. If the contr*ets 'f [h. r.r;lt'in 'nd mernberr
*f lhc rrew wiih i,he ahip nigant ehouhr rre for u
definite period o.
v.tlyage' they mn.y not be dirchargad untir after tho
furfiilment .f
thrir r:onl.nr*tn, *xrl_"pI lty r+*rolr uf inriullorr!irrrr

Artl'Icls {i$6. If the captain shourd be a co-owner of the veaaer,


he rnay not be discharged unregs the ship agent returns
to hirn the
amount of his i*terest the*ein" whieh, i'the arreence of
agreement
tretween the partier, ohall be appraisererrry expertr
*ppr<lint*d in the
maruter est{rt lished in the lsw of e ivil procedure.
AR'IICLH 60?. lf the captain who is a co.otpncr should htrve
pbtsined the cornm*nd of the veaser by virtue
of a special agreenoent
contained in the articlea of aeeociatiern, he *^y oot be
deprived of
hilr onffice exeept for the csuses raentioned in Article 605.
AnrrcLB so8. In case of the voruntar5r sale of the veesern all
contracte between the ehip agent cad tbe captain ehan
tcrruinaten
reeerrying to the latter hia right to the indernnity which
*"y p*rt"irr
to hin, according to the agreenente nade with the ship
"g*"t.
MATiITIMEI^{W ,196
Fersona
W}o TakePaA in MaritimeCommercr

They veaeel eold shall remain eubject to the oecurity of the


psynent of raid indenenity if, after tlre action ngainat the vondor
hac b€en inctituted. the lntter ic found to b* iru*clvent. I

PR(}tsLEMS:
L X Mining (io. ShippN.d h c,irqoo{'machinerrieson br:ardrhe !i/S
GoodShip rvhich was chartered by the Able SihippingCo.,a foreign corporation
representedin the Philippinrs b.viL+agent. Best Lines, lnc. When the goods
were del.ivered to the eorreitr;nee,Y Corporalion, they were found to have
suetained losses.The insurer, Sunshine l4surance Co., paid for the loesesn
h' thereby subrogating itself ,o the rights r-rfX Mining Oo.of Y Mining Co. uds-
h,. d-uis the shippilngcompany and the shipping rgenr.
l'[](' Upon arrival of the SrS Good Ship in Manila, Eest Lines, lnc. took
'Ii I
charge of the following: tairunloadurg of the'cargoand resuingof cargo receipts
in its name for the purpose r:f evidencing the condirion and the discbArge of
the cargo fronr the vess€l to the {irrastre operatnr and"/or unto the barge
lightere; tb) filing and processingof claims against the veseelSIS &ood Ship
for damagevlosseseustainedby the cargo,
When Sunshine Ingurance Co. sued both Al:le shipping Co. and Best
Lines, Inc. the latt€r contendedthat it uas a dj.gclosed
agent and could not
thereforebe held liable,de*piteth* insr;lvencyaf Able ShippingCo.
Rule on the contention of Bctt l,inec, Inc. wit,h rearons"
A: Besl Linec, Inc. g cont*rrlronlacks merit. Articles 58{i ancl587 of
the Code of Cnmmerce makes the ship agent iiable for the civil liabilities in
favor of tliird pereonEwhich arise from lire condr,;ctof lhe captain in the care
'fhe
oi'the goodr. liability of the ship agent i.* eolidary together with the ahip
owner, hence, the liability remains even if the principal-ahip+wner is insol-
vent. t 1984)
2. Q: S nhipped goo<lsfrorn Australia on board a foreigrr vessel
owned and operatedby X Shipping Co.,basc.din Auetralia and repreeented
in the Philippines by R. the goodswere consignedto T of Manila and insured
by U against all risks. Up<lnarriv*l in Manila Bay,the go,odswere discharged
from the veegelto a lighler owned by the llay }3nrkcrageCo.
When delivered to ancl reterved b1,'t, tht' guuds were found to have
eustained logoeeor damr:gges. ilyidencr: discloaedt.hat the damage occurred
while the goods were in the cr.rstodyof the carrier.
The insurance company paid thr.:anrounl rif tlre loee tlut souglrt
reimbureernentfrom X andlor R. R disciaimedany liability allegiig that he
ia a mere agent of X, and having acted as agent,of s disclosed principa! ia,
therelbre, not liable.
Can the insur&nce cttmp&ny recover from R? Reas{ros.
A: Yes, the ship egent is solidarily liable with the ahip owner for
indemnities in favor of thint p€rs$n which may arise in connectisn with the
care of the goodn(Articles 586 and 587, Code of Comrnerce)^'lherefora,
lhe
insurance company can recover frum B the amount repreeenting the vah.roof
the goodalogt or da$raged. (1981)
4ffi ON'I'tt H t.Aw (.rN'I'RAN SI'ORTATION
N{ n'h:li r\ N I ) C.A-SUS
ANT} I)UBLIC I"ITILITISS

CA$SS:

1'{.1CCN v. {iLICERIO IPIL, ETAL


C,IL No. [.'!t]l$5, Decemtrer 38. 1918.

The yrurpx,,r*rl
of the-actior bruuglrtirr llrt,scprrx'rr.drrrg,r
is t errablethe plarntiffto
necoverfrom the defendants jointly and severally the sunr of P450, which had been
delivered by the plaintrff [o the first. and fhird of the a]xrve-nameddefendank, master
and supercargc,reepectively,of,a bcncfl n:rmed iloria belonging to the seoonddefendant,
to be cerried, together witb various menchandisebelonging to the plaintiff, from the port
of Cebu ts the tovm of Catmon of the Province of Cebu. By virtue of the mntract executed
between the e&id seconddefendant and the plaintlff, the money and merchandis€ were
tn be transport*d by the said crall between the poinls above-narnedin consideration of,
the payment of a certain surn for each voy'age.'!"liemonr:ydisappearedfrorn said craf[
during the night of October 18, 1911, white it was anchored in the pnrt of Cebu and
nvrdy trt riaif for ils dr.ntinntion,C*t.mon,,:rnrlx'irs not.nftr,rwnrdsfound. "Ihe plainliff
hrrr.redhis action on thrl charge that lhe dinappr:irrarrcr" of said sum was due to the
atrnndonment,negligence,or l'ol.untary braach, un the part of the defendants,of the
tluty tirey had in respectto the safe-keepingof thti aforrmentioned sum.
The defendants,besidesdenyiag the allegations of lhe corrplaint, pieadedin epecial
defenee that t}e plaintiff, at his own expense and under his exclueive reaponribility,
charlered the said bcnc*, the property nfthe defendant l,auron, fur the fixed period of
three daye, atthe price of Pl0 per diem, and that, through the misfortune, negligence,or
abandsnmentof the pl*intiffhimself, thr: loss cr.rrnplnined of occurred,while aaid 6ancs
lvaa at anchor in the port of Cebu, and .rryascaused by theft committed by unhnovrn
thievea.They ftlrther allegedthat said defendnnt L,nurtn, th* owner ofthe bonca merely
placr-'dthiu cmft, at thc tliepoeal of lhe ptirinliff f'or [hc price and period ngreed upon, and
did not go with the &ancrl on its voyage horn Catmon to Cebu. An a counterclaim, the
defendanta aleo aaked that the plaintiffbe ordered to pay the freight agreed upon, which
had not yet been paid, amountfurg to P80, plus the sum of P?0, ae an indemni.ty for the
loaseaand dqmages caueed tbem by the attachment of the banca,iesusd at the instance
of the plnintiff upon.fili4g hir mmplaint. They also prayed for the additional aum of
Plfi), for tlre deterioration sf the said b@nco,and also thst of P2@ for other deterioration
suffered by the sane eince Novernber,L911,and which had not been paid for. Finally, the
dsfgnrlants asked to be absolved from the complaint.
Before ctmmencing the hearing of this case,the defendants made a vertal motion
aelring tbat the plaintiif be declared in defgult, with resp<xt to the counterclaim 6led.by
tbem in their nnrwer. On the *arne date, the plaintiffpreaented hie qnawer to eaid eounter
slnim, denlnng eaeh and all of the allegations thereof and of the defendants' epecial
defense. The aforementioned motion wari overmled by the cour!, and the defendants
excepted.
At the tersrination of the trial, the court, in view of the evidence adduced, held
that there was no room to doubt that the sole cauge ofthe diaappear&ac€ofthe money
from thb e&id6onca was the negligencecfthe master and the Buperc&rgo,the defendaqts
Ipil and Solamo, respectively, and that the defendant Narciso Lauron was reaponsible
for that neglig€nce, as owner of the banca, pursuant to articles 589, 687, and 618 of the
Code of Commerrce,the pl*intiff ttrerefore being entitled to recover the amount lost.
Jufument wae r?udered on April ?0, 191.!, in favor of the plainti$ and againet the
defendants joiatly and aeverally for the sum of P450, ',v'ithinterest tirereon atthe rage of
6 per cent per annum from the dnte of ftling of the complaint, October 24, 1911, with
'F

MAITITIMEI*AW ,19?
Ilersons Who I'ake Part in Maritrrnt Conrntr:rcl

cost"s.'fheplainrrlTwls absolvedlram the delendant'scounterclsinr.!'ron thi.ejudg:nent


the defendanleexceptedend at the sanr. tirnc nrovedfor a new rrial. Their motion waa
dented,to r+'hichmling lhey iil$$excepted,and, through lhe proper biU of exceptionr,
enteredand app,ealto thir SuprenreCourt. In thr:ir bricf they all*ge that the tria! court
rurrr.d:
l. , , q 7,.r r r l i i l f i r , t t h c ( l o d eo f ( , ' o m m < l r ci ne f a v o ro f
I n a p p l y i n ga r t i c l c s5 1 i 6 5
l : , ; . 1 . . r r' ,1i ' 1 ,
2. In overmlin6;thr mc,tionfirr dt,fiirritprr:i(.r)l{dby;the defendantsand in
sehtencingthe deftndantsjr,intl-r-anrl srverallv tr.rpl1' tht: plaintiffthe arnountmentioned
i n t h ej u d g m e n t ;a n d
3. l n a h s o l v i n gt h e y r l i r i n t i fffr r r n rt h e , i , ' l i ' r r < l : r r rcro' "t t n t e r c l a i m .
The evidencesi:ows that the piaint,iiTYu Con, a tnerchanf and a resident of the
town San Nicola:,,<lf'thecit-yof Clerbu,
of engagtd irr the sale of cloth and domeeticarticlee
and havrng a sliare in a shop, or srhall st{rre,sii.uatedin the town of Caimon, of seid
province,had severdl times chartered frr:nr therdefend;rntNarci.soLauraa, ebancd Damed
Maria belonging to the latter. of which Glicerio lpil was masLer and Justo Solamo,
supcrcargo.for the trzrnsportstionof certain merchandiseand somemoney to and Fom
the said town and the port of Cebu, that, on or about the 17th of October, 1911, the
plaintiffchartered the saiqlbanctr {icnr thr: drflndirnl Lauron for the tranaportationof
various merchandisefroni the port of'Cebrrto Catmrln. at the price of P45 for the round
trip, which rnerchandi* was lriack:d r>nhoarrlthr said craft which was then at anchorin
front of onrr of the grrrdtd fills of the wharf o[ said pt-rrt;that in the aftenroon of the
r followingda1,he deliveredto the other two deferrdants, Ipil. and Snlamo,master and
t $ufNrricargo, res;x'ctivel.v,of tht afore.namrd hanct, thc xum of P450, which waa in a
:) trunk belongirrg'krthe pl*intill'and was taken charge of by said two defendante,who
.Y receivedthis money frrrm the plaintiff, for the purposeof its delivery to the latter's shop
,t in (-'atnronlirr tlrc ptirchasc.ofcorlr irr this town; thll while the rnoneywsa etill in said
rnick abroad the vp.ssel,on the night of the said 18th of October,the time scheduledfor
n the departure of the ,tr/nrlo from the port of Cebu, strid masler and said Eupencargo
trsnsferrrodthe P450 [r.,.mthe piairrti{I"st.runk, wirr:reit was, to theirc, which wa.sin a
e ststeroomof the 6cncc, from which staterrx;rnboth the trunk and the moneydisappearcd
.f during that samenight, and that lhe investigat,ir-rns, madeto ascertainiheir whereaboutr,
producedno result.
It:
The facts are also admitted by lhe aforementionetlmaster and supercargo,two of
the defendants,that they reeeivedfnrm th+ pllrirrtifTsaidl)4ll), which eunr rvaain the
ll lstter's own tlrnk'which wtruplacedoul.+idrthc stlf,r:roomof Lhebancu,for the reason,
r.t, ae they mid, thai there wte no tr(x,rnfor it inside the sLatcrrxrrn;thai theee defendantc
tlrcrefore truneferrod eaid money lo thein lrunk, which was ineide lhe stateroomrand
nl that this trunk and the P450 therein contiiined dinappearedfronr the boat during the
night,oi thal srrrneday; that ssid surri hud not lxrcn found or returned to the plaintifr;
that the plaintiff, being on the ban.c<rin the afterrroon of that day, when hie trunk
containing the P450 wss esrried atxlard, and sccing that rsaidtwn defendsnte,who had
ld
,} the key of the trunk, has removed said surn to their trunk inside the etatsroom, charged
them to take special care of the money; that the masler Ipil aseured the plaintifr that
there wae no danger of the money being iost; and that. final, during the niSht in quertion,
Ie
both the ma$ter and the.Bup€rcargorrnclfbur c:rhin-hoyswere aboerd the banca.
1r'
It *'as likewise pmven by the allidavils :nade by the rnaetcr Ipil, the 8up€rcartro
It' Solamo,and the cabin-boyaof snid v'ensel,.Juun (]uiurrrcosnd Gabriel llaaang, beforethe
JI provincial fiscal of Cebu on the day following the commissionof the theit, which affidavits
L
498 NOTESAND C.d$ESON T}{E I^AWOI.ITRANSPORT.ATION
A}ID PT'BLICTNILITIES

wnrfi prtlr&nt{.(lrrl !,}u,trinl ns }hhilrita A,3,4, nrrrl6, nrrr}lry 1.f16' givln ut.tho
11'61-ltwrry
trial by the dn,fi:nrlarrllr lprl arrd llolamri, t.hat trrth *urrl cnlrrn-txryrand thtr other lwn,
Simerrn !{olnnro,und rnid cahin-lxrynlsri the o[her twc, llirneon Sotomo, and Eulnlia
Quiwnco, knew of thc existcnce of [he murrey in the trunk ineide the stoterrnm and
witnee$edits removal to eaid trurik from the plaintifFs; that the last two cabin-boya
ahuve-named,in companywith tlre mesler and thr. d,ulrerc{rrgo, conveyedthe plnintiffa
trunk, in which the money was previously contained,fronr the plaintitfs shop to the
bonca;and that no pereonnot.belnngingto the veegellutew that the money war in the
trunk incide ceid sist€rcrom.
Acconlingto the lestirnonyof the mastcr lpil hrrnsrlt'hr:slept outsidethe stateroofil
thnt night, brrt a cnbin-tioy nameri Gabrirl *lr.pt inridr. Tlre lnttr.r, howEysT,wnn not
ltrr'atttl*rlhy l.hr rllrlonrlanl*to hr rorarnurc,rl ir111,gnlrlkr Ilria 1xrilrl.,lrnr r*l*u t{ &f!!xtrtr
tltlrt ht t*"ltifir'd in rtnpoct tht retrrin hia uflidavrt, Exhitrlt 5, fN:firrcrtl'erred to, preuented
by the drferrdflrrt'8 own cotrnsel. The nrnsterlprilnnd t.hcsupr.'rcarga Solarnoalsoteetified
that they le'ft the cabin-boy Sime'onSolamo on guard that night; but this affirmqlion
was not corroboratedby Solamoat the trial, for he was not introduced as a witness, and
only his af{idavit, Exhibit 2, taken before the fiscal of Cebu on the day following the
contnrissiorlof the crime, was presentedby the defendant.s.This affidal"it, which should
have been admitted and not rejected,as w&s done iry the court and exceptedto by the
defendant.c,shows that Simeon Solamo stat€d that he was not d*signatcd to dcrguard
duty that night, but that on the morning ofthe said lgth ofOctober,that is, the next day
all agreedthat affiant shouldsay thnt he was on grrlrd, thorrghit was not true that he
w8s-
Fina!ly. said tu"o defcndants,the master and the supercargo,gave no satisfactnry
explanation in regard to the disappea{anceofthe trunk and the money therein eontained,
from the statproomin which the trunk was, nor as to who siole or might have stolen it.
The master of the 6anca merely testihed that they, he ancl tire supercargo,did to know
who the robberswere, for, when the robbery was crrmmitted,they were sound asleep,as
they were tired, and that he believeclthat the guard Simeonalso feil asleepbecausehe,
trn, wae tired. Th* st'condrkrfirndantgave thr.,Humctcst"ilron-v.Iloth of thtm testifir'd
that the snrall windr-rw cf lhe statersrm had beenbroken,and the lirslof thr:rn,i.€.,the
rnttr.kit',statltl llrnt rrll the window-blindnhad lx.,.lrrr.nroveri
frorrrthe windows,nrqwoll
as p{rrt erfthc pnrtition in which they were, ffid lh;jt thc trunk rn which the rnuneywas
il.;rrtiiincCcould have been passedthrough said small rvindow,treci:use.as this witness
himself had verified,the Chinaman'stnrnk, which difitrrr:dbut a little frorn the one
stolen,couldbe passedthrough the sameopening.The chiefpilot ofthe harbor ofCebu,
Placido Sepeda,who offrcially visited the said banca, also stated that the small wooden
window of the stateroornwas broken, and that he br:lievtrdthat in breaking it much
noise niust have been produced.However,no evidencewhatever r+'asofferedby counsel
for the defendantsto prove that it might have been possihleto remrivethe trunk from
the stateroam through the opening mnde by the breaking of the smail window,neither
was the size t-rfthe trunk provbn, in relation b LheL'hinaman'shr which the defendant
master referred in his testimon)',so that it rnight be vtlrified whether the statement
made by the latter wa$ tru{,, rriz.,that it might hnve lrr:enpossibleto remove from the
stat€room through eaid opening the tmn-k in which the P450 were contained, which
eum, the game ae the trunk, ita container, had ntit been found, in epite of the inveetigation
rnadefor the prrrpose.Furtherrnore, i[ wan not proven, nor ir*therc any circumstsntial
evidence to show,that the robbery in question wae committed by persons not belonging
to the craft..
It is therefore beyond aii doub! that the iosg or disappearance,on the night
afarernenlioned,of the P450,the prop€rty of the 1'laintiff, which, were in the poaeession
Mrlhlltlti'j I-{W
I'ersonsWho'firkc Part in Marlrirne Corrrrn,erce
4W

'.!r,
trf the defendants,the rnastrr &nd the supercargo
of the banca Mari,",occu*d thmusb
the manifest fnult and negrifenee of said defeniantr,
f"",-;;;y did they fail to take
rllrr the necesaaryprecaution;irt order that the.staberoorn
containing tbe tmnk in which
,!irl they kept the money r|:{a be properly grarded
! t\ 'i
by *"-U"r, tn;;; il;;Jfft
condition that it would be imposslue L eteal "f it or
!t
lhe irunk from that person* not
belongingto the ve$selmight forcean entrance
intu the stat€robmfrom the out"side,bul
.lr' also the-v did not expr*esltr station s.omeperson
inside the stateroom for the guarding
t,. and gafe-keepingof the tnrnk, for it war n,t provrn
that th* cabin-hroyoabriel etept
there' as the master.of the ves$er,Ipii,
stated, nor that the other cabin-boy, sinneon
Solamo,was c'nguard that night, for the latler
{-ltii contradictedthe ststementemade by tbe
two defendantson this point. on lhc ccntrary, it
fi, 'i was pruven by the martefs own Btstement
that all the people of the vessel, includtne
i : : tr himseif il ;d;;;;argo Solnmo, elept
noundly that, night; *I:h k cannot, in aly rnanner,
tltl eervethem &s an ercu6s,nor cnn
it be accepcedac an explanation of the etstsrnent
iltl that they were not arrare af what waa
thenrx*rias onboar4if fte rrunk*;;;""rry ;;;i;;#;;iJu-o
ion
the smsll rvindow of th9 atateroom, a aetail-which i'o **oved rhrough
lnd .!il;;;;roven, butn sn tbe
contrary increaeestheir liability, becauseit is very
tirt- strange that none of tbem, whs were
.t,1 sir and were amund or near ttre sLt€"oom, shourd
irave trei.a tn" noi* which the robbera
must have nrade in breeking its window. All of
thc theee cirn matancei together with that
of its having been impossible to hnow o,no t roto
ard the trunk and the money and the failure
to recover the one or the other make the conduct
la]", of the'two J-:*"a""* and of the other
membere of the crew of 6cnea, enrinently aupicio,rg
i ht: and prevent our holding that the
disappearance or lnse of the money ** a,r* fo
a for?uitoua eveat, to farw mi*urc, or
t"hat it was an occur:rencewhich cor.lldnot have
been foreeeen,or which, if foreseen,wae
1 {' r \ inerritable.
It'ti,
It is-unquestionablethat the defendant-cGlicrrrio
n tl. . lpil and Jus1r;Solamowere the
carrierg of thr eaid P4S0k,longrng to the plainr.itf,
anclthnt tlr_t;;;;;;il_;'f,oJ
the.latter lor the PuryL: of rieiivering it i.o
t,;il the store of the town of catmon, t' which it
had been connigned'tlnder guch circimstance$,
' li.'. sairJtlefendanLewere the depoeitaries
of the money.
,fl.'d
thtr
xxx
u,'li
Thc said tvi'odefendanLsbeurg the dcpositaries
of the sum in questron,and they
having faiied to exercise.forias safe-leeping'tl',e
ilt,s: diligence,uq,ri.*o ly the nature of the
obligationansumedby them and hy the ciierrnrgrnnrrs
('l lt
of the time ,i"i ir,- prrll'rr'i-
('t'l I evi<L'ntlhilt, in purltuflnc('|
of thc provixiorrn
ol nr.tielcxl{i0l lntl 1602,in thoir '*tati*n [o
articleg 1783 and 1?tt'1,and an prescrilr,r.din nrticles
d'!r'l:
1770, ofrhe Civit Code.they are
.i t l r ' l i liable for its loesor misplacementand mrrst reetore
it to the plaintiff, together with the
in st'l corre*pondingintereat thereon as an indemnity
for the lossesand damageecaueedhim
ffr rltl
through the loss of the enid ,run:.
{,t' ,
with respectto the other qlefendant,Narciso
rlerri l,aurtin, ae he was the owner of the
vessel in which the hs' or mispraccment
tlr'tll
of the p450 ocbunred,or *htch veaeer,ae
afrrre-ct€ted' Glicerio Ipil was *rrtur rna jrrto soranrc,Bup€rcargo,
r tilr' appointed to, or choeenfot.t!: both of whom were
hri:l: Frsiti{rns they held, by the dlfendaiit'*mueU and, as the
afr:rementinnedgum wae deliv€rea ro ti,* *uia
r f t , , tI *n*r.r, rpir, ;;J;h; inorchandiss to b$
trnrrrr;xrrtlrl lr.l'trtrlrn* of nri<l vr,nr*tllfnurr tlrl
I t l l . ti lxrr.tuf Cr,-huto tlre towrr of Calmon war
laderrby virttt| $f a conlract executedby and l.rctwcen
lhe plaintiffand the owner of the
*ll lli' v*ns{rl,Narci* l,auron, it bt"hnovenufl to *xlurrine
whether th; i;;rr areo,shnurd be
held to be liable, an requestedtry the plaintiffin
his complaint.
right said vessel was engaged-inthe transpcgtation
',i-cil)tI of merchandiseby sea and mede
voyagesto and from the port ofcebu to catnrrn.
and had heen equippei ,i-t"^r-J
"ra
600 NOTASAND CASESON THE I.AW ON TTTANSPCIRTATION
A,}'{DPI.IBLICLITIt,IiTIE$

ftrr thie purpo$e by its owner, Narciso Lauron, rvit.h'"virom,as aJbresald,the plaintiff
crrntrnctedfor the transportntira nf the rnerchrrnrlisevghichu'as to be earried, on the
e t n L r o n c t l ,r r n t t l t r , t r n r rotf ( i t ' l i ul o t l t r t t , w l to f ( i a t m o n .
d a t e h e r e i n H l x r vm

xxx

flniti4lly, tlw Supreme Cour-t explained that the banca called Maria, chartered W thz
plaintiff Yu Con from the defend.ant.Nbrci.soLauron, wctsa "uessel',pursuant to the
neoning of this word in mercontilc lau, that is, in accarclancewith the prouisionsof tfu
Cdz of Commercethen in force. SeeChapter 7 af this urarh.J

Gliceriolpil, lhe ma$ter of the said 6,rlrrr Ilirril, nrusl trlsobe consideredas it^s
c a p t a i n ,i n t l r c l c g n l; r c c e p t a t i oonf l h i r w o r d .
'I'he
sirrtrrCoclcol (lomnlr,rctin {brcl lri lhr:selsl;rrlrls.iirmpareil,
in its article 609,
rnaster-€with captaina. trt is to be notcd thal in lhe Code of Cr:mmerce of Spain the
denominationof arroecesis not included in said articie as equivalent to that of masters,
as it is in the Codeofthese Isl&nds.
General Review of Lcgialation
Cnrirmentingon said article, the afcrrenrentioned
and Jurispnrdenct'sa.vs'

is grvr,n,;rr:corriing
Tht, narncof capt,ainor mor"4ter to the kind of vessel,
to the personin chargeof it.
T h r . f i r x t .r l r . r t o t t r i l t r r t rior rnl p p l i , . r l l o I . l r o r i r , w l r1r 1 o v l t ' vt tr t t n r ' l sl h t l t ,
l r , r \r l i l l t rt,l r l l r r p i lgt r . r trr)' rs l i r p rl l l i . rgt , ', l r r r rt,i , r r , , r ;rr: t; i t il t r t l r l t ' t - t t t t rctiltl,l r u u g h
they be ertgtgedirr lhe constwisetrad*.
.lrrps t.,lrg;lgutl
Mastersarr thosewho comnrurrd.unrallr,r' exclusivelyin
the coastwisetrade.
For thc purporie.s t}re words "captain" and
of mnritim* c{)nln){'rct!.
"mast€r' have the same nreaning;both being thl: chiefs r:r commandersof
ships.(Vol.2, p. 168.)
Article 58? of the Codeof Com.mercein force provides:
Th* agcnt ehull tx civiliy lishb ftrr tht".indr:nrnitiesin firvor of lhird
p€roons which arise from the conduct crfthe caplain in the care ofthe goode
which the vesselcarried; but he may exempt hinrself therefrom by abandoning
' the veslielurith all her equipmenlssnd the frr:ighl he niay haveearnedduring
the trip.
A r t i c l e6 1 8 o f t h e s a m e( . l r < l t , u l spor t s t r i l x , < :

The captain shall be civilty liabte to the agcnt an<lthe latter Lo the
lhird personswho may have madecorrtracLewrtlr ltrr-'fornter -
l. For all the damagessuffered by the vesseland ils cargo by reeson
or crime has been'
ol'want of skill or negligenceon his psrtr If a nrisderne&nor
committed he shall be liable in accordancewith, the Penal Code.
2, For all the theft,e ceirnmitted by the crew, relerving his right of
action against the guilty parties.
The Codeof Commercepretrioustc the one now in force,to wit, that of
1829,in its article 624, provided that the agent rir shipowner should not be
,l
}L4}TI'I'IMII LAW
Pprmrrr\aihoTnke Part rn }tnrir,nlr,(.ory111sr,1"gg s0r ti
$
lirll-'iel'or an.vexcess€swiricil, ciuring thr-,navrgar.ion,
tlr. crPtnitt ttnd crt'w.n;rd i,hrrt.l'r tlr* [r,r]i{)rl
rnight be eomnitt*; b"y $
'l'such exfij$rJ€ru,tt lva* 'nly
propsr'to bnng action agarnstthe pxrrson*
and property ofthoae found guilty.
Eskrsen,in his work on rile Inrtrtutcs of Mercantile
Law (Vol.4,p.ltJ3b),maLes the
follriwi^g rtnrarke, in referring to the expoetr;;
l. ;i;;;", p.u*un,"a by tho code
'1, comnrisaion rrhich prepared arii pr*xrnled fu, ,pp.ouut
the crxe orcornmerw now in
force' in which expoeition of rcaxlns were set fo*h
I' ihe fundarnentsl differences betwoen
tJre proviaions conLa.inedin both cqldes,urith respect
to the euuiect-nratter now under
discusgion.He says:
its
.- - - Angther very important innovation introduced by the Code is that relative to the ,ll
liability for misdemeanoraand crirnes committed
by the captain or by membersof the
xj.
crew'Thie is a matterof the greatest importance
expressedb.vdifferen t j uris-consults.
on which r u.ri"ty ofopiniono hns b€€n ii
ii
hr'
f \. The old crxle declares the captain civilry liable
for ail damage austained by the
vesselor its cargo through lack ofglill or care on
his part, through violations ofthe law,
.r through unlawful'ncts committed by the rre w.
ltll'l no ,*gar.l" *,"t"rt or shipownora,it
declaresin unmistekeable terms that he ahail in no wiee
be liable fJ, uoy which,
during lhe navigation, may be conmritt*J Uy ti,"
captnin and the cr€w. "r*n
upon an exarnination,in the tight of the principles
of modern iaw, of the stand.ing
llgr,l ll,rt.r'in,:ou tha nou-liabiLill_of lhe sir;powner
for the untar+ful act€, that ig, the
crirncs or quasi crirnee,cornmitteclby tlrr caprain
anr] r,hecrew, it is obeervedthat it
cannot'be mainlained in the abeoluteand caregorical
terms in *i,i.h it l, rorrrlul*tea.--
It rs *el! and goodthst the shipowner be not
held criminally liable for such crimes
or quasi crimes; but the cannot be exrosed from_liability
for the dalage and harm which,
in conaequenceof thoee acts, may be suffered by
the ihlrd guJi*" Jlro contracted with
the captain, in hie double capacity of agent and eubordin"t"
*ltipowner himaclf. In
maritime eonLmerte,the ehippers and paseeng*r"
i;;"ki"g;;-;;"rtlr" with the captain
do aothrough the confidene they have in the eh-ipowne,
or,o ippoint*a niq irr"y p*L*"
llrat the owntrr made r careful inventigation treforeappointing hinn, and, above
t"heythemeelvesare unabre 1o.et ell,
to make such e; investigation, and even thougb
d'*r' the,vcould not obkrin cornpleoerccurity, inagmuch they nhouid
aa the shipowneil;;i;ffi;
hr s€esfir. appoint another.upLi" instead.
The shipowner ie in the name cai+ewith reepect
to the rnembers of the srew, for,
though he does not appoint direetly yet, expresely
or tacitly, he contributea to theii
eppointroent.
on the other hand. ifthe ehipownerderiv*a prolits
from the results ofthe choiceof rr{
the captain and the crew, when tire shoiee t*rrs out
successfur,it;;; j;ffi l* rl
ahould euffer the con'equenc-esof an unsucceseful
uy""ppuo"tion of the
rule of natural law contained io the Fartidas, ure., thai
"pti";;;i,
iw who enloyi the benefitsderiwd,
fram a thing must tibewise suffer the l*sses ihot enrue therefram.
Moreover,the Penai.Codecontri.insa general principle
that resolveethe question
under cnnsideration, foi'it declarer tnat *uci, persons
ae undertake and carry on any
induatry shall be civilly liable, in default of thoee who
may be criminapy liable, for the
rni*dernean,rsa'd crimes comrnitted by their. surxrrainrLu
i" lr," li*h"rgu of their
dutieg.
'l'lrr,{',rrL,ol
( ' 1 1 1 y 1 s 1 1 1 , 1 1l i.,1r 1 , llt rp 1 1 L } r
l l t . i t | , r . l n r . r r t l r l r gr l . r t , r t r - l t u l l t l i t y c l r l r t l i n O d
ift
1 f t r 'o l r l t ' t t h ' , r t l t t l r : l e I t ' l y l t t t t k t , $ t l r * u l r i p o w n r r r
lrublc crvilly ftrr lhc loes suffrlrod hy thoaa
502 NO1ESAND CA$EII ON TT{NI,AW OIf TA.ANSPORTA?ION
AT{DFLIBLICLTILTNES

whn contrnctorl with thr, C;rptnin, iri rrllugrlrr.rrr.r.1l-i[r, nrirlft.me.mn6rs


;1nalCrimnr
cornnriitt,rl b.y tho latk'r or b.y thrr ftulnltJ(.r,{of thr. r:rew"

It is therefcrrc ovident t,hlrl. in acccrtinrr(t, with lhe providion$ of


the Code of
Commerce in forte, which are applieable to the instan** the defendnnt Narcieo
Lauron, as the proprietor and r;wlrer of the crafl ol:which "".,
Glicerio lpil war lhe master
y$ in which, through the faulr aud negligenceof the latter and ortlr* uper"".go J*1g
Solamo,there occured the loss,thr:ft. or mlbery of the P,t50 that betongedto
thellaintilT
snd were tlelivered to sgd maater and aupercargo,a theft which, oo th"
other hand, an
nhownby the rvidence,doeRnot App{.arto have lxlericornnlilt*d by a perelon
n6t belonging
to the crafl, should,for r$aidloseor theft, tx held civilly liable to the plaintiff, who
executeJ
witlr r*rirlrlr.fi,nrllrnt l,nrlrluttlti,r.lrnt.rnt:1. f'trrt.lr,,trrrrrsporl.rrl,ior,,,f tlru ntr,rchlrndino trnd
? r i i " ' r ', ! f ' r : r ' t i t i ' l i l ! ! r li lh{ ' l l r ( ' 1 'it.ii r r ' 1 x rur ft ! i t l r r rr r r r tLl l t t [. u w r ro f
O u l , r t t oht ty, t r t e a n on f
l l r r q : r i rtl' r r r f l
'l'hert"firrc,
the trial court did not err in so hoidingin thejudgementappealedfrom.
'l'he
plainliffhaving filed his answer lo thc crosg-complaint ae Boonas the defendant,
presented their motion forl a declaration of the plaintifie default in
connectionwith
said cross-complaint,and it being optional w"ith the court to make in
such casesthe
declarationofdefault, as provided in section tr29ofthe CodeofCivil Ptucedure,
the raid
court did not incur the aeconderrur ar*aignedby the appellants in their brief.
tr,n*t.lv, nn the 6onco Maria rlid not mnkr, t.lrr.trip nhe nhouldhava m*de from tho
prrt ol'(lf bu kr the town of (lutmirrr,ott lhr rx'cusicnirr que*tion,
thnlugh carcechargeable,
arrha* treenneen,to the captain and tha Bupcrcargoof eaid banca,to *it,
beeouseof the
losa, theft of robbery of the P450 baronging trr the plaintiff, and ae a cutract
*;;uj;
for the transportation of the eaid sum and the merchandiee from sne of gaid points
to the
other,_forthe round trip, and not throggh payment by the plaintiffof the
wageedue the
crew for each day',as alleged by the *leferrdants,for the proofa presented by
tie latter in
regard to this point were insufficient, as the trial court so held, neitler
did the latter
incur error in overmling the.c'roes+omplarntfrlrmulatcd by the defendantsi"
tfr"i"
rrg;rirrrlthr. plaintrff. "***t
Therefore,and for all the rea*ns crboveset forth, we affirm the judgment app€eld
frrnr, with thr: c'st$ r.rfthin innrurce againut trre uppellantc. so ordeied

wINc KEa coMpRADoIrINc co. v. BARI("MoNoNcArrELrr


G.R. No. l9t'd0, Januar5r Zg, 1.y}}.
44 Phil.4{X
.
The plaintiff in this case,wing Kee corporati'n company, seeke to recover from
the defentlants principally the Admiral Line, as &gent for the Bark l$onon6ahela,
the
tum of P17,675.&{, with interest and cclsts,on account of goodswares,r and
merchandiee
eold and delivered b,ythe pleirttiffto the defendants for the use of the crew
of the Bark
Monongahela. The case, as submitt€d to the appellate court, must be reconstruetod
ae
best it may, from pleadinga not altogether clear and explicit, ftosr fac,ts taken
in part
fi'om the decieion of the trial court, and in part from the *'rhiUit", the atenographic
roteo
not having been writtea up, and from the briefa on tle queotione oilaw which
are involved.
- Turning first to the pleadings,we find the plaintiffin ite amendedcomplaint praying
for jr-rdgmentagainet the defendantsjointly and eeverrallyfor the ,om or prr"sz6.64,
neerring,thereby, we pr€svl9, that it had a juet end prefered clairn upon
and againai
the Bark Monongahela, and that the deht wae irue from the Adrnirel Line,
the eg;nt: c.
gF'...lryFF:--

MA.RITIMI: I,.A'W 60iJ


l ' r . . r s i l n r\ \ - l u i i ; r k . i ' a r t i l r l i a r r t r l t l u t (,rIilIreftt

G. I-,othigius,the captain of the bont; and rhe rlwner$of the hroat,eifherVictor S. Fox &
Co., Inc., or the United States Shipping Board [rnergency Fleet Corprrelion. Capta^in
l,othingrua and the Admirai I,ine alier*e'red.The owntJrswere not cit€d to appear.No
i
actionagainatthe bark wae taken. t'ollowing the hial, judgrnent w&srendereddiemissing
the complaint, without apecialfinding ae Locoats.
'fuining :l
nirxt to thc f*cbr,the exhihitau{'rct:ortlrclrowlh$t lruginningwilir Murch
l6 1921,anri ending with Ar:gust 16,1921,variottnsirpplii:swenefurnished the Bark
Monnngrrhrlrihy Wing Krt Compn*ldoringOonrplrn.yliout of the bills ftrr tlresr:gnndnare
made out against the "Admiral Line, S. S. $lonongahela.'All are counteraignedby the
mast€r and the first st€ward. It appears,therefore,that lhe plaintiffwnu looking to the
Admiral Line for paymenL.
ltre first requisitione for supplies are on forme headedThe Arirniral Line." Then
followeManila, the date, and the name,'\{ing Kee CornpradoringCo."Next ie the nrder,
*Pleaeedeliver to S. S. Monongahela now lying at Bay, the following gmd* and
reading:
rend bitla to the Admiral Line:". After thi* the goods are namd. At the fmt is found,
"United States Shipprng Board Emergenc"vFleel Coryroration,' although thes€ trords
*The Admirai Line (Pacific $fssraship Co.)
are erased in a few of the requieitions,
Operating Agentt. By J. J. Arustmng." On the eide of the requieifiona in red ink the
following: "Note: This requisition muet be receipted by either Chief Offier, Chief Steward
,rr.{lhiof llngineer and returneti tr: the Adrniral Line, with eix ccpieeof invoice immediaiely
aftcr deliver of goode."Aftcr May 4, 192l, the requisitione Beemto have be+n made out
by the sieward and the maater.We deduc'eliom lheae docurnents lhat the Admiral Line
wge t}re operating agent for the Monongahela, and wes respsnsible aa such until the
egencywaa terminated.
In the Manila Daily Bulletin for Ari.gust't, Ig?I,appeared rhe ftrllowing: "Notice *
Bark Monongahela - The qnder-rigned hereby 6ive not,icethat they are not rerponaible
in any manner wheteoev€r for any indetrtedneaeincured by the Bark Monongahela, its
Master and/or Crew - llhe Admiral Line." The trial jufus found ae a fact that on or
beforeAugtret4,lg2l,the Admiral Line had ceasedto act ag agent for the lvlooongahela.
Nevedhelese,supplies were furnished ihe $lonongahela after theae dates by the plaintiff.
'fitle
Turning finally to the law. we find section I of 2 of our Code of Commerce,
given up to the subject,"Ownera of Veeselgand Their Agents."The first article in thie
sestion {Art. 586) and the pmvision of law which in our ludgment is controlling, reade:
{he owner of a veeseland the agent shall civiltryliai;le for the acts of the captain
and for the obligationscontractedb-vlhe latter to repair, equip,and provisionthe veseel,
providedthe creditor provesthat the &rnourltclairned was inverted therein'
-By agent is understoodthe personrntrusted*'illr tlrr:provisioningofa vessel,or
who representsher in the port in which she happens lo l^r*:."
ht'
The civil law, in this reepect,is not at ail dissinrrlar to the c(lmnlortlaw. By t'he
t't
genernllnw of the tlnited Statesas rvell as thr: En6;landand }iurope,it haa been held
.ri lrl'th*ir prtncipal,
that whcn the ugcntsbuy in lhcir etwlrn$ltl{jn,bul rcrrllylor Llrr:itccourrt
the celler has an option tr look tc either for payment, unlesn:(t) he trust€d the agent
J11
exclusively;or (2) by the ueageand uriclerslandingof uhetrucines$lhe agr:ntonly is held;
[t':
or (3) unlessthe specialcircumetancesoflhe case.showthat only the agent'was intended
etl. m be bouncland the eeiler knew it or was chargeablerrit.h knowledgeof it. Although the
English rule that, nhere the agent huys in his {}wn name for theaccount of a foreign
61. principal, ihe agent only is bound appeare not !o have tleen followed in the United Statee,
r ni t yet the general doctrine is the same, that the eeller has an option to reeort to either.
'!: U r B e r * ' i n dv . S c h u l t zt 1 8 8 5 1 , 2 5F e d . , 9 l 2 . )
604 NOTNSAND CASESON TI{E T,AWON fRANSPORTATION
AND PUBI,IC UTIIJ?TES

Applf ing more directly the law tu ihe pleadings


t'hat thc plaintiffhae not foliowod and rhe facts, it ic first. io be uoted
out-ita-*t'eg*ti""irrrix rt*;;;r" against tlre Bark
Monongahela, and nislrl not have p";e"od
any way, coriridering the rather dubio'g
doetrine announcedin--theeoastr i;;i';,
riteumtr san tvic.,racrtrsOzt, ? phir. 5gz).
Not only this, but the plaintiffh*
r"'"ffort tc bring the owner of iho trark into
caaoand haa puahedwith no enthu.riasm"r"a-" it*r the
caseagni'*t the cnplain of thc boat"what
apparontly the praintifT wants for
the Admrraf Line, ae iil-ug"nt for the BarL
h paythc claim,'te
a;drh; hrier ro.ui*;;;*;;r{
I[:X#:I:,", if it acoafit, from
To all t}'ia appelleeansrrers that aa
tbe agencyhas-ceae€d, action cannot be brcught
asainst Admiral tune. To our rnindg
tn's iB a ;;;;;;;;ri*L"rr, ror puraued to
ite lngical r:onclusion'every ogent for
n vesaelc'ukl thus avoid rr.rsprnail.ritity purauant
t, itrtir:lc 58ti q-rfthe (lode of (lor'-nll€rce,
by gi'rng up itii rrge'cy whe' threatened with
suit to rtnlirrc'the'bligntionx of third purii"".
r$lr,rr,,v..r,
" r ' t ! ' r ' v r ' tt,,.t,iit*
'Lr ' r| ' I t r r r rw
{
*,,rr. wlen
t h c A d n r i r a rr , i n ew * s y e t t h e a g e n t . 1,rr,*,nte<l

In rt''qttn:ti'
th0rr'l'rrt,.wenrr nf opinionnnd xo holtl
lbr lhe Ilurk M0rr'ngrrhela,is liable thnt,thr.Arlnrirall,irrr:,ns rrglrnt
to ti* prni"unrrr suppliesfurn;rtr*a the lrlo'ongahelg
betweolrMarch I6, I92l and Auguet
z, tszt, but in not responsibre for f,rnished
after that date. The mathematicar
the plaintiffamounts to pl6,sz6.zg
;d;;;;;
-----"- show rhat tt lrrc qEU!
a"ui uI I "uppliea
ir,e Admirar Line to
" "l
In accordancewith the foregoing,judgment
ir reverserianclthe plaintiffnhall have
Rnd r*rtrver fr'm thc dcfentrant,thr:
a-l"i**i'i;rr-, Lheeurn of pI6,626.2g, withnut
and coat.$o ordered. interest

WALTER LUMBER
co.
;fffiY:Tfl:lfl3ff"
65Phil. sr?.
on Auguei 30' 1926, the ateamer
Heren c, beronging to the defendant, the
cadwallader GibeonLumber cr.,
courfleof ita maneu":lt of oaptain Miguer Lasa, in the
moor"ritrirr".o*n.,on,r
at ttre ptalntlrr wh'rf in ttrr,
z n t t t l x r a r r g xr tl ' r r t ' kx ' i r l . l h3n r t ;xrrr .,f ()lrrtn'(',
1 u r r t r , , l i r , t , l , i i , , 1 t " , ,rrr,.,;gr r r r lt , r , , * , , , gt r r er r r ' l x r r
lht'n''rt inhr th* wxt.n wherougxln 'rl*6
ttr""pi*intlft'br'ught rhr instant acti'n t'
from thc dcl'endantthcnum orPs,zos.ci, rocover
us danrag.srirr t.h. partiar dernorit,ion of the
whurf nnd for the losc of the timU", pifuJn.r"on.

