573 Merchant vessel constitute property which may be
acquired and transferred; Investigation into character
Acquisition of vessel – written and registered;
Acquisition by prescription
a. GF – 3 years with good title
b. BF – 10 years;
A captain may not acquire by prescription. Why?
GR and XPN
574 Construction of vessels
What is a vessel?
Vessels governed by COC – merchant vessels
Vessels are movable or personal properties
Modes of acquisition of ownership – (6) and others
Two types of sale of vessel – voluntary and judicial
Registration of vessels – PCG has exclusive
authority over (1) registration and documentation
and (2) issuance of all certs, licenses, and docs
necessary
Vessels required to be registered
Vessel 3 tons or less need not be registered (GR
and XPN)
Where registration is to be effected
a. Home port (when coast guard district is in
the said port)
b. Nearest Coast Guard District or Station
(when home port does not have such)
Options as to small boats
a. Cert of PH registry
b. Cert of ownership
c. Reg w PH Coast Guard
Record of docs affecting title – kept at principal
port of entry at PH Coast Guard office
Presumption of ownership from registration
Mere acts of ownership of a vessel registered in
another’s name by one whose funds the vessel was
purchased does not overcome the presumption.
Presumption is prima facie, not conclusive
Purpose of registration of the purchase of vessel
Registration of chattel mortgage of a vessel – not
necessary, only record affecting title needed
Purpose of certs of register of vessels (Cert of PH
register) – declare nationality of vessel
Aliens may be licensed as ship brokers
Ship brokerage:
a. Purchase and sale of vessels
b. Negotiation of freight, passengers, and
other business for xxx
Privileges of cert of ownership
of vessel by
Commandant PCG
1. W/N engaged or destined to be engaged
in legitimate trade
2. Domestic ownership
Inspection by Coast Guard District or Station
Commander
1. W/N engaged in legitimate trade
2. W/N entitled to have or retain the certs of
PH register
Administrative investigation by Coast Guard District
or Station Commander
1. W/N ownership is in accordance with law
Judicial review of findings of customs authorities
Shipbuilding and repair to be registered but not as
public utility – no Cert of Pub Conv is required
1. Valid COR
2. License from MIA
Radio apparatus
1. Vessels of PH register engaged in
coastwise trade and authorized to carry
passengers and/or freight
2. Cargo vessels of PH register of 350 tons or
more, engaged in coastwise trade, the
number of the crew complement
notwithstanding
3. XPN: vessels plying exclusively on rivers,
lakes, and bays, and on straits when the
distance traversed is not greater than 60
miles point to point and its voyage does
not last over 5 hours
Equipped with radio apparatus – distance of 200
nm or more
Operator – first class commercial radio telegraph
operator’s license
Bay and river coastwise license
Issued only if there is presentation of schedule of
rates and trips duly approved by the Public Service
Commission
In case of delay in issuance of approved sched,
license may still be issued with proper certification
of the PSC. Secure w/n reasonable time the
approval of scheds. Such approval shall then be
 noted on license
Vessels in deep sea fishing which carry their catch
to a port for sale are engaged in coastwise trade
575 Right of redemption and repurchase by co-owners
to sales made to strangers
Prescription: Within 9 days from inscription of the
sale in the registry and by depositing price at the
same time
576 Sale of vessel (what are and are not included)
Included: rigging, masts, stores, and engine
belonging to vendor at the time of the sale
Not included: arms, munitions of war, provisions,
and fuel
Obligation of vendor: deliver certified copy of the
record sheet of the vessel in the registry up to the
date of the sale
577 Sale of vessel (freightage and payment to crew)
1. While it is on voyage : purchaser
2. After the vessel arrived at the port of
destination: vendor
Right of pre-emption or first refusal: before sale;
prevents sale to third parties; action against seller
Right of redemption or repurchase: after sale;
dissolves a perfected and consummated sale;
action against purchaser
578 Voluntary sale abroad (vessel is on voyage or
foreign port)
1. Execute bill of sale before the PH consul at
the port where it terminates its voyage
2. Inscription in registry of consulate – to
affect third persons
3. Forwarding by consul of a true copy of the
instrument of purchase and sale to the
registry of vessels of the port of
registration
4. Statement must be made to appear of
whether vendor receives its price in whole
or in part or whether he preserves in
whole or in part any claim on said vessel.
This fact be stated in cert of navi if sale is
made to Filipino.
