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What is the Doctrine of Limited Liability?


Also called the no vessel, no liability doctrine, it provides that liability of ship owner is
limited to ship owners interest over the vessel. Consequently, in case of loss, the ship
owners liability is also extinguished. Limited liability likewise extends to ships
appurtenances, equipment, freightage, and insurance proceeds. The ship owners or
agents liability is merely co-extensive with his interest in the vessel, such that a total
loss of the vessel results in the liabilitys extinction. The vessels total destruction
extinguishes maritime liens because there is no longer any res to which they can attach.
(Monarch Insurance v. CA, G.R. No. 92735, June 8, 2000)

What are the exceptions to the doctrine of limited liability?


1. Repairs and provisioning of the vessel before the loss of the vessel; (Art. 586)
2. Insurance proceeds. If the vessel is insured, the proceeds will go to the persons
entitled to claim from the shipowner; (Vasquez v. CA, G.R. No. L-42926, Sept. 13,
1985)
3. Workmens Compensation cases (now Employees Compensation under the
Labor Code); (Oching v. San Diego, G.R. No. 775, Dec. 17, 1946)
4. When the shipowner is guilty of fault or negligence; Note: But if the captain is the
one who is guilty, doctrine may still be invoked, hence, abandonment is still an
option.
5. Private carrier; or
6. Voyage is not maritime in character.

What are the civil liabilities of ship owners and agents?


1. Damages suffered by a 3rd person for tort committed by the captain;
2. Contracts entered for provisioning and repair of vessel;
3. Indemnities in favor of 3rd persons arising from the conduct of the captain from
the care of goods; and
4. Damages in case of collision due to fault or negligence or want of skill of the
captain.

Who is a ship agent?

The person entrusted with provisioning or representing the vessel in the port in which it
may be found. Hence, whether acting as agent of the owner of the vessel or as agent of
the charterer, he will be considered as the ship agent and may be held liable as such, as
long as he is the one that provisions or represents the vessel. (Macondray & Co., Inc. v.
Provident Insurance Corp, G.R. No. 154305, Dec. 9, 2004)
What are the powers, functions, and liabilities of ship agents?
1. Indemnity for expenses incurred for ships benefit.
2. Discharge of captain and/or crew members. The following are the rules observed
by the ship agent:
a. Captain and/or crew members contract not for a definite period or voyage:
i. Before vessel sets out to sea: Ship agent at his discretion may discharge the
captain and members of the crew. Ship agent must pay captain and/or crew members
salaries earned according to their contracts, and without any indemnity whatsoever,
unless there is an expressed agreement;
ii. During voyage: Captain and/or crew member shall receive salary until return to
the port where contract was made. Article 637 of the Code of Commerce enumerates
the just causes for discharge.
b. Where captain and members of the crews contracts with ship agent be for a
definite period or voyage:
i. Captain and/or crew members may not be discharged until after the fulfillment
of their contracts, except by reason of insubordination in serious matters, robbery, theft,
habitual drunkenness, or damage caused to the vessel or to its cargo through malice or
manifest or proven negligence. (Art. 605, Code of Commerce)
ii. If the captain should be the vessels co-owner, he may not be discharged
unless ship agent returns his amount of interest therein. In the absence of agreement
between the parties, interest shall be appraised by experts appointed in the manner
established by civil procedure.

In what causes shall the captain be not liable for loss or injury to persons or
cargo?
1. Force majeure

2. Obligations contracted for the vessels benefit, except when the captain expressly
agrees to be liable.

In what cases shall the ship owner/agent be liable to the damages caused by the
captain?
1. Damages suffered by the vessel and its cargo by reason of want of skill or
negligence on his part
2. Thefts committed by the crew, reserving his right of action against the guilty
parties;
3. Losses, fines, and confiscations imposed an account of violation of customs,
police, health, and navigation laws and regulations;
4. Losses and damages caused by mutinies on board the vessel or by reason of
faults committed by the crew in the service and defense of the same, if he does
not prove that he made timely use of all his authority to prevent or avoid them;
5. Those caused by the misuse of the powers;
6. For those arising by reason of his going out of his course or taking a course
which he should not have taken without sufficient cause, in the opinion of the
officers of the vessel, at a meeting with the shippers or supercargoes who may
be on board. No exceptions whatsoever shall exempt him from this obligation;
7. For those arising by reason of his voluntarily entering a port other than that of his
destination, outside of the cases or without the formalities referred to in Article
612; and
8. For those arising by reason of non-observance of the provisions contained in the
regulations on situation of lights and maneuvers for the purpose of preventing
collisions (Art. 618).
Note: Ship owner/agent is not liable for the obligations contracted by the captain if the
latter exceeds his powers and privileges inherent in his position of those which may
have been conferred upon him by the former. However, if the amount claimed were used
for the benefit of the vessel, the ship owner or ship agent is liable.

What are the obligations of the captain?

1. Inventory of equipment
2. Keep a copy of Code of Commerce on board
3. Have a log book, freight book, accounting book 4. Conduct a marine survey of
vessel before loading
4. Remain on board while loading
5. Demand pilot on departure and on arrival at each port
6. Be on deck when sighting land
7. Arrivals under stress: to file marine protest in 24 hours
8. Record bottomry loan with Bureau of Customs
9. Keep papers and properties of crew members who might die
10. Conduct himself according to the instuctions of the ship agent
11. Report to ship agent on arrival
12. Observe rules on the situation of lights and maneuvers to prevent collisions
13. Remain on board until the last hope to save the vessel is lost and to abide by the
decision of the majority whether to abandon or not
14. In case of shipwreck: file marine protest, within 24 hours
15. Comply with rules and regulation on navigation. (Art. 612)

What are the inherent powers of the ship captain?