The defundant denied the plaintifPs


cauaes'f action, and in clel'ense allegedthat
the demolition of the wharf was j"";;;;ssive
weight of thousandsof board feet of
timber piled up'n it by the plainrifft"
b" rora"a und uhipped'n the Bte&merHelen
and to the bad ccinditionof tire piles c
said wharf.
"upp"rt*g
In view of the ev'idenceadduced
by both parties, rhe trial court held that the
defendqnt wag not liable for pr"tiJ*ihlf,ae
$r" of the plainrifl'e wharf, and fsr the loac
of the timber pilod theroon, oi"-i""iog
th" .Lplaint with coataagainet t;e plaintiff.
T:c Jud3e whu rcoh cognizanceof thic
case held:
'The
evidenceahows that said wharf was buirt
in 1921 and repaired ia
Thg r"epaire, accordiag to ttre depoaition
ls2l. of wileon c. smith, a witnes'
for the ptainrifr, *.T."i"to{ i. *pf""*iCbents
of pitesil;;;"* than 9
oid bente of piles without-be-g *prro"a.
Tberefore, th" ;hJ;f the plein6iff
was old. The murt is incrine'Jto b"d;
that the,rc"-rii"i"o c
"hghfly
i}IAEITIME I..AW ofi
FemonaWhoTalrc Fart in Maritime Conunerce

Btruck the dock but not with lbrce,for it was di{ficult for her to strike it' with
d force, aa hereinbefore "qtated,and due to the bad condition of the dock tbe
. slight impact w&s RulTicir.,nt to dertrny it. Tht lxrnt of the pileo toward the
k
i
€a8t Bide of the doch, as may be ceen frcm the pictures Exhibite E and F'
l. afbr itx dostnrction, doeanot lt{re$r{,arilynrctn Lhat tho deetnrction of *|o
'
lc
wharf war caucadby a rtrong impact, nr tho weight of the 60,000board fd
rt
cif lumber piled thereon, nlter *rrch elight impact.by the ateamsr aSsinst tts
,h dock, might have causedxaid pilee to lean townrd that aide'"

We are of opinion that this finding is supporredby thc evidence.In thia corurection,
it ie t, be nofed that tlre witnees, Dioriisio Pascua(for the plaintiCI tegtified that the
ht 60,000board feet ocrupiedone-fourth nf the wharf. In other words, by the tcatimony of
t{r the plaintiffs witnessesit has been proved that the plaintiffcompany piled up on the
iitl wharf a quantit"v.. of timber which {rxcecd*dit,s eafacity of resistance,becauseif the
rth whole wharf hada capacityof 100,000board feet of timber, one-fourthof it could suEtain
l{'ll one-fourthof that amount, or, nhout 25,0OOlxxrrd frrct,of timbcr. But it appearethat the
plaintilTcornpanyloadetl60,000lxrarelfi:ct, wt:ighrtrgt.rvtrl(Xitlnx, within s spaoecspsble
of rupporting onty 25,000bosrd feet. fitis must havg helped to bringabout the collapac
of the wharf on the eastsrn side and lhe consequentsliding down of the limber piled up
€fit
rela
on the one side.
hod
:8 to The court belowdid noi make any deilinitetinding as to the negligenceof the captain,
but the plaintiff apparently infers that there was nr:gligenceon his part, consideringthe
teetimony of its wilness Venancio Ignacio to the effect that the impact of the ahip with
the wharf wae due to lhe excessiveforce with which thc captain orderedthe wincheeto
Ulvt'

work. This was denied by the captain, testifying for the defendant.If, to thia denial, we
fresl

add the facte found by the trial court that naid captain dropped two anchors from tlre
prow and the kedge-anchorfrom the poop,and besidea,fastcned two linee of cablesto
ihe piles ordinarily used by vess€lein docking al that wharf, as preliminary to drawing
the vees€lalongsiJe the wharf, it witl be seenthat gaid winchee muet havc been carefully
gperated, and ii any forre was employed in working them, it wae doubtless due to the
fact that the veseel had already dropped anchor and could nnt move rapidly and the
'st.rearnwhich flowed from eaet to
,, Ll;l drawing of the veseel up tn the wharl was against the
n ii'e weet.We do not believe.thatthe mere statement of the witness lgnacio who has not kn
Sltglt' ehown to posEegstechnical knou,ledgeof the inaneuvers for docking vessel8,is sufficient
-
Prled to justify a holding that the fore employed by the winches on that occasionwa8 excessive
:f(\vi'r under the circumntancesof the caee,especially so if the captain's teetimony ig to be
ol t ilt' that.the u'incheswere clrefully rlpcra[r:d'
considered,
The witnesses for the plaintiff stat€ that the steamer Helen C atruck the wharf
<l ti:it
twice. but the trial court, after examining lhe evidence,found eaid t€etimony to'be
llt", 'rl'
(' exaggerated.
It it'l-r
As has been statcd, the plainiiffaeeks to recoveragainst the owner of the Bteaner
gcts of
Helen C, with whom it had no conlractual relalions basing its action on the
Il.it :he
Captain L,asa\.l,howas in comrnand of the vessel when docldng at the plaintiffs wharf in
tlit'lriss
Olutanga, Zamboanga. In support of its conlention, the plaintiff cites thi doctrine laid
,JrrtllI. (49 Phil., 117),wherein
down iri the caseof Ohta DeueiapmentCo. u. SteantshipPompey
it wae held that the defendant .o*puny, as ehip-owner, was liable for the indemnitiee
arising from the lack of skill or from negligence of the captain'
itr
F5
In the casecited, the steamship Pompey,under the command of Captain Alfredo
plaintiff' The
| .l Galvcz,was caqring cargo consisting principally of flour and rice for the
a*tua with her hlw facrng the land rrnd litstcnt'ti hcr c&blesto the port'oon the
!lll .nip
.tlr
NOTT]SAND CASES ON THII I,AW ON TRANS['ORTATION
AND PIJSLIC UTII,ITIUS

pier. The evidenceshows that heretofore other ships docking alongside said pier had the
bow facing the land and faatened a csble to a tree eituated farther wes! on the beach, a
precaution taken to avoid the xhip getting too clcse tn the pier.When the Pompey docked,
at the time in queetion, ehe did not fasten the cable to the tree on the ghore, nor drop her
kedge-anchorsfrom the prow.After being dtxked, they proceededto unload the flour and
rice which were lirst dep':ieitedon the pier and later transported to the plainti{fs
warehouse on land, where it was officially receipted for. The work of diacharging and
hauling the cargo to the plaintiff's warehousewas zrccomplishedwithout ary intervention
on the part of the plaintifl and exclusively by laborers and the crew of the ship. The
unloading of the cargo on to the pier was hastily done and thr:r'ebeing but fifteen or
twenty laborers engaged in hauling it lo the plaintiffs warehouee, a large amouni of
eargo accumulated on the dock. Ab 11:10 that morning, the pier eank with all the
merchandiee.
As may be noted, the fscta in that caa€ were different from thoee ia the caee in
question" In the former a contract of marine tranepoftation existed between the plaintiff
and the dcfcndant,whcreaein the iatl,nrno prerir.rurr:ontracluslrelalion exict€dbetween
the parties. For this reason,the caseof Ohta l)evelopmentCo. was decidedupon articlea
587 and 618 of the Cr:deof Commerce.But the inetant case,dealing, ae it doea,with an
otrligatinn arising frtrn culpa aquiliana or negligence,must be decidedin accordance
with articleg 1902 and L903 of the Civil Code.6
xxx
Co.( 17? Cal., 6lS, 612),in an
In the caseof Marylund Cosualty Co.a.Matson Naru.
action similar to the preeent,lhe cnurt held:

". . . the plaintiffcould only recover,if at all, upon a eufficient showing


ofnegligenceon the part ofthe defendantein the handling oftheir ahip, as a
'
result of which the irdury complained of aroee; and if the frnding of the trial
court, to the effect that there wae no.negligence in respect io t}te rnatter
complained of on the part of the defendants, is euetained by eufficient
evidence, there ie an end to the plaintiffg cas€."

The eeme doctrine was upheid by the Supreme Court of Spain in its judgment of
June 23, 1900,in deciding a cas€similer to the one at bar, where the plaintiffwas a third
l){rriiur!without arry contractul! relntion wilh thc dr'fcndunt before the acts werg
committed which gave rise to the c.omplaint. ln that jud6rment, the court eaid:

. . the action for darnagencausedby an act or omissionariaing from


fault or negligence, requirea an allegation ofone or the other ofsaid c&uleo,
which is the bnsieof said act"ion,accordingto articlce 1089, 1093, 1902,and
1903 of the Civil Code; and.uuch proof must be made by the plaintiffin
accordancewith the general principle of evidenceregarding obligatione as
laid down in article 1214;snd it not sumcient merely to suggest* what at
any rate cannot be admitted - that from the mere exietence of damage,,
liability must be presumed and that the defendant muet rebut auch a'
presumption."

And Manreea, eommenting on Article 1902 of the Civil Code,s.mongother thingr,


sa.yathe folkrwing:

sfuticfe l9O2 is the pmvieion of the Old Civil Code on quasi-delxt while Article 1903 is its
provieion on vicarioua liability ofcertain persons, including the employer.
MAITII'I}TFJIAW 607
PergoneWho Take Part in Maritime Cornrnerce

-Among
the questio's nloEt frequently raised and upoo which the
majority of caseehave been cecided with respect t,' the applieation of this
Iiabilitv, are Lhosereferring to the determination of ttre d".r,*ge or pnejud.ice,
and tn the fault or negligenceofthe person responsibletherefor.
''lhese
are the fwo inelispensablefactors iir tbe clbligationeunder
discussion,for without damageor pr*.|udicethere crin be no liability, and
nlthoughtlrix r'lerrrentis;;rtsttrt tl indlrnrrL.r.curr lrearvurdrdunlerss ariuing
frum stlmeperson'sfault or negligence.
-\l'rlh
rtslrct to thr drt'rnninaLrrrrr ol tlarrragr,.;.
l! n)ustlxr delilritcand
the rrrjurymust not be oc'casionecl b1'the perfrrrmance ot'an *l.rligarionor by
acts{jr omissionsof the injured part;n'hinrself; and firr the proofof the fault
or negligence' nleresuggesiions or inadrnissible presumptionswill not suffice,
but such evidencemust be adducedas to excludeall doubt regardingtheir
I existr:nceand relation tri the injurv. for, in nrder to give rise to an oblitadon,
there nrtrst|.xrlptwe.cnthr' fault or rrlgiigi.ni'r,and the evil n:nulting therefrom,
s a casualrelation."(l2 lr{anresa,fiOl,6{)2.1

e I n ( i 1 7 1 1 ' ,r'',.,I l t t r t t l a R n i l r ' x u l ( . ' r rj .l ,f { I ' h i l . . 7 6 f r rt,h r s c o u r t h t , l dt h a t n r t i c l el g 0 3


of the Civil (.'odeis not applicableto obligatiorrsarising;frnm contracts,but only
to
'rtrligations arising u'ithout anv agreenlenuirr, to ernplovtechnicalIanguage,thatarticle
refers oriiy kt culpa aquiliana and nst tn culpa utntrat:tual.
l!{ariresa(Vul.VIII, pager{i?)in his comrncntariesorrArticle; trl0Band llM of the
()ivil Codeclearly set^sforth this distinction. *hich was
alg<-r recoglized by this court in
the caseof Rahesc. Atlantic, Gutf and pacifit co. (? phit., 3sg)- In commenting upon
article 1093 tV(ll. VtrII, pngc 30 I llfanreia points orrt thr diffrrrr.ncthetwer"n:cjpa
rtt'tlr:rl{ttttvl tttttlttttlt'tx'ntlorrl, whieh,lr.vrtsrlll.giv*s nsr to lrrruhligulionlretweenp*raons
not fonrtt'rl.vhottndby nnv irtherobligntion"nnd culpa consirl*redsri an "incitlentin the
l ) . ' r f i r r r l r t n co(f:a r ro b l i g u t i o lw r h i c h g l r e l r d ye x i s l . c < . .l . . "
In thr.rRil,te.nc:a,le(supra), thie court bnxedrtn deciriionr:xpre*rilyon fhe principle
that article 1903otthe Civil Codeia not,applicabieto a culpa not ariaing from a contract.
)I
On thie point the court e&id:
d
e -The
acls trr.whichlhrlte'Arlich:s(190?rrnd I1)0iluf lhe Civil Coda)arre
applicablearc undergloodto be those ncrtgrowing oul of preexietingdutiee
of lhc parl,ientrrone another.Rut whr:rt relrrtiorlnnlrr,ndyforrneel give rineto
r l r t l i 0 xw
. h l ' l l r n rr p t t l l H l n gl r r t t r rt r i t r l r l r crl r. r( l u l r f r,t. r r r r l r l r ctt.,l p , t!rl " u n c h r n1ef
t ' h r x o d r r t i r . x t r t r t r h j o c t t o a r t i c l elflt( t l , l l ( ) l l , n n d l l ( ) 4 o f t t r e s a m s C o d e . "
(llnkos v. Atlnnlic, tlulf and pncificCo,,Z phil. 369,itib).

It i8 not true that proofofdue diligence and care in the seieclion ofand inetnrctions
to a e€n/ant relievee the master of liability for the fcrrmer'sacts; on the eontra4r, such
proof ahowo that that liability never exieted. Ae Manresa (Vol. l{Iil, page 6g) aays,the
liability arising fron arl extra-contractual wrong ie alwayo traeedupon a voluntary act
or cmiasion, which, while frce from any wrongful inteni, and due [o mere negligence or
carolessnese'causes damage to another. A masler who tokee ali pcssible prJca-ution in
xelectinghln servants or employeres, bearing in rnind tht quatific*iionn noceanaryfur ths
;x'rforntrttt:t'of thtl dutir:s to be enlrusted to therrr,arrd irrstructs l,hernwilh eqri.alcare,
complieswith hitr dr:ty to all third par-tiesto whom he is not troundunder eontiact, and
incurc no liability if. by reasonofthe negligenceofrsuclr$eryantsthough it be during the
performance of their duties as such, third parties should suffer damagee.It is true-that
608 NC}TESAND CASIS ON TH}; INW ON TRdNST,ORTATION
. AND PUBI,IC I]TILTTIES

under article 19OBof the Civil Code,the law presumeethar the ma,ster,if regardedae
an
esteblishment,has been negligent in the eelert;onof, or instruction to, ite s€rvants,
but
that is a meFejurio tantum piesurnption and in destmyeciby the evidenceof due eare
and diligence in thie rerpect.
Tho $upreme Court of Porto Rico,conrtruing ielent"icrrlprovi*ionein the Civil Code
of Porto Rim' held that thes€ articlee are applicable only to casesof extraontractual
q,Ton6{Carmona v. Cueeta,20 Porto R.icoReponts,Zl5).

Thig distinction was clearly stated by this court in Bahin u. Litonjua ond Lcynes
(30 Phii.624), wherein the action was baeedon the
defendanfs extra-contractual liability
for danages occaeionedby the carelessneaaof an employee of hie, in the performt r.* of
hie duty as such. Thie court, after citing the laet paragraph of article lg03 of the Civil
Code,held:

"From this article two things are spparent: ( rt That when an injury ie
caused by the negligence of a eervant or employee there inetantly aris,cea
prer.umptionof law that ther* waa negligenceon thc pnrt of the mast€r or
empltlyereither in the selectionof the servant or ern5rkryee, or in supen"ision
over him after the selection,or both; and <2t that prexumptionisjuris ta.ntum
and. not jurjs et de jure, and consequently,ma.vbe rebutied. It followg
necessarilvthat if the employershowsto the satisfactionof the court that in
eelectionand supervisionhe has exercisedthe carr:rrntidiligenccofa gcod
f,atherof a family,the presumptionis tivercorneand he is relievedfrom liability.
*Thia
lheory basesthe responsibilityof the rn:rsrerultimafely on his
own negligenceand not on that of his sen'ant. This is rhe notablepeculiarity
ofthe spanish law ofnegligence.It is, ofcourse, in striking contrast to the
American coctrine that, in relations rvith stranS;ers,the negligenceof the
seryant is conclusively the negligence of the master.'

The opinion of this court is thus expressed,to the effect that in case of extra-
contractual wrong, some fault personally imputabie to the defendant must exiat,
and
that the laet paragraphofarticle lg03 nnly esiahlishrsa rcbuttlblc presumptionand ia
on all fours with Manresa'sauthoritariveopinion(Vol.XII, page61i;, that ihe liability
createdby article 1903is enforcedby reasonof non-pr:rfornluil.,, of duties inherent in
the npecialrclatio's 'f uuthority or superiorirycxistirrgberwc.r the pcrs'n liable
'the for
damagedone and the person who by his act or omissionhas causedit.
The defendanicontendein ite answer that the captain and all the o{ficersofthe
steamer Helen C were duly licensedand ar.lthorizedto hold their respectivepositiops
at
the time when the wharf in question collapeed,and that said captain, officere,and
all tn
t'hemembereof the crew of the steamerhari lxrenchnsenflorthcir rcputcd gkilt in direrting
wi
and navigating the eteamerHelen C, safely"carefully,and e{Iicientiy.The evidenceshowg
that Captain Lasa at the time the plaintift"s wharf collapsedwas a iuly licensedcaptain,
to navigate and direct a vesselofany tonnage,and tha.t the appelleecontracted
3uthorized
hia serviceebecauseof his reputation as a captain, accordingto F. C. Cadwallader.Thia
being so, we are of opinion that the preu,.r*piion of liability against the defendant has the
been overcome by the exersise of the care and diligence ofa good father of a family in
eelectins Captain Lasa, in accoidance with the doctrlnes laid iown by thie cou.-t in the at
caeeecited above, and the defendant ie therefore abeolved from all t;au;t;ty. AD

By virtue uf the lbregourg, the.yuclgment eppealed liom muat be, as it ia hereby,


affirme{ with costeagainat fhe appollan|. So ordered.
T{ARI'rIMI-'IAW
Pors,rns.VlJroTake Part in lrlaritimp f'ommlrce
509

ut YU BIAO SONIUA & C(). v. Mt(iUltL J. OSSORIO


,re G.R No. l?890, June 14, lg2L.
on the eveningof the lSth of March, 1g20,a fire
broke out on Lroardthe rnotor boat
d.' Alfonso when this boat rryasin rhe pasig River,
city of Manila, ready to weigh anchor.A
rul short dis[ancefrorn the Alfonr+.th,' *trr,,rr,,,,\'.
li.r rrrr wrrslyirrg rrlrn6g*ide
nr<xrrod
to the
wharf of said rivar
The fire in the mo[or txraIAllirnsrrupr,'adLr lhe
stearnei]'. .\iuntua, caueingdnmnges
Coher deck, accordingto plaintiff, amounLing p6?,4f10.
to
The plaintiff, wtuch ie a regular partnership and
rhe ownerof the stcernert 9oo6,*
brought thie action to recover from ihe defendant,
lhe owner anJ agent of aaid motor
boat dfonso, the aforementioned sum aE indernnlty
for the d"*rg*s alreged by the
pleintiff to have been by hirn
-euatained tlrr'trg,h the Negligence of the agronteand
employeoaof the aaid defondant, which causcd the ire i" r.hu;lb;;;d
wherefrermir spread, and cauxedeaid <rarnagen motor boatAlfonso,
* ;; ;;;;;r-i. il"r"r. Thes€damrgpr
are *pc'cilied in the two cltusra of action ,.i lb.th irr
the cornplaiii, io uru firat of whictr
are menttoned the appurten&nces and parte of the
aforeeaia trrut *"r*a"ffiJ
and darnaged bv the ea:d rire, and for tharepair 'f which
*,u ,um"e""ei
oiilo,000 wae erpended
In t'he s€cond cauee of action it !s allegei rhat
the ptaintiff eustained dnmrge,g1a thg
amount of Y27,4@ for the demurrage uid duluy
rn the ordi'ar, of the aforeaaid
ves€€lY' sontua. After denyrng ggneialy and ""r"*r"
specificail.y the ailegationa of tbe rcmplaint,
the defendant alleges,an epe*ial defenre, that
hc hae-taken no part either directry or
indirectly in the acts-allegedin the complaint;
that if the plainiif has auatainedany
damagea'they are not the renult of the nct r,nid
t. hnve h.en comiittcd by the rgunte
and emplo-vooa of tho clofendunt;nnd [hat such dorrugr*t were
event and are not imputabte Lo the nogrigenc. by e fortui3oua
of the Jefundant, ";;"d
or any of hie agenta,
ernployet'x,or ntandaLories.
The casehaving treentricrd,thr: qr)urt.s.ntr:ncr.,d
th, di:fendant,to pey the prainx;6
lhe above-mentionedcum-of 116z,10c), with k;gal int.err:.st
thereon fronr the date of the
filing of the complaint, antl the costs.
l'rom t'hisjudSlent the defendant appcals
to this cotrrt aenigrringthr.eoemors, to
wit: (a) 'fht' firrding thnt tht' r'xPl'si,rr rr, ,1,rt'.ti,rrr .
wari duc to ihe negligenceof tho
perEonsin charge of the mocor boat Alfonso,(bt
the nnaing aad (c) the
ewarding ofsn erc66rivofum aa d*nrng**. "rrJemitoy*u,

- wit'h rugard to the first error, the following facts are proven; That during the day
ht'
&t and.nighrof the r2th, and-d,ring therday of
the ilth of Maich, iszg, thu* weru loaded
rll in the eaid motor bost Arfonso 2,00{r canesof petroleum
.;d 8,;;t'ca3.ga of gaeoline, of
rt which 5,000 caaeaof gaeoline and 2,0oo of petroleum
were placed in the hord of $aid
4S motor boat, and the bs** on deck; that said roading *ithout permiesion
from the custoims authoritiea; rhat ihe saiJ "'""'aoo*
crs€e wer_e roaded by meana of etraps
supportiag 10 or 12 caseeat a time; that the
eaid caaesof gaeoline ui.d pua"uh,r- *"o
placed in tlre hold about 14 fmt from the
boiiei of the main engine and about 4 feet 6om
a3 the boiler of the sm'ller englne; that on the
evening of the l.'th M;;, ;ffi:r#
in smeller engine wao in operaiio" p"uparatory "f notor lmat
to the diparture of the which,
h* st' that t'ime, wat getting ready to teave; that ih*
fir* in said -otoi uoat burst o{rt with
an explosion followed by a violent erpuleion of ga;ioline
and petroreum; tbat owing to tbe
prorimity of the motor boat to the aLarner y.
*,ntua, tf," r,i"grrii"d.if the fire and the
inflammability of the materiar that servedu,
irr"l, the fire epiead to tne eaio stermery.
and so rapidly that it was impossibL-for the crew
11*' of the y. sontua to che* its
Pmgre88.
510 NCYTES
AND CAST^S ON TT{E I.AW ON TNA,NSMNTATTON
A,ilD PT,BIJC T.InIJTIES

Expert testimony was also intnoduced by the plaintiff to the effect that it is but
natural that, after eeveral hansehipmente of more than 8,fi)0 casee of gaaoline and
2,000 caseeofpetrole'm there is bound to be a leakage, on an average of 1 to 4 caaeeper
hundred, due to tlrc fact that the loading is eff€cted by meann of otrapa nrpporting fronr
10 to 12 cas.€ at a time which, quite frequontly, receive violent bumpe reautting i11drgage
to the csnt and the consequent leakage of either gasoline or petroleunn, e8 tte o". *"y
be.
It was also ehown by expert teetimony that the gaeeeformed by the volatilizatjon
of the gaeoline or petroleum leaking from the c&ses are apt to accuruulate in a
compartment, such aa the hold of a ahip, without eufficient ventilation cauaing the gas€s
to ignita upon coming in contact with a eparh or upon the'temperature baing rufhciently
raired.
Under these cirflmstances we ane onstrained to hold that the fire whicb caused
tho da'mageefor which the plaintiff eeeksto b€ indemnified wae the inevitable effect of
the exploaion and fire which occurred in tlre motor boat,Alfonao; that tbie exploeion and
fire in the seid motor boat ie, with good ground, imputable to the negligence of the
persons haviag charge at that time of s&id motor boat and under whose dir€ction the
loading of the aforegaid ca.se8of petrole'rrn and gaeoline had been perforurad.
The trial court d.idnot, therefore, commit the first error aseignedby the appellant.
In the aecondassignment of ermr, the appellant coniende that the defendant ougtrt
not to be held liable for the negligence of hia agents nnd employees.
It ir proven that the sgents and employeee,thmugh whosenegligencethe explosion
and fire in queetion occr,rrred,werrsagents, omployc*ea, and mandatories of tlre dofendant.
Where the vess€l is one of freight, a public con"ern on public utility, ita owner or agent ia
liable for the tortuoue acta of hie agents(arta. 58?, 6lIJ, and 618, Codeof Commerce:and
arts. 1902, 1903, 1908, Civil Code).This principle hae be€n repeatedly upheld in varioue
decieionsof this court.
The doctrinee cited by the appellant in support ofhie theory have reference to the
relationetetween principal and agent in general, but ngt to the relatione between ship
agent and hie agenta and employeee;for thia reaoonthey cannot be epplied in the preseni
c8s€.
!n:tnreric:rn !n*',pr.inciplessimilar to thoseilr forcein the Philippineeand eonteined
in the Code of Commerceabove-cited,are prevailing:

"ves'€l owner'Bliability in general.- The generat liability of a vesael


' owner extende to loeseeby fire arieing from another vessel,or from the shore;
and the fact that fire produceethe motive power ofa boat doos not affoct the
cas€.such lossesare not within the exceptionaeither of act of God, or peril of
the gea, eroept by local custosr, unlees proximately caus€d by one olthe"e
events. In juriedictione wherc the civil law obtaim, however, it has be€n
held that if prvperty on a gteamboat in deetroyed by fire, Lhe ownerp of the
!1t are nnt raeponsible, if it wae being navigated with pmper diligence,
although the accident occund at night. The common law liability ertenda
cven to loaeby firea caured ontirely by eponlancouecomhuetion ofthe cargo,
without any negligence on the part of master or srew"" (R.C.L. vol" 24,
fp.

$rith regard to the allegation that the obligationg enumerated in a.rticle 612 of our
Code of Commerce ere inherent in the mast€r such inherent dutiea do not limit to the
$i
ilIARITIMI: IAW sll
'l:rko
i'r.r"ons'\fho Part in Mantrniri Oornnrerce

l u t l l r t . l r e c r v i l l i a b i l i t y A r l n i n g I r o n r t h e t r r r o r r f i r l f i l l l r t e n t ,h u t w h i l o t h e m a t t n r i s
t
rr,ngxrrr*ibloto t.!rerhip nfit,nt. lhr, *hi1i rrgr:rrt,ilr l,rtrn, ir, renprrnaihloto third peflont' as
is clcurly provitlecl in lrlicle tilS of said (l>tlr., rtr *'lrrelr cxlrrons lnerltion iri made, in
i n t h e : : n i da r t i c l c 6 t 2 .
. s r r t r s c c t i o r5s a r r d 7 , n f t h e r t r r t i e so n ' r t n ( ! r : t t { ) d
I

Therefore there is also nr,rground for holding thgt the second error assigned by the
ippellant hau been cornmittcC.
t
I
tI. CAPTAINS AND MASTERS OF VESSELS

J A. CONCEPT.
t
ln Yu (|an u. Glicerio Ipil,,:t o/."7 the Supreme Court quoted Spanieh
commentfiries on the Code of CommerceE which explain that strictly speahing'
i
"the name of captain or mast€r is given, according to the kind of vess€I, to the
rf person in charge of it. The {irsl denomination is applied to those who govern
d
vessels that navigate the high seas or ships of large dimensions and importance,
le
e although they be engaged in the coastwise trade. Masters are those who
cornmnnd $insller shipa errgagt:dexgltrsivr.lyin tht'cotrittwise tracle."
*firr the pllrposcfl of maritime
,t Nevr.rthgllss, it was alno clnrificd i.lrat.
fr1111{'l'('r,, l.lrr,rvorrls"r'rrJrt.rrirr" rrrrrl"rrtrtslt't""lrrn't' t.ltcrlttno rn{ltlning;}xlt,hbeing
rt 'Ihus,
the shit'fs (lr commanders of ships.ry the terms "captain" and "rnast€f
a r e u s e d s y n o n y m o t r s l yi n t h e C o d c o f C t l m n t e r c e .
.)n
\| Simiiarly, pertinent regulatiOns issued by the Maritime IndustryAuthority
t-' illr\P,I\.\ I ritfine s,rt "Inasti.r" iis i,he pcrson having command of t.heship.r0 The
rld sarne ternl is being used both frir dornestic Lrade and international trade. On
the other hand. a "boat captain" nteans a pfirson authorized by the MARINA to
t act as olTict.r and/or in command of a boaUship or has the qualification/licenee
tI t 0 a c t .a s s r r c h . r r
rhr' t
iup If
.1nt B. OUALIFICATIONS.

ARTICIJ 809. Captaine, mast€rs or patrone of vessele must be


red Filipinoe, have legal capacit5r to contrsct in accordsuc'e with thie
code, and prrDve the ekill, capacity, and qualificatioue neceeeary to
command and direct the veoeel, ag establiehed by marine or
navigation lawe, ordinancea' or regulations, nnd must aot be
disqualified according to the aame for the dircharge of tbe dutier of
tbe poeition
If the owner of n vere€l cletir.(|*to lxr the caplain thereof, without
having the legal qualiflcationc therefon he ghall timit himrelf to the
financial adminialration of the veseel, and shall intruet the

:No. I-10195, December 29, 1916, {t Phil. 7?0.


qcommcntaries and
on the Code of Commerce. in the. Gtrnoral Review of Lcgirlation
Iuri-rpru,.!lrrie, founded by D. Jost ltcus .','{}arcia. \bI. 2, p l6lt.
nIhi.cl.
'"tir.r MARINA Momrrrandttm Circrrlnrn Nox lil? nnd l4ti.
. our
t'lbitl .
, the
6II NCYTPS
AI.ID C.ASE8ON T}tE I.AW ON TRANSIJC}Nf,ATION
AND PUBI.IC

nevljrttm to e-perron pooaini thc qurltficrtionr r.oquf;ad ht dd


odlnrnad and rcaulrtloar.

c. FowERSANOFUilCnOHS.
_Tlre $upreme Court erptsincd in Inbr-Arient Maritime &n"tetpriw, Ine,
et al. u. court of Appeals' that "the captain of a vesael is a confidantial and
managerial employr* within the meaning of thc above doctrine. A mastcr or
captain, for purposesof maritime commerre,is one who has command of a vees€l.
A-captain commonly perforrns three (li) distinct rulcs; {1)he is a general agent
of the shipowner; (2) he is also commanderand technicardirector of tle vdsel;
and (3) he is a representativeof the country under whose flag he navigates.oi
these roles, by far the most important is the role performedly the ca-ptain as
commanderof the vessel;for such role (which, to our mind, is analogousto that
of "chief Executive oftricerr'tcEol of a present-daycorporateenterpriee)has to
do with the operation and preservation of the vessel during its voyage and the
protection ofthe passengerg(ifany) and crew and cargo.ln nie *iu * general
agent of the shipowne4 the captain has authonty to sign bills of ladiot,
gooda aboard and deal with the freight earned, ^gr*u ,rpon rates and ""rry
decid;
whether to take cargo.The ship captain, aa agent ofthe shipowner,haa legal
authority to enter into contracts with respect tn the vesgeland the-tradinfof
the vessel,subject to applicable limitations establishedby statute, contrac{ or
instructions and regulations of the shipowner.To the captain ie committed the
governance,care and management of the vessei.clearly, the captain is
vest*d
with both m&nagrlmentund fiducirrryfunt:tiorrs.',
In thie connection,the Codeof Cornmerceprovidesfor the following powers
and obligationsof the captain nr master as well as lhe procedurefor the exereiee
thereof:

ARTICLE 610. The fonowing powers shall b€ inherent in the


poeition of captain, mast€r or patron of s veeeel: r
l. To aplrciat or mahe contraste with the crew in the abs€nce
of the ahip agenf and to propos€ caid crew, ehould eaid agoat be
pnerenf but the ehip egont may not amploy any mamtror rgaln*t tl|.o
captain'r Grpn$.r mfu ral.
2. To command the crew and dirtct the vr:nnelto the port of
Its derilnatlon, ln accordance with the iagtmctlons he -"y he"o
neceivod ll.om the rhtp etent.
8. Tb lmpooe, in eccordence with the contr"acts and wtth the
lawr *nd regulattou ol tho nerchgnt nrarrno, and whon on borid
the veereln conrnectlond puniehmeat upon thoc€ who eil to comply
rlth htr orderr or ano rantlng ln dfucipHne, holdlni a prollrnlniri
horrlng on the crLuel aonn lttad on boerd tno veeeet Ln the rsei
rhlch crlnoe rhall bo tnruod ovor to tho ruthorltlal hrvlag .
Jurbdlctlon ovor thc ruro rt tho flnt prrt iouchorl.

uNo.1162S,August11,1994,
2BSSCRA262.
* Mriiirtuirrllflglmrifrfdl,rirr*riiFrr*,uo,iu**de$i5,*idl8*Srt
"g*i.-'*.',

.H
I MAlil'l'lMElnw
Wlrl'l'rtkrltrrrtrrrMlrrtrnte(lttnrnlon:o
!tr.rxrttrr
618

4. 'lir mnlr r"ontrut'tn for thr r'hlrtor of tha vnllol in thc


abronco nf the ehip agent or of itn eonrlSnce, aeting ln recordaaca
with the inetnrctionr receivrd nnd protrtting thc lntareltl ol tho
owlrer with utmoet care.
5. To adopt all proper meaaurea to keep the veceel well
L'., eupplied e.nd equipped, purchasing all that may be nscessstf,r for
urd the purpoee, provided there is no time to requeet inntnrction lrron
the ahip agent.
ior
8al 8. To order, in eimilar urgent cases while on a voyag€' th€
ant repairr on tho hull end enginea of thc ve*nel and in tt{ riSglng rnd
s€l; equipmenf which are sboolutely necee*aqy to enable it to continuo
. ()f and flnieh ite voyage; but if he should arrivs at a point whero ttere
ic a coneignee of the veaeel, he ehrrll act in concutroace wlth thc
l8S
latter.
hat
tt0 ARTICLE 6lf. I.u order to comply with the obligationr men'
the tioned in the preceding article, the captain, when he has no funds
erul end doas not €rp€ct to receive any from the ehip agent' ehall obtai!
the same in the sueeossive order stoted bolow:
lIrJ
cide l. By r.equeting eaid funda from the conrisnors of tbe vanel
ryrrl nr corrtripondente of tho rhip *rgtnt.
g 0l' 2. By applying to the contiglrees of the csrgo or to tlrocc
tor interestod theneio-
the
3. By drawing on tbe ahip agent.
Et3d
4. By borrowing the amount required by means of a loan on
bottomry.
6. By eelling a au-fficient amoult of the cargo to cover the
eum abeolutcly indiepensable for the repair of tbe rteesel 8nd to
eneble it to continuc itr voyage
In thee€ two last ces€s he muet apply to the judieial aut'horl$
of the port" if in the Philippines, and to the consul of the Ropublic of
the Philippines if in a foreign country, and where there ig nono' to
the local authority, proceeding in accordance with the provieionc of
Article 58!1,and rith the provieione of the law of civil procedure-
ABTICLE 612. The following obligatione shl"ll b€ inhsr€nt ila
the of6co of captsin:
l. To have on board before atartiag on a voyage a detailed
inventory of the hull, eng:inee, rigging, epare'maets, taekle, ald ot'har
oquipment of tbe veas€h the royal or the navlgatlon certltlcate; the
roll of the poraonc who rnslre up the crew of the vecaol' and the
eontracte enterud into with theu6 the lista of paceongorq th$ bill of
health; the csrtificete of the rcClstry proving the owaerehip of tbe
verael and dl the ob$ntions which oncumber tbe esore up to tbet
dsto; th6 chartorpertioe or nuthentieatod eopioe thoreof; t"belnvolcec
or manlfectc of the cargo, nnd the rnernorandum of the vielt or
incpection by erpertc, thould it have been made at the por.t of
departure.
614 NOTDS AND CASNS ON THE LAW ON TITANSI'OR?ATION
AND PUBUC UTILTTINS

2. To have e copy ofthir code on board.


3. Trr have i,hroo firlioed and otamp..d bodks, plactng
at the
beginning of each one a mernorand,,rn ol th" o,rroGr
of iolioe lt
c-ontaine, eigued by the merltime authority, aad lrr
hf.i ebscacc bi
the competont autborigr.
Intheltrstboo}, rhich chall be esil€d stogbook'ho ahallerter
*v bv day tbe e'ndltron of thc rtm'phere, irro p"""iir-r"r rrndr,
lba oou*or rahcn,thc rfigtng carrie4 tiio powerni ttrecng{io.
in nrvlgation, thc dbtancct covonrd, th{, nr&nouv{rn
urGd
olecutod, rnd
othor lncldontr of nevlgetron; he *han *ra. enter g[6 ,qmego
sufiersd
by the veeeel irc her hull, ong:inoq riggln*, end tackle, no
mlttar whnt
Itr ceuee mny bo, ar woll_ar thc t*frir-ont snd da-qgo tufionod by
cargo' and the effect and importanee of the jettieon, sh-oula
il"o u"
aayi and in cases of eerioug deciaions which require
th,,d*rir. o" s
meeting of tbe ofllicerr of the veeeel, or even of
the crew aud
pa€Fengere, he ahall record the decieiona.
adopted. For the
infomation iadicated be ehett ranle uee of the binnesre book nnd of
ths rtoanr of onglno trooh kept by tho onglnorlr.
. In the pecond book called the
"accounting booH he rhrlt record
all the anountr collectod and paid for the account
of the veacer"
entering epecillcally article by article, the eource of
the collectiou
and the amounts spent for provirione, repaire, acquisltionc
ol
equipmont or goods, fuel, food outfrte, wages, and other
erlreuces of
whatever nature tJrey may he. He shar furthermoFe
enter iherein a
list of atrl the menbera of the errew, etatingtheirdonicitee,
theirwsg€o
eud ealarieo, and the qrnounta they may have rcceived
oa acmuat,
diroctly or by delivery to their faniliee.
ln tbo third bo.'k" cdled -theight book,. he rhall record
thc
loedlng and dircherge of all the gJode, etaiing tn.i"
-""L ,ra
pachager, naner of the ahippora ind of tn.
cJ"oigbooo, ;rtr of
l*ai''s sad 'nleadin6 and tle freightage tnuv si"lliiiniJ o-,
book be shall record the naner and ptacee if
aailing of tU,
paai€ngerE, the number of packagec ia their baggage,
and tle price
ofpaccage.

4. Beforo receiving eargo, to meke r*.ith the offieers of the


crew and two exper-ts, if required by the ehippera and paoeengera,
an sxannlnation of the vorcel, in ordor to ercsr.trin whother
it ll wsaor-
tlghl, wlth rho rlggtng and eng{noo In good conditlon,
and wlth tha
equipno-nt required for good neviEation, preaerrring
undor hie
recponaibility e certitlcate of the mennorandum of
hie-inepection,
eigned by all thos€ who may have taten part therein
The erpert'a shall b€ appointed one by the captain of the
_ veesel
nnd another by thoae who requect itc erimination,
i",
dieagreement a third shail he appointed by the urarine""i """" of
"f
authority
the port or by the authoritn erercieing hie funetione.
6. To remain conrtantly oa board the vegsol with the crew
whlle thecargo tr being tarren Ln boarcr and t. carofuily
wutch tho
i'.'wsgo thonrof; not to coneent to tbe roading 'f any
-"*uoai"u
5t6
pers.
ng*n r*:?fl11ln1*L*.,commerce
"
or naetter of a ds.n{fer, ,us character, such arl inflaryrmable or exploeive
nsrbrtencen,withnut the. prr.carrtir,nr xhi<:h &ro recornmondod for
thtrir packing, h*trcitringand iq*l&ti*rr1 *'t to psrmit the cirrrioge on
deck of nny ear{to r'hieh }r.1'r*r*i'n rf ita a*angonnent. v*tumen or
welght mnk** th* w'rk rtf the lrrilorli difficult, and whlch mlght
endangor the eafety of the veaur:l;ancl if, on sccount of tbe nature of
the merchandiee, the rpecixl charscter of the chlpnent, ard
prineipally the favorable eeason in whieh it is undertakenu
nerchandic€ may be ca*ied on deck, he muet hear the opinion of
the of,ficers ofthe veeee!snel have the co.sent ofthe ehippere ond of
tbc ehip &gent.
8. Trr denland n pilot at th*r erl)en$r of the ver*e*l whsnevor
rer;rrired tr3'the nnvir;nrion, and principally when he has t{r enter a
port, canal, or niver, or hse to take e roadstead or anchoring plnco
with which neither he nor ther erf,Frcers a.d erew nrc ncqturinted"
7. To be on deck on r.^eaching land arrd to tahr commnnd on
entering and leaving por*6, canale, road.eteade, end rivors. unlees
ther.e in a pilot on troard diecharging his duties, IIe shali not apend
the night away from the veessl except for eeriouc cau^e€aor by reeaon
of ofiieial burineoa. ii

8. To preaent himoeld when male.inga port in dietreen, to tbe :$


mcritime authori{y if in the Philippinea nnd io the eonstd of the
Republic of the Philippinec if in a foreign coustry, before twenty.
four hourc havc rlapeed, and to raake a statenent nf the nans
regietry, and port of departure of the ve*ee! of its cargcl, and tha
cau.G of arrival which declaration shall bo viraed by ths authority
or the conrul, if afller er.nrnining the sa-Boeit ia found to be ecceptabte,
giving the captain the proper certificate proving his arrival la
dlrtrern s*d the re&rons therefor. ln the abse&cs of the maritime
ruthority or of ths connul, the decllratien nrugi ho mado br:fors tha
tocrl tuthurity.

$
i
9. Tb take the neceecnrSrntepe lx,fore the competent autbority
ln order to record in the certlfiesta of {he veacel in ttre regietry of
I veee€le the obligatione which he mey eontract in accordance with
Article 68{}.
tT
I 10. To place under good eare and cuetody all the papere and
i
i
belonginge of any mernbera of the crew who might die onthc veaeetn
drawing up a detailetl invcntory-. in the preaence of peoeengemr orr
in their absence, of members of the crew aa witneeeei.
ll. To eonduct himrolf net:ording l,o ths nuler nnd proeoSrtn
contllnod In thr Inrtnrctlonr of thr. *hlp ngoni., being ll*ble for rll
that whieh he nay do in violstion theneof.
.12. To inform the ship agent frorn the port at which the vees€l
arrivea, of the r€aaon of hie arrival, taking advrntage of the
eemaphorc, telegraph, mail, etc,; as the case !!rsy be; to notify him of
the cargo hei may have received, atating the namea and doniciios of
the shippets, beightage earned, and amounts borrowed on botfomqr
loan; to advise him of hie doperturc, and of nny operation nnd dats
*"hich may be of interest to him.
616 N(yIES ANP CASESOH 1X{S T,AWON TRANSTORTANON
AND PIJSLIC UTIIJ?TSS

f $. Tb obcavo tba rules with re*pect to rituetton, lt*hts ard


tnaneilv€nr in order to avoid colllrionc.
14" Tb nemqin on boand, in ees€ the vesssl ir in danger, nndl
all hop* to *evo it ig lffiL nnd bofore nbalrdoning it, to herr &e odoorx
of tJno cnow, ebicl,ing by the decision of tha ru.qiori$; nsd if tho boetr
are to ba te&,em &o, hg eb*Itr tske with bim" bafore rnything olas, tbo
bookc ard pcpolu" erad {hen tbs orticl$a of urort vsluq }mls5 obllgcd
to prove, in ca*e of tlas loes of the bexrkc und papen, thsi he did a.lt
hc could to enve tkam"
f 6, In case of *-r"eck, to make the proper prctcrt in due form
at the frret port of errivnf boforo the courpetcnt authority sr tlre
Philippine eonsu.l, withilr twenty-four houre, epecifying tberein all
the incidente af the wreelq irn accordance qdth oubdivisioa I of thtr
article.
L6. To ccmply with tbe obligatione impoeed by the laws and
regulationa on nnvigati$nu cwstorue, henlth, and otherr.