Formalities for sale of vessel when rendered
useless for navigation
1. Captain shall apply for examination of the
vessel
2. Notification of the consignee or insurer
should they reside at said port or their
reps thereat
3. Proof of damage and impossibility of the
repair of the vessel (579)
4. Order for sale at public auction (579)
579 Proof of damage and impossibility of vessel is
shown, order then the sale at public auction,
subject to rules:
1. Appraisal of hull, rigging, engines, stores,
and other articles, after making inventory,
said proceedings be brought to the notice
of the person who will take part in the
auction
2. Order or decree to hold auction be posted
in usual places/ OG/ two newspapers of
largest circ in port of auction
3. Period fixed for action 20 days or more
4. Announcement: repeated every 10 days
and publication made to appear in records
5. Hold auction on day fixed with formalities
prescribed
6. If sale is of vessel in foreign country,
proper procedures to be observed
PH vessels cannot be sold other than to Filipino or
American citizens
If acquired by NDC – Filipino or corps with 60%
Filipino ownership
580 How funds from a judicial sale for payment of
creditors be distributed and for cancellation of liens
held against ship – ORDER OF PREFERENCE
1. Public treasury
2. Judicial costs of proceedings
3. Pilot charges, tonnage dues, and other
seaport charges
4. Salaries of depositaries and keepers of the
vessel; expenses for preservation from
arrival to sale
5. Rent of warehouse of rigging and stores of
vessel
6. Salaries due the captain and crew during
last voyage
7. Reimbursement for goods of freight which
captain sold for repair of vessel (thru
judicial proceedings and recorded in
registry of the vessel)
8. Unpaid balance to vendor; unpaid credits
for material and labor in construction,
repair, provisioning with victuals and fuel
9. Amt borrowed on bottomry before
departure of vessel; borrowed during
voyage with authorization; insurance
 premium
10. Indemnity to shipper for undelivered
goods to consignee or for averages
suffered (with judicial or arbitration
decision)
581 Insufficiency of proceeds to pay creditors in one
number or grade – divided pro rata
582 Effect of execution and registration of bill of judicial
sale: extinguishment of liabilities. However, the
rights of persons not parties to a proceeding cannot
be affected thereby.
If proceeds of sale are not sufficient to cover
creditors as well as those unsecured or unpreferred
ones, the credit subsists. But creditors no longer
has guaranty and converted into ordinary credits.
Effect of registration of voluntary sale and made
while vessel is on voyage: credit subsists against
vessel until it return to the port of registry and 3
months after inscription of the sale in registry of
vessel or the arrival
580 creates lien upon vessel in favor of creditors
acc to rule of preference; the vessel serves as
guarantee for the satisfaction of claims of vessel
Legal liens – whoever buys a vessel or loans money
with the vessel as security on a chattel mortgage
takes the vessel subject to such liens. Hence, in no
case can the sale of vessel or the foreclosure of
chattel mortgage affect prior liens. The ship is taken
subject to the claim.
Lienor is given:
1. Right to arrest vessel for payment of his
claim
2. Proprietary interest – kind of limited
ownership to the extent of his claims
against the vessel
Procedure of enforcing liens (not only in 580 but
collection for any lien): 579 and 584
Any vessel may be attached and sold under this the
substantive law which defines the right and under
the procedural law in COC
Where there is no lien or charge upon vessel:
Attachment under Rule 59 of the ROC
Vessel may be made a defendant and be arrested
583 Procedure for contracting obligations under 580 (8)
(9), if while on voyage, captain finds it necessary to
contract said obligations:
1. Application by captain to xxx
2. Presentation by captain of certificate of
registration sheet
3. Making by judge or authority of
temporary memorandum of the result of
proceedings in the cert
Omission of the procedure: Captain shall be
personally liable for obligations contracted
584 Scope: Attachment and judicial sale of vessels
subject to liability under 580 as well as other
credits
1. 580 credits: attachment and sale
anywhere or in any port in which the
vessel may be found
NOTE: Where the vessel is loaded and
ready to sail, attachment may not be
effected.
XPN TO NOTE: Debts contracted to
prepare and provision the vessel for the
same voyage
2. Other credits: attachment and sale in the
port of registry
MODIFICATION AS TO OVERSEAS SHIPPING
The lien of preferred mortgage may be enforced by
suit in rem or otherwise in PH, or in any foreign
country in which the vessel shall be found pursuant
to the procedure of said country for the
enforcement of ship mortgages constituting
maritime liens on vessels documented under the
laws of said country.
585 Vessels as personal property
TITLE TWO: Persons who take part in maritime commerce
SECTION ONE: Shipowners and ship agents
586 Civil liability of shipowners and ship agents for the:
1. Acts of the captain
2. Obligations contracted by captain for REP
the vessel: creditors must prove amt
claimed
Ship agent – person entrusted for provisioning and
representing the vessel in the port in which it may
be found
587 Civil liability of ship agent (includes ship owners) for
indemnities in favor of third person arising from
conduct of the captain in care of the goods or to
other illicit or negligence acts of captain

Exempt: Abandoning the vessel w/ its equipment
and freight it may have earned. The effect is to
extinguish liability of the ship agent or owner. No
vessel, no liability.