1. To appoint or make contracts with the crew in the ship agents absence, and to
propose said crew, should said agent be present; but the ship agent may not
employ any member against the captain's express refusal
2. To command the crew and direct the vessel to the port of its destination, in
accordance with the instructions he may have received from the ship agent
3. To impose correctional punishment: a. Upon those who fail to comply with orders;
or b. Those wanting in discipline
4. To make contracts for the charter of the vessel in the absence of the ship agent
or of its consignee
5. To adopt all proper measures to keep the vessel well supplied and equipped,
purchasing all that may be necessary for the purpose, provided there is no time
to request instruction from the ship agent
6. To order, in similar urgent cases while on a voyage, the repairs on the hull and
engines of the vessel and in its rigging and equipment, which are absolutely
necessary to enable it to continue and finish its voyage. (Art. 610)

What is the three-fold character of the captain?


1. General agent of the ship owner
2. Vessels technical director
3. Government representative of the flag he navigates under
What is a voyage charter?
A voyage charter is a contract wherein the ship was leased for a single voyage for the
conveyance of goods, in consideration of the payment of freight. The shipowner retains
the possession, command and navigation of the ship, the charterer merely having use of
the space in the vessel in return for his payment of freight. An owner who retains
possession of the ship remains liable as carrier and must answer for loss or nondelivery of the goods received for transportation. (Cebu Salvage Corp. vs. Philippine
Home Assurance Corp., G.R. No. 150403, Jan. 25, 2007)
What is a charter party contract?
A contract whereby the whole or part of the ship is let by the owner to a merchant or
other person for a specified time or use for the conveyance of goods, in consideration of
the payment of freight. (Caltex v. Sulpicio Lines, G.R. No. 131166, Sept. 30, 1999)

What are the requisites before claim for damages under Art. 366 may be
demanded?
1. Consignment of goods through a common carrier, by a consignor in one place to
a consignee in another place; and
2. The delivery of the merchandise by the carrier to the consignee at the place of
destination (New Zealand Ins. Co., Ltd. v. Choa Joy, G.R. No. L- 7311, Sept. 30,
1955).

What is a bill of lading?


It is a written acknowledgement of receipt of goods and agreement to transport them to
a specific place and to a named person or to his order.

Liability of the Registered Owner of the Vehicle


May the registered owner of the vehicle be held liable for damages suffered by a
third person in the course of the operation of the vehicle?
Yes. The registered owner of a public service vehicle is responsible for damages that
may arise from consequences incident to its operation or that may be caused to any of
the passengers therein (Gelisan v. Alday, G.R. No. L-30212, Sept 30, 1987). Also, the
liability of the registered owner of a public service vehicle for damages arising from the
tortious acts of the driver is primary, direct, and joint and several or solidary with the
driver. (Philtranco Service Enterprises, Inc. v. CA, G.R. No. 120553)

Liability for Damages Caused by Mechanical Defects of Equipments


Is a carrier liable to its passengers for damages caused by mechanical defects of
equipments or appliances installed in the carrier?
Yes, whenever it appears that the defect would have been discovered by the carrier if it
had exercised the degree of care which under the circumstances was incumbent upon
it, with regard to inspection and application of the necessary tests. The manufacturer is
considered as being in law the agent or servant of the carrier, as far as regards the work
of constructing the appliance. The good repute of the manufacturer will not relieve the
carrier from liability. The rationale of the carrier's liability is the fact that the passenger
has neither choice nor control over the carrier in the selection and use of the equipment
and appliances in use by the carrier. Having no privity whatever with the manufacturer or
vendor of the defective equipment, the passenger has no remedy against him, while the
carrier usually has. It is but logical, therefore, that the carrier, while not in insurer of the
safety of his passengers, should nevertheless be held to answer for the flaws of his
equipment if such flaws were at all discoverable. (Necesito v. Paras, G.R. No. L-10605,
June 30, 1958)
What is assumption of risk on the part of passengers?
Passengers must take such risks incident to the mode of travel. Note: Carriers are not
insurers of any and all risks to passengers and goods. It merely undertakes to perform
certain duties to the public as the law imposes, and holds itself liable for any breach
thereof. (Pilapil v. CA, G.R. No. 52159, Dec. 22, 1989)
Aboitiz Shipping Corporation vs. CA, GR No. 84458, November 6, 1989

Is the victims presence in a vessel after 1 hour from his disembarkation was no
longer reasonable and he consequently ceased to be a passenger?
No. Carrier-passenger relationship continues until the passenger has been landed at
the port of destination and has left the vessel-owners premises (Aboitiz Shipping
Corporation vs. CA, GR No. 84458, November 6, 1989)

Injury While Trying to Board the Vehicle


May a common carrier be held liable to a passenger who was injured and
eventually died while trying to board the vehicle?
Yes. It is the duty of common carriers of passengers to afford passengers an opportunity
to board and enter, and they are liable for injuries suffered by boarding passengers
resulting from the sudden starting up or jerking of their conveyances while they are
doing so. The victim, by stepping and standing on the platform of the bus, is already
considered a passenger and is entitled all the rights and protection pertaining to such a
contractual relation. (Dangwa Transportation Co., Inc. v. CA, G.R. No. 95582, Oct. 7,
1991)

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