D. SISCft€TISH SF CAPTAIilIOR MASTEN.


A ship's caBtain mu.rt be eecordeda reasonablemeasureof diecretionary
authorily to cleeiderryhat t]re saf,ely of t]re ship and of its erew end cargo
ep*cifically require* on a stipulaied {,}ceanvoyage. lke eaptain is held reeponsible,
and prog:rly so, for euch s*t'ety. I{e is right there on tJreveseel,in aommand of
it and iit nnust b* pr*oumed) knowledgeable as to the speci{ic requiremente of
eeewsrthine** end the partieular risks and perils of the voyag* he is to smbark
u1xln.Th* npplicnblepinciple iB tlrnt the captein has crntrol of all dopa*rncnts
of xr,rvirt*irr tlt*r vflnmnl,rrfld rfiirirrlrr*hlr'tlixcrt.l.iurl
ltil trr itx nnvigati*n,til
It ie thtl right, *nd dtrty of the captain, irr thc exerciee of sound diecretion
and in goad faith, to do all thing* with respect to the vessel and its equipmerrt
and conduct of the vaysg* s'hich are reasonabrly neceseary for the prctection
and prenervation of the intereste under his ch*rge, whether thos? b€ of the
shipowners, chartereru, csrg$ own€rs or of underwritere. It ie s basie principtre
'master
ef admiralty law that in navigating the vessel, the rnust be left &ee tt
exercisehis awlr bemtjudgrnent. Under the requirernents of sa" I navigation, the
judgrnent and drsereiion *f the eaptain of ar ve$selmay be confined within a
xtrnitjac!,ct.,*ven in thi* itgt:$f ek*trolri,r:
t:onln;uni*rlione.!.
Indeed, if the ship capLainis convinced,as a reasonablyprudent and
competenl m*riner acting in gorxl laith thar lhe shipowner's or ship agent'a
instructions {ineisted upon hy raJio or ceiefaxfrcm their officeathoueands of
miies awal'i will resull, in the very specifir:circurnslanceslacing tLim,in irnposing
unacceptahie:-isksof lnss or seri*us danger lo ship or crew,he cannot caaqally
seek abserlutionfrc.n his responsibitity,if a marine casualty ocelrr$!in following
such ingtruc'tions.

trlntll'(]rirn!,
lll*ritirnt F n f r , r p r i s n , : i,n, r ' . r ' .f l r r r r l r , f A p p r . l r i g ,/ , \ r r f "
tnthid.
'5f6i.t.
ld

MARITIMEI..AW 6l?
FereonsWhoTbke Part in Mgritiloe Commerce

bt Compgnio & Commeree u. Hombr,.rgl,t6 the High Court recogEizd tbe


discretionary authority of the rnast€r of a veenel and trie rigbt to exercise hil
beetjudgnnent, with resp€ct to oavigating the ves{,elhe commands.ln Comp'Pie
de Commcrpe, a charter party wae executed between Comgaie dc Cotnngerte
and tbe ownensbfttre veas€lsanbi.a,under whichthe formeras chartererloaded
on board the Sambi,a, at the port of Saigon, certgin cargo destined for the Ports
of Dunkirk and Hamburg in Europe. The Sambas,flyingthe Gerananllag, could
not, in the judgment of its master, reach its ports of deetination becauee war
(slorld War I) had been declared between Gerrnany and France. firs mast€r of
the Sonrbic decided to deviate from the stipulated voyage and sailed inst€8d
for the Port of Manila. Compagni* d,e Commerte eued in the Philippines for
damageearining from breach of the charter party and unauthorized esle of the
cergo. In affirrning the decision of the trial court dismiesing the complaint, our
SuirrcrneCourt held thal the master of the Sornbis had reaeonablegrcqnds to
apprehend that the vessel wa^Bin danger of seizure or capture by the French
arrthoritieain Saigonand was jurtified by necesaityto elect the coursowhich he
trnk - i.e., to flee Saigon for the Port of Manila * with the reault that the
shipowner was relieved from liability for the deviation from the etipulated route
lrrrt f'romliability firr dantageto lhc car[,o.'l'heCourt snid:
-The dangerfrom which tht: masterof the Sambialled was a real and
n()l nlerely an imaginary one as counselfirr shipper cont*nds.Seizureat the
handnof an "enemy of the Kingt though not,inevitable , was a poasitrleoutcome
oi a failure to leave the port of Saigon; and we cannot say that under the
conditione exinting at the tirne whcn thc rnasterrelected to flee from t'hat
, F)rt,there were no grounds for a'reasonable.apprehensionofdange/ from
r*eizureby the French authoritie-.,and therefort,no neceegityfor flight.

ftl ll )ll The word "necessitlr"when applied to mercantile affaire, where the
)lli('l it
jutlgnrentrnust in the nature of things lxr cxt:rcised,cannot,of couree,mean
ef ! I(|Il
an irresistible coarpelling power. \{?rat is mean! b.vit in such casesi8 the
firrceof circumntanceswhich detcrntine lhc cour!+c a man ought to take Thus,
0l llrr'
where by the force of circumetances, a man has the duty cast upon him of
nr'lf lt)
taking some action for another, and under that r:bligation adopts & course
it t' ttt
which, to the judgmenl of a wise and prudent man, ia apparently the begtfor
r n .i h e the intereet of the personsfor whom he acis in a given emelgency'it may
[lrrl lt properly be naid ol the coureeso takt.n thnt it wus in a mercaniile ssnsc
. necegsaryto take it."

tt rrrtrl Compagni.e dc Cammerieri contended that the shipowner ehouid, at all


tllt'1,t'.s
events, be held responsible for the detcrioration in the value of the cargo incident
tfr,l:0f
to its long sl.ay on board the vessel frorn the date of its arrival in Manila untjl
the cargu was sold. The Supreme Ot-rurt,in rcjectirrg this contention also, dmlared
that:
3
B

!
*
f

r"No 1O988,March 31, lSl?, 36 Irhil. 51X),otcd in Inter-Orient Maritime Entarprieea,et ol.
v NLRI:. i6!d
t7IbkI., aa citrd in Inter-Orient Maritime Enterpriaes v. NI,RC.
618 NfTTESANDCASNSONTHA LIW ON TRANSI,(}NTAfiON
AND PLtsUC IJTIUTIES

"But it ie clear that the maet€r c,uld not be required to act on the veql
day of hie arrival; or before he had a reaeonabreopportunity to asertair
whether he could hope to carry our his contract und er* his freight; and
that he should not be held reeponsible for a reaeonabledelay incident to an
effort to aecertain the wishee of the freighter, and upon f*lum to securs
prompt advice, [o decidr for himnelf as to tho cource which he uhould odopt
to secure the interests of the abeent owner of the property aboarrdtlte veesel.
The rnaerer is entitled tr"rdelay for such a peri.d a8 may be reasonable
under the circumatances, before deeiding on the courge he will adopt. He
may claim a fair opportunity of carryi'g our a contract, and earning the
freight, whether by repairing or trarrshipping.should the repaii of the ahip
be undertaken, it must be proceeded with diligently; and if so done, tle
freighter will have n' ground of complaint, altnougtr-the coneequentdetay
be a long one, urless, indeed, the cargo is perishable, and liLely to be injured
by the delay. where that ia the case, it ought to be forwarded, or sold, or
given up, ae the caaonrny be, wilhout wniting firr repair*,

A ehipowner or shipmaeter (if communication with ihe shipowner ia


irnp,ossible)"will be allowed a reasonabtetime in which to decidewhat couree
he will adopt in such caeeeae those under discussion;time must b€ allowed
to him to ascertain the facts, and to balance the conflicting interesta involved,
of shipowner, cargo owner, underwriter on ship and freight. But oace tbe
time has elapsed, he ie bound to act promptly accordingk ne h"" elected
. either to repajr, or abandonthe voyage,or tranship. Ifhe delayn,and owing
to that delay a perishable cargo sufrers damage, the ahipownei *itt u" n"u"
Ibr that damage;he cannot,escapethar,obligation by pleedingthe absenceof
llOfinit.r,innl,ruetirrnrfnrrn tlrr,ownrrrilof [lrl r:lrrgoor flroir rrndrlrwrilAru,aince
ht hus control of thc cargo and ic cntit.lcd lo cloct.

E. PILOTAGE.
A pilot, in maritime law is a personduly quarified,and licensed,to conduct
a veeselinto or out of ports, or in certain waters. In a broad sen-se,the term
"pilot" includesboth: (1) those whoseduty it is to guide vesseleinto or out of
portg, or in particular watera, and (2.1those entrust€d with the navigation
of
vesaelnon the high senr.Howervcqlhr: ttrnr "pilot" ii lnorc genernlly underntrxrd
tltlll p{rrFolllrtktn ort lxrrlrrlrrl rr lrrrll,rcrrlirr'
plrrt,r,
lirr t.lrllrrlrlx)s{!
of *rneluctinga
-
nhip through a rivcl.,road ur channel,or.{ioln a porl,.rx
states possessingharbors have enacted laws or promulgated rules
requiring vesselsapproachingtheir ports to take on board pilots liceneedunder
thelocallawl9Thisisknownascompulsorypilotage.
In this jurindiction,compulsorypilotageis beingimplementedin the port
of Manila.m The Port of Manila is within tlrc Manila Pilotage District which ie

r8FarEaetern Shipping
Co. v. Court ofAppeals, No. 11006g,October l, lggS.
r'?0 Am. Jur. 2d 526.
?oFarllastern Shipping
Co. r,.Court of Appczrl.s.
supra.
's

MAfIITIMI' L{lV 6t9


lr;lrt llr lliintHrrt ('rrlillrrcrr:g
Irrruonri Who'f;rkr:

Ports
under compulsory pilotage purtiuant ftt Ser tiott fJ.Artrcle tll of Philippine
.l? that: l
Authont-v Administrative order No. 03-1J5, which provides

SEc. 8. Crlmpu!sor1, I,ilotugt Seruicc._ }.or ent4ring a harbor and


anchoring thereat, or passing through rivers or strait$ within a pilotage
district, as well as docking:rnclulrdockingat an-\'pier/wharf, tx shifling from
one berth or another, every uesselengagedin cr-rastwise and foreigrrtrade
shall be under compulsorypilotage. . '

In case of compulsory pilotage, rhe respective duties and responsibilities


nf the compulsory piiot andthe nraster have br:en specified by the same regplation
in this wise:

StiC. I l. Cttntrolof t,r'r.relsctntl liubilit;- fitr dunxtl4r' -- On compulaory


pilotage grounds,the Harlxtr Pilot providing the sen'ice lo a vessclshall be
.**lr,rnrihle for the darntrgecnusotlt0 tr vrs*cl or t<jlifil and property at porte
due to his negiigenceor fault. I{e can onl-vtre absolvedfrom liability if the
accidenl i.scausedby !br* majeure or rtatural calamities prol'ided he hag
exercisedprudenceand extra diligence fo prevent or minimize damlee.
The Mast€r shall retain overall comnand of the vedseleven on pilotage
grounds whereby he can countermand or overrule the order or command of
ihe Harbor Pilot on board. In such evenl. any damageclueed to a veeaelor to
life and Property at ports by reason of the fault or negligence of the Mast€r
shall be ihereaponribitity and liabilit.y of lhe regietered owner of ttre vegsel
concernedwithout prejudice to recourse againet said Masler'
such liability of the owner or Master of the vegselor its pilots ahall be
determined by competcnt authority in appropriate proceedings in the light
of the factr and circumstances of each particular case"
sEc. 32. Dutiee and responeibilitiesaf the Pilot or Pilots'Associa-
:.
:, tion. - Ttre duties and reaponsitrilities of the Harbor Pilot ehall be aa followe:
ct
ni xxx
0[ ft n pilnt rhall tn held rcslxrnriblc tilr the direction of a vesselfmm
ol tlre hme he g6sumechrx work ur u pilot lll:ntl'until he leaveeit anchoredor
r"
,xl berthed aafely;Provided,however,that his respnneihrilityshall ceaseat the
moment the Mashlr negi€'ctsor rtlustll to carry or'rthin order'

(lrrstornsAdministrat.ivc Ortlt'r No. l5-{il'rissued trventy years earlier


pf pilots:
likewise prorrded in Ohapter I thereof fur lhe respqnsibilities
icr
Par. XXXX. *- A Pilrt *hall b{} hrld rc.sponsitriefor the direction of a
.)r't v c s s r , ll ' r o n rt l r r , t i t r r c l t r , t t l l t r t t t t l cts' t t t t l r l l t l t l r r r r f t r t l t i l h r . l o n v t r i t S n c h o n d
frec lroln sftonl; Provitlgd, That his resppnsitrilit.y slull ceslre at the moment
ris
the nrasttlr iiegtccts or rofuses to r:ilrry orrt his inslructionn'

or anchorvessers
par.XLIV._ pilots,i,^' o.,,iirJrna ,ui*tvsecure
und(.r thcir e()ntrol when rr,qrl{r.rtr..tlto rlo so l)y tlt(r ntaritcr of such vessels'
620 NCIIESA}IDCASE$OilTHEIAWONIRANSFORTATTON
ANDPTJBL'C
t-rilLTTIES

a. Master and Filot.


The suprcnrccourt cxprained
the duriesuf a prlotin relationto
in Far EaaternShippinsc;. ,,.i;;;iiipp,,,,tr.,, the rnast€r

tingluh andArnericanauthoritiea,generalry-speaking,
,.o""$?ter t^hepilot
th",r,ip,,
J '':ffJf;'ffff :#tr;l:llffii''gil:#*;TJi
navigation. He becomeethe
masterpJ iic uice and should give
aa io npeed,course,-stopping all d.irections
and ;";;;g, anchoring, towing and the like.
And when a licensed.pilli i,
it is his dutv to insiston h"rid;i;;i""
".pf"y_alrr?pf"*.'.f,ere pilotage ie compulaory
*rrt of of rhe vegeel,or to decline
act ae pilot' under certnin to
ry"ut"-r or rnreign raw, the pirot
entire charge of'the veaeel, .'er not take
uut i" JL*"d m"r*ly the advieer
rchoretaine command oitt e ma"tar,
pilotage in conrpuleory. ""a'*ir*rlil#invrgatiun even in rocaritioawhor*

It ia quitn common for stace.!


an, rocnritieat' pr,vidc for c'mpulsrlry
pilnt'nge'nnd snfety r,tog
1tx11'l**,, -rtr.t"a requr:rrrgvessele
their ports' with certain u*.uptio*","to-L".o., approaching
under local law. The purpose board pilots dury liceneed
of these la!
lT:":r!',i90""*t"a-,-i'}.h"#;;;fi
oepart' and thus prot€ct life ,i:,1.:::ifJ.HJ;tff
and prop-rty-r.o* the dangers
f ::
ofnavigation.
In line with, such established
.octrines, Chapter II of Cuetoms
Adrninist'arive Order No rs-os
pr-*rr#r gg rules fnr cornpuraory
pilortrse pirotage
dintri"t*,,i*ons'ff.h is,r,"u.rirL iitl,,i"o,
fllh-e-covered nir,ri"r,
PAJTAGRA'H I' - pirotage for
ent'eringa harhrr and anchoring thereat,
as well as dcrcking
another sball be compulsory
T1,:10*frngp*;';,"r or shiiting from one berth ro
except Government vess€leand vessels
govern:nenra entitred t" offoreisD
*l'iilr u**rs eagagrld eorei-vrn river
ry 'rtre *crl aria a e*y"ir.t*i
raqry'ff,"ffi**
t-*=-:ry pd*ry: w,rr;r*, f :Lqse p.m. *uxa *ea; b* eceurp
L?at
"3 rr*oo*sary *tg:y -r:i:cc-{: F?es.rikdhmeser"
* ,wtii.bc"tase*r*i* *il op*oo"r
ylc|'ge zs al.u'red sDd.r rhpEs -,ojr;*.-
F:rcuaDt fu,_Clpt. Garino was assrgned to piJot MV pavlodar
ioto Berth { of the U*1"
frit.*"or""f"frri. Upon ase'mi6g such offnaeas
compulrory pirot, capt.-Gavino
ir n"ra-t lhe.uniru.e*ty accepted
etandards nf care and diligenc_ high
*.d; io oiror, whereby he assumeato
have akilt and knowredg"';n
.;;G;"i*uru* in the parricurar rryaterg
over which hie license.extends
superior r- *'a more to be tn st€d
of the maerer.A pitot than tlat
;;;;il;;; knowtedge of general and tocal
"l-",ldconditione
regulations and physinal
the waters for which he ir liceneed, "e"d"s the vessel in hia charge and
*.r, *li*icurar harbor or river. He is
not held to rhe highest p"*iur-
a"s;;;til and care, but must have and
erercise the ordinarv stiit and;;;;d"d
by the circumstances, nnd
ehown by an expert in his p.oio*rion.
:tj:If
crqumEtances. a pilot must Under extraordinary
ererciso e*rao"dirrary care.

rt&d
ilr'

jttApl'l'lMg t"A,W 621

ln Atleeu.'l'he Northuestt,rnlt tttail.llttktt Outnpany,Mr.Ju.sticeMillsr


spelledout in great delail the durieso{ a pilot:
. . . (T)he pilot of a river g|eanler.like the harbor pilot, is selectedfor
his personalknowledgeol'ihe topographythrough which he steershis vess€I.
In the long course of a thoueapclmiletl in one ol'thene rivera, he must be
familiar *'ittt ttt" app€arahceof the shore clneach side of the river as he goea
along. Its banke.to*r:s, its landings. iLshoueesand treea,are all landmarke
by wirictr he ste€rs his vessel. The compass is of little use to him. He mrxt
know where the navigable channet is, in its relation to all these external
objects. eapecially in ihe night. He must also be familiar with all dangem
that are permanently lrcated in the couree of the river, as sand'bars' 8nsgB,
sunken rocks or treee or abandoned vesselsor bargee.All this he muet know
and remember and avoid. To do this, he must be conatantly informed of t"he
changes in the curent of the river, of the sand-bars newly rnade, of logs or
,rr"gJ. o,. other objects newly presented, against which his vessel might be
injured.
xxx

It may be said that this is exacting a very high order of ability in a


pilot. But rnt"n *u coneider the value of lhe lives and property committed to
iheir control, for in this they are absolute nrasters, the high cornpeneation
they receive, the care which Congress has taken to secure by rigid and
frequent examinationsand renewal of licenses,this very claesof skill, we do
not think we frx lhe slandard trx-'higlr.
xxx
s p r l o tr s i n g o l e
e t i n r x r r ( ' r s r n gi r i sl u t r c t t o n a
W l r i l ei t i s i n c l u h r t a t - tr Il a
c<.,mmand of the ship and supersedestlre nra.sLer for the time being in the
conrmandand navigationof a ship and thlrt he beconres masterprr.r hac uice
of a vessbl piloted Uy nim, there is overwhelming authority to the effect that
the masterdoes not surrender his vessetto the pilot and the pilot is not the
mastrrr.Ttie master is ntill in conrntandof the vessel notwithstanding the
pre$enle of a pilot. There are oecasionswhen the maeter may and ahould
gtrviously
i n t t , r f e r g a n d e v e n d i s p l n c gt h e p i l o t . a s w l t c n t h c p i l o t i a
inconrlxrtcnl, irr intoxiclltetlriltd tlte (:ir'(;urllri,Li|rlc(:tt tlllry rcquire lhc master
to ciisplaceir compulaorypilot lx.rcr.rrrsr: ol incrrmpctcncy or physical incapacity.
Il, lrowrvt,r,thc nrast4rr rkx.Hrro[obscrvr.t.lrirttrcrttttPrrlrory pilot.ic irrcontpetent
or ph_vsically incapacitatecl, the mnsler rsjustiligd in relyingon the pilot, but
nnt hlinrllv.
The mast€r is not *'holl1'absolvt'dtrom his duties while a pilot is on
boarclhis vessel,and may arivi"e with or ofler suggestionsto him. He is etill
in commandof the vesse-I, exceptso fbr as her navigationis concerned,and
nttistcrtrttl'Lhe work
ortlinnr-v ,,1'l|r,'vlrisr'lt'ttlx' propcrlyctrrricdon and thc
usual precaution baken.Thuir. in pilrti*;ul$r,he is bourrdto see thal there ic
gufficientw6tclron deck,and tha.ttllc lM'll lre lrttr:lttivetlr their duties,ulso
that enginesare stopped,towlirresciist oil anrl the anchorsclear and ready
tl go at the pilot'sordcr.

As early as 1E69.the U.S.r-r;:t:Court tleclared,throughMr' Justice


Swayne,in ihe Steamshtp (ihina u. Wolsh,rhat it is the duty of the magter
622 NOTSSANT'CASESON THA I,AW ON TIIAN,I,T{)RTATTON
AND PUBLIC IrTIT,IfIES

to interfere in caseeof the pilot's intoxicafion


or manifegt incapacity, in ca.ees
ofdanger which he doesntt foreeee,;nl;n
alr casesofgreat neceseity.The
maeter hae the 'am€ power io diepracethe pilot
gubordinate officer of that he"hae io iu-o"" *y
the vess€I,ai tris aiscrefion.
In 1895'the us' suprerne court, thin fimr
tlrror.gh Mr..Iustice Br*wn,
omphnticall.yrulod thntr
N,r are we eatinfiedwith rhc conrrut:r r.rfth,: rnrrstr:rin lrnving rh* pilo{
in r'te churse of rhe ve'cer. w'ile the piioi,ruut
ttorr;p";";;;iil" *""*"
for the time being in the command
.,f thc chip, and hia orders
must be ohyed in a.n matters connected ""a'"*uigution
*rtr ho, navigation, the master is
not wholly absolved from his duties whire
the pilot ir on board, and may
adviee with him, and eve_n displace hrm in crse h* iu irrt xrcat*alr-*u"ir""try
incompetent. He ie etil iu command
of it u"r*"t, ;;;;; il, a" he,
navigation is concerned,and bound to " there
eeethat is a au.fficientwatch on
deck, and that the rnen aneattentive to
their duties.
' ' ' (Nht'withrtanding the pirut harrcrrargu,
it iu the dury of the mas!€r
to prevent acsident,and not t. abandon
the vcsr*t'rentirery to the pitot; lrut
that there are oe'tain duties rr* n"" t"
Jin.rrorge (n.twithata4dirs there ir a
pilot on board) for the benefit of
tire o*"... . . . that in well condictcd st ipe
themaeterdoea notrugardtt * p.u*o" oraa"ryl'i'cor*i;iffi-;putsory
pilot watersaefreeint.himfroL
the veaeel; to attenat *" of
"r-O .*"it
but that, *hite th* *u"t*" "ffiurrion
attendto t'hepilot'eordera,
ut rrir L]lew""f"ty
oury
hehimserf "mr"*
is *una to k"";;;;r;Jie onthe
navigation of the ve$ae.l,
and, when exceptiorrntci.turr,"ta'cls
to urge uyln the pilot to use every precaution, or,fy
hur to inniei"p.*"*i"i]rrot
,".t t*inr
tnkpn."
lrr Jrr.t.v, lt.*ted (,r., wlrir.h,lrkc tirc
c,r'prrlr'ry pilorage,with .l"ur/ ;rr*xen!prtiliona, involved
a sirnirarsccn*riowhJre at ura
of irryury'the vesselwae.in,the.!"rs* ;;o;; irr" tirnu
pir"t with the maet€r on the bridge
of the veseelbeeide eaid pilot, *," Jo"rtJf,"luin
"r*
mled:
T'e authority of the mastnr of a venn.l
ir nrrl irr c.mpretc arxynnce
whi,r ^ pilot, who in r*quired by law
to'e accepted,is in diechargeof hia
functions' . ' . It ie the duty nrth,r mo*t'r-i.,
intnnr"ru in niifiu pitot,a
intrrxicalion or manifest^incapacity, "u**
in cnser of danger which he doee not
foresee,and in all caeeaof great n*"ur"itf.
rh,, *o"tn, hns the 'flme powsr to
dirplar:r,th.pilot thnt ho hiratrrn,rnov,,,i,,y
Ile rrruyr:xcrcisoit, ur nrrt,accordingt0 ",,t",rArr'rt.,ftic*r 'f tho voercl.
his'digcrotiorr.,I'herewae e\ddenceto
eupport lin.ings that plaintiffe iqiury wae
due to the negrigent operarion of
t'he A'erras, and rhat lhe mast€r ;f-th"i
;;""r was negligent in fa'ing to
t'ake action to avoid endangering
siluatea ae the city of canton was
and persons or property thereon'. " "ur"*i
A phase ofthe evidencefurniehed support
for the inferencee. . . that
he negligently failed to sugg-estto the pilot
ihu d"nge. *hi.i, *re diucto'ed,
and means of av'iding su"h Ju"g"r; *a
tr,ui ti'," -aster's negligencein failing
to give timely admonition to the pilot proximatery
contribritel to the iqiury
complaint'dofl we are of opinion that the
*uiar",,r, rnclrti'nt.d te'<!edio prove
conduct of tho pilot, kT*l [o.the nraster,giving ri*e to a caseof danger
or
.gr€at neceBsity,calhng for the intcrvention Jf the mast€r.A maet€r of a veeeel
ie not without fBult in aoquieecingin
*na""t nr" pil't which invorveaapparent
*l&&d&&{M&k

pers<,n;: 028
,u'nrrll$f'if#S,,"* c,rnurerct

and avoidabledanger,*hether such danger in to the veaaelupon which the


pilot is, or to another vesstrl,or persons or property thereon or on shore.
(Emphaeieours.)

Still in another caseinvolving a nearly identical aetting,the captain of


n vesnolnlongnirlethe comtrrrrlrory pilot r*rr rlr.r.rrred
to b+ negligent,nineo,in
the wordaofthe court, "h., wae in a pruartion to exercisohia euperlorauthority
ifhe had deemedthe npeedexcessive,nrhe'ccarion in queetion.I thinh iu
was clearly negligent ofhim not to have recognrzedthe danger to any craft,
mooredat Gravell Dock and that he nhould have directedthe pilot to rpduce
his speed as required by the local governmental reguiations. His failure
amountedto negligence nnd renderslthe n'spondentliable.(stresssupplied.).
Thnugh a.compulsorvpilot might be regardedas an independentcontraetor,
he is nt all timen suhjectto the ultimnte r"ontrolof the *hip'nmenter
In sum, where a compulnory pilot is in charge of a ehip, the maetsr
txrirtgrrx.;uirt'd.to p.rmit lrinr trr rrnvigirtr.rt,if tlrc rrrrrntr:r
trbserrv*xthot lhe
pikrt is rrrconrpetent. or pltyr+icsllyirrcapuble,then it iu the dui,yof the maerer
to refrrbeto permit the pilot [o act. But if no such reaaonsare pieeent, then
the master is justilied in relying upon the pilot.,but not blindly. Under the
circumstancesof thie eaee,if a eiluation arose where the maeter,exercising
that,r.asonablerrgilancewhieh the mastrirof a ship shoulde*ercis€,observed,
or should have observed,that the pilor wa,qso navigating the veeeelthat she
wa,sgr-ring,or was likely to go, into danger,and there was in the exerciseof
reasonablecare and r"igilancean opportunity for the mast€r to intervene eo
a$ to savo the ship from danger,the mastcr should have acted accordingly.
The master of a vesselmuet exercisea d.gree of vigilance comrnenaurar€
w i t l r t h l ' r ' i r c r r r n r r, tn c r . r

b. Shipowner and Filot.


In generai, a pilot is personallyliable for damagescausedby his own
negligenceor default to the ownersof the vessel,and to third parties for damages
sustained in a collision. Such negligenceof the pilot in the perf,ormanceof duty
constitutesa maritime tort.u
In caseof collision,the colliding vesselis prim.a/ac'leresponsible,hence,
the burden of proof is upon the pnrty clniming lxrnefit of the exemptionfrom
liabili:y'.It muut be shown afhrnratively tlrat the pilot was at fault, and that
there was no fault on the part of the officers or crew, which might have been
conduciveto the damage.The fact that the law compelledthe rnaeter to take
lhe pilot doesnot exoneratethe vesselfrom liability. The parties who suffer are
entitled to have their remedy against the vesselthat oceasionedthe damage,
nnd nrc not rrrder necessityto look to tirc pilot from whom redressis not always
had for compensation.The owners of the vesselare responsibleto the injured
party for the acls of the pilot, and lhey mrrst trc lcft, to recover the amount ae
well as they can against him.23

??Far Enstern Sh:ipping


Co. r'. {lourt of Appea}r, et al., supra
BIhLI
I
624 NOTFSAND CASAgON THS IAW ON'|IiAN$TIORTATION
AND PUBI.IC UTII,ITIES

It cannot be maintained that the cireumstance of having


a pilot oo board,
and acting in confornrity to his directions operate as
a discharge of recponsibility
of the owners.Except insofar as their liabiiity is hmrted
o. *rf*pt o by rtatute,
the veeeelor her owner are riable fnr ali damages
lh- negligence or
other wrongr+of the ownerlror thoaein chargcof tlr."ou""a;y vtsrpl. fuh,rrctlrg pil't, of a
vfxxr'l is rtot u ctxttpujsoryoro in the sr:rr*eLlrirl
thc owrrcr or master of the
veenelnro h0rrndt.oaccepthinr, but is onrJrro"yr:rr r,,r,rrrrrtrrriry,
rlrl ownerr of th*
vl.llt.|lrrt.,lr||Lltt.lt|tlrt',|irrlltr.fbrlttlttrlgltgt'.ltl,tlr'L'rt

The Supreme Court further explained;,!

"ln the united states, the owners trf a vesserare


not personailyliable
for the neglig-entacts of a compulsory pilot, but by admrraltf
i"*, trr" faurt sr
negligenceof a compulsorr,_prrlot ie imputable to the veselr and it may be
held liable therefor in rem.*h".u, howeuer,by the provieror*
oitt statute
the pilot is compuleoryonly in the .ue.r"ethat iig rn,,'nr,..it " ie not
u pard,ana
in compulaory charge of the vesrer, there ie no exemption
from liability. Even
though the pilot is compulsory if hie negligencewa6 not
the sole cauaeof the
iqiury, but the negligenceof thr: masler or crew co*r.ributed
thereto, the
owners are liabre- But the riability of the ship in rem
does not rereaeethe
pilot from the consequencegof his own negligence.
The iationale for thia rure
ia that the mastsr is not entirely absolved if resprnsibilit
;; resp€cr ro
navigation when a compulsory pilot is in charge.
By way of validation and in light of the afcrrecitedg*idepost
rulings in
American mariiime cases,we declaie that our rulings
during the earry years
of this century in Ciry of Manila v. Gambe, Cnini
ttauigiti"" C"., Ltd. u.
vrdol, and Yap Tico & co. u. An<rersrtt,.cr ar . r.ti't: withst'od the proverbial
test of time and remain goodand relevant ca.selnw to
this day.
( . i t - r ', r f ' M u r r i r , s t ' n d s
f ' r - rtrh e d o c t r i r r ct h a t t l r e p i r o t w h o w a s i n
command-andcompletecontrol of a vessel,and not
the o*ne.r, must be held
res;ronsiblefor an accidentwhich war solely the rusult
uf tfru tni"t"f.e of the
pilot in rrot giving proper orders, and which did
not result *o- trr" failurc of
the owners-to equip the vesaerwith the most modern and
improved'machinery.
In china Navigation co., the pilot deviated fiom tt o orair,"f,
rrra".r" oourser
without heeding the waruings of the ship caprain.
li **-trri a care-
less deviation that cauiled the iesser to coilide with pinnacre
a rock which,
t'hough uncharted, wae known to piluis and local navigatore.
obviouery, the
captain was blameless. It wae ihe negligence of tfre pilot-alone
which
yas the proximate cause of the co[ieion. T[e court could'noi l,,rt tt
*tu
that - "n
The pilot in the caeeat bar having deviated from the ueual
and ordinary
*.Y* followed by narngators in passing through the etrait
in queetion,
without a substantiar neason,was guilty if neg';ence,
tn"lrrugrrgence
having been t'e pmximate cau.ceof ;he d"m"gei he ie liabre
"nJfor such da*agea
as usually dnd naturally flow therefrom. . . .
"

uIbi.d.
6lbid..
rnl*ffih"

perrone 6lt
*"ffiffi.. commere

. . (T)he defendnqt ahould have knovm ofthe eriet€nce and location of


the rock upon which the vecsel struck while under hia control gnd
management... .
Consistent with the pronouncements in theae two earlier caeee,but on
glighlly different tack, the Court in Yap fico & Co. exonerated the pilot
"
fi'roa liability for the accident rnherethe orders of the pilot in g* 5srdling of
the ahip were diaregarded by the officera end cr?w of the ehip. Arurding to
the Court, a pilot ia'. . . r"eeponeiblefor a frrll knowledge of ttre channel and
the navigation only eo far ae he can ac.complishit through the officerg and
crew of the ship, and i don't see that he can be held responsiblefor damage
when the evidencesbowa, ae it doeain thie caee,that the office$ and ctew of
the rhip failed to obey trie ordere." Nonethelees,it, ie poaeiblefor I sompulsort
pilot and t'he maet€rof the vees€l to be concurrently negligent and thns share
the bln'ne for the rcsulting damage aa joint tortfeasora, but only under the
eircunrftences obtaining in and demonstrated by the inntant petitionr.
It may be Baid, ae a general rule, that negligence in order to render a
peqon liable need not be tbe eole caus€ of an iqjury. It ie sufficient tbat his
neglig€nce, concur:riqg with on€ or moneefficient cau.eeeotler thaa plaintiffs,
is the proximate caueeof tbe iqiury. Accordingly, where e€veral causs mmbine
to produce iqiuriee, p€rron ia not reliovsd fiom liability bccauso he ic '
reap<rnsiblefor only one of theur, it being sufficient that the negligonceof tha
p€raon charged with idury ic sr efficient cauee without which the i4iury
would not have resulted to aa great nn ertent, and that euch cauge iB not
attributable to the person iqiured. It ie no defens€ to one of the conanroat
torif,eaaorg that the fuojurywould not have reeulted from his negligene alone,
without the negligencr or wrongful acts of the other concurrent tortf,easor.
Where several cauEesproducing e-n injury are concurrent and each ig an
efhcient cause$.ithout whi*h fhe i4lury would not have happened,the iqjury
may be attributed to all or any of the csus€Band recovery nay be had againct
any or all of the reeponaible p€rsorls although under the sircumetancee of
the cage, it may app€ar that one of them was more culpable, and that the
duty owed by them to ttre iqiured person was nct the aame. No acto/e
negligenceceaaeEto be a proximate cause merely becau.leit doesnot exceed
the negligenceofother actors. Each wrongdoeris responsiblefor the entire
result and.is liable as though his acts were the sole causeof the injury.
There is no contribution betweenjoint tr-rrtfea.sors whose liability is
solidary since bottr of them are liable frrr the total damage. Where the
conclrff{.'nt nr succe$8ive n{'gligent act.ror ornirxiorrsof two or moro per$on8,
trlthoughuctrngirttltpendently,urr in conrlirrrirtron the dircct and pror.inratc
cauce of a single inyury to a third person, it is inrgrsuible to determine in
w h a t p r o p o r t i o ne a c h c o n t r i b u t c d t o t h e i n j u r y a n d e i t h e r o f t h e m i e
responsiblefcrrthe whole injrrrv \l'trere their concurring negligenceresulted
in injun i:r damagr'Lo a thirtl partl', they bt,cr,rrre joint tortfeaeoreand rtre
solidarily liable for the resuiting damageunderArticle 2194of the Civil Code.

Except insofar as therr lt"Urlri, ," f t*ited or exempredby statute, the


veeeelor her owners are liable for all damagescausedby the negligenceor
other wnrngr+nf ttlt ownornor thoto in chrrrgr,oft.hcvonn*|.An a gnnoral rule,
the owners or thoce in poasesaionand cr.rnlrolofrl vcsccl and the v€ss€lare
ft:2ti ),1(
)'l'l:s r\Nl) (:AStjs ()N,1tF; l.Aw (rN ,t,fr4N".it,()Rlnl.t(,N
, t N l ) l ! l t l i l , l (: I 1 1 . t t , l ' l ' l t , ; , ! i

linble f<rr^!r nirturor ond pro',*&t*


crunr'gts crrusc.dfo pcrsons or prup€rty
by reasonof her neglig"ni."nufu*iit,.,.
nr"ientinn."

c: Pilot and hin Association.


?hc fact that the pirui,is a memire*r'rrn
irr<s'ciationdoesnot nrake the
assrrciationjointly ancl geverally
liable. Arricle 2lg0 of ilr" ci"il code
applv becauee there is n' emproyer-*- doesnot
- - - - rpi;y;;-
" ' r v v ;-;;
' r " q l ;;htp.
r r / r r r ' r r P ' ilu'supru*e
r rle
eXplained: court

"Adminietrarive order No. 15-65,


- -"' 'as basis for the adjudged solidary
liability of MpA and Capt. C""ino.

The pertinent provisionsin chapter r.rf


I cust'nie Administrative order
No. 15-65are:
"PAR' lo(ml' * In a, piro[age
districts r.r.hercpirotageic eonrpuieory,
there shall be creatcd ana mirntrr-i?rea'r,irrr,,
pilits or pirota,ass<riation,in
the manner hereinafter pr"*;b;:-;
rir"*" fund equal tn pt,O{D.fX) for
each pilot thereof for thc purpose
oipryrng craims for damages[o vessers
property causedthrough actr or
or,iraissionsof its memberswhire rendered
service' in
In Manila,lh" p2,000.00
ffnt":lfiYttJlotase "oru*otundshattbe
PAR' )LK'IIt. - A pilots' association
shat not be tiabre under theee
regtrlatione for damage to any vessel,
or other prop**y, ,*s.,itiril f**
of a member of an aasociati,n in
the actual perforrnanee of hir:duty for ""t a
gr€at€r am'unt than.eeventy -fr"e
per fi,%)of its prercr*red ressrve
fund; it being underatoodtn"t ir tt,e "entum
*rr.*rntinn in trerdtinbre firr &n *nr{}unr
gre$l€r rhun tho arnount alxrva-sl.aled,
lhe excessch$' b€ paid by trr"
funde of the momber concerned. *r*"ri

PAR. )OO0. -.If^a. payment is


made from the reserve fund of an
associationon accotrlt of damages.r,,""d
by a member thereof,and he sha*
have been found at faurt, *u"ti.**.
ri"u reimburse the associationin
the amount so paid as soon.aspracticable;
and for.this purpose,not tessthan
twenty-five per cent 'rn of his
dividenJuli-lr be retained each month
the fult amount hns been until
."""** f,.,rrd.
""r"*"Jt"-iir.,
PAR. )OOilV. Notlrjn8 in^these
; regulations shall relieve any pilots,
associationor membcra theieofi individlnty on .ntt".iiuu]yl
respons'ririty for damagesto^rife.or.property Ln- .irrit
resurting r."r, ,r,"'r.*
members in the performanceof their
a,rtl"* "i
Correlativelv.lhe relevant prolisions ppA
of Admi'istrative Order No.
03-85' which time-rvamendedthir
rnanrime regularion-srate:
"p;il;lie

,'o'1,' z r,i/r/s'Ass,",,,*,,,lit'[]",,,,," rn,,


organizethemselveeinto a pilots'Assrrciation r,irurage
r,isrrictshan
or firm, th* memirersof which
shall promulgutt'tlreir.owrr rly-r,nws
not irr crlrflicr,with rhe rule$ and
rcgulationr promulgatedby the iuthorty.
i.,"-- By-Laws shali be submitted
Itot later tiran one ( r ) month after
the organization of the pilots, Aesosiation
I
j
i
...ryEfTlFt4fll]e!i.ii;r::E41aw$s$,rilrirdurlxi*,r&1isrri[s,sriri&iE ilidsiiridaii_,rk{ii{j*18!irirll
i

pcrs,ns
whr'ffi,tJlT:tffiinrr: .,r,rn*rc, 627
.

l b r u p p r o v a l b y t h e ( i e r r r , r : r lr l r a r r r i g * r, ! r r r e A u t l r o r i r y .
. anrendmentsthereto subsequeot
shall likewise lle subuiittecifor apprcval.
SEC. 25. Indemnity Insuranteand Resert,efund __
a) Each Pilot.,l'Ass<leiation
shall cullectivel_r.
insure its nrembership
at the rale of P50,000,o0eachmember to crver i' whore'r in part
ani liabilify
arising frorn any accidentresulting in clar'ageto vessel(s), port
faciitiee and
other properties and./orir{ury to purron. oideath which'any
*u*L, *ry
lrave csused in lhe c,ourseof hic perfirnnunce of pilotage
dutier. . . .
b) The Pilotage Association shair tikewise aet up and maintain
a
reaerve fund which shalr answer for any part of the
liability *i""*a t" i"
the immediately preceding paragraph which is reft unsstiafied
by the
ingurance proceeds,in the following manner:

1) Each pilot in the Associarionshail contribute from hie own


account an Fmount of p4,000.00 (p6,000.00 in the Manila pilotage
District) to the reserve fund. Thie fund ehalr not be cunsidered part
of
the capital of the Association nor charged aE an expensetb";t
2) Sevent.v-frvo lx,rrrnt r?fri,{,, *f tho rni{rry€ fund ahall bo *et
a'de for uco in tho payrlent of darnageurefe*ed to above incurrod
in
the actual performanceof pikrtc' dutles and the excessrhalr
hc paid
fmm the personal funds of the member concerned.

xxx
5) If payment is nlade frorn the re.servefund'f an Association
on account of damage caused hy a niember thereof who
ie f'und.at
fault, he shall reimburr*ethe Assr,"i,ti'n in the anrount,ao paid
as a(*,n
a'rpracticable;and f,r this purprse,nor ressthan twenty-fiveper
centurn
t2lt'At of his dividendshall rxl rrrt;rincdt,;rr:lr lnrrrrrlruntil thc full rrrn,runt
IrrrN l x l r r r c l . u r r r r ,t tol t l r r . r r . s r , r r , , . h r r r r r . ' r ' l r r , rtrl.rrrr.fpl ri l.,rr,t
ilrvulued
s h n l l l r c e n t i t l e dt o h i s f u l l d i v i d tn d .
6) whcl the reimbursenrent. has rreencompleLed as prescribed
in the precedingparagraph, the ten per cent unt l rovd and,the
interest
w i t h h e l d f r o m t h e s h a r e so f ' t h e o t h e r p i r o t s i ^ a c c o r d a n c e
with
paragraph(4t hereofshall be rerturncdto t-hem.

Liability of Pilots' Ass't"i'ri,n N'thing in rheseregurarierns


s h . i l l lf t ' l i . v c a n y P i l o t s 'A s s ' t . j i r r i r r (r , r .l r i ( . n r r l r : r s. l r r , m o f ,
i l r t l i v i j u a l r yo r
, , , l l l r ' I i ,c, l ; . l r o r r r. t r r -cr i r i ] , a t l r , r r r r i s t r . . i t.rrvfel ( y o cr n m i n a l
r e s g l n s i b i l i t yl b r
damagtsto life or propertvrenrrllirrqfrorntlrr.irrrlivirtrrnl actsof if.nmemtrers
ns woll rrstlrosr.ol'thl Arlirrrrrtion'rr cllrplri"\,r.t.s nnrl crew in the perl.orrnance
o l ' r h t ' i rd t r t i e s .

court of,{ppe_als,while affrrming the rrial court's finding of soridar"y


on the part of FESC, MpA and capr. Gavino,correcrly blsed
lia-bilitv MpAs
liability not on the conceptof employer-er.riloy""relationship
Letweencapt.
Ga'ino and itsel{ but on the piovisions of iustorns Adrninistrative
order
.i\o. I a-bc:

The Appellant I{PA aversthat, ctrnr.ranL' the fin<iingsand d"isquisitio.s


of the Court a qua, the Appellant Ga'ino r,,,as.ot and has
never been an
.Irtployec,f the MPA but was onJya m.mber fherc'f. The
Court a qu,, it is
*
F
I
I
?
i
rq
NOTESAI'ID CA,3ESON THE I,AW ON TNANSPORfATION
AND PUBLIC UTILITIES

noteworthy, did not Btsrf the factual barin on which it anchored ite finding
that Gavino was the enrpleiyeeof MI)A. We sre in accord with MPA! p6e.
cas€ law teaches ug tbet, for an employer-employeerelatioaship to exirt,
(1) eslection
the conlluence of the following elements must b€ eatablished:
and engagenrentof eo.pl"yc'es; (21 the payment of wages; (3) the power of
aismis8al (4) the employerrspor*'erlo control the employeeawith resPgctto
(Ruga vsrsus
the means and method by which the work ie to be performed
NLRC, r8r SCRA 266).

oftbe
onArticle21.80
Theriabilityof MpAro,dr*"go.*iJrlo,ur,"noruu
Ncw Civil Cod* ar ernrneously firrrnd ilnr! rtet:lared by the court a quo but
under the pnovisionsof custoDs Adminietrative order No. 1646, tupm,in
tandem wiih the by-laws of the MPA'"
There being no employer-employee relationship, clearly Article 2180
108 of the Civil Code is inlpp[cable since there ie no rricarious liability of an
employer to epeak of. It ig eo stated in AInr."ricanlaw, ae followe:
The well-established rule ie that pilot associationg are i mune to
vicarious liability fOr the tort of tlreir membere. They are not the employer of
their membem and ererciee no coutrol over them once they take the helm of
the veasel. firey aru also not partnerahipo becaua€ the members do not
function 8t agp;ts for the association or for each other. Filots'astocistiool
are also not li"ble fot negtigently aesuring the competence of their meEbGrs
becaus€ ar profeseionsl sssociationr they made no guarantee of the
pmfeaaional conduct of their member€ to the generd public'
where under tocal rtatutes and regrrlationa, pilot aaoociationalack the
neoessary legal incidente nfrreponsibility, they have boen held not liablo for
danages;used by the default of a member pilot. Whether or not the mambere
of a pilof'ae$ciation are in legal effect a co-partnership dependr wholly on
tbe powers and duties of the membere in relation to one anotber under t'he
pruvisiona of the governing atahrtee and regulationa. The relation of a pilot
L hig aggocittisn ia not that of a eervant to the maeter, but of an associate
aeeieting aad participating in a oorlmon purpose. ultimately, tle rights and
liabilities between a pilots'association and an individuel member depend
larFly upon the *nrtii ttion, articles or by-lawa of the essociation, aubject
to appropriate government regulations.
No relianc.e can be placed by MPA on the cited American rulingr as to
immunity frorn liabiliry of a pilots' as8{riation in light of eristing poeitivg
teg,tt"Uo" under Philippine law. The Court of Appeale proPer! lPplied the
clear and unequivocal provisions of custome Adminietrstive ol.der No. 16'
65. In doing so,it ras just being consirtent s'ith its finding of the nonsistenm
of employJr-employee relatioiehip between MPA and Capt' Gavino which
precludes the application of Article 2180 of the Civil Ccde'"

F. ON CAPTAINS.
CODEOF CONMERCEPROVISIOHS
AR,llcLE613.Acaptelnwhonavlgatesforfretghtlnconnon
or oa ahares rney not ^.k. .rry eeparate transactioa for hlr 6ga
accoun$ and should he do thu proftt whlch nay accnre lhdl
"o,
d penuona
*," rHtJlH#urne commerce

belong to the other pcreona interreete4 and the lor*ec rhrll


bc bornp
by hirn erclurively.
AnflCLE 8I4. A captain who, having rnade an agrcarnent to
nate s yoyngc' reile to perfom hir undirtaLio6 *Ihoui bcrnt
preventcd by fortrritotl accident or fortv- nqjeu'v.rhall indemnffy
lor all the loerer w|lch he may caua€ witf,out p*i"af*
to th;
crtrrlnd ponrltla thich may bc prop€r.
ARTICLE 816. Without the cons€nt of the agerq the capr-l-
cemot have himreU aubttituted by anothe, p.r"oo; and rho'ld
he
do eo, beeidee beiag liable for all the acts of the substitot" *rrd
noolrd
to the indernnitie* nentioned in the f,oregoing artlcler, the cepl+ln
e,awell ae the eubstitute mny be diacharged Uy tUe ehip agent
ARI'ICLE 0lo. uthe provieione and fuel of the vecs€l rhould be
congunred befone arriving at the port ofdestination, the eaptain ehrll
order, with the coneent of the ofticers of the 8s.,,le, the arrivnl
et tlhc
nearest port to ge{ a cupply of either; but if there a"re p€rxtnc
orr
wbo have provisionc of their own, he may for.ce them to deliver
eaid proviaion for the common con*umption of all thoce who may
bc
on boerd, paylng the price thereof at the same time, or at the
l"ird,
at the firat port reaehed.
ARTICLE 6l?. The captain may not contract loang on neepon.
dentia eecur.ed by the cargo; and shourd he do so, the contractc
rhnll
be void.
Neither may he borrow mouey on bottonr5r for his own tranr-
actione, except on the portion of the vese€l he owns, provided
no
money hae b'een pnevioualy borrowed on the whole veroor, rad thcrc
does not exiet nny other kind of lien or obrigation chargeabrc agrio"t
the vees€I. If he may do eonhe muet etate what intereei he hlr ia ([6
vessel.
In caee of violation of thir article, the principal, intarecf and
coets ehall be for the pereonar account of the captain, and the ehip
agent may furthernone diecharge him.
A8'TICLE 818- The captain ehalr b€ civilly tiable to the ehip
agent. and the latter to the third percone who may have made
contracts with the formen
l. I'or all the dnmages gu.efered by the vesael aod ite calgo
by reaeon of want of akill or negrigen.* on iri" part. If a mi"dei*eno"
or crime hse been eommltted" h* shau be liable in aceondrnce with
the Penal Code.
2. For ell the thefts conrmitted by the cr.ewo recerw.ing hlr
right of aetion againet the guilty parties.
3. For the lmser, finee, and confiscationr inpocod an accnuot
of violation of, cuetome, police, health, and navigation lawr and
regrrlationr.
'1. ll,r thrn kxror rnd da'rngt n r:'***r rry mutinior on borrd
tho vo'el or by roae.n of faulk comlittcd try the crow in tbo ,.,nico
NOTESA}ID CASESON THE LAW ON TRANSPORTATTON
AND PUBLIE UTILITIES

and defenae of the flsmer ll he drpn not prove that he made tlrnely
uco of all hlr authority to.prevent or avoid them.
6. Iror thoro cau*ed by tho miru*t-'of tho poworr nnd the non'
fulflllment of the obligationr pertalning to him in accordance wltb
Ar-tlclea 810 and 812.
8. Forthose arieing by reaeon ofhie going out ofhis cour&e
or takinga coure€ which he ehould not have taken without cuficient
caurrc, in the oplnion of the 6fllcere of ihe veeeel, at a meeting with
the ehippere or super'eargo€s who rnay be on board
No oxcoptlons shrtto{'lvsr *hrll ornmpt hlm from thir
obligation.
7, l-or those ariring by reaeon of hir voluntarily entaring a
port other than that of hic deatinstion' outgide of the caa€s or without
the fomalitiee referred to in Article 612.
8. For thoee arieing by reaeon of noa'obeervance of the
proviaione contained in the regulationa on situation of lighta and
maneuvers for the purpose of pneventing collisione.
ARTTCLE 619. The eaptain ehalt tre liable for the caralo from
tho time it in dollverecl to him at thei dock or afloat alongrido the
vosrct at tho port of loadlng, until ho dclivenr it on th{, shoro or on
the diachnrging whar{ at the port of unloading, unleae the eontrary
hsc been expreeely agreed upon.
ARTICLE 820. The captein sball not be liable for the damages
caueed to the ve$€l or to the cargo by force mqieure; but he ahall
alwrye be so for thos€ ariBing through his own faull no agrrmnaent
to the conb?ry being valid.
Nelther ghall be be pereonally liable for the otrligatlone he may
have contracted for the repair, eguipment, and proviaioning of the
velrelo whlch rhdl dcvolvo upon the rhlp egent, unlcer t:Le formor
har orprocely bound hinr"elf pereonally or hag eiSned a blll of
erehango or prornlerorT noto ln hlr nane.
ARTICLE 821. A cnptaia who bonows money on the buJt, engine,
riggfurg or tackle of the vetoeln or pledgee or eells merchandige or
provisione outeide of the cas€s a.ud without the formditie pneecribed
in thie Code, ahall be liable for the principal, intereete, and coete,
and ehall iademnify for the damagee he may cause.
He who comnlta baud ln hie accounta chdl pay tho asouat
delbauded and chdl be ar.rbject to the provisions olths Pend Code,
ARTICLE &l& lf rhilc on e Yolrrg€ the captnia ehould ltlrn of
t:|o appoaranco of privateers or mer of war againct bis n88' he ahall
bo obliged to mahe the neareet aeutral port, infom hie ageut or
abippera, and await an occagion to sail under eonrtoy' or until the
dnnger it over or he has received expr'esa otders fbom the rhlp agent
or the ehipperr.
ARIICLE frAS.If he ehould be attaeked by a privateen al4 alter
havingHed to avoid tbe encounter andhavlngrosleted the delivoty
fi ,,.r-
q

a8t
r\rr,r,rrg
wrr..S:frLlT,l'rl#rme
commerce
of tbe effects of the
leccel or ite cargo, they ebould be forcibly talGn
away from him' or he rhould be obtiged to deliver then".he
rbell
F*r entrT thereof ia hie fleight u"** pn"vc ln" t"rt
bcfore "lthe competont authority firet "ra
port "nnu
ha to-uchec.-
"ith.
- l&r the for.ee m4jeurc haa been proved, he rhcll be erenptod
fhorn llrbility.
ARTICLA 8l.4. A ehptnln whoro vemcl hu
fonr throngb r
hunlerno or who bollevor thrt iho carfo hrr ru|tJrsd
{smrf,cr or
lvcragar, rhrll mnlo n proteat therion belore tbe eonpeicn3
ruthorlty at thc ftnt port he touchac, wlthin twcnty.four'hou'
following hir arrlvel and aball ratify lt withirr the same'pe*oa
wleu
he arrlvee at htc derttnstlon, I'nr-sdiately proeoeding Titf thc proof
of the frete, and he a*y not open the hatchee until ctt€r
thir r,ri
been dono.
Tbe cspreln lhall procecd ln the .arn€ merner, lf' the vsmel
- .
hevlng bccn rracle4 ho ir caved alone or with part of hb crrer, ln
pblcb cals bo rhdl eppear before
the nearort uoihortty, and n .kc r
lworr rtatorncrtt o? facta.
The authorlty or the coasul ehalr verify the said facto reeciving
cworn etst€mentr of the menbenc of the crew and pnr*engera
who
I may have been save4 e.nd totring such other etepe ie -"i""oi"t
i"
f arriving at the faetc he ehall make a atat€ment of the rsrurt
of tbe
proceedinge in the log book and in that of the eailing
matc, and shell
deliver-totbeeaptain the originat record of the prdding;,;;p.d
t and folioed, with a memorandum of the frrrior, whic-h he mugt
il
rubrical'e, in order that it rnay Lrepresented to the judgo or
i eourt of
the port of destination.
The atatomcut of tho captnin rhafi be accepted if it is
v itr
sccordance with thos€ of the crew and paaa€ngerE; ilthey din3ree,
e
the lntter shall b€ accepted, alwaye proof to the clntrary.
r ""yiog
rf ARTICLE 625. The captsin, ,'nder his persona! reoponsibility
sr a(x)n ae he at?ivec st tbe port of destination, sho;ld get the
neceaaery permisaion from the health aad cuetoma ofticem,
and
perform the other formaritios required by the regulations
rf of the
.d adminiotration, delivoring the without any defateation, to rhe
coneiqe.e, and in I pnop€r case, "n the
"f., veaselo
a, riggrng, and froightage
to the ehip agenL

et [If by reason of the absence of the consrynee or on accaant of thc


nonappeantnceof a legal holdzr rtf the bills af latling, the captain sho,uld
3, not
hnou,t, whon hc is to legally make the dtliuet of the,argo, he shall plo.ce
x* it
of a.t the disposal of tfu proper judge or court or iut'hority, ii ordcr that'h.e
may
{l determine-what is proper with regartr ta its depisit, preservation and,
JT custrxly.P
ne
nt

tr 31T1iisparagraph war
already repealed by rhe Oode of Civil Pr6edure and the Rulee of
F' Court, Nolledo,Codeof Comrnerce of thz philippint:t, Annotated,l9g9 Ed., p. Sl.

p*r+d{ffirt}+ ...,. spls**sd#ie$r


F

i 6:t3

PROBLEM9:
NOIES Ar.lD CTLCES
ON THD l.AW ON TRANSPOffiAflON
ANDPUBLICUTILTruS

1) X owne the ehip MA/ Agr.rinaldo,He b$relroat chartsr*d tlia ehip


to Y who appointed all ita crpw mernberg fmm the eaptein down to its Lust
official.Y then tranaported a ahipment of 10,000 bage of eugar belonging to
Z. Tbru the negligence of the ship captain, half of the sugar was r{amqg€d
due to sea water. Since Y is bankrupt, Z sued the captain and K Still the auit
. gucceed?

A The suit will succeedagainst the captain but not against X The
captain ia liable becauee his negligence caused the damage or injury. On the
other hand, the barcboat chartprer becomee the owner pro hac uite, hence,
he is responeible for the acts of his captain. The shipowner is not liable because
. the contract ig between the bareboat charterer and Y. The ahip owner wae
neither a party to the contract for the ahipment of the goodenor an ernployer
of the ship captain. (1989)
2) X ch&rtered the ship of Y to transporl his logs from Zanboanga
to Manila. In the coluse of their voyage, the ship met a Btorm and had to
dock in Cebu for three daye. Z, the captain of the ship borrowed P 20,000.00
. from X on the pretert that he would need the money for the repair of the
ehip. Z miaappropriated the money and converted it to hir on'n trenefit. What
ia the liability of X if any?
A: Mr. Y iE not liable. Under Article 586 of the Code a shipowner
would only be liable for contracle made by the captain (a) whon duly
euthorized or (b) evon when unauthorized, for ship repaira, or for quipping
or prorisioning the vegse'lwhcn the proceedsare invested therein. The loan
by tho captain from X doec not fall under any of thc f<rregoingcaeoc.( 1989)

CASE:

F{'ISR.ORIEI{T MARTNME ENTENPRISES, INC., SEA IIONAE SIIIP,


INC. and TRENDA WORLD SHIPPING (MANIIII), INC. v.
NANONAL I"ABOR REII\TIONS COMMISSION
and RIZALINO D.'IAYONG
G.R.No. 116286,Auguet I 1.,19S4.
Prir"aterespondentCaptainRizaiinoTayong,a licensedMaster Mariner with
experience in commandingocean-going vessels,wae employedon S July 1989by
petitionersTtendaWorldShipping(Manila),lnc.andSeaHorseShipManagement, Inc.
throughpetitionerInter-OrientMaritimeEnterprises, Inc.as Masterof the vesselld/V
OcvanicMindoro,for a periodof one( 1)year,as evidencedby an employment contract.
On f5 July 1989,CaptainTayongaseumedcommandof petitionere'vesselat the port of
Hongkong.Hie instructionswereto replenishbunkerand fie.gelfuel, to sail forthwith to
RichardBay,SouthAfrica, and there to ioad 120,000metric tonsof coal.
On l6 July 1989,whilc at thd I'orl,of Ikrngkongnnd in the proceee of unloading
cargo,CaptainTayongreceiveda weatherreport that n storm code-named "Gordon"
wouldshortlyhit Hclngkong. Frecaubonary werr:takento securethe eafetyof
nle.isures
the vessel,as well as its crew,consideringthat the vessel'sturbo-chargerwas leaking di
and the vesselwasfourteenil4t vearsold. to
t

UANUTMEI,AW 633
hrmas Whot*e hrt in Msritigp Commerce

On 2l July lgEg, Captsin Tayong followed-up t^herequieition by tle formcr csptain


of tbe Ooecnrr Mtrwlarc for supplies of orygen &nd acetyleoe, neoesaat1tfor tbe welding-
repsir of the turbo-charger &nd the soonomizer. Thia requieitiqn hsd boen made uporn
rvquoat of tho (lhiaf Onfinacr of thc voeeoland hnd be*n approvod by tlx rhipowncr.
on 25 July 1989, the vssel aeiled from Hong Kong for silgapore. tn the Mast€/g
eailing meeEage,caBtain Tayong raported a watcr leak from M.E. Turbo Charg€r No.2
Exhauat gao caeing. He was eubeequently instruct€d to blank offthe cooliog water end
mnirtt&in reduced ftpl\d rrnless authoriaed by the ownars.

On 29 July 1989, while the vees€l waE en route to Singapore, Captain Tapng
reported that the vessel had stopp€d in mid-ocean for aix t6) houra and forty-fivo (,[6)
minut€t due to a leaking sconomizer.He was insl.mcted to ahut down ths eoonomizcr
. and us€ fls 6rrvilisy boiler inrtasd.
On .91July t98$ at060? hre., tlre vonrelnrrivod ut,tho pnrt of Singapor*;Thc Chiof
Eng{neer rrminded captaln lbyong that the orygen and acetylene auppliec hrd nct
been delivercd. Captein hyons inquired hom the ship'a agent in Singapore sbout the
zupplies. 'lhe ship agent stated that tieae could only be delivered at O80Ohours on
Auguet l, 1989 ae tbe ator€s had cloeed.
Captain Tayong called the ehipowner,Sea Hors€ Ship Management, Ltd., in London
and iuformed them thlt the departure of the veeE€l for South Africa may be afiected
becaue€nfthe delay in the delivery ofthe euppliee.
Sea Horce advieed Captain Thyong to contact its Technicsl Director, Mr. Clarh,
who was in Tokyo and who could provide a eolution f<rrthe eupply of eaid orygen and
acetylono.
On the night of 3l Juty 1989, Mr. Clark received a catl from Captain Tayong
informing him that the veasel cannot aail withorrt the orygen and acetylene for eafety
rcaeonedue to the probleme witb the turbo charger and economizer.Mr. Clark reeponded
that by shutting offthe water to the turbo chargere and using the auriliary boiler, ther.,e
should be no further pmblemn. Aceording to Mr. Clark, captain Tayong asreed with hisr
that the veeselcou-ldsail as echeduledon 0100 hours on l August 1989 for South Africa.
According to Captain Tayong, however, he communicated to $ea Horso hie
reservations regarding proceeding to South Africa without the requested euppliea, end
waa advised by Sea'Horse to wait for the auppliea at 08o0 hra. of I August 1989, which
Sea Horse had arranged to be delivered on board the aceanic Mindorp.At 0800 boure on
1du8uet 1989, the requisitioned euppliee were delivered and Captain Thyong immediately
:r uith eailcd for Richard Bay.
nqtt hv

'r1t.lnc.
When the vessel arrived at the port of Richard Bay, South Africa on 16 August
1989, Captain Tayong wae instruct€d to turo-over his poat to the new csptain. He was
scl l{Ir' thereafter repatriated to the Philippines, alter seruing petitioners for a littlc more than
ontract. two weeke.He was not inforured of the charges againet him.
, port of
r\\ith !o On 5 October 1989, Captain Tayong irrstituted a complaint for iilegal di$misral
before tlre Philippine overseas Employment Adminisiration ("POEf), qlniming trir
unpaid salary for the unexpired portion of the writtcn employment ontraet, plur
iloading attorney's fees.
Gordon"
*rfcrY of . Petitioners, in their anawer to the complaint, denied ttrat they had illegaly
lcrrkrng dicrniesed Captain Tayong. Fetitionera alleged that he hnd refueed to as.il immodiatoly
to South Africa to the prejudice and damage of petitionera. Accordiag to petitionera, as a
direct result of Captain Tayong,edelay, petitioners' veseel waa placed'off-hire" by the
D.t{ NOTE$AND CASUSONTHE I.AW ONTfIANSPORTATION
ANN PUET,TCUTILITIT:S

chart*rers for twelve ( 12)hour:s.Thie meant lhat ihe charterera refuaedto pay the chartrr
-us$ts,goo.oo,
hire of compensstion cnmeapondingto twetve { 12) hours, amounting to
due to time loet in the voyage. They stated that they had dismiesed
i;vate reepondeni
for loss of trugt and confidence.
The POEA dismiseed Captain Tayong's complaint and held that there wae valid
eaue€for hie untimely repatriation. The decisionof lne fOea placed considerableweight
on petitioners' assettion that all the time lost as a resull of the delay was causedby
captain Tayong and that hie coneernfor the oxygen and acetylene was not !egiti;;;
thesorupplirf8were not necersnnn'rlr indirprrrrrrl,l,,t,t,r,uni,rg lhe vonn*|.Tho ITTOEA
lxrliovt'tl Ilrul tlle t)ap[*irl ltutl urrrr.ulorrlbly rclirur,dto fuljow the inalruetione
of
pt'tiliunerrrrrtrdtheir reprusentrt.ive. derpik ;xrtit.ioncrs'firmnssurancen that the vessel
wa$ seuworth.ylor tlrc voyngetri Sorrt,hfurica.
On appeal.the Notionsl l.nlxrr fu,lttions Conrmission("NLRC")reversedand cet
aside the.decisionof the POEA. Thrr NLRC found that captain Tayong had not been
offtrrdtcl nn opportunity to be henrd rurd t,lrat no substtlrtial evrdenceiag adduced'to
establiah the ba*is for petitionere' ioss of trust or confidence in the Captain" The NLRC
declanedthat he had only acted in accordancewith his duties to maintain the
seaworthinees of the vess€l and to ineure the safety of the ship and the crew.The NLBC
directs'dpetitionern to pay the flnptain {a) hin r,niary f<rrthe uncxpirod yrrtion of the
('.ltltrftct nt tls$1,!Xt0.ff) a rnr"rnth,pluu one {l) monl}r leavrl banefii;
and tbt attonrefs
feesequivulent to ten pcrcent ( 10,/r)of the lotal award tlue.
Petitioners, before this Court, claim that the I.ILRC had acted urith grave abuse of
discretion. Petitioners allege that they had adduced eufficient evidenceto establish the
basis f<lrprivate respondent'sdischarge,contrary to the conclusionreachedby the NLRC.
Petitioners insist that Captain Tayong, who must protect the interes1 of petitioners" had
caused them unnecessary damage, and that they, as ownerg of the vessol. cannot be
compelledkl keep in their emplo-va capfain of a vessel in whom they have f"-i ifr"ii
tru$t and confidence. Petitioners finally contend that the award to the Captain of hie
salary correep<lndingto the unexpired Sxrrtionof the contract und one (l) monlh leave
pay,including attorney'e feea,n lro conalituled grave.abuae,f discretion.
I.
The petition mugt fail.
\fc nutt' prclirninarily tlraL peurliilrrersfaileci to atlach a clearly legible, properly
certified, true copy of the decision of the TILRC dated 23 April 1g94, in violation of
requirement no. 3 of RevisedCircular No. i-88. On this ground alone,the petition c6uld
have been dismissed.But the Court chosenot to do so, in view ofthe nature ofqulition
here raised and instead required private respondentto file a comment on the petition.
Capt*in Tayong subrnitled his comment. fhebffice of the tiolicitor General r"kud fo, rn
extension of thirty t30t days to file ilq cornment on behalf of the NLRC. We eonsider that
the solicitor General'scomment,may be disi:cneedwith in thie case.
It is *'eil-settled in this jurisdiction that confidential and managerial employees
csnnot be arbitrarily dismissed at any time, and without ca,r*u* ou*naUly estaltiaheA
in an appropriate inveatigation. Such employees,too, are entitled to security oftenure,
fair standards of employment and the protection of labor,laws.
The captain of a vessel is a confidential and managerial employee within the
meaning of the above doctrine. A maeter or captain, for po.po** of maritime comuierce,
is one who hae command of a veesel"A captain commonly performa three
{B) d1stin61
roles: (1) he ie a general agent of the ahipowner; (2) he is ^iro and technical
"o*-"oder
director ofthe vessel; and (3) he is a representative ofthe country under whose IIag he
F
4
i 'ersone
wh",r5.ll,lflTl'JfI,,,,.,
comrnrrce ss'
aavlgtrl€8' 01 these roles, by far the rnost
imporkrnt is the role performed by the
as commanderof the vess€l;for euch captain
role iwhich, t<.rr.rurmind, is analogoua
"chief Executive ofcer" tcEor to t"hai of
a p.e"*nt-a"y co.grr"t hae to do with
the operation and preservationofthe -of
veeeelduring ils voyage "rrilrpriae]
and the protection ofthe
pa's€nser8 rifanv) *:r ca1ro.
T9 eign1L{ In hisrore; r;'#i;;;i ortheehipnwner, the
captain han authorityto billa nrLdirrr{, errrrygrxrdx*txurrjirnd
pRrrred,anroerp{,n.raton dcal with the froight
nherdecidewhettor to t'kr ,,r,rgu.?.lr*
tlre ehipowner, has legat autlrority uiip eaptain,ae ageni of
r" irrt" contracte with reapec.tlo the vees€l
thetradinsoftheve-eser, subjecmi "nt".
,oJt*ur- and
or instructions and reguralions
rirri;;i;;-i"ui*i?a byotarure, conrracr
ir," *hiporrr.,u..To the captain is committ€d
governance'care and management"r the
of the veeEel"clearly, trt" ."it"l" ie veet€d
management and fi duciary functions. with both

It is plain from the of the presentpetition that captain Tayong


any opportunity to defend :Tg.d" was denied
himaetf. Petitionerecurtly dirrniar*j
and summarily ordered hie repatriati* hirn fr,m hia comrnand
t"-ort* Philippinee ;tl,o,rfi.rr"r*ing him of the
charse or chargee reveiled againar hil:;;jr"ch
ha* si"irri;;;; ehancero rafr.rteany
ruch chargr' ln fact, it waionry
o" ib o"tuu*r.rgg9 that captain Tayong
recei'ed a
f"',:ilHJflfJ;n*]iff;ffb ilIiie'-o'i"nt 'd;l;;'ffi tolxplain
whvhe
we aleofind that the principal contention
of petitioners against the decisionof the
NLRC pertains to facrs, tnat ie, ;t;rh";;;;ot
there ,..r"" sufficient baai.sfor
the allegedloenof tnrst or eonfi<lence.
is' as a general rule, the cpncerr
\4tehave cr.rnsistent ly".t,r*flnd
held that a queetionof "fact"
*r"rroiun administrative body, so rong as there is
suhetantial evidence nf record t" ,r_t"i'"
it"
"*tion.
The record requires ua.to reject petitionere'claim
fac't'wore not eupp.rted.uytun"t*niiJ;;;;;.-. that the Nl,RC,aconcluaioneof
['r.riti,nt.rc r.ly on r*:lf-ar:rvingaflidnvit^e
of their own offrcoruand emproyeoaprJ","'rrry
tencringto support petitionero,ailegation
that captain Tayong had periorm"a-"*"
iri*ical tn petitionere;inr,ereats ftr
nuppoaedlv.he was discharged.The official which,
report ofil!r. it""t, p*iirroners:.epres€ntative,
in fact supports the NLRC'a conclueion
trr.ipirut" respondentcaptain did not arbitrarily
and maliciously delay the voyage t"
s""ttiemca.,There had been, Mr. crark
dinrup6iqt in the normal n-"tliti"g etat€d, a
ti" vessels turbo-charger and economizer
thst h8d prevented the f'll or ."gulai "r and
uf the vessel.TL;, r{". clark relayed to
captain Tavong insrrucrions r:-"*tlir "*."rt""
,"a,r.*a Rpil;;";;;rh" uor.u" to sourh
4sigu' insteadt *tllig-t: si"gnor"-r* the s.,ppries rhat wJurd perrnir
rep+ir of the malfunctioning -..hio"ry ahipboard
and equipment.

[The supreme court explained that a ship captain


is accorded reasonablediscretinn in
ensuring the safetv of the uesserorrd
n[ see section D u,rtcre a portian of this
dccbion was quoted.J "]",.
xxx
The critical question,therefrrre;is whether
gmunds to believethat the safety or rr,r capLain l,ayong had reasonable
oriire nrra the crc*.rnaolnl, commandor the
grssrbri'y of aubstantiarcrelayat ""**i
eearequiredhirn to wait ro, trnJ"tiuury of
neededfor the repair of the t*!*"rt*g* the auppriee
trru n"ooo*ir., brro.e on the
long voyage from Singapore to South
Ah;'- "a "muarting
In this connection; it is epecially rerevant
to recail that, according to the report of
Mr' Robert clark' Technical o1*t"igin"tirg""i
sea.Horee ship Managemenr,Inc.,
the oeanic Mindnrohad,stoppedin mid-oceai
for nix (6t hours ard forty-five (4s) minucea
636 NOTESAND CASESON THE T,AWON fRANSPOETATTCN
AND PUBIJC IINI,ITIES

on its way to Singapore becaue€of ite leaking ecunomizer.Equally retevant is the tater
dated 2 Auguet lg89 aent by Captain Tayong to sea Horae after &aanic afuyinoral.urd
leff' Singapore and wae en routs'to South Africa. tn thia teler, Captain lbyong crplained
his decision to Sea Hnrse in tfie following terme:

I CAPI R.D. TAYOIIG RE: UR PROBLEM IN SPORE (StNcApOnE)


I nxPI"aINAcNToYoUfi{ATurEARE INSECURITY/DANGERTO gAIt'
IN sPoRE wour I{AvtNc SUPPLYoF o)ff/AcET. pra uNoEns,TA}ID
HV PLENTY TO BE DONE EEPAIRFM A/.TN ENGINE UKV TURAO
CHARGER PI PELI N E, ECCINOMI ZER LEAKAGEN Erc WE COULD NW
T,'IXI'T W/OIIT OXYIAT:ETONROARD.I AND MR. CI.ART(WE
CONTACTEDEACH OTHER BY PHONE TN PAPANN HE AI}VSED US
TO SAIT,TO RBAYN WILL SUPPIJ OXY/ACETUI}ON AR,R,TVAL RBAY
I{E ALSO EWI},]NED'I'0 MY L'IE TIOWTO F'IND THE NE*TEDYWI
OI|T Utr IACET B(n ClE HE DISAGREEDt {R. CIA,RKIDtrA,TTIATIg
WIIY WE URGREQUESTED]YRKIND OFT'ICETO ARRANGESUPPLY
oxY/AcET BEFORESATLINGTa Avorn RrsK/ DANGERoR DEt tLyAT
SEA N WE TOOK PRECAUTIONUR TRIP I,'OR 16 DAYSFM SPORETO
RBAY.Pls. LINDERSTANDuR SITUATION.(Emphasispartly in eource
and partly supplied)

[lrrdcr all the circumsl.ances


of this c{rric,w{1,nlcrrgrvith thc NLltC, areunablelto
hold that Captain Tayong'sdecision(arrived at afterrconsullationwith the veesel'sChief
Engineer) t"owait eeven(?) hourn.in Singapore frrr thc drlivery on board the Ocecnlc
Mindant of t}e requisitioned auppliee needed for the welding-repair, on board the uhip,
of the turbo-charger and the eeonomizer equipment of the veaeel,constituted -"r"iy
gbltlarY, capricioue or groesly ineubordinat€ behavior on hie part. In the view of the
NLRC, that decision of Captain Tayong did not constitute'a legal baeis for the surnm&ry
digmiessl of Captain Tayong and for termination of hie contract with petihonera prior to
the expiration of the terur thereof.We cannot hold r,hisconciueionoith" wmC to be a
grave abuaeofdigcretion amounting to an exceesor loeeofjurisdiction; indeed, we shar€
that concluaion and make it our own.
Clt'urly, petitionera were arrgeredat,Cuptain'fnynrrg'sdecisiol t9 wait for detii'dly
of the neededaupplieabeforeeailing fr.omSingapore,and may have change{ t"heireetima;
of their ability to work with him and of hie capabilitieuae a ship *pt*in. A"suming that
to be petitioner8'management prerogative, that prerogative is nevertheteee not-to be
exerciaed, in the caee at bar, at the cost of loee of Captain Tayong,s righte under hie
cnntract with petitionern and under philippine law.
ACCORDINGLI petitionere having failed to ehow grave abuse of diecretion
amounting to loes or exeesaof jurisdiction on the pnrt of the NLRC in rendering its
aeeailed decieion, the Petition for certiltrari ie hereby DTSMISSED, for lack of merit.

SWEET |JNBS,lNC. v.
THE HONONABI^E COUFT OF APPEALS, ET AI-
G.R. No, I-{8IH0, Aprtl 28, lg8{t.

For haviag by-peseed a port of calt without previous notice, petitioner shipping
comPany and the ship captain were gued for rlamages by four of its passengers,private
reepondentohereia, befor.ethe then court of First Inatance of cebu, Branch vlu.
Briefly, the facts of record show tlat private respondente purchaeed first-class
tichets from petitioner at the lattey's ofhce in Cebu City. They were to board petitionerrs
M,{}il'f'lMl] t/\w 68?
PergonsWho Take.Part in llaritimn (iomnrerce

veesel.IvttVSweet Grace,bound for Catbalogan,W,stern Samar.lnstead of departing at


elex the scheduledhour of about midnight on July tJ, l9?2, rhe vessslset ssil at,3:00AM. of
!" , il Jrrlv 9. 1972only to be towed hack trr (lebu ,lue to enginetrouble, arriving thore at about
.1.00P.M.on the samedny.[&rpairshaving lrr,rrrrr:conrpli.rhcd, the vestrellift*d anchor
in.rl
agsin on July 10, 1972at around 8:00A.l{
I n s t e r r do f ' t k r c k i r t gu t ( l r r t l x r l o g a nl ,l ' l r r c hw i r s l h e l r r s l p o r t o f c a l l , t h e v e s s e l
pr@'eeded rlirect toTaclotranRt arourrrl9:0{)P.lt. of ,Irrly'10, 1972.Private respondentE
hlrdno rec{)llr${'hutto dir*rnrbarkanrl lxrirrtll [t.rr],lxrirt.trr Catl"ralogan.
[A suit for damagesfor breachof contract of carriage was filed and the Trial Court,
affirmed b-vrespondentAppellate Court, awarded nroral damages,exernplarydamages
and attorne-v's feesplus inkrests and cost$of srrit.i
The governing provisionsare founciin the Codeol'(iommerceand read ae follows:

ART. 614. A captain who, having agreed to make a voyage,faiis to


tulfill hig underllkirrg, witirorr[]xrirrgprevlrrt.r:<i
by lrrrtrrikruncvenl or firrce
maJeure,shall indemnify all the !-rsseswhich hic failure may cauoe,without
prejudicetn criminal penaltiea which may be proper.
and
'
ART. 698. In case of interruption of a voyage already begun, the
,rlrlt'to pa$sengersshall only be obligt d tri pa1'the fa,'ein proportion to the dietanc€
g('hief covered. without right to recover damages if the intermption is due to
). , ,; 'rir' fortuitous event or force mrijcure, hut with a right to indernnity, if t}e
rr'.i,iP. interruption tihould havr: becn caused by the csptain exclusively.lf the
nr''l (ll\ internrption ehould be caue€dby the disability ofthe veesel,&nd the paaseng€r
, . ., , t t l r t j should agroc to wait for her rrpniru, lre muy not bo required [o pay any
l
increaeedfare of paesage,but hic living expenucsduring the delay ehall b€
llilllrttry
to
t for his own account.
'Pnor
I
tobea rI
$

ve share ,q The cmcial factor t}ren ie the exiet€nce of a fortuitotrs event or/ore m4jewz Witbort
f
ri
it, the right to damagee and indernnity exists against a captain who fails to fulfiU his'
undertaking or where the intern-rption has been caueedby the captain erclueively.
deii,jei1
*stlillat€
As found by both Courts below, there was no fortuitous event or faw nqjewu
ung thrrt which prtvented the vess€l Fom fulfilling ita undertaking of taking private respondente
not io tre to Catbalogan. In the 6ret place, mechanical defects in the carrier are not considered a
rndor hia cw fartuito tlat exempie the carrier from reeponeibility.
In the s€condplace, even grantingarguznd.a that the engine fsilure wae e fortuitous
!iscretion cilent, it accountedonly for the delay in departure. When the veee€lfi"ally left the port
lering its of Cebu on July 10, 1972, there wag no longer anyforce majeure that juatified by-paaeing
'merit. a port of call. The vess€l was completely repaired the following day after it was towed
b,ackto Cebu. In fact, aft,er docking at Tacloban City, it left the next day for lvlanila to
complateils vo5'age.
The reason fcrr by-passing the port of Catbalogan, as admitted by petitione/e
General Manager,wae to enable the vesscl to clltch up wilh itg schedulefor the riert
seek. The record aleo diecloeeethat there were 50 paesengereforTacloban compared to
?! pnonengers fnr Catbnlognn,qn rh:rt the Cathaloganphasccouldbe ncrappedwithOut
,r. l autttt' ioo much loss for lhe company.
vIII In defense,petitionercannotreiy on the conditionsin small bold print at the back
,:{tht' trcket rt'rtdirtg.
firsl'clnss
J(,tltionelrs
688 NorEs
ar.rD
*ffilH#rwssy*spoftrArloN

the paarengey'; ecc?ptaDce of t.|ia ticket ehall be considetd f,s en


acceptaoc€of the following onditionr:
3. In caa€ the vess€l cannot continue or complete the trip fm eny

I caure whatsoever, the carier neserryesthe right bo briry the paaraager to


hia/her deetination at the expene€ofthe carrier or to cancel the ticket and
refund the paeaengerthe value of his/her ticket;

11. The sailing scheduleof the vesselfor which tl-ie ticket was issud
is au\|ect to change without previoue notice. {Exhibit, "l-A")

Hvott nasumtng thnl. thom arndili(rtri ilro xqunrr,tylpgrlicablo Uoi,hc cam at ber,
potitioner did not comply mth the s$mo.It did not cancelthe ticket nor did it rafund the
vttftrarof thl [ickrrtsln privttlt:rtryrrrdr:nta.lk*itlrs, it wls rrotl.]rcvr.a$el'x
s$iling schedulo
that was involved.Private reapondents'complaintis direct€dnot at the delayeddeparture
the ncxt da.vhut nl the b.y-pacningof ()atbalogln, thr,ir dr.ntinrrtion.Had petitioner
rrulrfiedihcm previously,and offered to bnng them to their destination at,ite expenee,or
refunded t,hevalue of the tickete purchared, perhapu,this controversywould not have
arisen.
Furthermore, the condilions relied upon by pctitionercannot prevail overArticles
614 and 698 of the Code of Commerceheretoforequotcd.
'l'ho vttyngttto (lu1$6lq1gon 'inlcrnrptr:tl"
wug |y t.hc capluin upon inctruction of
manngtment. Thrt "internrption" w&s n(,t due to lirrtuii,orrsevcrt or forcemqieure nar Lo
dieability of the vessel. Having been caused by thc captain upon inatruction of
management,the pasaengers'right to indemnity ie evident. The owner of a veeeeland
the ahip agent shall be civilly liable for the acts ofthe captain.
Under Articl e 222Aof ihe Civil Code,moral damagesare j uetly due in breacheeof
contract where the defendant acted fraudulently or in bad faith. tsoth the Trial Court
and the Appellate Coun found that there wae bad faith on the part ofpetitioner in that:

( I t f)cfentlants-nppcllants
did not givr:noticr:to pltinliffa-Hppelleer
as to the changeofschedule ofthe veseel;
(2) Knowing fully well that il would take no less than fifteen hours
to effect the repaira of the damaged engine, defendants-appellants inst€ad
made announcement of assur&nsethat the vesselwould leave within a ehort
period of time, and when plaintiffs-appellees wanted to leave the port and
gaveup the trip, de,fendants-rtppellantn'
rnrprloyeeswould comcand aay,'we
are leaving, already;'
(3) Defendants-appellanta
did not ofTerto refund plaintiffs-appellees'
tickete nor provide them with tranaportat.ion from Tacloban City to
( lrrt lrrrlo,{rr
n.

That finding of bad faith ie binding on u8, since it is not the function of the Court
to rnalyze and review evidence on this point all over agaih, aeide fram the fac'bthat we
fird it faithful 1pths srssning of bad faitb enunciated thue:
Bad faith means a breach of a knswn duty through some motive or interest or
illwill. Self-enrichment or fraternal intereet, and not personal illwill may have been the
motive, but it is malice neverthelesg
MAIIITIME h{W 630
Perrons Whn Take Part in Murrtrlle Conrmerce

Utrtier Llre.iruuutstanues, ltowel'er, we tlnd Lhe awarci of meiral damages exceggive


and accordingly reduce them to p8,000.{10, respor:tively, firr each oflhe private
nesp0ndent$.

The total award of sttrrney's feei of P5,(Xi0.{i{)ix in order considering that the caae
has reached this ?ribunal.

Ineofar as exemplary damages are concerned, although there was bad faith, we
are not inclinecl trr granl them in addition tn mr.rraldarnages. Exernplary danrages cennot
be recoverrd alt u matt€r of right; the cuurt deerd,:s whelher or nrrt they ehould be
adudicatcd. The objective to meet its schr:dub nright have br.en calleri for, but pet,itioner
ahould hnvr. tlrkcn lhe nt.cerrsar.v stt.pr flrrrtlrr: protr:ctrrrrrof itx passerrgeruufider ito
contract of carnage.

A r l i c l ( " 1 2 1 5 ( 2 t o l ' t h r ' ( l r t r l ( ' o t l t ' r r r v r r k r . tl rl - r ' p r . t r t i r r r r ,r ,sri n a p p l i c a b l eh e r e i n . T h e


c harm done !o privatr respondenLs outx'eighs any L,nefits they may have derived frorn
e being tranaported to Tacloban instcad of being taken kr Oatbalogan, lheir destination
I and the vessel's hrst port ofcall, pursuant, to its norrnal schedule.

III. O F F T C E R SA N D C R E W O F V E S S E L S

Article 6'18 of the code of commerce provicles that "the complement of a


v e r r $ c sl h n l l l x ' u n d t ' r s t t x r d a l l t h e l x , r s ( ) n so ! ) b o o r d , f r o n r t h c c a p t a i n t o t h e
cabin boy, necessary for the management. maneuvers, and service, and therefore.
I'l L h e c o m ; l l { ' t r r l n t t h r r l l i n c l u r l c l . l r r , r ' r , . w t, . l r cr r r i l i r r g r r r r r l . ( , r , l r g i r r r . r : r rx,t o k c r g
l,r and o*ter ctttPlo;'eecon board not having specific designationu; but it shall not
of
include the passengers or the persons whom the vessel is transporting."
rl(i
on the other hand, Rgpublic Act No. 8544, otherwiee known as the
"Philippine Merchant Marine ofEcers Act of 19g8" refers to either a marine
,of
deck officer or a marine deck engineer.
Jrt
&t: The ofticers who are n€rmed in the regulation issued by the MARINA in
connection with safe manning for international trade (Memorandum Circular
No. 137t are the following:

t. Master is a pereon haring comrnand of a ship.


2. Deck 0fficer meane an officer qualified in accordancewith the
provisions of ihe International convention on standarda of rraining,
certification and watchkeeping for seafarere (srcw) 1g?g, ae amended,
Chaptcr II.
3. Chief Engineer is a ee;rrorIicensed marine eng"ineerofficer
responsiblefor the mechanical propulsion and the og:ration anJmaintenance
of the mechanicatand electrical ingtallations of the ehip.
4. Engircer Oftcer means an ofTicerqualified in accordancewith
Lhe pnrvisions uf the lrrtcrrraLiorul convention on standards of Tbaining,
rt we certification and watchheeping for seafarers (srcw) 1g?g, as amende4
Chapter lII.
.st or 5. Radia Afficer is a peraonholding an appropriatc ccrtificate iesued
n the and recognizedby the Adminietration under the provisions of the Radio
Regu:ations.
640 NOTESAND CA.SES
ONTHN LAW ON TRANSPORTATION
AHD PTIBI,ICTJTII,TTINS

6. Ratingxman is a memtrerof the ship'scrr:wother than the master


or an officer.

on the other hand, Memorandum circular No. 14g issued by the I4ARINA
for domeetic trade specifies the following offrcers:

1. Offlcer means a member of the crew, other than the maater, who
has been designacedas auch national raw or regulation or, in the abaenceof
auch deeignation, by collective agreement or cusiom.
2. Mailer riroons th.epereon having command of a ahip.
3. Chbf Mate meanfian offrcernext in rank to the maeter and upon
whom the commaud of a ship will fall in the event of the incapacity of-tbe
Mast€r.
4' Decholftcer means an offrcer quarified in accordancewith the
provisionsof Chaptrr II of the Convenrion.
5' chief Engincer officer meansa senior engrneerofficer reaponeibre
for the mechanical pmpulaion and tle operation and maintenance of t^he
mechanical and electricai inetallations of the ship.
6, Secrrnr/fnglnc tr \fft,.trm(.u1lH tlrc errgirrterolTicornert-in-rank
to the chief Engineer and up.n whorn the reuponsibilityfor rhe mechanical
propuleion and the operation and mainlenance .of the mechanical and
electrical installation ofthe ship will fall in the event ofthe incapacity ofthe
Chief Engrneer.
7. Engineer officer meanr{'ano{Ticerrluarificd in accordancewith
tlre provioioneofchapter III ofthe Convention.
8. Medical Practitianer rnrrins a rcgistcrcd l)octor of Modicine in'
charge of the med,icaldepartment of a nhip.
fl. Rnrt&r(lffivr rrr$fipgo [x,ru{}r lrrlrlrrrgnrr rrp;rro;rrirtocertificate
lrld and rocognizedby the Admi*isrration under ihe piuviaions of the
Radio Regulatione Act.
10. Paramedic are auxiliarymedicar personnet.suchas midwivee,or
nuraes with apecial training on administ€ring first aid.
11. Mojor Potran (MAP) shalr refer to a marine deck officer dury
regiatered and certificated to act as officer or master of veaeevship of no:t
more than 500 GT navigating in the major coastwise trade routea within the
territorial limita of the philippines.
12. Minor Patron (MIp) s]:all refer to a marine deck ofiicor duly
regietered and certificat€d to act ag oflicer ,r master of vesoeuehip of not
mone than 250 GT navigating within a specified body of water in the minor
coastwise trade routes in the philippines.
13. Boot captain rneans a person authorized by the Adurinietration {
to act aa officerr and/or in commandof a boaushipor the qualificationricense I
i
to act as euch. r
1
14. Marine DieselMeehanic iMrlM) means a person authorized by
the Adminintrntionto openrt,eand maintain lhc ship'sdieselenginey'e
or the
qualification/licenee to act ae guch. l
I
t

$
i
l'.
ia:
.i
MARLIIMUI-AW
FersonnWhrlTnke Part in M$ritrrno Llomqrercc

i5. Ebctrtcwn means a lrcensedmaster e]ectrician who is reaponsibh


foi the maintcD'pcc of the eleclncel and e.lectronicinstallations of tbe ahip.
tINA 16. Rating mr ans a member of the ship'screw other than the master
or an officer.

A, REGULANONOF MERCHAHTMARINEPROFESS|oN.
'lhe practice
of marine prr,rfe*sionis now governed by special lawg and
pertinent mlee issued hy the Maritirne Industry Authority and the Board of
Marine Deck officers &nd Board of Marine Engineer officers.In particular,the
?hilippine Merchant Marine o{ficers Act of 1gg8" whs paesed in order to
regulate Merchant Marini Professionin the Philippines.
The law declaree that it is'the poliry of the state to pmmote and insurs
the safety of life and property at aca,prot*ct and sr:ryethe marine environment
t and ecology,and prevent marine pollution and accident at s€a by complying
with the standards of Tlaining, Certificarirln anrl watchheeping for Seafarurr
l9?8 (STf,W'78), as amended, to which the Philippinea ia sigrratory.ry tt ia
likewis€ the declared plicy of the State to inetitutionetize radicsl ehnngss as
.t
I
required by intemational and national etandards to insure that only qualifio4
j
compet€nt and globally competitive Marine Deckl8ngineer officers as
e detcrnined thmugh licensure exgminations ahall be allowed entryto the practbe
of the Mercbant Marine profession.s
The same law created the Boa.rdof Marine Deck Oflicers end the Board of
Marine Engineer Officers to implement its provieions.x
some of the pertinent provirione 'f the Act are reprodued hereunder.

Section 4. Definitbn of Tert*e.-


(a) Practiee of Metv.hant Merine Profeulon - sbstl ng(er to
t'he profescion requiri-ng the application of fundq'nental rDd hon
priaciplee of navigation, aeamnnehip and enginoeringto tho pecultar
condition and ruquirenentr of on board maneg€rroudopcredonrd
nrlntonenct ol main pn1rp.rtrleq and ou-llhrf,r ongiaec, rtablllty erd
trln of the veeeel nnd eergo hrndiing. It eb"&[ aleo oovsr bnt ylll Eot
be limited to tbe following:
{U Tbe propor handliag aad etowage of cergoer on
bonrd ahip which inctud,es the eafe carriage of paeeengurcfron
port of origin to port of destination;
$) The safe watchkeeping of the veseet'g navlgrtlon tn
accordance wtth the Ruler of the Road at Sea;
(3) The Meritirno Education qnd T!.qinin*of Codctrand
othor M^orias hofesrion^sb;

tS*tion 3, Republic Act No. 8544.


'Ibid.
tSectione 5 to 12, Rapublic Act No. 8b44, ueeAppendir.
j

1 542 NT)TI]SANI] CfusNSONT}{E I,AWON TRANSPOIITATIOb{


/1l{ll FI IlJt.l(: ! r'l'll,l'l'll.)s

(.1, llrr;rloymr,nt wlth l(.rvcrttrtrl'nt. ;rruvirlrel rueh it{im


or F)sition require.s the knowlcdgc nnd exttet'ti$e ola Mertehant
Marine Officer.
(b) Merehant blarine Vessel - shall aPply only to the
commercial shipe, propelled by machinery, public or private, atrictly
engaged in maritime corntneFce' both seagoing andl/or near coastal
trade, vessela engaged in the training of cadets for the merchant
marine prof€asion, and noncombatant veatels of the Pbilippine
(ioverrrment.
(c) Merchant tllsrine Otficer - nhall refer to marine deek or
engincer officer.
(d) lllerehanl Marine Deeh Officer - shall refer to a duly
registered, certified end licensed matter mariner, chief mate and
officer-in-chqrge of a navigational watch
(e) Merchant Marinc Engineer Officei - ehall !^efer to a duly
registered, certified and licensed chief engineen second engineer,
and officer-in-charge of an engineering watch in a manned engine
nxrm or deaignatcd duty engineer in a periodically unmanned engine
room, and coaetal eng:ino€r.
Section 13. Ercrndnation Required. - All applicants for
registration for the practice of Maritime Profeeeion ehsll b€ required
to undergo and pass a written technical eramination ae provided
for in this Act. Whea conditions and circumatancee waraat, the
Board may give srglk-in examinations, suhject to the approval of
the Commission.
Section 14. Quolificotionc of Applicont fot Examinotion. -
Every applicant for eramination shall eatablish the following
requi8iter:
(a)
I
He ie a citizen of the Philippinee;
(b) He ie of good morel characoer;
(c) Hs has met et'andarde of medical fitneea, particularly with
good eyeight nnd hoarin5 ae certified by a Department of Health
(DOII) accreditod modicsl institution conducting phyeicd aad
medical eraniastions for s€efarers;'
(d) In tbe crce of Marine DecVEngineer OfFicen' he munt be a
greduate of Bechelor of Science in Mariiine lbucportotion or
Bschelor of Scieace in Mrrinri Engineering in e cchoof acedernR
inetitute, college or university duly reeogDized by tbe Co-'lni"sion
on Higher Educetion (CHED); (e) For an applicant tehing the
eramination, other than that for the Marine Dock/Engineer OfEcer,
be murt have completod a courae approvod by tbe approprinte
gov€rnment agency, as defined in the rules and regulationr
implementing thie Act.
Section 16. Fraudulont Applicatdoa. - Tbe Board may aurpond
or revoke any Certificate of Registration obtained througb
mitrepreeentation made ia the application for e-nrninatiott.
'lT'l 6#l
,i.,-$on
r wh,,rjl: Tl'nffl,""" c,mrn*rcr

Sr.cl ion t 6. Sr.o;x,of Exumi nil'ticn, * 'l'he subjecto thrt shsll bc


i ncI uded i n the exam i na tion for Mari ne Decvt)ngineer of icirr ehelt
include, {rmong othr.rri, the following nrajor firnclione:
( l, Navigation
{2) Cargo Handling and Stowage
(3) Controlling the Operation of the Ship and Care for the
Personr ()nboard
(4) Marine Engineering
(5) Electrical, Electronic and Control Engineering
(6) Maintenance and Replir
,i
$
(7) Radio Communicationa I
at the following levele of
reeponsibility {
i
(1) Managenent Level
(2) Operation Level
'fhe
aaid sub.iecta and their syllabi may be amended by the
Board so an to conform to technological changes brought about by
continuing trrndc in lhe profe*ion.
St'ction Tl.Pnlctiee af Merthanl llfarine Profe*ilon. -No peruon
shnll practice or offer to practice the nrerchant marine profeaeion
in the Philippinee or offer himrelf as a marine deck/enginocr omoer!
or utre the title, word, letten figure or uny nign tending to eonvey the
impren*ion thnt he ir R mnrine deck/enginr,er officer udo{is he hs.i
raiiefactorily puoed the lieensure examinaiion given by the Boand
and is a holder of a valid Certifir:ate of ltcgiatration and
Certificate of Competency duly iesued to him by ttre Boord of
Mqrine Declr/llrr ginoer ()ffieeni.
ln compliance with the STCIV '?tl convention and ite
amendmente, the p€rson holding senior merchant marine licencee
namely, the rnaeten ehief officer, chief engineer and second engineer"s
nrunt be able to function under the managenent level of
responaibility while the officers-in-ehrirge of navigational and
engineering wateh must be able to funetion under the operational
level of responsihility.
Sr.ct i on 2t1.II e<,ogn i t i ttu rtl' Cert i fi t t t ex. :- A fore i gner holding a
certificate of cornpetency issued by his national administration in
accordance with STCW'?8 Convention, as amended, requirements
shall be issued special dispensation to serve on boand a Philippine
registered veseel engaged in the international trade: proaided,That
the Philippine Certificate of Competency issued and endoreed by
the Board shall be recipr.ucally recogpize'd try the sqid foreign
national adminietration to allow the Filipino merchant marine to
practice hic profession on troard the f<rreignefs flag veseel.
' lit:ctiun 29. Quctlity standard*. -'l-he Board shall eeteblieh a
ryrlem 'f standanln that xhall lle sulrje.r.:t to cxtr.rnat man&genrent
I,

ONTI{O LAW ON TR}-NSPONTATION


NCITESAI'IDCA,SES
ANS PUBTJT:{"ITILITISS

artGoDGol or rudlt in accordencs wlth tho STCW ?E Conventlonn


ar rn€Ddd.
Soctlon $O. Fundfng Proulriax' - Such rurlt aN mry bo
nocofficry to crrly out the proviriom ol lhir Act rhrll he lncludod ln
the (ionsrol Approprirtionr Act of thr: ycar following itr onactrncnt
lnto law and thereafiler.
Sostion 31. I n t e gration af M c ri nc D ec k IE n gi n eer hffvt tz. - All
marine decVengineer officers chall be integrated into one (l)
national organization wbich ahall be recognized by tho Board and
by the Comnileion aB the one and only integratod rnd aocltdited
esgociation of Marine DecL/Eagineer Officere. A blarine Decli/
Engineer Offiicer duly regktered with the lloard ehsll automatically
becone a member of the integratod and accredited esloclatictn of
Merine lleek/Engineer Of,tcere, and ehall receive the benefite and
prlvilegee appurtonant thereto upon payment of the requtrod leca
and duer. Memberehip in the intepat€d arrd accredited nneociation
ahrll n6l be a bar to memberehip in other agsociations of morlne
decb/engbeer oficere.
Section gl2. Cde of Ethko for h{arine Dechlfinghver Officerc.
- The Boed chalt sdopt and approve the Codc of Ethls for Mertna
DecUEngino€r Ofllcere prc€cribed by the intcgrated and accneditad
natlond srroclrtion of Merlne Deck/Engineer Olllcsrr.

B. ilINITUT SAFE TANNING.


It ie not enough that the offrcers manning the merchant vessel have all
the qualifications imposed by the Philippine Merchant Marine OfficersAct'and
other speciai laws or regulatione. It is also required that there is aufficient
numbr of officere and crew that are serving in the vees€I" In thie oonneiction'
the Philippines subscribes to the rules provided for in the Conveation on
Standarde of Tiaining, Certification and Watchkeeping for Seafarers 1978
(STCW'78). Consist€nt with this treaty, the Maritime InduetryAuthority iaeud I
Memorandurn Circular 1S7 which providea for the rules on mininum ssfe I
msnniog in Philippine registered veesels engaged in internation&l trade.
Memorandum Circular No. 137 providee in part: I
I

I
fV. GenerelProvieions: I
t
1. Se.agoing shipeehail becompletelymannedby Filipino aeafarem.
No foreign offrcoraoball be allowed onboardunleeeapprovodby tbe
Adminictration.
{
2. Magter,officereand ratingsonboardseagoingrhipe ahallbeduly I
qualified, competent,certificated and medically fit in accordancewith tbe *I
t
eristing nrlee on the issuaDceof certificatesand endore€mentsfor eeafarers.
$
3. Seagorngehipsshall have onboardan approvedminimum safe
manning certificate indicating the minimum numbr of o6cers and cr€w
and their corresponding liceneesand qualificationrequiremente.
}TARITIMET.AW
persona Who Take part 616
in Meritime Commerce

4' Mae,ers,officers and ratingu performing watchkeeping


, ahalr meot
the^training requiremente of'tirc* igza, ," amended, and thoae not
performing watchkeepingdurieeshail undergo
the baeiceafetytraining. For
high s-peedcraft,, the crew shalr undergo additionar
tr"i"i"g"i"-;rdance
with IMO ResolurionMSC 16 r63ra<iofted
on Z0 May 19gt.
5. By 0l February lggg, at least two (2) deck
offrcersof eeagoing
ship rnuat be holdereof Radio General of .ot"r*'certificate
(Gocr.

V. Mini"rrum Safe Manning:

1: - .In adopting the Table of Minimum Safe Manning, herein


prescribed, the Administration fook
cognizance of the principree of safe
Manning, under IMo Reeorutiontto. a.+6t
txttt. s"ru u";"i"g;;"r thes€
Rulee shall, thenefore,mean that the crew
shail include sufficient offieers
and ratinge with appropriate ckiils and
experience
t 'v"L! to !e sr'5urs
eneure that
L' the
follo*'ing-principtescan be eompriedwjth:

a. Thc capa'rlity kr nr'int'i' u sufe fr.dg" ,rat"h


at cea in
aceordancewith the ST'CWOonvention
tg?g, as amended;
h. 'I'hr
cnpabrrrtyto nr(&r arrd unmtxrr & veerereffoctively;
c. The capability booperate and maintain effectively
watertight cloeing anangernente including all the
ability to ,oo""t ;;C;;;;
damagecontrol parry;
d' The capabilityto op'rate an, whr:n practicabre,
maintain
e f T i c i e n t ,a l l f i r o c q u i p r n e n ta n d I i [ e
s a ' r n g a p p l i a n c e sp r o v i d e d
including the ability to muster and disemba.k
p*rung"r, lrra no.r-
\.e rrll essentialpersonnel;
:t alld
icient 'when e. The capabilityto managethe safety functionsof
the ship
employedin a stationarvor ne.rr-rilaltonary
r:titin, nrndeat sea:
On r)n f' The capabirityto maintain a safeengineeringwatch
at sea
l 97 8 in acc,rdancewith-[rres'tcw (]r'vcrrrir'
lgzg, ae anlendedand argo
to maint'aingenerareurveillanceof spaces
rssued contarningmain propulsion
and auxiliary machinery;
n sirfe
iracle. g' The capability to opcrat€the rnain pr,pulsion and
auxiriary
machineryand maintain it in a .;aff c'rrditi'n
to enarirethe ship to
overcomethe fcrreseeablepen ,ls of the vo-yage;and
h. The capability to maintain the safety arrangementir
the cleanlinessof machinery$pacerito minimize and
the risk of fire.
In tle applicaLionof the basicprinciplesof
., ? safemanning to en'ure
the safe operationsof shipe, the forrrwin6;guideli.es
o^' i *ru-iy
a' "'a;ptua,
There shourd be sufficient nurnber of quarified personnel
to meet the peak work'load situations ancl
ie conditi'ns wirh d'ueifgara
to the number of hours of shipb<,,ard duties and rest periodsthat may
be assignedto a seafarer;
fe
b. The bridge watch sha' consistof at least one (.l.t
w offrcerand
one r1r deck rating qualified [o rake navigarional
tu*i, p.r"iJ"l ,i,"t
546 NCITESAItiDCASESO}i TTTSTJ\WON TR,\.hISPORTATION
ANT,PUELICUTILI?III9

they comply wrth the requirernenLtef Part.sjt and ll-l Section h-VlHln
{
ofthe STUW lg78, aa amended: .x
ti
c. Except in nhipnof lirnitcrl qirr,,I thrr.e ffi) wnlch syatem
shall bc urlupted;
d. At cach end of the ship, tltrrr slrouldbc suflicientpersons
to enable them io acceptand effectivety-.ecurea tug and to send away
tnnsion and Eecurelines and backsprings.Any necesearyoperation
should be capable of being performed at bow and etem simultaneously;
e. The engineering watch should consist of not less the one
( 1) duly qualified engineer officer and may include appropriate engine-
rrx.rmratings providedlhat tlrey cornplywith the retluiremenleof Parts
3 and 3-2, Section A-VIlyZ of the STL]W 19?g,as amended;
l. I n d e x i g n i r l r n gt l l c r r u l n l r c ro t p c r s u r r n eal e e i g n e dt o
enginccringwatches,nccount, slrtll lx' takon rlf thr_, fr-rllowing:
i. the numlx4 uizeiKW) arrdtype r.rfthe main propulsion
and auxiliary unite over which survcillanccis to trc maintained
and the number of nrachineryripacescontaining theseunits; and
ii. adequacyof internal communieation.
C. powor,n lhrcn (3)
Except in *hipe of linritcd JrroJrrrlricn
w&tch eystem should be adopted;and
h. Thcrc nhouldtrea suflicientnunrlx:rof dcnignat*dporeonnel
availableto ensurethe cleanlinessofnrachineryspaces.
3. The Administration shall issue a nrinimum safe manning
certificate which neede to contain the following information:
a. A clear statement of the Ship's Name, Call Sign, IMO
Number and Offrcial Number, Gross Tonnage, Type of $hip, Fort of
Regiatry,and Kilowatt of the Main Propulsion;
b. A lsble ehowingthe lrunrbersarrtlgradcoof the poruonn*l
required to be carried, togetlrer with any special conditions or other
remarkg."

on the other hand, Mernorandum circular 148 of the MARINA governs


minimum safe manning for domestic trade. The circular reads in part:

n'. Gencral Prorrisions:

1. P h i l i p p i n e - r e g i s t e r e ds h i p s l h a l l b c c o m p l e t e l ym a n n e d b y
Filipino offrctrrsnnd rntingr, excoptan uul]rorizedby the Administration.
2. Maet€rc,offrcereand ratingn onboardIrhilippine-regiateredshipe I
ehall be duly qualified, competent,certificated and medicajly fit in accordance :
with these Rules and Regulations.
3. Philippine.regsteredships shall have onboardan approvedsafe :
manning document indicating therein the minimum safe manning'
complement and their correspondinglicensesand qualification requirements.
E

u
.1j

per:xr'su'n"'l[t X*l1ti*l1} - - con,


merce
617

{' N1asters, nfrice.sa:rrlrirtr.gs pi,rrbrrnrngwarchkeepingchail


t l r r ' . r' ' r r i f i r ' : r r i r r7ns ' 1 . , 1 , 1 r , , , rrrrrf.'rsr'trs' c r ! ;r r , z H . meet
r r s r r r r r . r r r r r .rdr n, d t l r ' s * n o t
rx'rh'r'rr rrg wrti:hk..qpr rrNri ut rt..isir.rili'r{r'rii, lrirsr.rurr.tyt.rairing.
s ; x . r ' rrl: r r r 1 1 iirr nigh
t l ,r r , r : r r , *q, h , i l l r r r r r l , , r , ,{ ,r, l , l i t i , , , r ,l ,rlr r i r r i r r igr ,
, , , . , , , r r j , , r ,w
a ri U r
I t r l () l L ' x r l r r L i , rrr\ r . \ c. r { it,i i t ; ,. r r t r, r r r r . rr.r ; r r . v , r r t
}tn IttNA circularc.
5. The highentofTicr.ron rir:<:k
srrailrr: o|lrighcr rank than the highest
ollicer rn the enginedepartment,exceptin
caseswhere the requiredengrne
is much great*r and n,.rtin prrrp.rti'n &rgr,ss
ry:::,1"', registeredtonnage
iGRl')' rE.g',Tugbo^rsn hich are '[ big
Kir' ,riti'g but are
"i,."iiclrrr.
o. tn. vesselsn'rth a \'()-\'aguduralir.,nrirne of less t,haneight (g)
,J i ( ,.. , ,
tll-5,.1lr/lrutrrlllI rri t!1il l!t ollit:r.rs riiltll lr(,r.nrlllrr.l(,rl.
'i
l ' ) r r g i r r {t ') t r t l r r r tl t a l r r r g s l i r t l l l i r . n i ( , i r } t r r r . . ( i
r r r l ( W r n s t e a d. f I } } l l t
,tK\\'l;{.t tll[)r

l ' l r c t o t t r lx N * r ' | ! . , i a t ( ,
, . ]t r x l w { . rr' ' : r ltr r r l' r r r r l i r i l r; r r r i p u r s i s pr n a c l r i l i r r i e s
s l t i r l ll r r ' t l r e l r i s i s f i i r d r t * r m i r r i r g t r r r . r r i l r i * . n r
n r a n n r ' g r e q u i r e m e n t . rsn
t h t . r , r r g r n rr,l e p c r r n r e n t .

9. Ships shall have on boarcr medical personnel


. in relation to the
nurnber of passengers and thc cluralirrn
'f thc ,,.ryageas sh.wn below.

No. of l,assengers \b-vagr| )uriltirrri Medical Personnel


Required
Srx)-2txx) l 2 l r r s "o r l e s s I paranredic
(.)verl2 hrs. 1 medicalpractitioner
Uver2000 l 2 h r s .o r l e s s I paramedic
Ovt,r l2 hrs' I ncclica! practitioner
I paramedic

l ' l s u c l r l n c d r c u lp r a c r r t r . r r e r r n t rp u r a m e d i c s
*hall underg' an
orientation/refresher courscon prrbrichr.art.rr ln rt,ratir.,n trrship nanitatio' to
be coilductedby the lrtralth authorit-v.
'rns
.9'2 such medicarpersor:nelnamrci as ship Hearth officer
sha, be
resp'nsible for ensuring at ail times rhe 'ccessarv
or;;;;L;yg,-r-
andcleanliness. "iona*i"
9.3 Drrringthe v.r.yage,
th* mrdic;rlpractiti'n.r sh;rllrnaintainheallh
record:i'logbtxrks
and supprya'y i*rbrmati'n requiredtly the health authority
as to health conditionson hoarddunng the voyarge.
I
9-4 lhe Master shall make known to
lhe heaith authority,
immediately upon diecovery,any case of iilne's
. which is communicabrein
ntttu* 'r dcath on ir.Rrcr, in trrcrert,, pr'tr:ct
ti rrrc intereet cif the other
p,s$engersand to facirirate rhe crearance
if public health.
of the ship ,"ith;;;
""i*g"ring
l

i! l0' Masters and first offrcersi' ihe c,astwlse


voyage(category II)
and bay and river voyegercatr,g'rv IIr r nrustbe h'rrtt,rs
nr.srripn"aln?nrir*
'rryffi

T
s;.!kM&.*b d,d*x;rl*irlib ixe.{ile;I{".d1sit*sdliisldll]i|slt'

NOTESANn CASESOU THE I.Aw ON TRANSI),0&TATION


A}.JI,IPLJI]IJCUTILITJES

operatorn certificate issued by thtr National relecommunieatione


oommiseion.Radiooflicers *hall hold rhe licennesrbr rhe foilowins:

Class 'fonnage
Radio Lieense
A,B over 500 gt one SecondClaee
over 250 g't one Third Clase
C,D,E over l6tl0 gt one SecondClaes
r r v l r l - r { l { )l- { i ( X ) onc Third Clase

!'ess€l certified by a recognizedclassification societyand./orthc National


T e l t r c o m m u n i c a t i o nc o m r r r i s s i o na s t o c o m p r i a n c ew i t h t h e G M D S S
requirement may not have a radio offrceron board.
I l. 'Ihe Stc:wardI)t p'rinrt,'t slrall br: adequlrtelystaffed for the
provisionoffood and ottrer senricesto the crew and paeeengers.Allgtewardg
^nd ftxrdhandlers shall conipl"r,*.ith thr, h'ric rafety training and health
rrqurrcmentg and must lle hold.rs ol'valid Seal'arer'sldentification and
Iiecord Bookr.r
t SIRBsr.
12. !'or finhirrg't.ssels l.rl"vrrrg
tlrr. rlrterlr'tiolnl watcre with groee
tonnage 500 and below,the tr{aster shall be a licensed3rd Matc and./ora
l\ta1.orPnlron, F'oroth.r lishirrg vr:sst,lst,h* proviniorrsfor coastwire vnyage
shall apply to lishing vesserlsengagedin international voyage.
13. The 3rd l{ate actingas Master of fisrhingvesselwith grosstonnage
over 500-1600shall be with experienceofnot lessthan five (b) years aeMaater
of a ship.
14. The following Ohief Engineer Officer for fishing vesselsengage
in thc domeretic/international
tradc, shall be ;rs follows:
a. For over 1200-2400KW, the Chief Engineer shall be a
4th ilfarine Engineer with five (F/ .vearsexperienceae 4th Marine
Enginuer.
b. For over 2400KW, the ChierfEngineershall be a 3rd Marine
Engineer with five {l'),ycarri rxpr:rir,nct as lrd Marine Engineer.
15. Special manning applies only to fishing veseeleengagedin\
i r r t r r n a t i o n avl o y u g r .
16. For tanker vesseisover 2b0-500grosstonnagethat are on limited
coastwiseoperation.the 3rd Matercan act as Nlasfer-
17. Officers ard cren' of irigh sp.ed crali shali meet the training
rer-iur!'Frnenlipn:v:ded uncjer reievanr If-{RI5A crrcularg. T}rere shalt be
an addrtionalone 'lr deck reting for even'one hundred (100) authorized
passengercapacity.
18. For High Speed Craft, lhe mannlng requirement described is
Iimited to da.wimenav"igationonly. Nightime nar,igationshall be subject to
additional manning requirement as approvedby the Administration
ptraons sao
"""'.Htffffm-" c.;
V. Minimurn Safe lt{enaing:
In adopting the Table of Minimurn Safe
l: -
preecribed, Manning herein
the Admirietration took c.gnizance of the principrei
Manning of safe
underIMo Reoorur,ion
Nn.e.dr irur).safeM.;"iil;;er
Rujes ahall, thenfore, mean that the crew tbme
ehsll include sufEcient offimtr
and ratinsr with appropriar+ skilrn and expert;;;;-;ir,"iil"
principlee can be complied with: ir1"*r,s

a' The capabirity to rnaintain a aafe bridge watch


at eea in
accordancewitb the STCW Convention
of 1g?g, *;;;d"d;
b. The capability to moor and unmoor a vees€l
effectively;
c. The capability to op€ratf and maistsio eflectively
watcrtight cloeing arrangements incrud.ing all the
ability to murntan ersuve
dnmage contml pany; -:.
d. Tbe capability to operat€ and nhen practicable,
maint+in
effrcient, all fire equipment and life aaving
provided
inslu'ling the ability to mueter and dieenoba* "ppriri""r
p'**"s"r, iod ooo-
ees€ntial peroonnel;

e. The capability to manage the safety functions


of the ahip
when employedin a stationary or nlar_stationary
mode at Eea:
ll The capability k, mai'tain a safeengineeringwatch
et aea
in accordancewith the $TCW Convention,
l9?g, ae aoanded and aleo
to maintain general.surveillance of epacee
cond;;;;; orir",oo
6n! grr*i liaty nnachinery;

C. The capabilie to operate the m?in propulsion


and auxiliary
unachinary and maintain it in a sqfe conditio"
to un ule.tl" *ip to
overroornethe fo,rssseable perils of tlre voyage;
and
h. The capability to maintrin the aafety arran*emeate
and
the cleanlinees of machineqr rpsces to minimize
iU" *frf n*.
'1
In the application of tiebasic principreeof
., safemanniagtoensu'.
the eafe operatiour of ahipe, the following
S,ridetines l"r"UyTaopt"a,
"r"
a' l'here should be euJficient numbera of quariFed pe*onnel
to meet the pealr worh'load aituatione and
conditione witn aue rqarrl
to the number of houre ehipboard dutiee
and reat periode trrat may be
aaaignedto a saaferer.
b. The bridge watch ehall consiedof at leaet one
sfficsr and
one deck
Tting q.ualified to take na'igationJ *""i, plvrli ,fr"t
tfey oonply with the requirernente of darte
B and 3-I section A-wIn
ofthe STCW lg?g, ae arnended.

c. Except,in shipe of limited eize, a three watch eyatem


be addpted. ehatl

d. At each end of tjre ship there should be gufrcient pereonn


to enable them &oaccept and efi'eciiveiy
eecurea tug and to ecnd away
tension and gocure rines and-backapringe.
Any niceaeary operation
rhould be capabreof being performed at biru
aod stern eimd;eouery.
5.50 NOTESANB CASESON ?1IS I"AW ON TRANSPORTATION
AND PI.JBLICUTILITIES

e. The engineering watch should coneiet of not lesc than one


dlrl1-qrralifierdengineerrand may include appropriate engine'roon
ratings providedthat they coniply with the requirementsof Parts 3
and 3-2,SectionA-YIM of the STCW 19?ti,as amended.
f. I n d e s i g n a t i n g t h e n u m b c r o f p e r s o n n e l a e s i g n e dt o
cngineering watches,accountshall tle raken of the following:
'I'he
i. rrumber,size (Kw) and type of the main propulsion
and auxiliary uniLs over which surveillance is to be maintained and
thc number of machinerynpaccsc()ntainingtheseunits; and
ii. adequary of internal ceimmunicalion.

t{. a three watch


Except.in ships of linrilcc,lpropulsion p$\&'er,
system should be adopted;
h. Therrcslrtiukibe a ,{ullicir.lrt personnei
riurrrltt o{'rltsignatcd
availableto ensurethe cleanlinessof machineryspaces;
3. The Adnrinistrationshall issuc a (lr,:rtilicateof lnspeclionwith
vessel'sminimum safe manning indicating the numbensand grades of the
personnelrequired to be carried,togetherrvith any specialconditionsor other
remarks."

C. S F C U R I T YO F T E N U R E .

Bvery worker in the Philippine has a constitulionally protccted right to


securit.y of terture. Consequently, an entployee cannot be dismissed without;just
or la,*4ul cause and without affording the employec w'ith due process'

The Labor Code provrsions apply to ollicers and crew of merchant vessels
engaged in domestic trade or coastwise shipping. Hence, matters concerning
their disntissal or disciplinary action musl lrc rn accordance with provisions of
the Labor Code. For offrcers and crew who are working in foreign vessels who
are involved in overseus_shipping,thr.rc urust he cornpliance with the applicatlle
laws on overseas eryployment as well as regulations issued by the Philippine
Overseas Employ.ment Administration (POBA). For instance, the POEA imposes
standard contract provisions for seafarers employed abroad which include the
following:s

"SECTION I8. TERMINATION 0T' I.]MI'I,OYMF:NT

A. The employment of the seafarer shall ceasewhen the seafarer


completeshis period of contractual serviceaboard the vessel,signs-offfrom
the vesseland arrives at the point ofhire.
B. The employment of lhe sealarer is also terminated when the
qenfarerarrives at the point of hirc ior aitv of the followingreasons

1. when the seafarersigns-offandis diseinbarkedfor medical


reasonspursuant to Section20 (BX5) ofthis Contract.

sEffective 2000.
551
Personr
*" rff TTrunH, u,*(tunrn* rce

2. when the sr.afirrr.rxigns.off tltre trr shipwreck, chip'u uale,


lay-up ofveseel, discontinuance of voyage or change ofvessel principal
in irccordancewiih Sr:ctions'22,2i1arrd ll(i of this (lontrtct.

3. rvhen the seafamr in * riting, r'olr^rrrtarily


resigns and signs
off prior to expiration of crlntract pur-{uiurt to Section lgiG} of thi$
Contract.

{. when the .ieaiartr i" clr.cirirlCerlt'urjust ci.ruseas provided


I i r r i n S l c l i o r r l l i l o f t . l t r s{ l r - l n t r : r r : t .

SE('TI(}N I 1' tIF;I"\'I'III,\]'II I\

A. If the vessel is out-sidethe llhilippines utx,r) the expiration of the


contract. thc seafilrer shnll contin'uc his.ur:r"'icet-rnboard until the vessel's
arrival at a convenient port and,,'or aller arrival of the replacement crew
pror"ided that, in an,\'case, thr: cor:tinuance of such service shall not exceed
three month-s.The seafart'r shall l.x,entitled to carned wages and benefits as
provided in this contracl.

B. lf llre vcssel arrives rrt ir t'onvt,nicnt lNrrt fx.lirrr the t:xpiration of


!lto t'rltttrrtcl, lltl rlurrtr,r,'r.rnpLl-vr.l. trr;r.v{r,rrrurrrrt.r. Ilrr: srlrtlrrr:r frrxtt tuclt
;.xlrt, provi<lt,ii lltc tutst.rvt.d lxrr!ion (,l lti;, r'llntr;r('l rs rrr)t rnore tlurn one (l)
t r t o t t L l t . ' l ' l r r . ' s r t t l i t r t . r ' s h al rl rl :r , r r t r t l t , rrlr r t l - yl r i l l r . cr . r u r r r , dw i r g r , s ; r r r rrl. & r l l { t d
leave pav llrd to his basic wirg(.s c{)rn:spor)dil}gto tlrt, unsen'ed portion of
the contract, unless within 60 dil.ys fiont discnrbarkltion, thc seafarer is
rehired at the same rato and position in which c*sr: the scafarer shall be
entillcd c,nly tlr his earned wagt,s and t,rrirrr,cllcavr pay.

O. Il'the vessel arrivt's itt i'rc6nyt'ttignt p6rt within :l peri(d of three


{3) nrontlrs belore the expiration r.tfhis contract, thc ma]it*r/employer nray
rt'grittritt[r tltt' t'ttrtfttrtr fr,rnr xrr<:hlxrrt l]rrrvi{|r.dI.hrrt t.}rr.H{.ltfnrcrnhall bc
p n r r l t r l l l t t x l i t t t t t ' r l w n l { r ' r . l t r n r l r l r l , l u r r1, l 1 1s, s ' 1 1 f 1 1 n
1 l1r,r1r l ln l n o l x t p n i t l l r i n
llttvt' prr.!'lur tlrt t.tttirtl currtruct p{.n(xl plrr* ir tr'r'rnrrru[iolrpay *quivalcnt to
rrrre( | ) rnorrtlr of hir basic p{ry,pnn'r{/e(/, hnrt't't'tt, t.hrrtthir rn(xl{:(rf t"erminalion
may only be exercised by the masfer/employer, if'the original cr.rntractperiod
of the seafarer is at least ten ( l0t months, provided, further that the conditione
of this mode of t€rmination shall not appl-v to dismissal lor cause.

D. The s€afarer shall, ifdischarged at a port abroad for any re&son


other than for dincipline, l* accommodatr:d ashorc and in c&$es where it is
not intended that he rejoin the vessel, shall be repatriated tn the Fhilippines
vin sen or rir or Rs mav ol,herwee bp rlirrytld hv the ernployer/maetcr/nEency.

E. When the B€efarer in diechargetl lirr an-vjust cause, lhe employer


shail have the right to recover the cosLsofhis replacumrrnt and repatriation
from the seafarer's wages and other earnings.

F. The seafarer, when discharged and repatriated as directed by


the employer/masterlagency shall be entitled to basic wages from date of
signing off until arrival at thc port of hire except when the discharge is in
accordance with the above or for disciplinary reasons.

G. A seafarer who request for earll' termination of his contract shall


be liable for hiil repatriation co*t as wt'll as Llrc t.r:rnsgror-tutioncoet of his
. ''*
il
$
I
NOryESAT{DC.A.SESONTHE IAW ONTRANSR)RTATION
AI{D PUBLIC UTTLTTIE8

rcplecsment. The employer may, in caeeof compassionategrounds, a38ume


tbo transporlation coct ofthn eeafare/* replacemcnt-

SECTTON22. TERMINATION DLTETO S}IIPWRNCK


Where the veasel is wrecked necessitating the termination of
employment before the date indicated in the contract, the seafarer ebell b€
entitled hr earnrd wage8,medical examination at emlloyer's expense to
dctermine his fitness to rpork, repatriation at emplbyey'scost and one month
basic wage as termination pay.

SECTION 23. TERMINATION DUE TO 1TSSEL SALN, LAY.UP OR


DISCOI{TTNUANCE OF VOYAGE
Where the veesel ia sold, laid-up, or the voyage is disconti'nued
neceaeitating the tersrination of enployment before tbe detc indicstod iu
i the Contract, the s€aferer shnll be entitled to e.,rned lssgeg, rcpatriation at
I
employer'e coet 8nd one (l) month basic wage ae t€rmination P8y, unlees
arrangements have been made for the eeafarerto join anoLhervesselbelonging
b tht gsme principat to complete hie contract in which case ihe seafarer
I shall be entitlecl to baaicwagesuntil the date of joining thc other vnseel.

ii SECTION 2.1.TERMINATION DUE TO I'h'SEAWORTHINESS


A If ltre venselis declared uneeaworthyby a claseificelionrriety'
port state or {lag state, the seafarer shall not be ftrrcedto sail $rith the vess€I.
!I R. If the vessel'sunseaworthinnssnecesgitatcsthe tcrmination of
employment before the date indicated in the Contract, the eeafarer shall be
t entitled to earned wages!repatriation 8t cost.t0 the employer and termination
!I pay eguivalent to one (1) month basic wage'"

I D. CODEOF COI'IIERCEPROVISIONS.
a. Sailing Mate.
ARTICI-E S28. ln order to be a eailing mate it ehatl be neeeeeary:
l. To have the qualifications reqtllred by the marine or
navigation lawe or rcgulatione.
2. Not to be tliequalified in accnrdance therewith for the
diecharge of hig duties.
ARTICIJ S2?. The sailing mate, ae the a€cond chief of the vesecl'
and unleea the agent orders otherwise, ehall take tho place of the
captain in casee of ab8€qc8,3iskneaal or death, and ehau then assume
all his lxtwera, dutiee, nnd reeponetbilities.
ARTICLE 628. The eailiag mnte muat provide himself with
chartc of the io which he will navigate with the nsLronomical
"u"r
tablee and instnments for obe€rvation which are in ure and which
rr'! n€c3tcar? for tha dirchargo of hie dutiee, boing ltoble for the
accidents w*ch may erieq by reaeon of hie omieeion in thie negard.
553
pt'rs'nstt n t,hl 1\lli1f ,',f,ll, (r*nrr't'rtr.
" ",,,
ARTICLE 829. The sailing mate shall ;rarticularly and pereon.
ally keep s took, folioed and stamped on all it* pages, denominated
'Binnaelc llook- with n mernorlrrdrrrr lt thr. lrcginning
rtating the
number of ftrlios it contains, signed b.r'thc conrpetent authority, and
g h a l l e n t e r t h o r e i n d a i l y t h e d i s t a r r t : c ,t h e c o u r e e t r a v e l l e d . t h e
variations of the needle, the leew:r1'.the direction and force of the
*"ind, the condition of the atmosphcre and of the sen, the rigging
set, the latitude and longitude observed, the number nf furnace
heated, the steam prenaure, the number of revolutionst and ! nder
the title'incidintc," the maneuvers made. the meeting with other
verlloh, nnd ull the dct.ail* nnrl irrr.irlr.ntr*whiclr may occur during
the voyage.
ARTI(lt.f: 6il0. In orek.r {o r.hnngr"thc courgc and to takc the
one most convenient for a g<xrdvoyage of the vessel, the eailing mate
I ehall come to an agreement with the captain. If the latter ehould
l
object, the sailing mate ehall state to him the proper obs€rvatione in
the preeence of the other oflicers of the sea. If the captain should
J etill insiet on his negative decision, the aailing mate ehall make the
proper protest" eigned by him and by one other omcer. in the log
boolq and ehall obey the captain, who alone shall be reiponsible for
the conaequencea of hin deeirion.
ARTIUL'S 631.'Ihe uailirrg nralc slrirll be reeponeible for all the
damagee caused to the vr:rrel and the cargo by reason of hia
negligence or want of ekill without prejudice to the criminal liability
.1. which may arise, if a felony or misdcme*rnor has treen committed.

of
b" Second Mate and lllarine Engineer.
,II
A R T I C I , E 6 3 2 . ' l " h r ,f t r t l o u ' i n g s l r n l l h e t h c o b l i g t t i o n e o f t h e
second mate:
l. T o w n l c . ho v r . r ' l l r r ' ; r r r . r r . r v r r l i oorfrt h r . l r r r l ln r r d . r i g g i n g o f
tht. veaoel, and to tnkr: churge of the pnrxervation of the t&ckle and
cquipment which make up htr outfit, ouggesting to thc captain {,he
repairs necesaary and the replacement of the goods and implements
which ane rendered uselees and are lnst.
1"
2" To take care that the cargo is r*,ell arranged. keeping the
or
vessel always ready for rnaneuver.
3. 'fo precerlc
orr!cr',disr:ilrline, rnel good service among the
creq requecting the necessary orde.rs and Instructions of the
r:aptain, nnd giving him prompt inf<rrmation of any occuffence irr
whic:h the intorvcntion of hin arrtirority muy be ncce*unry.
4. To a.lsign to each ri$ilor the work hc is to do on board, in
accordance with the inst,ruction received and to see that it is
promptly and accurately carried out.

ft 5. To take charge under inventory ofthe riggrng and all the


* equipment of the veesel, if it ehould tre laid up, unless the ahip agent
8 haa ordered otherwice.
t
*
I
E
f
*
a
fr
f
554 AND CASHSON'I'Iil IAW Oi\i'TII.NVSPORTATION
}{OTFJS
AI{D PIIBLICUTILITIES

With reganl to ongineere the following rrrlee nhall goveru:


t. In orrler to lp takcn on lrourd trl rr mrrrine engineer lorrning
part of the complement of s rnerehant vessel, it shall be necesoary to
have the qualificatione $'hich the lawe and regulations require,and
not be diequelifiled in accordance therewith for the diecharge of hie
dutiee. Engineere shall be considered officer:e of the vesael but they
shall have no authority or inteirvention except in matterg referring
to the motor apparatue.
2. l$hen there ere twn or more engincets on board a vcss€l,
one of them shall bo the chlef, and the other engine:rr nnd ell the
personnel ofthe enginee ehall tre under hin orderr; he ehall aleo have
charge ofthe motor apparatu*, dhe rpare pnrte, the inetrun*cnts and
toole pertaining thereto, the fuel, the lubricating material and,
finally, whatever i* entrueted to un cngine{f r on board a vea*el.
3. He eball keep the enginee and boilers in good eondition
antl state olcleanlineae, nnd shall order what nray be pr:oper in ord€r
that tbey may alwaye be ready to work with regularity, being tiable
for the accidente or damages whieh hie negligeuce or want of akill
may eaua€ to the motor apparetus, tn the veesel and to the cargo,
withorrt prejudiee to the crimintl liability which may he proper if
there has been a felony or misdemeonor.
{. He ehall not make any change in the moCor apparatuc, or
proceed to repair the averages he may have noticed in the aame, or
change the normal epeed of its movement without the prior
authorization of the captain, to whom, if he should object to their
being made, be r*hall state the proper otrservstions in the prenence
of the other engineera or officers; and if, notnrlthstanding thia, the
captain should insist on his olrjection, the chief engineer ohall make
the proper proteets, entering the 6sme in the engine book, and Ehall
obcy the enptnin, who, ulonr. xhnll brl rcrponslblo for the
(:ontequencer of hie decleion.

5. He ahall inform the captain of any average which may


occur in the motor apparatus, and shall adviee hirn whenever it may
be neceseara to stop the enginee for some time, or when any other
incident o.ceurain his department of which the captain should be
immediately informed, besidee frequently ndvieing him of the
coneumption of fuel nnd lubrienting mnttrinl.
O. lle rhnll heep n lxrck or mgrrtr!'cnlltd llre'engine hool,,'
in shialr *hrJ, b? rr*tl"rod *!l tfuo dar"s rvrl*'rvt!}* !r, lb. rrrt,ef rtx*
ort;'{nor, crr*h lr, l\re orallp|rt. tho tt*rutror rrf t1,rf$arrc. h*raf*d. tb*
vacuum in the cnndenner" tho ternperaturo, thr degroe ofraturatlon
of the wnter in the boilerr ths concumption of fuel and lubricating
rnaterial, and under the heading of 'noteworthy occurrencea,t the
averagea and maladjustments which occur in the engines and b,oilerq
the eausee thereof and the means employed to repair the eaue
likewiee, the force and direction of the wind, the rigging set and tbe
apeed of the veesel sball be stated, taking the infonnation fron the
Binnacle Book.
$55
rlergong* n" t.*t 1.i,1i.1t"t#ln*',
* " (-.,n,rr:*cc

e. (lrew.

ARTICLR 6ltiJ.'t'he rl'<:ond nrste rhall take command of, tho


vt'rxr'l in r:nre of the inrrbilitl" or rliulrrnlifi.ttlon of the capt$in rnd
the railing mnte, arsuming in such care their poworc rnd
rexponribility.
AIITICLE 6it.{.'Ihe captain rnay makc. up the crew of hia veeael
with cuch number of men ac he may consider prop€r, and in the
absence of Filipino railor:r, he may take on foreigaerr reniding in
the'c,unl,ry, the number ther*'f, nlrt t' exceed one-fillth of the crew.
If in f<rreignporte the captain sh.uld not find a rufficient numtrer of
! " i l i r i n o x r r i l l , r r .h r . r n l l ( ' r r , i n l r l { , r ! ' t hrr".r r . ww i t l r f c r n r i g n o n , w l t h t l r o
croltscntof the contul or rmnrine guthorities.
'I'he
sgreement which t\e eaptlin nray rnake with the members
of the crew and others who go to make up the complement of the
veenel, to n,hich reference ie made in Article 612, nuet be reduced to
writing in the account book, without the intervention of a notary
public or clerk ofcourt ('eecribanoo;, signed by the partiee thereto
and vieaed by the marine authority if they be executed in Fhilippine
territory or by the consulg or coneular agente oftbe Republic ofthe
Philippinee if executed abroad, ntating therein all the obligatronr
which each one contraetr und nll thc rlghir he acqulres rald
authorities taking carc that these obligatione and rightc are recorded
in a clear and definite manne!" which give no room for doubte or
claims. .
The captain ahall take care to read to them thg articlee of this
Code which coneern therr,.etating in said document that they were
read.
If the book contains the requisites preecribed in Article gl2,
and there ehould not appear any signs of alteratione irr ito entries, it
ehall be adrnittcd aa evidence in queetiona which may arlre beiwoon
the captain and the crcw with rerptlct to the agreementr contslned
therein and the amounts paid on accouni of the sqrne.
Every member of the cFew may demand of the captain I copy,
signed by the latter, of the agreement and of the liquidation of hie
wagea, as they app€ar in the book.
ARTICLE &95. A aearnan who has been contracted ts serve on a
veeeel may not r.eecind his contract or fail to comply therewith ercopt
by reaeon of a legitimate impedinrent which may have happenod to
him.
Noither mcy hn trenrf,er fronr ihe eervice of ono veetel to
another without obtaining the written permieeion *lf the captain of
the veaeel on which he may be.
lf, without obtaining said perrriseion, the eeamsn who has
eigned for one vess€l should eign for another one, the cecond contract
shall be void, and the captain rnay chooee between forcing him to
fulfill the genrice to which he first bound himeelf, or at hie exp€nse
to look for a pereon to rubntitute him.
T
566 NO4tsSAND CASESON ITIE I,A$/ ON TRANSPORf,ATION
AND PI'BLIC UTTIJTIES

Furthernore, be ehall lole the wagee earned on hie first


he hed cigned'
contract' to the benefit of the veesel for which
A captain who, hnowing that a ssnatr ia in tbc sarrica of
a nery agneement rith him witbout
another v&e€L should blve mtde
ffiin; r;*;a tl* permircion referrrd to in tbe precGdins
p*"d"pft:", "lu-
ehall tre tubsidiarily reeponeible to the captaln of the
pertr of the
vessel to which the aeaman fliet bilonged' for-that
ti" third paragraph of this article' which
indemnity referred ;;;
the seaman mny not be nble to pay'
which a seaman
ARTICLE tr|8. If there ia no fixed period for
-"y not be discharged until the end of the
has been contracteJtt.
retur-n voyage to the port where he enlisted'
niiftC[,E 6{}?. Neither lna:/ the captain diecharge a seamsn
during the time hi;;;;;;ct except forSust csuse' tle followiirg
"f
being considered as guch:
on the
1. The perpetratiort of a crime which disturbs order
veenel,
2. Repeated insubordination' want of diecipline' or nort'
fulfillment of the eela'ice.
of
3. Repeated incapacity and negligencc in the futfillment
the service he ehould render'
1. I-lallituoldrunkenness'
to
5. occurrence which incapacitatee the eeaman
A n y-work
with the exception of that
perform the *rrttu"te*l to him'
provided in Article 644.
{t" l)r'xcrtion.
'ltre traptain ma.v,howevcr, bcfirre gctting out on a-voynge and
without giving tty refuse to permit a neam&n whom he may
""t"oo, land' in which caee
have engagert to go on board, and leave him on
ha<t rtnderedseta'icee'
he will t * oirtig.a lo pav trim ttis walte8 as if he
the veseel if the
This indemnity shall be paid frorn the funds of
captain should havJ"J"a to" of pruden-ce alf iltUe yterest
of the safety gJ of the farrner' Should this not be the
"taeons
"oa "trvicee
caee, it shail be p"ia UV the captain per*onally'
and uatll the
After the voyage haa bogua, durlng the aame'
-"y not aLandon &ny member of hir
eonclusion thereofJle gome hie
""pt"ii
,,"tu"", by reason of crine'
crew on land or ;;;;;;
authority in the firet
;;;;;-.nt ana aetvetT to the cornpetent
for the captain'
port touchea gfroulJbe p.ip*", a matter obligatory
the voyaEe
ARTICLE 6{}8' If, affer tte crew has been engage4
or of the chariercrs before or
in revoked by tho will of the ehip agent
aftcrtheveee€lhaeputtoeen,oriftheveea€linforthesanereaaon with
trlvo$ a dertinstion iiff."s"t irom thnt fixcd In the agreemont
tho crew, the latter aleiiU" ioa"-"ified on account of tho roacisrlon
of tbe cootraet, aecording to the casee followel
persons 66?
*.r:$?Jlttrfflime commerc.e
,rrt
l. Il the revocation of the voyege ebould be docidod upon
before tho doperture of the ves**l from tho podtn oecb mitor mg1trsd
:l {rI ehrll bc jlvon ona month'r relnry, lx.rlrlor rhet mty bc duo Utro, f"
,()rrl tccondasoe rilh hlr eontract, for the *erv{eer rend*red to thc vcrrol
lirrg up tb the date of the rovocation.
thc
?- If the agreement ehould have been for a fired anlonnt for
t ht' the whole voyaga, that which may be due for celd month and dryt
shsll b€ detcrmined in proportion to the approrinetc nunbcr of
daye the voyago should have lant*d, in the judguont of erportq ln
the rlrrnner esteblished in the law of Civil Procedura; and lf tho
propocod voyage ahould be of euch short duretton that ll lr erlcuht d
at approrimately one month, the indemnlty rhdl be fired forffb€n
dayr, dlrcounting [n ntl cul.r ths cumr rdvenccd-
3. lf the rr.r'<rcation ahould talre place after the vceecl her
put to rea, the reamcn ongaged for a fhod emouat for thc voyrgc
ahsll rcceive in full the aalary which may have been offered thero er
if tbe voynge had tcrminaled; and thoae engaged by the month rhell
receive the arnount correeponding to thc tine tbey night heve boen
on board and to the time tbey may require to snrivs at tho port of
dectiantlon, the cnptrin being obliged, furthermor€, to pay the
c€amen in both ctres, the paneage to the eiid port nr to tha port of
ralllng of tho veceel, as msy be convenient for tbanr.
4. Ilthe ebip agenr oh the charteren of the vecsel rhould$ve
it a dectination difiercnt from that lked tn the egreemea! End-thc
nembera of the crew should not agree thereto, they tbell be $ven
by way of lndomnlty half tbe amount n:ed in eaee No. l, besider whrt
may be,owed them for the part of the monthly wagea correaponding
to the daye which have elapeed from the dat€ of tbeir agraenent*
If tbey aceept the change, and the voyag€, on account ofthc
gleat€r dietance or of other reasons, ehould give riee to an Insraero
{e 8nd
re lrrl|y of wagor, tho latter rhnll be adf uatr.d prlvntoly or tlrrough amlcrble
h csse arbitratorr ln case of dieagreement. Even though the voyago rbould
n'icttr. bo nhortened to a noarer point, thia *hall not give rlre to a rsductlon
lrl thc wrftr .f,Fa€d upon.
l if the
1f
-*oct If the revocetioo nr change of the voyage should eorne frnom the
b€ the rhlppers or charterere, the agent ahsll have a right to denrqnd of
them the ii{srnnit5r which may be justly due.

rtil the ABIICLE fr18. U the revocatioa of tbo voysge abould arles hon
r of his .juftcauro lndependent of the will of the ahip agentandchertenerr,
{re, hia and the vossel ehould not have left the port, tbe menbon of the
be first crss rhall bavo no other right thsn to collect the wagee earncd up
aptsin. to the dey on which the revocation took place.

voysge AIITICL$ 0{0" The foltorlng rhdl bo Jurt crurar lor the
nsvocatlon of tbG voyage"
fore or
'rea8on l. A declaratlon of wnr or intordlctlon of comncrc€ rtth tho
'trt with
Ircwor to whos€ territory tbe vees€l was bound.
lciesion
2. Tho blockadc of the port of itc dostinatinn, nrthebreallag
out of an epidemic alter the agreement.
rs t';"r1li,?,Hlt, nrL\lsP(rHrArtoN
rrr)'fl,s ANI) LrAS i
i$'f

port tho goodt which


3. The prohibition to roceive in eaid
make up the cargo of tbe veoal"
rarne by order of the
{. The detcntion or embarger of the
indepeodent of the will of the
sovern"men! or for;;il;;;;;
uhip agent.
5. The inability of the vessel to navigate
been begun' any <lfthe frrst
AIi,TICLE 641.If, after a voyage has
article should occur' the
three eause" ,r,u,,tio"tJ in the foiegoing
lf* port wtricir the captain may deenn
sailors shall tre p.il-tt
f'""unt of thc vt's*cl und cargo' accoreling
advlsable t<l make f"" tii" is to
to the time they -;; t;;" t.rved.thereon; but if the veesel
the crew may rnutually demand
r:ontinuc its voyage, ihe captain and
the enforcemeat of the con[ract'
fourth cause' the crew shall
In case of the occurrence of the
if the agreement is by month; but il
continue to be paid i"ii'"ug"*'
months' the contract shall be
the detention should ut"o*d threc
rescinded and the u" paid r*'hat they should have-earoed
"irir And if
nccording to the
"r"* t'ovtgu had been concluded'
"";;;;;;titt* sum for the voyage' the contract
the agreement ehould be for a fixed
;.;"tT;,tomplied within the terms agrectl upon'
hrrvc no other right thun to
!n thc fifth case, the crcw shull
dinability of the ves*et nhould
collect tbe wagca t"""tti; f'"t if thr:
lack of skill r-rfthe captain'
have been caused by the negligence.or the crew fcrr the
th; ehall. inderrnnifv
l:ngineer' or eailin"j;;;t;; liability
damagea sufrered, i*"v" *i'ftout prejudicc to the criminnl
which maY be ProP€r'
been engaged on shares' they
ARTICLE 642" If the crew have greater
nhalt not be entitled,'i;;;-"" of tht' rcvoctrtion' rletny' or
but the proportionnte part of
ertenaion of the fundn of the verecl
"";;;:,;;"v'rti"g Into thc common
tlro ilrrh'mnlty whieh way hr. pniel
hy the persont liatrle for sald occurretlcer'
crrrgo ehould b€ totslly lost'
ARTICIJ 643' If the vessel and her both
by reason of o" *'"t"k' all rights "hJt Ue extinguiehed'
""pttrt* wages whatsoever' and ae regarde
as regardo the crew to demand any
to recover-the advancea made'
the ahip agent
carg, -' or of .both' should be
If a portion of the vessel or of ihe
includinithe captain' ehall retain
cavc4 the crew the r.emainder of the
""gd"d;;;i;" t". they gt"
thelr rightc on il,uTi"agu, * it" "n
vt,nset nrr well o. t'"Jtu-'i"""'nt of the f"ttightt'ge of the carro csved;
lhart'r'xhnll not havo nny right
but rallorr who nro ongaged on- ofthe
huil, but only on the po'tlon
whatso€ver on the aalvage ofthc the rcmahrdcr
heightage tu** iitt'tttrhoutd hol'." worhed ti rccover
tlw
'nn thal-t be giuen from thc amount of
of the ehipwrcchei *tLi nadc ond to the risha'
ealoage t^ ,-tji-'ii'"iion -of .thcZfuai
encountertd io oiito ucomplieh the eoluo,ge'l'l

salvagc l;rw' Act' No' 2616' a* infra'


ffi"e was alrcnclyrepealcdimplietlly b1'thr
,t{
't

I l!t'rsrnr
MARITIMT:I.AW
Whu'l'ukt l'att ttl MnnLittlt: ( itttttttcrctl
559

ARTICL& t;44. A riennoan who fallr sick ah&ll lrot los€ hir right
to waget during the voyage. unlets the eick'necs i* the retult of hil
own f;ulL At any rate, ihe coets of the elt€ndance and cur"e ehall be
defraycd from the comtnon fundn, in the form of I lo&n'
If the sickners should comtr from an ir{ury received in the
eervice or defennr of the vernol, the soaman shnll be attended and
curccl at the erpenre of the common funde deductlng, before any"thing
else, from the proceedn ofthe freightoge the cost ofthe sttendance
and cure.
.uTTICLE G{5. If a .ro8man should die during the voyage, his
heirs r*,ill be given the wages earned and not received aecording to
-
hia contract and the caus€ of hio death, namely
If he died a natural desth and wasengaged oD wsse$ tbstwhich
may hrve been esrmed up to the date of hie death ahall be paid'
If the coatract wac for a fixed sum for the whole voyage' hslf
the amount earned ehall be paid if the e€anen died on the voyage
:|
out, ahd the whole amount if he died on the return voyagle"
t
J And if the contrsct wa$ on sbares and death occurlled after the
t voyage was begun, the heirg shalt b€ pnid the entire portion due the
*.r*rr; but if the lattcr died before the departure of ths vetssl from
the port. the beire shall not be entitled to clsim anything'
:o
Iti If death oeeumed in the defenee of the veneel, the aeaman ahall
n. be considered ae livingn and his heirs thall be pnid, at the end of the
hr' voyage, the full of wager or the integral part of the profits
"-o,rot
whieh moy br: cluo him n* to ot,hcr* of lrlr r:lnrll'
it!
In the 0&rr!em&nner, the r.cflmHn captured while defending the
rc) vrrrnel rhnlt be consldor*d pr+ncnt ilr ar t{) r:qioy thc s&nlo b€nnfit{
tcr as the reet; but ehould he have been captured on acc-ount of
or other accident not related to the serwice, he chall
:11 ""rrlo"rne"e
only receive the wages due up to the day of his capttrre'
ARTICLE 846. The vet$el with her eng:ines' riCSrrS: equipment
ost. and freightage shall he liable for the wages earned by the crew
payment to
!oth engaged*per month or for the trip, the liquidatioa and
rrrls take place between one voyage and the other'
A f t e r a n e w v o y a- pg reehcaesdbi e
negn u n d e r t a k e n ' c r e d i t s o f g u c h k i n d
d lrr pertaining tn the voyage ehall lose their right of
tirttt pre fert'ncre.
f tlrt' ARTICLE64?"Theofficerrandthecrewoftheveeselshaube
ir {'il:
frce from all obligationa if they deem it pnoper, in the follnwingcaree:
ight
'f ihr: l. If, before beginning the voyage, the captain attempte to
waa
inllt r change it, or a naval war with the power to which the vessel
'I'tlt*' destined occura.
flsA's'
2. If a disease should bresk out trnd be officially declared an
epidemic in the port of destination.
:t. lf the vessel chould change owner rrr captair'
NO'IE$A!{U CltSnSONTHE IAW ONTRANSPOR?ATION
AND PI.'BUC UTILITIES

ARIICLE 8l& By the conrploment of a vonet rhrll ba nndsr


nto<rd all tho porronn na bo*rd, t?orn thc captaln iCI thG crbla boy,
noccrarr:f for thc Eanagement, nrneuycn, lad tcnvicc, rnd
ihcrofore, tfte oonploarcnt shrll lncluda tbc cr.ow, thc rdfing mrte.,
eagtnen5 ltolcrr end otheremployeoa on bnard notbrvtngapcclfic
dcrllgnatlonr; but lt rhnll not lretuda tho pmranjoFf or tfti p+rronr
wlrqrm tho voeBal b trunrporl,ing.

tv. SUPERCARGOES.3:

ARTICLE 640. Supercarg'oes ehsll diecharge on board the veecel


the administrative dutiee which the ehip agent or the ahippere may
have aesigned tb them; they ehall keep an account and record of
their traugactiong in e book which ahall have the seme conditionc
snd requieites as required for the accounting book of the captein,
and they ahatl recpect the letter in hie capaclty ar chlefofthe veragl
the powero and r,eeponeibilitiee of the captrin ehall cene, rhcn
thene ir a sup€rcargo, nrlth regard to that part of the adnlnlrtrntlon
legittnatety conferred upon the lattcr, but shatrl continre fur force
for all acta which are ineeparable f,rom hia authority and ofhca.
ARIICLE 660. All the provisions contained in the eeoond recdo'n
of fitle III, Book lI, with regard to capacity, mnlrner 6f 6nling
contracte, and lisbilities of factore, shall be applicable to
superca.rlgoes.
ARTICLE 861. Supercargoes may not, without tpoclal
authorlzation or agreemanl make any traneaction lor thclr orn
accouat duringthe voyage, with the exception oftheventuru which,
in aceordance witb the custom of the port of dertlnrtlon, they are
perndtted to do.

!{sit[sj shnlt they be permitted to invest in the retun bip more


than the profite from the venturee, unleee there ie rn eiprerc
authorizatioa lton the principala.

aPrs;ilntly, tbri prmn who actr a* trearurer


of the vt $crl ir the Fureor.
CHAPTER
9

CI.IARTER
PARTTES

I. DEFINITION
AHD CONCEPT,
rn culter {Phiti.t, Inc. t. surpicto Lines,Inc. etc.,t.a
charter party was
essentiallydefinedas a contractwherebyan e*tire ship,
or someprincipal part
of the said ship, is let by thr.'owner Ihcn,r,ft<,:r mcrchant
or other personfona
specriietlLrrneor use lbr the ccinr,e_yance
of'go<l<is,
in considerationofihe payment
of freight.
The term charter party is taken fr"omcarta partito which
literalry mean'
"divideddocument."Certo purtilo rerf'ers
to llre ancient practiceof writing out
the terms and conditions nf the contract in duplicate on
or" pieceof parchment
and then fividing it down the middre thus providing
each p'"*y ,"ltt a copy.z
The charter contract is often referred to as a form of "mercantile
leaeeofor
it involves a charterer, who is most often a merchant nir**ir
or herself, who
desirento lenncn nhi,por vessclowrredb.vnnol.hcrfor the
transpsrt of hia ot her
guds for cornmercialpurposes.'fhe chnrter rnay aleo
involve the traneportation
of persons from one port to another.j rhe parties thereto
are therefore the
charterer,or charter partli and the shipowner.
The contract undoubtedly arose from the fact that
in the earliegt days of
commerce' not too many merchants owned ships or veagerg
becausg the
acquisition of which entailed considerableexpengeor capitalonln"i,
p"*. firuc,
the charterers, with less cost but with convenience,si*ply
reasedships from
the shipowners for the conveyanceof their goodsfrom
orr'epoirrt or au"tination
to an0the'r,or 0f their own trxrrs{fn.q in rrr<krrto r.rjrnxact in far-away
places, "rrnr**r"u
'rht'srrua[i,'in
ttre carlicst da-vsrs still prevailing today,Hence,the
Maririme Ildustv Authority allows the regrstrationof
merchant'vessels
ccrtarrrc,'rliti'rrs e'en if tlreyare 'rrl; c,' a bareb'at "ra",
chartcr.a

r(l.lt \o.
l j l i l 6 t i , S c p t e n r l r t . ri J ( , !1, 9 g . 9 J, l i r S ( . l K { i ( ) 9 .
r(fhorlr..r.arrd
Gilcs, Shippirtll.latr
' : l l f i l r t n r , ' l ' ( ' . 1 ' h t l r l t l t t t r r ( ' t , u t n, (t tt t. ht t lt l!rtll l. ,nr r I l { }
l l , H l t l t r . r r r r . lr.li r l, ; 1 1U . 2 0 ? , r : r t r r r g l ) r : l V i x n , p .
l ' r . 1 7h t . n . r r r i r l l r . rr r : l i , r r t d t o a r r i l M a r l i n
2{)2.
rMAltlN^
r l t : l \ l o R A N I ) t r I f ( : r R ( : r : r . A l t f , i ( ) r , r : is r . r i r , go f
t ( x 1 3 ,S u , o h a p r . r : r ? .
662 NO'I'ESANO CASESON THI' t".{WON TRAN$PORTATION
AND PUB',I(; TJTILITINS
li
II. DIFFERENTKINDSOF CfIARTERPARTIES,
There are two (2) main categoriesunder which charter parties may fall.
These are: (l) The Bareboat or Demise charter, and (2) contract
of
Affreightmenf.The latter is further subdividedinto (a) Time Charter
and (b)
VrryageCharte,r.

A. BAREBOATCHARTER.
In a bareboator demisecharter,the shiporvnerleasesto the chartererthe
ivhole vessel, transferr.ing to the latter the entire command, possession
and
consequentcontrol over the vessel'snavigation,including the mastel and
the
crew, who thereby becomethe charterer's "servants.'As the shipowner is
not
normallv reqtriredto providr fnr l r:rt,v,', th,: charterer gains ponseasion of the
ve.gsr:l"l)$r'c,"hcllcc,tlre terrn"bareboat."'l'hus, thc chartererbecomesthe owner
"pro har:uic'r,''ol'thcvesselirincehe rnunsthc veirsll wit,h
his own s+rtof magter
ttttllt'r|w, t'lli'r:livcl.y
lrrrcotttitrg
t.hr.owrrt.r
lrrr tlrr vova!{t,or serviceutiputated,
sulrject,howeverto any liabitity frrr darnagesarisingfrom negligence"s
I\ioreover,the bareboatcharterer assumr,srtti a large extent, the eustomary
rights and liabilities of the shiporvnerin relation to ihlrd personswho
may
have dealt with him or with the vessel.In this latter instance,the -"rt".
otihl
vesselis the agent ofthe charterer,and not ofthe shipowner,and therefore,
it is
the charterer or owner pro hac uice,and n.t the generalowner ofthe ves'el,
who is liable ftrr the exPt-'nses of the vo-vage
incluriingthe wagesof the seamen.6

B. CONTRACTOF AFFREIGHTMENT.
In a time charter,the vesseli.sleasedto rhe chartererfor a fixed periodof
time, rvhereasin a voyagecharter,the vesselis leased{br a singleor particular
voyage.In both the time and voyagecharters, which are said to be contracts
of
affnrightmt"nt,thc chartcrerhires the vcssolrrni-y,
cither fitr n clcterminate period
o1'timeor fbr a singleor consecutivevoyage,rvith the shipownerproviding
for
the provisionsof the ship. thc wagssof the mrrsturand crcw,and ihe o"puiru,
for the maintenanceof the vessel.T
ln Litonlua Shipping Company, Inc. u. Nationol Seamen Boarcl,et al.,s
petitioner Litonjua, as the duly appointed local crewing managing
office of
l"i*i"{ shipping corporation which had chartered the I,lv n"no" Bay, was
held liable together with Fairwind for the damages suffered by piivate
respondent candongo who had been unjustly dismissed as a Third Engineer

- ^ - . l c o a s t w i s e L i g h t e r a g e c o r p . r ' . c o u r t o f A p p e a l s . c / n / . , G , R . N o1.1 4 1 6 ? . J u l y 1 21, 9 9 5 . z 4 5


scRA ?96.
Shipprng Co. r".Nacional SeamenBoard, er oi., C.R. l{o. 51910,Augrxt 10,
-_^ ^^Itgry-"a lgg9,
l?6 scRA 189.
TPlanter'ePr'ducts,
Inc. v. court of Appeals,et c/., G.R. No. r01s03, septemher 16, rggg,
226 SCRA 478.
eIbtd.
MARITIME I,A}V 563
Chrrrler tr'nrtie:r

even before his eontract had lapsed. Candr;rrgoiiacl earlier been hired by the
ve$sel's master as a Third Engineer for a period of twelve monthe. The Court
l-:rll.
predi_cat9dits ruling, among other rnatters, uprrn the ndture of the charterparty
ct uf
that had been entered by Fairwind, which was that of a bareboat or demise
d ttr)
charter. It was obgeryed that:

"In modern maritime law and usage,there are three (3)distinguiahabte


typ€s of charter parties; {a) the "bareboat" or "demie€" charteri ft) the "time"
charter; and (c) the *voyage" or "trip" charter. A bareboat or demis€ charter
.r the is a demise of a veesel,nruch ag a lease of an unfurniehed house ie a demise
r attd of real property" The shipowner tunrs over pos'ession of his veesel to the
d the charterer, who t}ten undertakes to provide a c?ew and vistusls and suppliea
g not and fuel for her during the term of the chartcr. The shipowner ie not normally
required by the terms of a deqrige charter to provide a creq and so the
if the
charterer gets the "bar€ boat," l.a, without a crew. sometimer, of cours€,the
;Wn(ff
demis€ charter might provide that the ahipowrrer is to furnish a srastsrand
aster crew io man thc vees€lunder the charterer's direction, such that the msster
:ated, and c'rew provided by the shipowner becomethe agents and servantg or
employeesof the chartrrer, and the qh'rtav1,1rand not the owner) through
the agencyofthe rnaster,has possessionand control ofthe vessetduring the
ma11'
charter period.A time chilrtcr,upon tlxr other hand,likc a deminecharter,ie
, l'nll)"
n contract fbr lhe use of r vcssel frrr :r specifiedperiod of t,ime or for lhe
rrft lie duration irf one or more specified',.vages.In thjs case,however,the owner of
e. tt ls a time-charteredvessel(unlike the cx,ncrof a vesselundera demieeor bare_
€sSt:1, boat charter), retains possessionand control through the master and crew
ln('tl ,'i who remain his employees.what the time chartcreracquiresir the right io
rrt.ilizr.the carrving.crrpaeil.v rrnrlfirr:ilitir,s
ol'[hl vrrxee!nnd to designaleher
rft.stinirtiuns during tlrr tcrrrrol'thc chnr:tl.r. A vo,vage charLcr,or trip charter,
i-c riltritl.rrt cr.tntracl.
of :rlli'riglrrrrt,nt,
ih;rLis, :r crintl'uclfor the carriageof
griotls'f'rontorl('(ir nt{}r('porl,sul'lorrr!irrg trrurrr'(}rnl(}rcprlrl.sof unloading,on
lrt,l111
{)noor on a seriusof vo_yages. In n vt',vlgt:ehariur,mastcrand crcw remnin in
rtrtltr
t l r r .r ' l r r l l l o v( ) f t . h r .r , r v r r l ri l f t l t c v r , - * r , l
it'tr rrl-
x't'lrXl It is well-gettled tlrlrt.in a dt.,rnt,"rt,{)r' l)iul lroirt cirirrtr:r,tlrc ch:rrterer ig
ng f(,r treated as oBtnerp.o huc t tt:t'of thr vt..ssel,llrc charterer asaurning in large
.rtil slrs measure the custtrmary right^r and liatrilitips of the shipowner in relatinn to
third personx who havt dealt with hirrr or wrth t[c) vessel. In such caae,the
Masrter of the vessel is the lgent. of t.hr.r:hnrtcrer irnd nnl. of the shipowner.
'l'ltl
c l t i t r l $ r t ' r I t r t l w l u , r , r , r t h t t t 't , * t ,, ; r r r r lr r o l .I . l r rg. t . t r r , r t loI w r l l r o l ' L l l r rv r t n * $ 1 ,
i,,,,,1 l r { l r e l t l l i l r l r l t l i r r t i r l r x i l ( , n H . , rol l ' t . } r r .v o y r r 1 1irr,r t . l t r < l i n 1t h1e w n g r x o l ' t h e
Ht.iltilt.il.

't \ :tt t'


't'r
{l |:( ItI. EFFEGTOF CHARTERON CHARACTEROF CARRIER
Generally,the characterof the comnroncarrier as such is not,affectedby
,9,i : t5 the charter party if the same is a contract of' affreightment.Thus, in Caltex
(Phil'), Inc. us. sulpicio Lines,Inc., etc.swhich involved caltex (phil.), Inc.'s
\ !'l1q
lease, udo a voyage charter, of the v{issel "MT vector" owned by respondent
- ! (i.tli.

'lhid
56{ NOTESAND CASASONMIP T,AWONTRANSPORTATION
AND PUBTJCUTILITIE$

Sulpicio Lines, Inc., the Supreme Court characterized the said specieofcharter
p"JV * one which does not affect at all the naturs of the business of Sulpicic
of
Linee,Inc. ae a commoncarrier. consequentll" the rights andresponeibi'lities
from
ownernhip still restttl on fhtl owRor,*rtid tho t:lrartt:rlr wan thereby frmd
any liability to third personsin respectofLhe vessel'
of
The High Court, in so concluding lhereon, relied upon the earlier case
where it held that sincethe parties
PlantersPriucts, Inc. us.Court of Appeol"s,1"
in the charter entered into a tirrre charter-party,the commoncarrier remained
a commoncarrier.
. I t i s t h r , r t . f l r r r , i m l t r r r n t i . u ';tt' l lht irtltr l i t. . l r r ' l . i .rl,rr; t l lr r , n t l r t n : rssu c h .
ur
nr:twithstirrrrlrlglhe charter ol lhtr whole'tr ltr.rrttotlrrl'lr vt,s''iclby ont:
ig linritr"rl t., Llrl shilr only, as in the Case
nrorl p{rrs{(}ns, Jrr6virllrltht.r:hlrrtlr
o l i t l r t , , r r . l r ; r t l t . rv' 0 \f , ! l l l 0 c h r t r l r . r ' l t i : r i l l r l y $ l r l ^ t r l l i I r ' l t : r t ' l 0 r t t r l : l t t d l ' ' { l x r l l r
t h r : v g s x l : rl l r t l r t s c r r w , l t r ri n t t l l i r r r : b l r nutr t l t ' t l l l r i t ' t l r l tilt t ' t t t l t t t t ocr a
l rrttr
becomespnvilte. At leasl insofaras the part itrulil r \'(r.\': tgtr crrvtring thc charter-
party is concernecl.Intlubitabll a ship-o*rrcr in a titlre or voyagecharter
,etains possessionand contr'l of the ship, *lthough her holds.may,for the
moment, be the property <lfthe charterer''
we quote with approval the observdt.iotrs ol'lt:roul {-)olinvaux.the
learn,'tl batrister-at-larl--

"As a matter of principle,it is tliflicult ro iind a valid distinctiontretween


cneenin which a ship ic ,io".l t , t,hr:grrxls rrfttncitnd of gr:veralpersonS'
",rnu*y
Where the ship herself is let lo a chartr:rer,srl that l){rttrkcgover the charge
and control of her, the caseis different; the shipowner is not then a carrier'
stnct
But when her senices only are let, the same gr(iur)(lstirr inrposinga
one or The
nranl'. rnaster and
responsibilit-yexist, whether he is emplo-vedb,v
the freight,:r' iri each case is usuaily
the crew are in each casehis servant$,
without any representativeon board the slrip: the sarneopportunitiesfor
fraud or collusionoccur;anclthr: santediffrcrrlt.V itr 'liscovttringlhc truth as
to what has taken placearisesx x x'"

IV. PERSONS WHO MAY MAKE CHARTER.


part, who
The owner or owners of the vessel, either in rvlrt,leor tn majority
into charter
have legal control and possessi<lnof the vcsscl, rnay virlitll.y entcr
person called a broker may. however, intervene
parties"with a charterei. A third
in the execution of the charter between the principals''i

The charberer,by himself, nral'subchar"ter'lheerltire Vc"ssel to a third person


charter regarding
but only in the event ihut th"r" is no prohihition in the original
charterer for
nny suircharter. In such a case, any cargo cleiivered bv the second
subcharter, where
loading may not generally be refused by the captain.r2 The
is an indepentlent contract by itself involving nnly the chert€rer
entered into,

'926scRA 476[19931.
ttArt.654,Codeof Commerce.
t2Art. 679, Code of Commerce.
MARITIME I^AW 686
Chartr:rParl.ier

and the subcharterer and thereforc doesnnt give rise to any aontrac'tualrelation
between the general owner and the subcharterer.
Part owners of the vesgelare not precludeclfrom chartering the aarnefor
t"heir own commercial purpos€s. In fact, such part owners eqioy prefereDcein
the charter ,f the veeeel over other pergrrns who offer equal conditione and
li eight.''
In the Codeof Commerce,the ship agent is not allowed to make contractg
for a new charter unlese he is properly or duly authorized by the owner, or by
virtue of an authority given by a resolution of the majority of the coowners. He
may, however, make such charter if the same has been extended to him in hig
certificate of appointrnent.ra
on the other hand, it is one of the inherent powers of the captain or master
of the vessel to enter into valid and binding charter parties, but only in the
cvent of ubserrceof the ship agent or cr.rnxignee, and only if the aaid captain or
mar;teracts in accordancewith the instructions of the agent or owrer and protccts
ttre latter's interests.15
However, the valid.ity of the charter is not affected by the circunstance
that the Captain or master who executed the charter rriolated the orders or
inst.ructiclnsof lhe agent or owner.In fhls latter caee,the agent or owner shall
have a right of action to recover damagesagainst the erring captain or magter.16

V. REQUISITESOF A VALID CHARTERPARW.


As the charter party is a contract, it is therefore to be governed by the
drrncraiprinr:iplesgovernirigorclinsry contracts.Hence,the parties therein are
i freeto st.ipulateupon suchterme and conditionnthat would cuit their purpos€n,
i,r subjectto thc c'aLtect
that theseshouldncrlbt,cr.rntraryto law or public policy.r?
t Thus, the matfer of the time or order in which the loading and unloading of
!
cargo would take place may be governed by the special etipulation that the
parties have agreed upon under the charter party. For ern-ple, it may be
etipulated that the loading of coal would be dependent on the output of the
mines.ts
The requisites of a charter party may be enumerated, thus: l.) consent of
the contracting partiea; 2) an existing veseel which ehould be placed at the
dispoeitionof the shippe4 3) the frerght; and 4) comptiancawith the requirements
x'rs()n of Art. 652 of the Code of Commerce,rewhich requires that:
rrding
rer for
* hi'.re
rrl tl f ef :3Art. 593, Code of Commerce.
r'Art. 598, Code of Commerce.
ttArt. 609, No. 4, Code of Commerce.
r'Art. 655, Code of Commerce.
r?Art.l3U;, New Civil Code.
rrO'Farrely Cia v. Manila Elertric Company,No. 31222,October29, 1929,54 Phil.
l.
r r i M e r t i n .s r r p r n .
I
{

1
q
N(}TBSA.}IDOA$DSON THI: I".dWON 1'I$NST'ORTATION
AND P{,IBLICT'TII,ITTES
I
"A chertcr party must be drawn in tluplicate and aigned by the
contracting parties, and when either does not know how or is not
ahle to do ro, by two witne*res at hir rr.qu*rt,
The charter pnrty ehall contain, beriideg the conditions freelv
rtipulatr.d, the followlng ei nrunrrtn nc{!ni
l. The kind, name, tonnage of the vensel"
2. Her flag and port of registry.
g. The nnme, sulr.narne, and domicile of the captain.
4. Tbe name, mrname, and domicile of the ship agent, if the
latter ehould make the charter party.
6. The name, surname, and domicile of the charterer. arld if
he states that he is acting by commisaion that of the percon for whoee
account he makes the eonlrnct.
6. Tbe port of loading and unloading.
7. The capacity, number of tone or weight, or measu.rement
wlic| they respectively bind themselves to load and trane;rcrt, or
whether the charter party ie total.
8. The fteight to be paid, stating whether it is to be a fixed
amount for the voyag€ or so mueh per month, or for tbe apace to be
occupied, or for the weight or mea$urement of the go<dr *aking up
the cargo, or in any other manner whatsoever agreed upon.
tf. Thc nmerrrntof prlmtge to lrrr lxrirl the cuptain.
lo. The daye agr.eed upon for loading and unloading
ll. The lay days and extra lay days to be allowed and the
denunage for each of them to be paid."

Primage that is refened to in paragraph 9 refers to paymenl for the use of


fhe equipment belonging to the captain.
Where the charter is executedwith the intervention of a broker who certifies
i,r,lhe autlienticil.yof the signaturesof the parricsa* having beensignedin hie
lhe chlrtt'r contractwould conrrtitul(,firll evidcncein court. In caeeof
Pr(fn(!nc(!,
discrepancybetweenthe copy ofthe broker and the parties, that ofthe brskey's
would prevail if the same should have beenkept in accordancewith law. However,
even though no broker intervened in its execution, the charter shall nonetheless
be admitted as evidencein court if the parties thereto duly'acknowledgedthe
signaturestherein to be their orvn.:,r

VI. FREIGHT.
The parties themselvesnray fix the manner or form in which the.charter
price or money shall be satisfied. In most cases,the compensationto be paid for

sArt. 65"1.(luir'of
Commercc.
|t8fryfitutkdrfiru* afq5*{s&a.8'uF&rltr&ptrn*r*xtrffisnlge**.
I

$
:l MAtrtl'tMEt-AW
Oharler Parl.ios
65?

the utilrzationol'the vesse I by the churtererwoutd consistin a fixed sum of


m{rnr'}', particrilarly if'r}rechlrrtr.rinvolvesa contractof affreighmentin which
case"the cha:ler price or money would be gor:ernedb1,the principles relative tn
freight. otherwise, the parties may agree rhat the compensationbe in some
other form, as where it is rnadedependentupon profits earned by the charterer.
\l'ith respect to the freight, it shall accrue according to the conditions
stipulated in the contract. Otherwise, if there should be no stipulation to that
effect,or there is but the same is ambiguous,then the rules shail be that: l) the
freight shall tregin.to run from the day of loading on the veseel;2) in charters
with a {ixed period, the freight shall begin upon that very day; and 3) if the
freight is charged according to weight, the payment thereof shall be made
accordingto the groasweight, including the weight of the containers.rr
\!?rere the goodswere jettisoned for the common safety,freightage shall
not accruethereon, although the same will be regardedu* a get average.z?
If the goodwere lost on accountof shipwreck or strandirrg, oi d,r" "ral
to seizui by
pirates or enemies,no freight will accruethereby.However,if the freight shouli
have been paid in advance, then the same should be returned unless iherc is an
sg"eementto the contrary.a

d In one case, the failure of the captain or master to carry the goodeon his
,e ship or to eendthem to the point ofdestination in another vesselresult€d in the
p abandonmentupon any claim for freight thereon,exceptwhere it has beenmade
pa.vablein advance.?a

VII. DEMURRAGE
AND DEADFREIGHT.
Arricle652tpar'.10r proi'idesthat thc tirrrelor loatlingand unloadingshall
be provided for in the Charter Pafty'.The period so stipulated is what is t<ntiwn
ir.sthe "lay days.'
e t t s eo f
I)emurrage,rn the strict senseof rhr-'l,r,rm, mean8a $um of moneydue by
('rr;corrtractIor lhc dert.ent
('xl,)r ion ol'thr: vt:ssrliir kladingor unloading,beynnd
ttrtrfies the time allowedfor that purposein the chilrter party"f In otherwords, if the
'd in his vesselis detainedbcyondthe numlxrrof tia.!slrgrcedugxlnin the.chartercontract
t cu:ieof for the loadingand unloadingof cargo,or for evenrualsail, the charterer shall
br,rker's answer for the demurrage incurred therebv the sum of which is usually fixed
i()\rever. tr1'the parties in the charter party.rt r
:theless on the other hand, where the charterer faiied to occupythe leasedportion
lged the of the vessel, he may thereby be made liable by lhe shipo*tr"t ior the
-deatlfreighr"
that occurred.??

IArt. 659,
Code of Cornmerce.
r?Art.660, Cbde
of (lomnrlrcr,.
elt rrrtcr i'Art. 661, (lode
of Cornmerce.
pard for racoinpagnie-de
C o m m e r c e v l { a m b r r r g A r r r r , . r i c : rN
, o. togu6, March 31,1917,36 phil. sgO
-?rr Am .lur
2d 1052.
r"'Nalional
F'tmdAuthorit.,v v. Court of Appcals, l} l I SCRA TO0.
t;lhtd.
{
.il
r{5
s;
#
{r
' rlll
I
5bE NOTESAND CASESON THE I.AW ON TRANSPT}Rf,ATION
I
I ANDPUBTIC UNLTNES
,l
'l
I A. COMPT,ITTIrION OF I,AYDAYS.
I
J
In connectionwith demurrage, it has been observedthat unleesthe contrary
intention appears in.the charter party, the stipulatcrl lay days do
n.t begin ti
run ngainst the consigneeuntil the veeselhas arrived nurtt, or other irsual
and customay place for loading or unroading,and is "iin actual readinesa
to
dischargeita cargo in accdrdancewith ite legal obligation.$

- If no lay days is provided for in the charter party, it is understnadthat


the
charbrer will unload and discharge the cargoeswithin a reasonable
time or
*"iLh reaironablediligence.s

VIII. RIGHTSAND OBLIGATIOI{SOF THE CHARTER PARTIES.


A. SHIPOWHEROR CAPTAIN.
As in any ordinary contract, the parties in the charter agreement have
corre_epondingrights and obligationn. Apart from those ncorlirrg
from the
stipulations of the parties, the atatutory rights and obligations of the
charter
parties are to he found in the Cndeof Commerce,The eviilent
failurc or ref,usal
on the part ofthe shipowneror ofhis agenteto receivecargo which
had been
contractedto be transported'under the charter party conetitutes a sure
breach
of the charter party, as to warrant a euit for damages by the charterer
f;;;h
breach.s
With reapectto thc shipowntr or the copuun,nrtrrtigrrrlrry br: made sl'
someof their primary rights and obligatione in prcrpercases,thus:

l. The shipowner is bound to obeerve,relative to the charter


partv, the capacity of the vesselor that which is indicated expressly
in the registry a margin greater than two percent between that
representedand her actual capacity which is not allowable.3r
2. Generally, any loss incurred by a shipper whose cargo is
refus€d on accountof the receipt by the shipot"ner of a greater amount
of cargo belonging to other persons ehali be for the account of the
ahipowner in the form of indemnity. If there ia only one shipper and
therp wae apparent fraud or erron inthe vessel's th" ct arte*"
may opt to have the freight reduced if he does""p""ity,
not choose to regcind
the charter, with a further right to be indemnified therefor.u
3. Ifthere should be several charter parties, and due to lack
Epace'not all could be accommodatcd although not one would want
to rescind the charter, preference shau be given to the peraon who is

*70Am Jur !d 10t53.


tlbid,., at p. 106,t.

]Bohn, Moyor & Co. v. Ilanco Erpanol-Filipino, I I phil. 253.


ItAi. 669, Code of Com.oerce.
aArt. 679, Code of
C,omrnerre.
frir
4

i':,lili,ii,T,',i)
first in loading hrs cargc',rrrrdrhc rrt.lrr:rs.sh.ll have preference in the
order of the dates o{' their charter. In the atrsence of priority, the
Y
charterers may choose to load in proportion tq the **or.rrrt" of weight
or space that lhey ma1'have contract*:d, with a right to indemnified
I for the loss.s
(,
4. T h t ' s h i p o w n e r . u r i t l c r c t , r l l r i n c o r r d r t i o n s ,m a y e f f e c t a
substitution in respect of the vessel which had been initially chartered
wrlh t.hat of annther, srr long as Lhr-'substitutc versselhad been dulv
inspected and is seaworthy.$

l-r l'urthc'rmore, afi.er three-lllUrs ,l the vessel is loaded, the


shiporvner ma)' not suhstitute rhe charterecl vessel r,r'ithanother one
unless he procures the consent of the charterers or shippers.
otherwise, he runs the risk of answenng for all darnages suffered
during the voyage by those who did not give their cansent.ss
'l'hc
6. captain ulay not, il'the vessel has becn chartered in
v v h o l c ,a ( : c e p tc a r g o f r o n r ; u r y r t h r : r I X r r s ( ) nr n k : s s t h r . t : o n . s e not f t h e
t ' l u t r t t ' r l r i s o l r t : r i r r r , t(l). t l r r : r , n . i s tr l:r, r . c r r p t ; r i l ri r r i r yl l e c o r r r p e l l e d
by
t h r ' c h ; r r t r , r c r t o t r n l r . r r l t l r t : s a i d < . ; r r g or r r r d1 r i r . r . t ,t h c c h a r t c r e r a n y
drrmlrgt' that ht: nra-vsullcr on ac('ount tht:ret.rf.,rs
'l'hc
7. s h i p o r v n r r n r a v l l s o b r r g c n er a l l y . h e l d l i a b l e f o r
d a m a g e s i n c u r r e d h . vt h . c h a r t c r c r r l , e t r t h t : r ' o l r r n t a r yd e r a y o f t h e
c i t p t l r r r tr r r ; l r r t t i l r gt o s l l r , l ) n , ! " i ( l { . (l rl r . r v ; r sr . r . t l r r l s l . eldl y; w a y o f a
t r o l . l t r i i iol r , j r t r l i r . i rrrrl o t . r t rl"u, 1 r 1 !l o s r , , r : r t . l r r ,
1 l r . 1 1 l t i. nr r e . r , ?

B. CHARTERER
'fht
rigirts and obligalionsof []rr.,r.hnrtcrc'r
nray be sumnarized as follows:
1. As previouslynoteri,the charturer shall have the right to
sulleltilrtt:rllrc vr:sstlt' a tlrir"dl)crso]l'n11,illre is so authorizedby
the shipowner. otherwise,he shall be liableto rhc shipownerfor any
clunr:rge catrsedto the laltcr by virtue ol'the sutrcharter.s
2. A chartererwho l'ads grxxlsciifrerentfr'm that contracted
upon, without the knowledgeof the shipowner or captain, and which
results to damagedue to confiscation,embargo,detention,and other
causes,to the said shipowner,shall be liabxeto indemnify the parties
injured thereby.3s

KArt, 649, Code ofComrnerce.


sArt. 670, Code ofCommerce.
sArt. 670, Code ofCornmerce.
tArt. ti?2, Ctde of {lommerce .
r7Art.6??, (lode of Commerce,
'"Art.
l l 7 C , C , r d eo f C o n m o r t ; r .
nArt. 681, Code
of Commerce.
I 570 NOTESANDCASESONT}IE I,A$' ONTRANSPORTATION
ANDPT,'BLIC I,rNLTTIES

:]. Should illicit cnrgo lrc shippedhy the charterer in the


chartt'redvesselwith the knowledgeof the shipowneror of'thecaptain,
gaid chartcrer shall he jointly liahle with thc shipownerfor all
dtnrrgcs causc<Jto the other shippers."'
4. Thc charterersand shippersma1'not, for the payment of
freight and other expensesincurred, abandon the goods damaged
due to inherent defectsor by reason of fortuitous event.Abnrrdonrnent
may be proper howeverif the cargo,if consistingof liquid, may have
leaked out and none remains exceptone-fourth of their contente.{r

IX. EFFECTOF BILL OF LADING.


If a bill of lading was issuedlry the shipowner lo the charterer,the charter
party still governs their rights and the bill of lading may be used as proof of
receiptofthe goods.
However, while the bill of lading does not operate as a new contract or
modify the chartcr pnrty as between the shipownt:r and the charterer, the bill
oflading doesconstitute a contract between the vesseland the consignee,and
neither he nor his t'ndorseeis bound by the terms of the charter party of which
he has no notice or knowledge.{?

X. CODE OF COMMERCE PROVISIONS.

PAR'I'I
}.() RIV1SAND }iT' }'E(,:TS O }' C I IA III'F] It PAITTIES

AR'IICLE 652. A charter party must tre drrwn in duplicate and


eigned by the contracting partier, and when either doee not know
how or is not able to do eo, by two witneeaes at hin requeet.
The charter party ghall contain, beeides the conditions freely
rtipulated, the following circumrtonce.r:
l. The kin4 na&e, and tonnage of the vesnel.
2. lh fllg nnd port of rt'gintry.
3. The name, 6urname, and donricile of the c*ptain.
4. The name, surname, snd domicile of the ship agent, if the
latter ehould make the chsrter party.
5. The narne, aurnamer and dnmicile of the charterer; rnd if
he etates that he is acting by cornmi$ion, that of the pereon for whose
account he makee the contract.
6. The port of loading and unloading.

{cArt. 682, Codeof Commerce.


"Art. 687. Codeof Commerce.
{2?0Arn Jur 2d 600.
,t
$tAiil.l'tln, lr\\1,
( l h ; r r l , . r! ) i r r t l . . 5?t

7. The r.apacitl., ntrmhr.r,()f


m('aauremenl which thr:y
rr:xpectivcly Sind.t{)nA or the weight or
to transport, or whetheitnu tbems€lves to toad and
.n""t., p"rty ir total.
8. fhe feightage to be pait!, stating *,hether
fired amount for the it ie to b€ a
.r"1ll"*""r, p., irorrli,-;"',i
to be occupie4 or for"o-yrg. *h,
tie l.ishJ";L€&aune of the g@dd "o"..
the cnrgoeonsintr.or in any,rtlr,r. of which
^r.rrr*crwhrlnooveragpoodupon.
0.
The amount of primage to he paid
to the eaptain.
lO. 'lhe
dtys agreed upon fir luadingand
unloading.
ll. The lay dnye and extra lal,days
demurrage to be paid fo";;;;;h;,. to be s.llowed and the

1 t'I' ARTICLE 6Eg. I-f the cargo


should be received without
iof charter party haviugbeen the
' aa execut€d ir aercordance "i;:;,;;;'conrract eba,, b€ underatood
*itrt *rn"i appears in the b'l
the eoteevidence.of tiue *iii-"u*""T of tadirg,
or the righir and obtigati""" ;;;Xlii r" ihu **.go i"" Jrtir*,rrrog
bill the Chartener. atisnr, of
(rt rae
the captaia,
C,EplArn cnd of,
"guot,
rnd
ARTTCLE 664. The charter
ieh partiee executed with
intervenrionof a broker, *u" the
cignaturce of t'he contracting ""*rn:*';;.";;il;;J, of the
purtiee becauoe they were eigued
hie preeence, shalt be tuu in
#;;;;;'"orrr.r; ond if they ahould be
conflictiag, that which accords
*i il ;;. which the br.t."' iL
in his regietry, if Lept in eccordri." rc"p
*ltr, law, ahall govern_
The contraetr ehall aleo be admitted-
a broker har not taken p".t;h";;;i"l ae evidence, even though
aehnowlerlc thr rrgnnt'*" ,r rt* eont,rnctingprr*or
t* ir.. ii"'""rr,,, n* therr onrr.
If no broker hae intsrvened
in the charter party and the
eignaturee arc not acknowledgea,
a""Ut* ej.all be decided by qhat
ia provided for in rh.e.bin-
the proofe submitted by the"i;il;;;i i., ,r,* *u"oi. t-n*Lr, ry
p"J.!...-"
ARTICI"E g'b' charter parties
execured by the captain in the
of the-ehip agent atrattue varia
*Ti"r
tn executin* them h-eehould en, efrective, even ihough
have ncted in vioratiori'j'ril"
and inetructione of the utrlp
the ratter ".a.."
nharl
havc'a right of seti'n rtr;"it-;;.',.uif,i"
"g";t;t-"-ii.rr'r,*n'ut
damagtx.
"'r .",,!r'r'r for
r 0 r Indernnlficetion
I n O e m n l I l C A l of
ARTICLE S56. the charrer party the time in
loading and unloading
]f,inare which the
to take placc is.not etated, the
the port where theee acte ueages of
take place shalr be observed.
stipulated or the cuetomary After the
pu.ioa- t po*o.a, and there ia no
expreas proviso in th.e.ihartei "L
p.""tv fixing the i;d;;;tior
delay the captain shat be the
""titrJJ;;irriarra- a*-u*ago for tho Iny
rav d"v" o;i;;-;;;";;;" er.psedin roadinsand
*il,:Ti-:xtra
A t t ' l ' l ( : 1 , ' t t 5 ? . , 1 fr l u r i n g
thr: vry.gr. the veeael ehould
rendered unaeaworthy, the be
cait.ir, rro obriged to chartcr at his
"rr"rr
I
672 NO"ES AND CASASON THE T.AWON TRANSPORTATION
AND PUBLIC UTII,ITIES

erp€o"€ nnother one ia good condition


toreceive the cargo aad carry
it to ib deetinatio4 foi which purpoe€
he sha[ be to !oo[
l":l-rryrt noronrvat the po*ofaivar burateo i" rrr""br;ril
wlrhln dietance of li0 kitometers. "ri?ifurhood
Ifthe captaiq, through indolence or malice,
ehould not furniah
a vecs€l to its deetiration, the ahippera, after
requiriog iiu
to char.ter a veesel with:r, an inertindible period ;;;;;;, ""ptrio
and petition tbe judicial authority to eummariry "o.
approve the charter
party which they may have made.

The en,ne authority chail judici ally (-por


la uil de appremio.)
eompel the captai\ to earry iut,
for his account and under hie
reeponeibility, the ehar'tcr uade by the
nhippers.
Ifthe captain diligence, ehould not find a
vesserfor .notwithntaldinghis
the cha'ter, slalt depieit th" ;";e";;-diiio*"r
the ahippere, to whom !e or
he shalr com*u.ric"te the facts on the first
opportunity which pres€nts itser! the
freight being adjusteJ in euctr
casee by the distance covered by the
ves.sel, *itil ".r'
,r,, I,igtt
!5'"1 ,o
indemnification whatsoever. "rry
ARTICLE 688. The freightage shall ac<.ruc
according to the
conditione stipulated in the coltract,
and should they"not be
expreeeed, or ahould they be amtriguous.
the following shall be
obeenfed: ""i""
l. Iftheveesel hasbeen chartered by months
orby days,the
freightage ehall begin to .rn from the
dap' tlre r.ading .f the veesel
ic begun.
2. In charters.maele for u fixtrt pr:riorl, thc
frciglrttgc shall
begin t<t run from that very day.

3. If the freightage is charged ac<:ording


payrnent ehall be rnade according to wcight, the
to gross weight, including the
containere, euch ae ba*ers o" uoylth.i
objects in which tn*
ie contained- "."go
ARTICLE 059. The merchandise eold by
the captain to pay.for
the neceeeary repairs to the t rrU, -""iinery
or equipment, or for
unavoidable and urgent needs, shall pa."_
freightage.
Ttre price of this merchandise shall be
fixcd according to the
result of the voyage, namely:
l' Ifthe veeeershould arrive safely at the port
ofdestination,
the captain shall pay the price r*'hich
the'sare'f merchandise of the
ea.ne kind brings at that port.
2. If the veccel rhould be loet, the r:alrtlin
ahnll pay the price
realized from said merchandiee in tbe
sale.
The game rule ehall be observeel in
the payment of the
freightage, which sha[ be i" t"rr
ir trre vessel arrives at her
deetination' and in oroportion to the ai"ir."*
c,vered ifBhe shaurd
be loet before arrival.
"*?*
IITARITIMI] I.AW
Cbarter Parties
q\
,k ARTTCLE 0so. jettiaoned for trm oonaron rafoty
xl fr{ercbandice
rhell not pay freightage; but the arr'uat of iba r.tt"r--.t |l u
g3nrlforea ra goneral a,verage computing the sane tn proportlm to
ths dbtrnco eovcrad whoa they wonr jottfuonod.
*lr
ilr AIrIrcI^E 661. Neither mer-chandiae roet by rseonofahiprrect
nt' or rtrendtng nor thoce roizsd by the pintoe or encniec,
p"y
t'r heigttage. "U"U
rtbe tfeight^oge ehotrld have been paid in adva-ce,
it aha[ bG
returud, unlecs there ie nrl &gTeement to the contrary.
AarrcIJ ffiz. w rbe veecer or the merchaodiac rbourd bc
rudoen.'d' or thc offocir orthe ;hipwr.ck bG edvryod, ths rMgbtago
ill oorrrpooding to tho dirtnnce covered by tho t""rfpofirn3
of the cerao rb.tl bo petd; end rhoutd the veerot, arter
"-.et botng
tranrport 6d*4
Bl aald rncrchqndiee to the pnrt of destiaatroi, tto rbrt
:h lbelsbtsg€ sbctt !s patd, without prejldice to whet
*"y ilao" Uy
1.1' neuon of the ayerage.

ARTICLE d8s" Merchandiae which cuffer doterroration


or
ti. dirninutisnr on aceourrt of inherent defects i.J q"rlitlr
'r' yldJtfon ", ,".ot,
of tbo packlng or beeauso of fortultoue ,Urlt ""a
pry
x. ftetgttnge ln futt end as dlpulated In ths char{or party.
AltrlclE 6or. r'ha neru.rt rncreaco In worght or riac or tla
la' merrchrndi,ro loedcd on the vo'er rhrlr necnrs to
tho bonoflt of trho
el ald rhell pry tho propcrr lrnightago fl:rod in tho contres{
::wn6r, lor
tho aeme.

rll ARTICLE 666. The cargo shall be epecialty liable


for ttc
pe5ruent of the herghtefe, orpena€r aad dutioe
d"t"S there&on,
which mu.ct bo nolnbureod by ihe ehipp€rs, as wsll er
l('
d, tf. p"* i
j!_T:i"S rvorig. c vh-lc_h mar correrpond ro ig but tt ahrili6166
te :
r-"-1tb. caphin to deLay rrnlssfisg sn account of eurpiclon
{o f]Fl thrt
thir obltgetlon nay not be corrplted wlth.
t

$ thould therv be nearonrr for drstruct, theJudge or court,


tf at tlhe
lnetance-of t'he crptain, moy order the dopoert ot*the
,r nor*h*qrrrrc
t untll he hr. bcc,u peid i! fuit.
I
AIUIICLE OB& Itc captain may reque*t the sals of the
cergo to
the arnountnocorearyto pay the feigttage, Grponseq end averrgor
d-uc hin' nea*vhg tho rfutt to aem"sna th€ belancc due hrrn
thardor
if the proceedr of tho sare shourd not *uffico t" r""rr
urr rrJit
ARTICLE 68?. Tte goode loaded ehall be liablo tn thefi""tplsco
firr the_frel3ht nnd Grpcns€s thereof durtng twen$r
dayr, to ba
'e eountad hom tbo drto olthotr delrverv or d"p"ntr o.rrtig
tht ;*t"4
the ealc oltho't'o 'pry be *querted, even though th; dother
erpditorr and thc bautnrptcy of the ehlpper or conrljnao
c ehonld
o{geur.
.r
d ^ Th1r-$tnaynothemadeueeof, however,onthogmdcwhich,
after betng dotivered' wcre turned over to a thtrd pofun wrthout
-qlic€ on the pert of the letter and for
a valuable conriderrtlon.
6?4 NOTESAI{D EASESON fHE I.AWON TITANSPONTATION
AND Pt'BI.,ICTJTILITIES

ARTICLE 668. If the consignee should not be found nr chould


refus€ to receive the cargo, thejudge or court, at the inetance ofthe
captaih, shall order its deposit and the sale of what may be neicesaary
to pay the freightage and other erpenaes on the eame.
lhe eale shall likewise be allowed when the goods depositcd
run the riek ofdeteriornting, or by reanon oftheir condition or othar
circumstance; the expnnllea of prcservotion and cuetody rhould be
dieproportionate.

PAIIT 2
RIGHTS AND OBLIGATIONS OF SHIPOWNERS

ARTICLE 669. The shipowner or the captain shall obs€re i!


charter partiee tJre capacity of the vessel or that erpreeely designntcd
in its regietry, a diFerence greatcr than 2 percent betweou that stat€d
and her true capacity not being permiesible
If the shilrcwner or the c.rptain chould contract to caira a
greater amount of cargo than the veesel can carry in view of bor
lonnage, they eh*ll indemnify tlre rhipperu whone contrect* th*y do
not fulfill for the losoea they may have caue€d wher by reaeon of
their default, according to the following caaee,tsiz,:
If the veagel has been ehartered by one shipper only, snfl 15sr"e
ahould appear to be an elror or fraud in her capacity, and the
charterer should not wieh to rescind the contract, when he has a
right to do eo, the freightage shall he reduced in proportion to the
cargo which the veeacl can not receive, the pereon from whom the
veesel ig chert€rod being furthermnre obliged to indsmnif! the
ebar.ter=r for thc.locsa be nry hcve crruced hin.
tf, on tho oontrnry thoro rhoutd lxr rcvornl chartor partlor, and
by reaeon of want of rpace all the cargo contracted for cannot lte f,
loaded, and none of the charterers dcoirca to rescind the eontract,
preference shall b€ given to the pereou who has already loaded and I
I
aranged the freight tn the veaeel, and the reet ahdl take the ptncea I
correeponrling to them in the order of the datee of thelr contracta. I,
Should'tbsro be no priority the charlerere may loa4 il they
wieh, in pnoportion to the anlourts of weight or cpsoe for which
oach may havo contractod, and the pereon from whom ths veescl
wae chartored ahall he obliged to indemnify thern lor loes€e nnd
dnmagee.
ARTICLE 670. If the peraon from whom the veeesl is chartered,
after receiving a part of the freight, should not frnd oufficient to
make up at leaet three.fiftha of the amount which the veeoel may
hold, at the price he may have fired, he may substitut€ for the
traneportation another ve6e€l inepected and declared euitable for
the eeme voyage, the erpeneee of tranefer and the inereaee in the
price of the charter, ehould there be any,lrcing for hirl acbount- Should
he not bo ablo to rnake thit change, he rhall undortaho tho voyaga nt
the time agroed upon; end should no time have been fixed, within
i*fl:i,?lty
liftoen daye {bom the time tbe loading began, unlerc
otLcrwtco
stipulated-
If the owrrer of the pnrt of thc frcigrrt arrr:ady roeded
ahould
procure so'e more at the aame price and
under eimilar or
proportloneto eondltlone to therce accoptod for
ths |tutgtt recclved,
the po'eoa fbon rhom tJre veoeer is chart€red or the
caf,taio cao uot
to accept the neetof the cargo; and should he do J, the.lipp""
Tq:?
rhallh6vs a right to demand that ihe veer€l put to
cea wi"th the cargo
shich it may have on board.
ARTXCLE 6?1. Atter three-fifthe of the vees€l hne been loadod,
the pe'ron hom whom ahe is chartered may nof without
tho oonesnt
of the charterers or ehippers, subetitute the vee€€r
deeigbated in
party by aaothor one, under the penalty:"?-"Hog
llu "lllur
li-*rth.o"by llable for sll the locsef, nnd d.".ogl a"rfug
tbo voyago to the cargo ofthoee who dtd not conrent "***r"g
to tho chango.
ARTICLE 872. lI the veeeel haa been chartered in whole, the
captein nay no! without the consent of the eharteror,
accept catrgo
fron anyotherpereon; and should he do eo, ssidehart€rsrmi
obtige
him to unload it ond to tndemnify him for the rocs€s eut?ored
tloreby.
AnTrcLE 0?3. The p€rs{,n tbom whorn the veseer ic chsrtsrod
shall he liable for all the ioesee csueed to the chartener
by reaeon of
the voluntar5r delay of the captain i', puttingto *r" r""orfuiagtotbe
p-reecrlbed provlded he has Leoo .equeated, notnrlally
1ul?t- or
judicially, to put to cea at the proper time.
AnrIcLE 6?4. If ths cha'terer should cnrry to tho veccsl mors
cargo than that contracted for, the erce'a nay be
admitted in
accordnnce with the price etipurated in the coniract, if
it can be
well etowed without irduring the other ehippera; but if
in order to
load it, the vessel would be throrrn out oitrim, the cnptain murt
refus€ it or unload it at tbe crpenae of lts owDer.

In the ra[re rn&nner, the captain may, before loaving the por!
unloed ma'chandlro crradortrnery praeod nn bortd, or-tranrpori
thom, lf he can do ro wlth tho vesgeiln trlm, demani*ng
Uy -"y of
fh'eightage the htgbert prrce which mey have beon etipula-tci
r", ora
voyage.
ARTICLE 878. u the vearel hae been chartered to receive
the
in another port, the captain ehall appear before the coneignoe
t*go
derignated in tho charrer party; and, shourd the lottcr
not derivor
the cargo to him, he ehatt inform the eharterer and
walt hic
Inntnrcti'nr, tho lay dnyl agror.d u;xrn 'r th'no allowod
by cuetom
in the p'rt tregtnning to nrn in the meantime, unleaa
thene fu en
(!rproilt, agreemont to tho contrnry.

should the captain nrt receive an anliwer within


the trme
necenflnrv th*rcfor. he rhall make ef?orr.nro finrl
frelght; and nhnuld
he notrind any allLer the ray days and extra lay dayi have
erapeed,
he shall-make a p'oteet and return to the port where
the chartcr
wae made.
6?6 NcrEsAND
t*;iooilff"W,ffT,;*t*nrArloN

Tbc chrrtcrer rhet poyrhe freightage


ia fuil dirco'ntiag thrt
whish nay have beon earaed ttu'uereh*ndis€ -u"n -ry 1""
booa carried on.$e voysgc ",n,,
the ,eturrn tJp,
3r'',' sirlrro'a
lir fo,
tbo aceount of thtrd e"d,,". ""t ""
The eame shall be done if a veeeel,
having been chartened for
the round trip, rho'rd not bo
6"u" ty carro on ita ret.rn
A*TICLE 6?9. Tho captain ehall loee the
indemnify the chartere* i'-til;;" freightage and ehall
chould prove, eveu againrt
the certificate of i.epeetionn ir
L", u""o i*au ;;-til" port of
deprrture' that tbe vecs€r** i"*"'"
"ou conditi'n to aavrgate at the
tlna of receiving the cargo.
ARTI.LE 62z' The charter partv sha'subeier,
of war or a blockade.ehouldtahe pj*"h"ri"g if a declaration
not havlng eny ialtnrctionl frrru the voyago, tho captsin
lhe In ruch caae the
captain muat pr"ooeedto the nearert
*rfe "ha"t""ea
and n""r*i l-J,
rnd ewsltlnr th1 rhlppor, u.l rh. r,xponxr nnd ""quortrnl
pa*l durl*g tho "ttt:T \n raierlor
dctsatlon *hnll U" p"ia *
$*r.fri;-";;;;.
Il, by onderr-ot the ehlpprr, the cargo
should be diecharged at
of arrivat, the freisiri"g" r"u ir," ,roy"s.
Hri** o".;h;,il patd In

ARTTCLE6?8.If.the tinre nr.r.r.suary, in the opinion of the judge


or court, to re"ceivethe order.s of
the shipper h.rrf elape€,
without the eaptain having recer""i "fi""fa the
."v in.rtructione, cargo ehall
be deposired,and it shalr L ri"[r. i"r,t"
p*y,","ot
and erpenres on iteaccount a,r"lr,g-tl,, "iii"ilightage
J,,lay, which ,iati ue p"ia
from the proceedr of tho p""t n*j
tid.

PART 3

.,. fl,.*,,,.;.:,:::":.::":1,**o",*,
the whole or part thereof
*;h ;; ae he may coneider noct
couvenient the cao'tain "r b"iog.u"*.a
to refur,e t Gi"r o,,
board the freight aluvered "g!bt ahr";;
chantcnere,providod thrt
trre conditlona of the nrct char*er-are
oli *u"ogu, and that tbe price
g1t' upon ir psid ir-full to the bom rrhom the veecel is
chertore4 even thougt **o
!1" n U cargo ig not embarked, with tbe
ll nig31is11estabtich€dln tbu
;i;;.
""xt
ARTICLE {t80.Achart€rer who does
not complete the ftrll cargo
he bound hi"nrelf to ehip.s\lt
o"" *trLightage of the anount he
faib to ship, if .he captain ad
tor." other beight to comprete
the load of the veeee\L which;;;h" ""t -- -. ;*t chartcrer ehall pay tbe
dilfenence, ehould there be auy.
AnrIcLE 6sl' If the chartorar ahour,
rord goodr dirferent ft.om
thoro ctated at the tfuneof erec"itrg
til party, rrithout tbo
Lnowledge of the penon from whoi
tt. "'artcr wac chart€red or of t
"""""t
I

I
;t

{
fi
I'
IlrtRlTIll!l ir\W 677
Chsrtr.rPartie..l

tbe captain' and should thereh5'give risr: kr l'sses, by rerebn of oonfi*.


cltlonr eobargo, detontioru or other c$ur{{,!{rto the peroon lnom whom
tbe veceel wer ehartcred or to the shipper*, the poraon giving riro
thcreto rhrll be li^rbls with lhe value of hi' ehipment rnd frirthsruore
ht_rprop€rty, for thc full inderrrnity to alt thoae iqjured tbroogb
-{q
hir frult.
Art'flcl-s 8tt2. lf thc urerchandi*e eh,uld have boon rhlp@
for tho puryo€€ of illicit (:omrnercc, and were lakon nn board rltb
the knowledge of the person from *'h'm the vesser was cbartercd or
of the ceptain, the latten jointly r*.ith the owner of the Barne, eh.all b€
liable for all the loeeeg whicb may be caused the other rhippore; and
even thougb it may have been stipulated, they ean not demand any
iade-rity whatso€ver from the eharterer for the danraged ceueed
to the vesel.
ARTICLE 683. In eace of making a port to repalr the bull,
mrchinery, or equipmena of the vecnel, the shlppcn mir.et eselt untlt
thc veaeol h rcpeirod, bcins pernitted to unload it at therr owa
orp€nr€ ah@ld thcy deen it propen
ll, lor the benefit of the cargo eubject to deterioretion, the
ehippera or the court, or the consul. or the competent authority in a
foreigu countr;r, ebuld orrder the cnen€handiee to be unroaded. tbe
exlrensGr ef 'nlos.llng and reloading ehall be for the nccount of the
fonen
ARIICLE 884. Utbe charterer, without the occurrenee of any
of th-
-ca.eee of force m4ieure meationed in the foregoing rrticle,
rhould wtrh to u4load his mer.handise b€fore arrtrtng aitbo port
of destlnatlon, he ehall pay the fuII freightage, the erpeneeo of the
arrival mede at hir rcquegt, and the loeses and damages caus€d the
other ahipperr, sbould there be any.
ARTICLE 6S5. ln charters for transportation of general fieight"
any of the ahippers may unload the merchandise before the
beginning of the voyage, paying one-half of the freightage, tbe
elryn8e of etowing and restowing the cargo, and any other dcmage
which for hie reaaon he may cauae the other shippere.
ARTICLE SSS.After the vessel has been unloaded and the cargo
plaecd at the dicJxrral qrfrhr: r.qnsigrrr.r.,
l,hr:l&ttcr mufit immediahly
pny the captain the freightage due ancl the other erpeneoi for whlch
eaid cargo may be liable.
The primage must be paid in the same prolx)rtion and at the
esme time ae tbe freightage, all thc ctranges and modificatione to
which the latter should be aubject also governing the former.
ARTICLE 687. The chartercrs and ahippeie ruay not abandon
mercbnndiae .l+tttaged on account of inherent defect or fortuitoug
evenl for the pa5rment of the freightage and other ex1renc€a.
The abandonment ehall be prop€r, however, if the cargo ehould
coneiet of liquida arad they have leaked ouf nothing psrnaintng in
the eontaiaerr but one-fourth part of their contcnts.
t ffi
i 578 NorEs
AND
cAsES
oflmffiri$ffi**RrAuoN

P.{RT 4
TOTAL OR PARTTAL RESCISSION OF CIIARTAR PARIIES
ARTICLE 88& A eherter party may be reecinded at the reqned
of tho chartoron
l. lf bcfore loading tbe vesael he ahould not afree with that
rtrtcd In tha certlftceto oli rrrr.rgu, or if l,hcre rhoutd Lo an orror in
tho stetement of the flag under which ebe'saile.
2. lf the voruel ehoutd not be placed ut thc diepocat of the
char-terer within tbe period and in the manner agreed ,p*rr.
3. Ifafter the vessel hns put to sea, she should return to the
port of departure, on.account of risk from pirates, enemies, or bad
weather, and the shippers ehould agree to unload her.
In the rsecondand third eRresthe p.,rn.rn from whom thc vesgel
wae chartered ehall indemnify the charterer for the voyage out.
4. If the charter ehould have been made by the rnonth*, the
charterere ehall pay the full freightage for one month, if the voyage
is for a port in the eame *,atere, and for two monthe, if for a port in
different waterg.
From one port to another of the philippinee and a{jacent
ial&nds, the freightage for one month only shali be paid.
5. If the veee€l should make a port during the voyage in order
to- Take urg-ent rcpairr, and the ehsr-tere* ehould pr*f.r io diepore
of the rnerchandise.

-Wh_e1the detay doee not ercced thirty day,s,the shippere ehall


pay the full freightage for the voynge out.
Should the delay exceed thirty daye, they ehall only pay the
freightage in proportion to the distance eove rect try the v."**1.
AR't'luLE 889. At the r equest nf r,hepera'n frslm whonr the vess€r
ie chartered the charter party may be rescinded:
l. If the charterer, at the termination of the ertra lay daya,
doen not plnr:e the cargo nlongaide the vr.nrol.
In such cace the charterer must pay half the freight etipulated,
beeidee the demurrage due for the lay dayr ancl extra lay days.
2. If the pereon f,rom whom the vessel wae cha!.tered ehould
oell it before the charterer hae bbgun to load it, and the purcbaeer
should load it for hir own aecount
In euch caee the vendor ehall indemnify the charterer for the
losses ho may suffer.
If the new owner of the vessel should not load it for hie oyn
accounl the chartor party rball be reepected, and the vsndor ehsll
lndomnlf! tha purehrror ll tha former did not Inform htm ol the
chertor pending at the tlme of making the eale.
ARTICLE {ffr}. The charter party ehall be reocinded and all
ectionE arising thenehon rhall be extinguiehed" if, before tbe yegs€l
t'
ri
4

MARITIMiI I.AW f,ZS


Chart+rl'lrtrr.x
't

pub to ;€a llom the port of departure, any i


.f the foilowing caaer t
should occun t

l' rl declaration of war or ini,erdiction of comnenee with


the
power to whose porte the vescel waa to make
ite voyege.
2' A condition of brockade of the port of deatinntion
of said
veuel, or tho breelrng out of en epidomrc arltor
tho contr*ct rvar
crocutcd.
$. 'fhe
prohlhltlon kr Ftxr*.lyont the rsld prrt thornorrolrandfuc
conolltutlng tho r:rgo of tho vor*cl.
4. An lndefinrte detention, hy reaeon 'f an embargo of
tbe
veesel by order of the goru"o-.ot, or for ,"v reaaon
independent of the will of the ahip agent. "inu,
5" The inability of the veeael to navigate, without fnult
of,
the captain or ship agent.
The un-loading ehalt be mede for the account of the
charterer.
ARTICLE Ggl. Ifthe vesser cannot put to aea on account
ofthe
cloeing of the port of dopartunr or nny irthcr trrmprrnry
eauro, tho
-contracting
chartor sh'll rtmnin in force, with neith*r.*e 'f the
parties having a right to.claim damaggs.
'rhe
subsietence and wages of the crew shst be eonaidered
as
general average.

' -D*ing the internrption, the charterer may at the proper tinre
and for hia own accorrnt, unload and load the roerchaadiee,
paying
demu*age if he deraye the reloading afiier the ca*se for
the detention
has ceaeed.
ARTICLE 6S2. A charter party shall ber partially reecinded
unlesx there is an agrecErent t<rthe contrary, and {
the captain ehall
only be entitled-to thefreightage for the voyage
n-ty reseon of
a declaration of war, closing of po"t", or interdiction
""t, of co-rnercial
relatione during the voyage, the veeeel ghould
make the port
designated for auch a c,rae io tru instructions of
the chartcrer.

PROBLEMS:

l. I'he Sand DevelopingCorporatit,n,enters int' a voyagechartcr


yilh xYz shipping corporation-,ovei the raner's vessel,tvtrv uay ku*.
Ilufore the Sand.!3y9toqment,Corporariuncould load
it, XyZ Shipping
corporation sold M/v Lady r,oveto osrob Mantime c".p., *rri.n
decidedto
load it for its own amount.

a) M a y X Y Z S h i p p i n g C o r p o r a t . i o nv a l i d l y a s k f o r t h e
r e s c i s s i o no f t h e C h a r l e r p a r t y ? I f s o , c a n S a n d
Development
Corporation recoverdamages?To what extent?
b) If the Oelob Maritime Corporation, did not load it for its
own account,is it bound by the charter party?

_ . c) Explain the rneaningof"Ownerpro HsrVice" ofthe vessel.


In what kind of charter party doesthis obtain?
li:*,,*
;its&

NOfEs AND CAqql_oyT?rff


LAw oN TRAN8FORrA?I0N $
AND Hnt.rc rrnt,rflFfi
$
{{ '
A: a.t yea. KyZ ShippingCorporation
the charter party. Rcocierio.,'i. may ask for tlre racission of
utio*!i'inae, erticte 6gg of tbe cods of
uommenceif, as in trris
case,th" o**r rotJth" u""**r
begr:n to ,oad t'he veesel before tbe charter hnr
and tr," o6"; loads it for his c.,wnLorrnt.
Hou'c'e r' sand corp<lratron
may recover damages to the
extent of its ,osses.
14 b) yes' The last
paragraph nf Article 6gg
provides that "if the of the code of commercs
new owner of the vessersh-ould
acclunt,rhecharterp"rry not road it for hie owa
rll.l bi,"rpJ;;"r,a tn*
the purchaserif the foTt,
did nor nfo",r, f,i_ of the"urraor.L"tii"i"_*f,
charterpendingat tbe
time of makinsthe eare."
H"n.", ii o;H.114;'ne corporation
MA/ t ady love for its own d.idnot road
account,it would hts-"lg b,
with the right of aetionasain*t the charA-rparry
xvz biippii'Jr'orron Maritirne
if the latter was not informed for uL"*"
rhu ;;;;;parry at the time of salea.
"f
c) The term "Owner pro I:Iac
understoodto bethe charterer Vice,of the-vesselis generalty
ofthe uere"r*io enteredinto a
with the shipownerwhich charter party
is ir ti- lr uu*uoat or demisechartcr.
The chartereran "ownerpro "-*r"
hoc uice,;;;;" " h.econtmls
ow.''eetof captain*d,*T the ahip with hi8
thereby.tr;;& --*'"1 becomingthe ownerfor
voyageor servicestiputated. the
f fSgf i

CASES:

OFARREL
NAVIGATION -y.gl! qghg bueinese-::g:: the name of rfrALAySrAN
COMP^(Ti ;. i#'MANII.A
ELECTRIC -- COMPANY
G.R lio. \IZZZ, October ZS,
ftg.-
This actionwasinstituteer
in the court of !"irst Instance
o'Farrel v cia, a commercjalpa.tnershiploing of the city of Manila by
Navigationcompanv,wii[{i;;;;;;io#'.", n*ir,"r";;;; ,h" ofthe Malaysian
recoveringfrom the Manita pr"ctrii ";e ror rr," purpoee
in tl," citv oim"r,iir,
i"*;;;'ra ,ry,, thruecauaesoi""uon, of
the aggregate
it"%'ffinffi#*i.n*o"t'"ri"gi t"r*iue_to rhe;*J;.fr oreach
lter the action was O"rul,O,l.arrel orcontract.
and W J. 'donovan i Ci.**
a""fared insolvent,
proeecured,,,,a".r,i";Fif t11trj:?Tll*:fi
notchanged. In thecourse_"rri"irr*"'-ar#u'in :ffi,.f,mm:*Ir
th" c"rrt"ii[*i'i**"**ecf,sewas
coneolidatedwithanotheractioninetitutadi"n
bvthesociet!***r ,r,. ,"-u *"rt, *_" ddreq.rant,
crt*ilr"ri-r lot"1,yr., "r"ir"itn"
i' tli"
only with the actionia$itu-tcd
*r 9rt .ppuarweeremncerned
uy oi"-Jy
rreviewthe hiar co"rt ounat,iiti" cia. uponhearinjthe caeonow
ilin *""-rrot wenroundedand under
Jti;;;;"-t nbaorvsd
ttre
iiifffn-rffiJle "o'npt'int rheprainriff.
r*m rhielodgmont
the
tl" S oc:
tctt Ft,,nc.,
i sedes oh.ar tnnnasea du Tbnhin(hereinafter
*r"* TtlT"tH
whiretheMln;;;;;:.Tff
il:r::-"H1,,til!f.f#*Itr""*trltHt:lH;
,l{ iHJ i#il,#ilH ;*ll"f;# vciarmarar"i"iri'-*"rion
company)
in operating r.uigtrt u".r"ls in c)rienta! a ahipping comqanyengaged
*Tp-*vcon'umes rargequanriti".
,"n*. I.Tl-ud:
nr*"i, g# ln*fil*
part fromthe eoar "n;,'ffffi:fflf
"o''p"ni rr H**""'r"'il'"-"nro-ent
underwhich the deflndani
.'e***b*ff
I

!l
MARITIMII I,AW 681
CharterParties

had ber"npurthaeing coal fron said company having been found to be unseti6factory
for
DdDlei'tlatioll or olher, !o the del'eudenl, a new conlract was enter€d into,
in tle month of
Auguat, 1923, whereby the coal compeny agre€d to sell and the defendsnt
agreod to huy,
in t'he period Fom Septemberl, lg23, toAugrat gl, 1924,?6,0{x)tonr oraustcoel,
rii;
a margin of l0 per cent more or leee.In t-hiecontract it wae agreed that
delivery silould
be taken by the defendant in lotr of aborrt from 2,(X)oio 4,(fi tnna at trErlar
intorvelg,
as could bost be arangotl to suit both purchaaerr and aellers, the purchaeera
ag1.ooi11gto
take not le$e than about 6,000 tona per month and trr senrJnot,more Lhan one
at to
ho loaded al' the Bametinre. It was als,ostipulatcd that the dust eoal,
in"r"Ui*t "rnui
sale,ehould be loadedeither in the stream tr alongsidethe wharf or quay "i*."at
at Hongay,
the opt'ionof the coal company,"with quick deapatr.h,vess€letaking their
turn in loading."
Ag neither the coal oompany nor the Manila Erectric company rnai engaged
in operatiig
eeagoingvessels,it becameneceesaryfor the defendant tomake arangement
with eomi
ehipping company for the service neeescar)'to transpr.rrt the coal to Manila.
Thie need
(irutoti o'Furrol, t.lrengoriiof'[lrr..
lx'ilrg rt1t1xrrilnt, coiil(:()ntpllrly,
ig Mgliln, dir6ctrd ths
attartrtiorrof llre dtfondsnt c{tmpanyhr thc Mall.yxian Navigaiion Company,
t}e [rade.
traltr*of ( )'Farr0l y {)irl, ax olxtrntittg vepeclrL}ratwoulrtlxr avurlubluI'ortrapuporting
the
coaj' ln ilrir cunn6tt'ionit ahould be not*d t"hat0'l'nrr*l war ag*nt bottr of the coaf
*.iliy
nud tht MulrryrrnrrNuvrgntion(ionrptny
'ltte
contractbctwe'ert tlre plainliffanri tlrt r|,ferrdirntfor thl trarruportotionof the
coal prrrchascdb.vtlre defelrduntfru&r the coal ct.rrrrparry wus, in uubetanee,ae followe:
l. The Malaysian Navigatro. co. undertakeeto transport seventy-
iirr tiir.rusarrti
ton* ol cr,aii lti p:r ccnt,rnoreor lessl, frorn Honjay to Manila
nt the lreight rata of four p*uru und fili.v ccrrtavori(Ir4.50r,p", ton of 1,016
krlos, lece a rebate of I per cent.
2' Irreight to be paid on arrivar r.,r'eachshipment at Manila ae per
B/t_.
3. Loading to be for account and risk of shippers accordingto
c-ustomaryquick despatchsubject to turn of mines.
4. F'or discharging at Manila the iltanila Electric co. wiil provide
suffrcient lighters to r.eceive-
the coal at ship side as faet as the ehip can
discharge Demu'age, if any, to be at the raLe of p600 per day of fraction
thereof;it in understoodthat the Mnnila filcctric co. wilt not be compeltedto :
pay demurrage for daya when it ehall hsve received at leaet 50Otong
ofcoal.

The practice.ftlllowedby the partics in the performanceof thie contract was that,
upon the receipt of information in Manila by the defendant company from the
coai
company' advising that a cargo of coal r+raa,or aoon would be available in Hongay, t5e
mesgagewas turned over to o'Farrel y cia, and the la[er company made
the
arrangements for the sending of a boat to Hongay. But delay io the taking on of
coal
occurred in Hongay, owing io the inability of the coal company to deliver the coal to
'laitilS boata. Th9 prtponderance the
of the prcof ehowe tbat thia delay war due to the fact
tbat tho crsnos of ths cod company at, Hongay were defoctivo and ofton out of ordor.
At
sny rsts tllc roaul! war *r*t tbo plcintilfr boatc were freqqently kept waiting in the
port; and it in flct appaare tbat altogether they were held there idl* ot t
u oodt"al*r"ty-
tIreo tlays, (o say nothing of the time ocuupied in the lad.ing of the ahipa after tbeir
turn
had for taking cargo. .There can be no doubt, we th-ink, that theae delaye wen
-com9
attributable to the coal 6!npeny.
t 582 NorEs
AND
"*oyroilffi.W,f#ffr"onrArro*

lnrr, lRon rhe vieirerhat Rlainr:TsEhirymadero Hongal;


the mal

ff.1"*trT,r###it"ii}1'ttr*tr$ilq[t.'trttffi
"^*"""rjri?:::il
r*sTTi
tlliel:l:*,T,lr,;llliHll,*HTllil:ll'}*1*
Hongav' ;l'*:;-ffi,tr
forreartharthernrorJ"ji'#
ribered
forthe*", *.iJriiTI"H ,"rr"" .o
abovesuggested,
deliverieeof coa!to the defendant
r"a*roir:ll.,f*::1:Tt
rons, comDanv
i*'rfrlr:Ttrl*:Tffr1amou1ted,."r'"e ii1+,onr_v,
oreome abou*i,sz6
:ill|"T;Hil*::",1i',tu'"*e';;:
ff1il"'i:'#1"*Trp:-:q;::liffiJffi
c:*0."-rlJ;"'""to"*et,ls24.*'*::-ojor"ru.l""?r;:ifi:ffi
i:X**rt"t
ortn*s.i;;"t; ".'*ined bvit from up"'" gir"s
"nit:r."::'j.. noticeof tre dirp"t"h
noJd"Tilffi ,l$i'"':fi "j1;*,t,rs24,'i,"r"i".J'
was ehorr
nei,ry t"",ffi :ff
"zo.ooo
ffi fffrlf :fi;,:#.[ffi
fif iT'Jfr;Yffi iff :f il'Tlkl":tft*a'ir,r,,ipy^,"{theapprovaror
:ff ,*:lffitr";l;tTl"ff
"':l;3trff
theformer
ff'T:"ff
itr"'*""#3:ffi fffi #;
thefacttt;ili *",iiilil;lff.q::'"n companr,
tl"l it would be unable,bo tt t"tt ' *-rnrniJ'ttil
"
c""io-"',i""".'"Ifl
traneportatio; ;'f;;
;rTllrrr#,Hffi ji,'x*11*tr$ft*l;
r;lr;tl;;i:r
proceedrr.*,"i r"J-" the contract for
the

In tho plnintifl'rr
threerepara,€causesof
1T^rlfrrr
to.ecover actionare atated,in the first
pao,rgo,
the"u,n.of * *,ip.o"auonwhich
i[1fi"#;::l$;Ti:u"*F
as the
conlempla*o t l'.t"t"tved had all of the *rt n**r.-iuii"lrilJ," o for tranaportation.
caueeor"",r""1i,"Ti,:l,T.FTT"n::'ff
l':k*r'#f
repreaentedbv thedemu..ug" #j#ffi
.i;;;aii"tr,u,pirintifr, at
the onehundredtwenry+hrle;;il;;;^i,rri5r, ;;;il of p600per
awaitinstheir turn ir, ,[*r.*"rJo"*n"a in day,for
*i!: o-n.Jr. ffif thir<i. Honsav
cnusaol?ii*in" prainriffeeekn
ff;:f,:T"ffi:f i,,,rT,r*i";'i'"rl "',Tffiffl,n,.n
"i',,],,",i nnotrsair
ror
ro

*u'*?ili, j,l*Jilri:Tl:t:l' plaintiffs.rhree


cat*esof acrion
ia rheorderin
;:.nn,l*ttr"* '"tr"::H
i*:iti:sq
",,1o
i:;T*:#xTkffi#,ffi
Ftrr##ltf ,tr'tr'f:Hfr
i:i.*:ii:ri::f;
the."r.om;1,;,';"#T.""
#1"],i*?irtr"s#,ff
#
0oeupplyshio" fo.,rl: transportation'otir,"
anddesisted
the failureof rhe coar
j]*::,#,#l,H
rut-"{"";;;;iil;'f"tff;",tr_'il,"'ffi"ili1,U*::t;[],'l
,n"k;-;;pt
"o"t

Sompanv_ro deriverie*
lf il"i
trtrfi.:f$ryI"-Hi;f *il l,X*: *111 [i *h, l *r,
the ptaintirfe
"rrhe ca
"fura
caueeof action.The ttt*.y :l",r", " diccue"ion
in our ortrre
usesor
^tiir'.'* trilifrlutietr,at
,i"aJi;;i":Tt"arlv-eeen
:Ip*{ *u;;s;;;;iil?ol?ffiHff"'fiJ'; the coJ
"*Jrii

:ig*""T:H:i*J:'1"n*d";i;#"HtrJiiTff
1thepoeition
anctof the plaintiff i orol.r."l
1*:trfff"T:?"",'m
i|lil ffT
asenr iio*oi"tr
oftheour"no*nr''ff11*
".flT"tv. ", rh";;;i'1"#*;Tj:il1
theplaintltrJilffi:l,J,l:ffi.:illtur :j,::':lo"n5
oPinioncommitldrnienyinedamagea
to
t
{i
J

MARTTtrMEI"AW 68$
Chartcr Partier

The heart of the controverry ir, we think, more properly fcrundin


the imue preoentcd
undor the e€cond cau,0eof actiou,. whieh rais€a the q";$o.
of the reeponaibili{y of the
defendsnt for demurage of the plaintiffs vees€ls rt Horrg"y.
[n connection wittr t]iq
rnatter it wiu be notcd, upon careful
inapection of the contriJbetween the prninffisn6
the defendant, that the rtipulation for demurrage at the rate of
P6o0 per day, or fraction
thereo{, ie found in the panrgraph of the contract;hich deals
urp*"i"U-y ffos.tirchr*E
of coal at Manila. There is-nirtipuration for demurrage inciaeni "tith
to delay at Hongay;
an!, on the contrary ir ia atipulated, in the ttrird paragr'aph
ofit;;ntract, that toading
at Hongay should be "according to cucklmary quick denjatch nuhject
to turn of minar.,
ln eppollnnt'* briof r.mphnrir hnr lxx'rr pln.rui rrixrnt,h. w,,rclrnrltl,rrlnry
quiclt 6orpeteh
and Urc oth$r wordr Eublocl!o lurn of rrrincslrlvt rrst l*trn 6kcn
no much into account.
It eppearuin t'ho prtnf thgt the venaoladc*irous of landing coal
at Hongay wenoladen
according to th+ custom of the port, in strist rotatlon, except
in one instance wbere a
Malayuian ahip war Eiven preGrence over, tws other ehipa whose
owners did not object.
. P"."|P**eion'aubjeet to turn of mings" ahould be interpreted, *u tt i"f., to mean t;at
the lading of the venselashould be nubie.cttn the outprrt of the
minee and that ves{i€lg
ehould take their tur..n in tnking on the coal. trt resulL that
the ladiag of the coal wss
dependent upon the output of *re minee and the order oi ,rrip,
-."ri"g cargo at the
loading placee.The expresaion 'eubject to turn of mines" waa
no doubt iarerted in tbe
contract in lieu of a atipulatiort for demurrage.The inaertion of that
expreesionin ctaurc
3-mlrdothn Malsytinnrhipr depandr,ntrrprn thrrloutlingtirciliti**
uf thacoal**p"rrjrt
Hongay,snd relieved the defentlant fronr any liability fJn Jem"*"g*
uy rerEon of delaye
tlratmightoccurintheportincidenttothetrbtrrinirrgandlo;inf;fti1;;:.
The plaintiff here invokee article 656 of the Code of Commerce,
which reods a8
followe:

"If in the charter party the time in which the loarting and unloading
is
to take place in not etated, the cuatoms of the port *h"L theee
acts take
place ahall be obeen'ed.After the period stipulated
or the cuatomar;rone has
paesed, and should tlere not be in the rreight contract
clause
fixing the indemnification for tho d*lay, the crrptain nholt"r, "op..r"
bo entitlod to
d*mand dtnrurrage for tho ueual and o*iro lay clayuwhich -ry
hu;;;;pJ
in loading and unloading.'

however,rhat rhe stipularion of the contract making the


,^-r,_Y:11,"1lI:
loadrng ot clal eubject:oh:n,
bothe turn of mines renders article 656 inapplicable, thie beLg a
epeciatstipulation deterrnining the order of loading. It reeults ttraitie
aefendant cannot
be held responsible for the delay that occurred.
Thu p.;iirtjust tlelerminedia fatai alsoro the third causeof action,
in which Fc\covery
is nought,for dplay incurred by one ahip whieh left without cargo.
The judgment appealedfuom,in our opinion,is wilhout error,
and the eamewip be
affrrmed, with corts againet the appellant. bo ordercd.

CALTEK (PHII.TPPINES), INC. v.


- SULPICIO LINES, INC., ET AL
G.R. No. 131168, geptember 90, lgg$.

Is the charter€r of a sea vees€lliable fsr dnmages


- resulting from a colligion between
the chartcred veesel and a pa.esenger
"hipt
When r1f,l Vectorleft th"_ryI of Limay, Bataan, on December
1"9,lgg? carrying
petroleum pruducte of Caltcx tFhilippinea), inc. (hereinaftcr
CstbiJ no on. could have
684 NOTESAND CA.sSSON ITTE I.AW ON TN.ANSPORTATION
A!{D FUBLIC UTIIJTIES

guoss€d that it would collide rith MV lloaa Paz, hilling almoct all the paracrryen and
crew membera of both shipq and thue rmulting in one of the counffr rroilt Bsritimg
disaEt€rg.
The petition before us geekl to reverse the Court ofAppeals decieioal tln CA,4.R
CV No. 29526 promulgated on April 15, 1997,Juetice Jorge S. lmperial, ponente,Justices
Mabutas and Hormachuelos, concui"ning.lholding petitioner jointly liable with the
op€rator of MT Vector for damages when the latter collided with Sulpicio.Lineg, lnc.'g
pass€ngerahip MV Doila Paz,
'lfhe facte are as follows:

On December 19, 198?, motor tanker MT Vector left Linay, Bataan, at about 8:0O
p.m., enroute to Masbate, loaded with 8,800 barrele of petroleum products shipped by
petitioner Caltex. tFindingp and Becommendation of the Board of Marine lnquiry dated
March 22, 1988, Rollo,p. 368.1MT Vector ie a tramping motor tanker owned and operatcd
by Vector Shippurg Corporation, engaged in lhe businees of tranaporting fuel products
euch as gaaoline, keroaene,diesel 8nd crrde oil. During that particular voyage,the MT
Vcctor carried on bon;d garolino alrd othcr oil prodrrr:tsuwncd by Caltex by virtue of a
cbarter contract between them. [I6id., Rollo, p. 350.1
On Deeember20, 1987,at, about,6:30a.m., lhc pussetrgcrchip MV Doda Paz lefl,
the port ofTacloban headed for Manila with a complement of 59 crew membereincluding
the marter and his offrcera,and passengerstotaling 1,493 ac indicated in the Coast
Guard Clearance.t/bid., Rollo,p. 35?.Actually, there were more than 4,000 pasaengera..l
The MV Dofra Paz is a paseengerand cargo vessel owned and operated by Sulpicio Lines,
Inc. plying the route of Manila/Tacloban/Catbalogan/Manila/Catbalogan/Tacloban/
Manila, making trips twice a week.
At about l0;30 p.m. of December20, 1987,the two vesselscollidedin the open eea
within the vicinity of Dumdi Point between Marinduque and Oriental Mindoro. All the
crewmembere of MV Dofla Paz died, while the two gurvivors from MT Vector claimed
that they were sleeping at the time of the incident.
The MV Dofra Paz ca:r'riedan estimated 4,000 passengers;many indeed, $/eFenot
in the paseengermanifest. Only 24 sunrived the tragedy after having been rescued from
the burning waters by vessels that responded to distrees calls. lDecision, Court, ofAppeals,
dated April 15, 1997, Rollo, pp. 54-75.1Among those who perished were public scbool
teacher Sebastiar Cafiezal (47 years old) and his daughter Corazon Caiezal (11 years
old), both unmanifegted paesengersbut proved to be on board the vessel.
On March 22, 1988, the board of marine inquiry in BMI Cas€ No. 653-8? after
investigation found that the MT Vectoa its registered operator Francisco Soriano, and
its owner and actual operator Vector Shipping Corporation, were at fault and responsible
for ite co[ieion with MV Dofia Paz. [Finding and Recommendationg of the Boerd ofMarine
Inquiry dated March 22, 1988, Rollo, pp. 347-402.)
On February 13, lg8g,Tereeita Cafrezaland Sotera E. Cafrezal,Sebasfian Caiezal'o
wife and mother respectively, filed with the Regional Tlial Court, Branch 8, Manila, a
complaint for "Damages Arising from Breach of Contract of Carriage" againet Sulpicio
Linea, Inc. (herealter Sulpicio). Sulpicio, in turn, filed a third party conplsint againet
Franqisco Soriano, Vector Shipping Corporation and Caltcx (Philippines), Inc. Sulpicio
alleged that Caltex chartered M[Vector with groao and evident bad faith knowing fully
well that MT Vector was impmperly manned, ill-equipped, unseaworthy and a hazard to
safe navigation; as a reault, it ramned against MV Dof,a Paz in the open aea aetting l[T
Vectoy'e highly flammable caryo ablaze.
J

t
$
\
MARTNME I.AW
0hartr:r l'or{rea
&86

ion septemfur 15, lgg2, the rrwl court reruk:redlutrgnrent nwhing sullilcio Liws
lrablc- Tle court of Appeals mu-lified the triu! ct)ut:!'siultng und iina"a ptitiarwr
Coltez a:t otte of the those liabte for darnages therebl mahingiaid petitioner Cattex
and
vector shipping co. equally liabrc under the thint poriy to reimburx/
indzmnifu d"efendant sul-picio Lincs, Irw of the aboui-nwntionzd "o^ptoint
damagel ottornrj,b
fees and coatswhi.ch the httcr is adjudged to pay plaintiffs, the sanu to fu shsred hrrlf
by vector s,!.o1itw co. king tfu vesiel at iauit
fo, the collision) and tfu othcr hoif
b! Caltpr (Phils.) Inc.l

Hence,thie petition.
We find the petition meritorious.
Firat: The charterer haa no liabihty for ilanrugcsunder Phitippine Maritime lawe.
' The respectiverights and dutiea ofa ohipper
and the carrier dependsnot on whether
the carrier ie public or private, but on whethlr the contract ofcarriage ia a
bi1 oflading
or equivalent shipping documentson the one hand, or a charter party or sim.ilar
contract
on other. [Philippine Admiralty and Maritirne La*; by Attya. Eduardo Hernandez
!!e
and Antcru Pefrasaler,l g8z, p 23?, citing $chrx.nlrlunr & viunnnp*rulm,Adrniralty
and
Marilime Law, al p. 364.1
Petitionerand Vectorentcred int{) r (:{rntrrt'tof rrlfrr:ightment,aleo known
as a
voyagecharter. [Ibid., p.495, citing Healy & fiharp, Admiralty, p. a0b.l

- A charte r party is a contract by whrch un entire ship, or some priacipat part thereof,
is let by the owner to anotler person for a specifiedtime r. *; a contract of ifreigbbeni
is one by which the owner of a ship or other vessel leis the whole or part of
her to a
merchant or other p€rson for the conveyanceof goods, on a particular voyage,
in
coneiderationof the payrnent of freight. [TabacaleraInsurance Co.u,Nortt front
Shilping
Servicea,272 SCRA SZ7 (lgg7), citing planters Ilrrxluclr, Inc. v. Court of
appeata,Zed
scRA476( re93)|
A eontrnct of affreightmeni rnay hc either time r:harter,wherein the leaeedveaSel
ia leased to the charterer for a hxed period of time, or voyagecharter. ,*t
th".hifis
leaeedfor a single voyage.In both cases,the charter-pariy pro,rideofor"r"i6 the hire ofthe
veaeelonly, either for a deternrinate period of time or for a single or consecutive
voyagg,
the ship-owner to supply the ahip's store, pay for the *ougus,rf tf,e mast€r of the
crew,aaj
defray the expendesfor the maincenanceof the ship. trOia., .iting Planters Froducts,
Inc. v. Court of Appeals,226 SCRA 4?6 i i99:l ) 1
Under a demiee or bareboat charter on Lhe other hand, the charterer mane the
vecselwith his own peopleand becomcs,in t,ffe.ct.thc .wrrlf for the voyflge scryice
or
stipulated, aulljecl to linbility for danrugesclused by negligence.
If the charter is a contract of affreightment. whrch leave.rthe general rlwner in
poseeseionof the ship as owner for the voyage. the rights and
the responsibilities of
ownership rest on the owner. The charkrrer is free lit,m liability to third pereons
in
resp€ctof the ship. lPuromines v. courr of Appeals,2z0 scRA 2si (1gg3j.]

Second:MT Vectori* a comnton carricr


chartcr parties fail into three main categories.(rr delnise or bareboat,(2) time
.
charter, (3) voyage charter. Doee a charter party agreement turn the common
carrier
NOTES Af{D CASES ON THE L-AWOI\i TRANSPORTATION
ANN P[IBI,IC UTII,MIES

into a privatc one?wc need to answer this question in order to shed light on the
of the Parties'
responsibilitres
In this case.the charter party agreement did not convert the common carrier into .f-
character
a private carrier. The parties entered into a loyage charter, which retains the
*'n";:;';;;'*;"{""',. t,{
r',,, ,roo*ot,,rzz6scRA4?6reea)jwesaid:
' 'lt is therefore imperative that a public carrier shall remain as such, il
p€r8on8'
notwithrliantling the charter of the whole ilr portion 0f a ve8selby one or more
provided the charter is limited to the ship only,as in the caseof a time+harter or voyage
It is only when the charter includesbot-hthe vesseland its crew,ae in a bareboat
"h".tr.. particular
or demise that a common carrier bec<imesprivatc, at least insofar as the
vayage covering the charter-party is concerned. Indubitably, a ship-owner in a tine or
charter retqins poa*eseionand control of th$ ship, 4lthough her holde may, for
"oy"go
the nronrent,be the property of the charterer.'
L8[er, we mled in coantwise Lighterage corporatktn u. court of Appale{ 245 scRA
797 (1995i]
"Although a charter party may transform & commoncarrier into a private one,the
same however ie not true in a contract of afTreightmetrtxxx"
A comnroncarrier rs a person or corporation whosc regrrlar bueineeeis tO carry
passengers or prop€ny for all perEor]$who nray choosek'r employ and to remunerate
him. [united statcs us. Qnin"jon,31 Phil. 189 (1915);L]nited statee v. Tan Piaoco,40
of
irhil.853 ( 1920)lMTVector.fitr the definitionul'a srntntoncarritr underArtictret?32
16s scRA 612,61?-619 (1988)l we
the cir.il codc. In Guzman vs. cou!:t of Appeals,f
mled:
xxx

I Inder the CarriageofGoodsby SeaAct :


.Sec.3.(1)Thecerrnershallbebounclbelbreandatthebeginningofthe
voyageto exercisedue diligenceto --
{a) }take the shiP seaworthY;
ibt P r o p e r l ym a n , e q u i p ,a n d s u t r p l y1 5 1t'h i p ;
xxx xxx xxx

Thus, the carriers are deemed!o rvarrant impliediy the seaworthinessof the ahip'
and manned
For a tessel to be seaworthy,it must,be adequately equipped for the voyage
with a suflicient number oicompetent officers and crew:The failure of a comrnon carrier
vusncl involvcrl irr its contract of carriege ia a
t, nrrrinhrin in senworthy contlit.ionLhe
preecribedin Article 1?55of the Civil Code.18 lTlans-Asia Shipping
clear breachof its cluty
14
Lines v. court of Appeale,254 scRA 260 r1996),citing chan Keep v. chan Gioco'
Phil. 5 (1909)1.
The provisions owed their conceptionto the nature of the business of common
of neceeeity
carriers. This busineseis impreesedwith a special public duty. The public must
rely on [ne care alci skill ofconilrrrt carnels in lhe vigilanceovei the goodsand safety cf
the passengers, especiallybecausewifh the nrqdern development ofscience and invention,
traneportation has becomem0re rapid, more coilrplicatedand eomehowmore hazardous'
MARI'TIMF]Il\W 68?
.Charter Parties

[Arturo M. Tolentino, Commenlaries anci Jurisprudence on the Civil Code of the


Philippines, volume v' rq92, p. 29g. citing commiesion Report, pp. 6&6?J
For theee
rca8ons'a passengeror a ehipperofgoodsis under no obligationto conductan inrpection
of the ship and its crew, tbe ca*ier being obliged by]aw to impliedly wsmsnt
its
s€aworthinesa.
'fhia
auide, we now nrle on whether Caltex is liable for damageo undor ths
Civil
Code.
Tbird: Is Caltet liablz for d,amageaunder the Ciuil Code?
We rule that it is no!.

- Sulpicio argues that Caltex negligently shipped its highty combuetible


fuel cargo
aboardanunseaworthyvesselsuchasit,",l,irvecLr*hen*cait**
1' Did nbt take steps to have M,/TVecfor'scertificate of inspection and coastqrige
licenserenewed:
l' I)rtrct'ededt<rshrp ita cargodesprtr:tlcl'cct.s
l'r.,unci
by Mr, CarloeTan of Bataan
RefineryOorprrration:
3' WitnessedItT \tector subnritting fakc documentsand certificatesto
the
PhilippineCoastGuard
Sulpipiofurther argues that Caltex choseMT Vectorto tran$port its cargo
despite
t h e s ed e f i c i e n c i e s :
I' The master of M/T \''cctorriid not possesthr: requiredChiet'Matelicengeto
c o m m a n d : r n dn a v i g a l el h e v e s s e l ;
2 T h t s r . c , r n tnl r a t r . ,l l o r r n l t l r , ' l ' i r r r flir.;,r r lt l r r . l i c r : r r : .,rref a M i n o r p a t r o n ,
luthoriztd kr navigatr onll' rn bir.vsand river-t *'hcn the subjectcollision
occurredin the
opensea;
3. The chief Engrneer.I'rioteo Aguas, had no license to operate the engine
of
the vessel;
4' T'hr:r'csseldid not havt' a Third ltrrte, a r:rriiooper,.rlor
and a lookout:and
5. T)re vesseihad a defectivemain engine.fMemorandumof sulpicio Lines,
l n c . ,R o l l r i ,p p . 4 9 : l - 5 2 0 . 1
As basislrrr the liabilitl'of Calttx, the fiourt of Appealsrelied onArticles
20 and
2 1 7 6o f t h r ,f l i v i l ( ' r x L ,u. h i c h i > r o v i r l t , :

"r\rcicle20.-- .Lve^'p.rsu' *,ho


cuntrar.l'tolaw,willfully r,rrnegligently
cau-s(-'.s
danrageto :rnother,shall intlcnrnif-vtire lat|er ftrr the same.
"Article 21?6.-\l'hoever by act or r.rmissioncausesdamageto another,
there being fault or negligence,is obligedto pay for the damag?done.
such
fault or negligencc,if there is n. pre-existing cr-rntractualrela*tionbetween
the parties. is cailed a quasi-delictand is governedby the provisioneofthiE
Chapter."
.And what is negligence?

The Civil (lodeprorides:

"Article 1173.The fault or negligenccof the obligor coneist' in


the
omrssiono[that diligencew]rich is requiredby the natuie of the obligation
lty N(,r1ni A};t., (.A.\F,.sr/.\ TitF, t.AW ON TItA.l.i.$p,0lrTATlON
A}ii) PUIJLIL'UI'IIJTIES

und corresrrundgwrrh tha errcurrr:;lanccs ol ulrj ilerb.uns,or,rhe time aod of


the place'trVbennegligertce.shorvsbiid faitlr. ur. pr""iri"*
of etti.tu rrzr
a n d 2 2 0 1p a r a g r a p h2 , s l r a l !a p p i r
If the law doer not stat€ the diligence which is to be
obsertredin the performance,
that which is expectedof a go,cl far,h,riof a farnil-vshal]
l* ;;,r;;."
ln SouthcastentColleg:e,In,:. r. ('t,urt of Appeuls,t2gz
SCRA 422 (1ggg), cititrg
valenzuela v. court rrfAppeals,2,53s(jri;\ rol iltiti6t;
r.'r q"rbrr ; sandiganbayan,24{
SCtfA 22.1rlgg5r; Crr.ibsuk, Nr\ v. riirrchahan, l40
SCRA 2f2 (f996)J we aaid tbet
negligence, aa commonly unclersto<xl,is corrdr-rctwhich
naturally or reaeonably creatao
undue riak or harm to others. lt nrlry bc the failure
to ouserre irrat degree ofcarc,
precaution, and vigilance' wbich the circumstancesju.stly
demand, or tbe omissio" t" ao
something which ordinarily regulate the conduct of no*"n
atrarJ,'"routd do.
The charterer of a veggelha-sno obligation before transporting
its cargo to erun,ue
that, the vess€lir charrered compriedwirli'art regarrequiie;;;i;.
h" duty resta upon
the commoncarrier simply ftrr tx:ing ,,r,g,,gr,r1 irr .pubhc
u,ervice." IDe Guzman v,Court of
Appenls, l6s SCR*{,612 i lg8g)j r.n" civit b,rde dernands
arUg*"[ *nich ie U;
the nature of the obligation and t,hat whiclr corresponds ""q"ir?d
wirh the ctrcrrmstancee of +-he
persons,the time and the plitce.Henue corrsiiienng
, the nature oitUe oU6gauonbetseen
caltex and MT vector, the iiabitity as fc,undby thi c";;;pp;;
ig without baeis.
The relationship between the parties in this csse governed
is by epeciar Lrre.
Becaus€oithe implied wananty of seaworthinese,
[Under d*Uoo B(l) of the Carriagp
of Goodsby SeaAct. I shippers oi grxrds,when transacting
with colnmon canriers, aru not
expected to inquire into the ves",-'l's*carvorthineon.ghoiron;ae
of its ticengsr and
compliancewith atl maritirne laws.To cienrand-o.e
from rlripp"* *a hold them liable
in caee of failure exhibits nothing hrrr.t.hr, frrtility
of our maritime lawe insofar as
lhe protection of t,he public irr gt irerirl rs .,teerned.
lly the same token, we cannot
expect passengersto inquire every time th*y board
n ln**on carrier, *rr"lrr"" tir"
carrior posfio*seff tht rrr.cessrrrvpa[)(.r-s,rrihat. ull the carrier,s employeeeane qua_
lified' Such a practice would be an a'bsurdit.vin a
businesswhere time is always of the
essence.considering the nature of rr;rnsPrrrtarion business,jurr"rng"r, and shippers
alike cuetomarily presume that comsr'n t'arricrs possess
i tf,," i"g"r requiaiteain ita
operation. "f
Thus, the nattrr{'of the obliiJrrtirrrr
ol {';rltr.xrtirnandsordinary diligencelike any
r:ther slupper in shipplng hrs cargoe..

. -l-q*ory reading of therrecordsconvincesus that Calrex had - reasonsto believe


that MT Vector could legallv transp'rt carq.)rhat tir"*
;t; ;;;;.
"f

cirltex and vector shipping q"r"r*J,l had been doing bueinesssince 1985,or
for about two years before the tragic incident r-rcurred
in 1gg7. past s€fficea rendered
showedno reason for Caltex to obs,.r.,r,r a high.r dcgreeof diligen;-
olearly, as a mere voyagecharterer,caltex had
lhe right to pre'ume t},at the ehip
w a s g e a w o r t h y a s e v e n t h e P h i l i p g r i r r t{,l o r r s rC
. u a r c l i t e e l f w a s c o n v i n c e do f i t s
seaworthiness.All things considered,we find no legal
U"*ir to frofa ietitioner liable for
damages.
AsvectorshippingcorporationdidnotappealfronrthecourtofAppears,deeision,
.
we.limit our ruling to the liabilrty of caltex ,,ione.Howev"r,
*" -ui"t"in the court of
Appeals'ruling insofaras Vectoris concerned.
MARITIMN I-AW s80
(lhartr:r l'nrtres

{Thc SuprcntcCourt rcuersed the decisictnof'the,Court ol Appeals insofar


aa it luld Calt&
lioblc-unfur the third prty camplaint to reimburse I indemnifu
dcfendent sulpicb Litwc,
Inc. the damages thc latter is adjufued. to pay praintinr-"pwlii,
nit.. but affirmed dccbion
of thc court dfupealu iwofar aa it orders sufpiri, Luuts, Inc.to
the
1*,y rwirs of &fustian
E, caficzal and corazon^cafiezar danwges is ser
forth thervii. inrra-wrtr defcndant.
lilr' yw\llce ,V1t1orSh.ip1ting Corpt\rolirtt ttntlF\ttr,t i:t t, ,<i,triurtrtu t,rr lrr,ltllit$rlt,lrt n"imhurx
'J{.1 iwle ntnifv tlofi,tr1no,tfrlyricro Lmtn. lnc u,lrulc,r,t I
r ilutr,{r$,rs, rrutrrtwys, f&, t JJlt, ii
tltrrt krttc,rit utlludlgul t<tpay plutntt/l'uaplx:lh:t:xin the <.uxc.l "n
8l i':

I rt',
1) (l{

8Urt',
r[X)r,
trt 0t'
d bl'
f thl
teell
iis

8WS.
iag,t
e not
antl
iabl,s
tr as
Inn0t
r thir

,f the
)Pers
rn its
li

e $ll"v

:ltcr t

15. or
dered

e ship
of il:s
rle f,rr

:ision,
rurt of
CHAPTER1O
LOANSON BOTTCIMRY
AND RESPONDENTIA

The year 1s00 B-c. saw the emergence-of'an $:


empire in ancient
The first .rr"" li'g"uyro., to'iuuu-JJrr"aMesopotamia
knownas Babvron. $
the wholeof 4
Mesopotamia wa' Hammurabi. r*u-**pire extends to about seven hundred
miles long and about a hundred
mires wide. The famoua
#
ancient empire include_ther""grt
of stones *fr"r" Liof"rtiru.*
from trrig
laws known ae
fr
the code of Hammurabi was."1. r*".oae
"nt" - $
of lawe was "Bet up in the courtyard g
of temples for the public to.orr",rtt.i-- {
t
I
^ Among the fragments of the code of l{ammurabi that eur.\dvedincrude x
reference to rulee
"g"":TitgFttomry' The portion;ri;*.*abi,s code on
v:?#,":::"il'tri*t*ini'*""vt;ff ;;;;;"#\'ntotheow*ir $
t
I
t
'Tbe $
merchnlt advanced goodeto the trader,
a seated memorandum or inveitory who hended him in rcturn
containing tir;;;;;., of the gmde
on.heunderet*ndins rhat the trr"1"t" orio:f."Jpayabre were
tn beat fixedterms,6utthat in""""riii
ti,u ""aorr,i" u"iig -u-u*il,l ,huio,r**"
"r"".tnn ltie part,
through no negligcncuu. conrri"orr""
declaration to that effbct he elto,rte on rnaking '-'borha eolemn
b* rreed frorn iir;"b, capital
bonowed and interegt. rhi" amrngument
' v given
rs 6 . ' 4 ' r rlegar
s 5 4 r rforce
u l v e in
l I the code of
HammUfabi.,

The transactionmentionedin the ancient


in this jurisdiction.For morethr" ; codeof laws is arsorecognized
- roanson bottomry andrcspondcntia
are governedby the Codeof Comrnu..*.";;lr;y,

I. DEFINTTIONS ANDCONCEPT.
Bottomry,in maritime raw,is a contract
wherebythe owner of a ship
borrowsfor the use,equipm""t;;;;;;orrn*
pledgesthe ship(or the keelor r,u**t,G, iefinite term, and
"
Uoni^ ottneshipporspro tato)as security,with
the stipulationthat if the ship i" i""i
ari"g the voyageor during the rimilsd
time on accountof the perils;r"*";;;l-,
the lendershall losehis rnonev.z

'J l\'l l{r'orte,A


short Irinto*'f thc w,rrd, l$9? oxf<rrd
uuru paperback
'zlllack'n r-'rfxroscl( Edition,
r'dlt'lonrp.4g.
f .
Law Dictionary,6th Ed.
T
1
lmnrs6ffii#pond€nria

where tlre gmda, or Eomepart thereof, nre hypothecacodae eocurity for a


loan. t}o rcpa.ymentof which ir dep*ndent trlxrn marii.imc rirka, what enrues ig
a loan on reepondentia. The usual form of a loan on reapondentia is that of a
boad. ln this kind of maritine loan, it ie the borrower's peraonal reepoaeibility
which is de€med to be the principal security for the performance of thl contact,
hance the term "reepondentia.E
There must be a marine risk upon which the loan is predicated euch that
ifthe vess€l or the cargo is lost by virtue ofthat risk, the lender loseathe capital
or money lent. Thua, there is no bottornry nar rcopondcnfla if the money borrowed
is subiect to repayment in any event, nor in the caee where a collateral sasureg
tho obligation to repay as rryhenthere is an insurance policy upon the vesaol or
tbe cargo, as the case may be. the peculiarity of the loane on bottomry and
rcspandzntb aros€ fron the bazards of the trade whereby the lender had to
bear with, and aesume, the numemus marine perils thai lay in the path of
many a ship'e voyage; and thue, upon the termination of a eafe jounney, he ia
entitled to receive thereby a greater return on his principal then woo14or6i;"*,
be received by a lender in an ordinary or simple lo.o. Ho**""r, the lender in a
losn on rcspond.entia doee not lose his capital ahould the ahip perish due to
marine peril, so long as the geode subject of the loan euryive oi saved; but
where the ehip and the cargo on bo&rd it ehould disappear due to "r"perils of the
oea, the lender on rcspndenrlc ahall suffer ioea of his capital.

II. D|SNNGUISI{EDFROH STHPLELOAN


The loan on bottomry or reepondentia may be dietinguished from aimple
loan in the following rnanner:
Firetly, in bottomry or rcapondcntia, the rate of intereat ia not subject to
the Usury Law on account of the ertraordinary risks involved whercas in aimpte
loan, the rate of intereet must not exceed the ceiling fixed by the Usury Law.
saondly, in bottomry or reapondenlro, there muet necegseriti be e marine riek
t"heexistence of which mustbe duly established whereae in a simple loan, there
need not be euch risks involved. Thirdly, the loan on bottomry oi respondzntia
muet be executed in aecordance with form and lnaRner required in the Code of
commerce whereae in a simple loan, the formal requiaites regarding contracts
in general would apply. Fourthly, the loan on bottomry or reapondcnrla must ba
recorded in the regrstry of vessels in order to bind third p"r"ons whereas no
euch registration is required in the case of a simple loan. And fifth, in the loan
on bottomry or respandzntia, preference ie extenaea to the last lender if there
be several lendera, on the theory that were it not for the lagt lender, then tle
prior lenderr would not have benefited from the preeervation of ths occurity.
wherern, in a einple loan, t"he first lender, as a general rule, eqjoya preferen&
over subs€quent ones.

'Ibid.
ii *;.w .aa-^.rd.{rwabdlE;gilbl

1
.dd.

,{

I 6s2 NCIr*sAND"Tt?fgffy,ffif,Tff**mArroN

Theremay be.evente wherethe roanon bottomryor rcspondcntia


regardedas a eimpreloan onrv.tt mayb
u*, irtr," r*"d;;l;J; prove that he
an er's'nf which is larSerthan the vnryeo-ithe"ui"., roaned
loan due ro fraudurenr ri_.Tr"for the bott mT
T-"";i;;l"vui uv rr,* uo;;;;; loan shalrbevalii
only for the amountatwhich th" iujJ.t
principal shB"ilberepaidas if it i- *pp.ui*ua uy and the aurprua
**, * u ,1-pi" roan,wiih""fr"*, I
AIso, if the fuII amount of the ro"o r"g*r iot thereon..
*rri-.i';;;*;;"ii ""rtto
ord",
vesse!is not usc_,d.?. *.gr, roadthe
:h: ,, giu*n un the goodsii"ii them
havebeenroadetr. the barance"urr#'ro""id^er-ed could not
"f which
as a simpreloan
be returned prior to tt u .or*"o""rne.rt should
order to forestailthe possibiriivof or tn" uuy"g*.i-it i" is neceasaryin
oin", .untractswhichdiffer in nature
beingincludedunderihu from
k,t"mry loan.6Finally, if the effec,ts
which the money is taken"*"il b" "itr*r""uj".*a on
'--r to any risk, the contract \^nirbe
regardedas a simpleloan.?

III. PARNESTO THELOAiIS.

, The shipownermay Becurea roanon


t'hscasewherehe is only p""t L*r-t u,on his ship,arthoughin
a,rvfitt'mrl
bottc,,n; tr{;;;;y contractsharl
" oi;;;;;;-"r
ontv to ttre eitent
*-t'-T-rd
ls a part owner,may in like manner in the vlseel.ft* ,r,ip captainwho
obtaina loan o" uott"-.ionly to the
of his interest.Thereare instancu" ertent
ho**u*, when the captain,arthoughhe
no interest in the ship,may hae
on accountof extremenecessity,";;-.th;ilJ into a roanon bottamryaswhen,
"nte,
he may borrow
in orderto comnlvwith the.obiig"ri""J""der by meansof a loan on bottomnr
of commercu'*ilo roaneon uott,imry Aiicles sgs 6ll of the codl
mn] h,,*ou". be made, "ra
in any caoo,on the
salariesof the creq nor or the p"ufix'oiri"h
may be expected.e
Thc cnrgoown('r,on the rrtrrcrrrarr.r,
loan on respon'dentiatl,":t-?;til'"** shirilrravethe right to enterinto a
the ship owner and-not of the The captain, being a mere agent of
.u.g,i owner,may not contracta Ioan
respandentia,and if he does on
,,,"h-u roan wourdie void trr" principar,
interest,and costso{the .o"t"r"irirJrio
"o, "rra
.hurguubr;;-hi;'private
andhemayeven bedischarged;G;;#il;;,i account,
tii" rr,fi;;;,
IV. FORMOF THE LOA}IS.
llre loanson bottornryot respanerentic
rnuetbeexecutedin the accordancg
rormand manner
preacriberr.
i" n'ii.r" zlo Jr#;;-
rnJ,t" ofconmerce,

rArticle 726,
Code of Commerce.
oArticle 727,
C<d,eof Commerrt,.
rDel Vieo, p.
694.
TArticle ?29,
Code of Commerrce.
'Article
?28, Crxk,of Commonr,
rArticl.r ?21'r,
(ixlt of Commnrce.
roArticlo8l?.
Crxh of Commorro.
i iji

ffi
{ MARITIME LATry
I;rilrtl utr llllLrLilly 'rltri !terpol'tl''r'l ' '

*1. By me*tt" of a public iaetrunrenr'


partier
2. By meane of a poticy eignecl try the contraeting
ead tbe broher tlkins part tberein
8. By ncelr of e privatc instrument'

Undcrwh|cbcvorofthgreformlthecrrntrncti*erocutad,it
;;LJ r" tbo oortlltcato of regiatry of the-vescolrnd ehdl
"b"11
L rsrdod in th;rosirtry of voerale, without whtch roqu6itor, tho
the
*"aftt of thir kina siFtt not have, with regard to-othercrodits'
shlch, accordiog to their nature' They ehould have
p*f"."...
iitlo|rgu the obligation shall be valid between the contrecting
partiea.
govorrrod by tbe
Tbe contrscts mrdo during a voyage ehall b€
be effective wlth regard
prov6lonr olArttclor 68tt and 6l l,
",'d "tt*tt
tothtrdpor.oD'hornthedrteoft.heirerecution,ift.beyehouldbe
of the vccrol
romrdcd to th" t dttty of vecrolr of the port of regittry
her arival. thould
bcfors tbe lapce oi uix;lt daye trom tbe date of
arlu without the record haviTg been nade ln
tl" *fa cf*i
"tip."
the contracte made during tbe voyago of tho
*i *ttthi of vesreb'
prod.uce no efiect with regard to ttrird p€rson8, ereept
"o"oi"hall
lron the &y of their lnrcription'
eccqurlance
In order tbet the policy of the contracts execut€d in
fooce, they must conform.lo tbe regstry
wtt'hNo. Z rneyhevobisai'.i
prJ thsreln' *ith to thoee erecuted
of the broker wbo tooh "*"p*tof ttra algn*ure chdl
ln accordenewithNo. i, the acknowledguent
bo rrquircd.
not gfve rtsr
Contrectr which rre not reducod to wrlting shsll
to judicirl ection"'
r"rfttre kind, nome
Furthermore, the contract must contain a statemelrt
domicile of the captain; tbe
and regietry of the ve88el; the name, surname, and
grving and the p€r8on receiving
D8mes, sulanmeE, and domiciles of the p€r8on
the time for
the loan; the amouniof tU" loan andihu ptu*i.rm stipulated;
and the voydge during
rsp"ynuot; the objects pledged to secure repayment;
whicb the risk is t0 run.rr

v.co}|sEQUENcEsoFLossoFEFFECTSoFTHELoANs.
sea during the
If the effects of the loane be lost due to an accident of the
in the contract
ti-", *Joo tfre oaasion of the voyage which has been designated
lender losesthe right to
and it is proven that the ."rgo *L on board, thcn thc
The lender, howevel
institut€ tle action which *oota pertained to him as such.
inherent defect of t"he
,*t ir, ,rr"r, right of action if the loss was caused by the
trarratrv rrnrlte
ihfi;;; thto,rln th" fault or malice of the borrowcr,or through
the ve88€r.'s u
pa*1f tne ."pLio, or if it was caused by damages suffered by

rrArtiele 72l,Code of Commerce'


694 NOTESAND CASE.SONTI{E I"AW ONTRANSPORT41ION
A}ID FIJBLIC IInLT$ES

cons€quenceofbeing engagedin a contraband, Or ifit arose frum having loaded


the gpods on n vessel different from that deeignated in the contract, unlesg in
tlus iatte, instance, the change was made due to faru maiearv-a
The lendere on bottomry or respondcnlra shall suffer in proportion to their
reapectiva intereet, tho general average which rnay take placa ia the thingx
upon which the loane wsm made. In particular averagee,if tfiaro ia nOagfeemont
between the parties, tbe lender on bottonry ar rvspondantin is oblistrtsd to
contributs in proportiom to hie reepective interest, should it not beloog to th*
kind of risks excepted inArticle 731.13
If what transpiree ia a ehipwreek, the amount far the payment of t*re loan
shall be reduced to ihe procds of the effects which have been saved but only
aiter deducting the costs ofthe salvag*" Ifthe loan ehould be on the vessel or
an3,of her parts, the &eiglrt earned during the voyage for which the loan was
contracted ehall aleo br: tiable fcrr its pa;mtent, as far as it may reach.rr
If the eame 'resselor cargo should be the object of a loan on bottomry or
respondcntia and :::arine insurance, the value of what may be saved in caseof
shipwreck shall be divided between the lender and the insurer, in proportion to
the legitimate intereet of each one, taking into consideration, for tbis purpose
only, the principal with respect to the loan, and without prejudic* to the right of
rrreferenceof other creditors in accordnncewith Artiele S80.tt

vl. coDE oF coHMERcEPROVTSIONS.


AnflCLS ?1S.A lola in whtch under any condltlon whataver'
the repayment of tbe sun loaned and of the prenium rtipulatcd
depends upon tbe esfe arrivel h pprt of the goodr on which it la
made, or of the price they may receive in caee of accident' ehall be
coneidered a loan on bottonry at rcepondcntio.
ARTICLF: ?lO. Loanr oa bottom4r ar reepondentic may bo
erecutc&
l. By mecnr of a publlc irctrunenl
2. By mennr of a policy sisned by the contractlng partiex
and tbe brohor tekiag part therotn,
'
8. By meane of a pr{vete lnctruxrent.
Under whlchevm of theee forrnr the eontnrct is erecutsd' it
ahalt be eutored tn the cartll{cste of the neglctry of tha voc*l and
chell bo reeordd tn the rtgiatry of veorela, wlthout whioh nquidtoc
tho cradita of thle klnd ohall not h*vc, wtth regerd to ot&or ortdttq
the pnneferencowhich' rccording to thei'r nnture, thoy rhould hava'

rrArticle 731, Code of C*mmerce.


ItArticle 732, Coqteof Cr:rnmerte.
t'Article 734. Code of Commerce.
ItArticle 735, Code of Comnerce.
{r.,.**.i."!ffnd{r *-&lfdi*rtbr*ffi d*&4'*

MA}iITIME I"AIY
Laaneon Bottomryand llerpondentia

altbomgh the obligation ehall be volid between the coatraeting


partiee.
Tho contrtcta nade during a voyage ehnll b€ govemcd by the
provielonr of Articlec 68il and 0l l, and ohall be efiectlvs rrlth rcgnrd
ht'tr
to thhd porrern bon the date ol thoir erocutlon" tf thcy rhculd bc
lngri
r'ecorded in the regirtry of vese€ls of the port of rcglrtry of tha vcrrel
Ietrl before the lapce of eight daye following ite arrivd. If caideight daye
d tt, should elapee without the record having been uade il tbe
tht' colreaponding regiatry, the contracte made during the voyage of a
veeg€l ehall pr.oduce no efrect with regard to third peraons, ercept
'0it from.the day and date of their inscription.
r,
r r rl r ln orrder that the policy of the contractc executrcd in eccordnraca
' l . lt ' n'ith No. 2 mny huve binding firct, llrr.I nrurt confoim to tbo rsglrtry
wil:i
of the broker who took part thc'rein. With respect to ihoec erecuted
in accordance with No.3 thcl acknowledgment erfthe rtgnatuno rhall
be required.
\ rll
Contracts which are not reduced to writing ghall not give riee
to judicial action.
n t,,
xls('
ARTICLE 72L. In a contract on bottomr5r or retportdcnt'rc the
following must be ststed:
)t 0l
l. The kind, nlm€, and rcgiotry of the vooeel.
2. Tbe name, lurnane, ond domicile of the eaptein.
3. The n&nher,rurn&melr, snd domicllclr of the p€rfirn glvtnf
and the peraon neceiving the losn.
4. The s.mount of the loan and the premium stipulsted
5. The time for repaSrment.
6. The goods ptedged to eecure repayment.
7. Tbe voyage during which the risk ie ru!. $*
AfiTICLE 722, ?*nc contnrct may be sredo to ordor, ln whlch $[
cnro l,hey rhrll bo trnnafrrnhlo by inrlorr*nront, rrnd thc lndoraao li
lr,

rhall acquiro nll the rightc arrd ehall incur all the riskr cornoapondtng $!,
ll
to the indoneer. t.
rt
ARTICLE ??-i. toane may be made in goodc and in s61shrnfi66, I!
fixing their value in order to determine the principal of the loan I}
it'
it,
ARTICLE 724, The loans may be constituted jointly or t:
reparately: it
E'
5t
1g
1. 0n the hull of the veerel. :*
ts $
!
2, On tho rlfging. t {,.
S. On the equiprnent, provieionu, snd fuol. ti
rt
$t
4. On the engine, if the veseel ie a st€amer, ttl
!.:q
t r-
5. On the merchand.ise loaded. lf,
t{:
If the loan in conetituted on tbe hull of the veerelo the rigging Il'
equipment and other goode, prnvisions, fuel, etesni enginec, and the
sec NorEsAND
r*fffi,.filfJ#,r,:ffiy*sF0&rArToN

frclfhtrfo orrnod d_urirgth:


v-olage o: rljgh the loan ir ,*ode
Ebo be conridersd ee ioctudea ehdl
i, in. liability for the lorn-
I?thc loan rbe earjo, all that which constituter
ra.ae ebnil be rnbjel
I.T*:" 6. the
of the veecel o1.or th" ? ""o""Juorr.3nd if on .;;;;"" object
cpccifica{y nentioned ,uu ouj"ci[-o"-rltnrv
";;;;oi"l"
tii;;t . ",na
"h.u
AnnCLE ?25. No loans oa
rrl.rlcr of tho Grlr or on bottomry
-orp**t6d.pay U* rnadc on tho
tho prrnt
A*''CLE ?lS. I! th"
rarountr'rracrtharrtha lsnder ehould pnovo thct bs lornsd rn
""r"r -*"",r".e
ror'n' o! aeoou'D'of baudulent "itrr".ru.i.*i ri"ur, t" ii" L,**o
emproyed uy tilJuo-o-ur,
ffIffiH;#: "d;;;;"unt atwhrcf,
earJobjecd
re
The rurpluc principal shau
be retumed with legal iater-egtr for
the entire tin, o",q.rirrd
f;;;;";;;t.
AR?ICLE ?2?- If th,e liill qrno+nt of the
to load the vecrer.n""rJ""r loan contrrcted in ordsr
bc r.eturnod before cloaring.
f""Ji
- ---s ri"
"r trr* car3o,tho barrnaerhrll
llte nne nr.ocedura rhsll
bo obxrrvcd with r*grrrd to
trl,cn ar lorn, tf thcy wcne the goodr
aot loaded.
ABTICIJ ?2t. The loao which
rhe.captal"n ta&,ecat tho polat
ne€ldeacc of t'he owncn of of
u. only afiect tbat pnrt thereof
which belonjr to the ;;*h-,"il;;;her
"""*r "il"u
exould not have owne'or tleir rgents
rrvgl o;'t ;6;;;iho"i""tioo thenefor or rhoutd
Dot Dave taken part in the
traaeacti;
rfone ornoreof the orraers
r'ount noqr.rrv to rrepairor shourd hc requeetad to furairh the
p.ort.ror, th. ,;;i;i",Ll,,u"ua
not do ro wrthrn i-roty'fo'r
ln default nry have ln
d";, il; in'erreetwhich.tbe partier
the ,;"il be tiabre for the toan in the
propcr proporlion. "*;t
Outcide of the neaidence of
the ownere- the captn In may
loaag in aecordance with coatract
th;;;;"t;; of Artielee 68$ eod drt.
ARTTCLE ?20' sbould the goodc
be eubjoctad to rir\ th-u on which rnoney ie tarren
not
rlth.tho oblbation on th. "orrt"ir-t;;iil consrdered a rrmpre roen,
p""t;ith;
rndrntamrt
il lt rt"r i,il-;;"r;:?
;;;
ff :fr: *i rJtrH
ARTICLE
"fi
?$0. Loenr
pnolerenre over thore mrdo durlng tho voyage rhalt
ma*e befor-1iu hrve
they rhalt be graduated i, .t*o.ing of the voerel, and
th;i;;;;i"o." of their datea.
loaac for the tact voyage
oo"**" shall hove prefenence over prior

Should several loanq f,ave


been made-at tbe eame port of
undcrghecs and fortheG;-r;r;;ll arzival
of them ehsu b€ paid pro

ARTICLE ZSf. The perraining


erttqutebcd bv thc .ur"r"tu
TToy to the lender rhalt be
i"J;ffi goods on which the rorn
MARITTMET.AW
Loanson llottomryandRorpnndentia

w*r mede' lf lt srnoeo fnom an accident of tho rcr


at t,ha trno end
d.uring thc voyage deeignated in the coutracr."a i-i. p"vcn thet
thc cargo !ra. on bo.rq but thre rhril not tala plroo
rinc rm rnr
caursd hy the lnh3;s1i defect of t"hc thi&g, o, tLoogt
tlr-t"ott o,
melice, of the bo*wea or barnetry on thJ part of thz crptrirq or if
it wac caueed by drneg.r auffered f,y the vess€l . ro."fruoncc of
being engaged in contratrnnd, or if li arocc from "rhavtng
loaded the
merchandia€ on a vecaer differeaf fron thet aerigbiGd
is the
contract, unlesg thic change ahould have been -"aiby
reaeon of
force mqjeure.
h'oof of ths loce ac welr nr of the exictenco ln tho vcocr
of the
goods declarcd to tho render ss the object of
- the loan il inc'nbsnt
upon him wbo necoived t"be loen-
AIfIICLE 7f!. Ipnderc on botto mryt or rr.lcrrcrdrtentlg-,cbalt euffe4
in proportion to tbeir necpective interccf the gencal
ew"agc wnicn
mey take plrcc in the goodr on which the loan ic nrde.
In patticular averegeq in the absence ofan erprere
t*r6€ment
between the contracttng partier, the lsndcr on
botionry or
rztpandentia rhall aLo- contributo in prcportion to hi, o""p".uo,
intereet, ahould it not berong to the kiniof ;"t.-- - ;;pidh
-------- the
foregoing article.
ARTICLE ?lllt" thould the poriod durtng whrreh the leadgr
chrr
rua the rirk not brvc boon rtrtad rn tho coutracr
rt rba[ r"'t, wtth
r.egard to the veaeel, enginee, rigfrng, aad equlpmonq
d thc
moment grid vecr€l putr to ees uatn rhe drtrpr rnclor.rn
irha port of
deetlnation; and rtth regerd to the merehandiec,
hom th" tl-" tury
are loaded at tho shoro orshrr{of the port of jhlpment unttt tbey
are unloaded ln the port of eonrlgn-.ol
ARTICLE ?8{. rn caco of chlpmec\ the *rou,nt linble for tho
palrment of tho loss shnil bc reduced to the p;;"d";til.
goodr
eave4 sfter dedusting the cocts ofthe ealvage.
If the loan should be on the vegs€l or any of ltr par{s,
the
lbelghtago serrrcd durrn* tho voyaga for rybich
*rd'rorp xae
oontraetod rhell rbo bb [shlc for ttc piyrnonf ar fir
lr rr mey rnercb.
ARTICLE 7s6. If the aane veaa€r or cargo ehould be
the obJect
of a loan on bottomrr or retpondenrro and marrne
iarurence, ths
velue of
tha_t m_al bo ravad ln care of rhlpwrect ,nati n" at"iCuA
D€rween the lend€r and-the lnrurer, tn proportlon
to the lcattimatc
Tt"ort of eech ona, tnrrrng tnto concrderatLn, for thl, fiffi onry, j
ihe prlnclpal Fith rfp?c{ to the lonn, and wtihout pi{"ai*
L tf,
right of pnefe'ene of other creditors in accordanoe *lt[
rra.u cm.
AIUIICLE 7SS.If there ahould be delay ir repeymeut of the
prin-cipal and preru.lurnr of the loen, only ur r""-".,a"u
borr of
legal intereel

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