588 Acts beyond the power of the captain
GR: Shipowner and ship agent are not liable
XPN: Amt claimed were invested for the benefit of
vessel
XPN TO XPN: Article 1759 – liability of shipowner
for death or injury of passengers for willful acts of
its employees
Persons who participate in maritime commerce:
1. Shipowner
2. Ship agent
3. Captain or master of the vessel
4. Other officers (sailing mate;
quartermaster or second mate; engineer)
5. Seamen
6. Other persons who make up the
complement (stokers; supercargo)
Liabilities of ship owner and ship agent: They are
primarily liable for the –
1. Acts of the captain
2. Obligations contracted by captain for REP
the vessel: creditors must prove amt
claimed
3. Indemnities in favor of third persons
4. Damages to third persons for tort or
quasi-delict committed by captain, except
collision with another vessel
5. Damages in case of collision due to the
fault or negligence of the captain, sailing
mate, or any member of the complement
6. Losses and damages due to shippers and
owners of cargo transported (note: agent
has recourse against ship owner)
Reason for imposition on liability on owner:
He has the actual control over the conduct of the
voyage and has the most capital embarked in the
venture
Liability of owner when vessel is leased:
1. Owner continues to be responsible to
third persons for acts of the captain, even
if the captain is appointed by the lessor,
because the captain is the only one who
appears as having control of the vessel in
the certificate of registration to which
third parties look.
2. The delegation by lessor of a captain does
not exempt owner because if such effect
is allowed, then owners can easily
circumvent the law by exploiting the
vessel thru lease.
3. Also, the law does not distinguish the
liability of the owner when the captain is
appointed by him or not.
Charterer
He is not liable if he has no jurisdiction or control
over the acts of the captain.
Liability of agent for lawful and unlawful acts of the
captain
1. Lawful: liable due to contract of agency
2. Unlawful: subsidiary liability
The law does not make the liability of the ship
agent dependent on solvency or insolvency of ship
owner or charterer.
Limited liability of ship owner or agent
Limited to the value of the vessel or its insurance,
as evidence by 587
Note: Limited liability is not applicable if there is no
abandonment of the vessel
Effect of abandonment:
Extinguishment of the responsibility of owner as it
amounts to an offer of the value of the vessel, of
her equipment, and freight money earned
Acceptance of abandonment is compulsory. It
cannot be refused by the creditor.
Principle of limited liability: Abandonment of the
vessel by shipowner will absolve him from liability
587: abandon the vessel, liability is limited to the
value of the vessel (including equipment and
freight money earned)
590: reiterates principle in 587
837: applies 587 principle in cases of collision and it
has been observed that such article is a necessary
consequence of the right to abandon the vessel
given to the shipowner
Limited liability applies to maritime liens:
When there is total destruction of the vessel,
maritime liens are extinguished as there is no
longer res to which it can attach
Non-application of limited liability rule:
 1. Where shipowner is at fault
Rationale: The doctrine is premised on the
condition that the death or injury to the
passenger occurred by reason of the fault
or negligence of the captain only
2. Compensation Act
3. Liabilities for repairs of and provisioning
of the vessel effected before loss of vessel
4. Where the vessel is insured
GR: Three cases where the loss or destruction of
vessel extinguishes liability of shipowner:
1. 587 – liability arising from acts of the
captain in care of goods or passengers or
other negligent or illicit acts of captain
2. 643 – liability for the wages or the captain
and crew and advances made by ship
agent if the vessel is lost by shipwreck or
capture
3. 837 – liability for collision
XPN: Does not affect liability of owners for repairs
of vessel completed before loss (naturally, loss
extinguishes maritime lien, but not this)
Origin and reason for limited liability:
The doctrine is established due to the innumerable
hazards and perils attending maritime trade and
voyages. To offset against these adverse conditions
and to encourage ship building and maritime
commerce, it was necessary to confine liability to
the value of the ship, its equipment, and freight, or
insurance. So that if the shipowner or agent
abandoned the ship, equipment, and freight, his
liability was extinguished.
589 Part owners – partnership presumed as established
by co-owners
Deciding in cases of disagreements of views:
1. More than 2: resolutions of majority
2. 2: vote of the member with largest
interest; if equal, by lot
Number of votes:
1. Person with smallest share – 1 vote
2. Others – as many votes as they have equal
parts to the smallest
Detention, attachment, or levy of vessel by part
owner
RULE: Cannot be detained in its entirety for private
debts of part owner
LIMITATION: Only to the extent of the interest such
part owner has in the vessel, without interfering
with the navigation
590 Acts of captain in 587 (acts of captain in the
vigilance of goods and safety of passengers and
other illicit or negligent acts):
Co-owners are civilly liable proportionate to their
interest
EXEMPT: Abandon his part of the vessel before a
notary
591 Expenses for repair, those incurred by resolution of
majority, maintenance, etc:
Co-owners are liable in proportion to their
ownership
592 GR: Resolution of majority with regard to REP in
port of departure shall bind minority
XPN: Minority members renounce interests, which
must be acquired by other co-owners, after judicial
appraisment
Resolution re dissolution of partnership, binding to
minority
Sale of vessel
GR: Public auction
XPN: Co-owners unanimously agree otherwise
XPN TO XPN: right of repurchase and redemption
593 Preference in charter
1. Owner of vessel, under same conditions
and price
2. If two or more should claim this right:
Greater interest
3. If equal interests: By lot
594 Election of manager :
Co-owners shall elect the manager who shall
represent them in the capacity of ship agent
Appointment of ship agent: Revocable at will of
members
595 Ship agent
 1. Must have the capacity to trade
2. Must be recorded in the merchant’s
registry of the province
3. Represent the ownership
4. May take judicial and extrajudicial steps in
matters relating to commerce – any
liability arising in connection therewith
may be enforced against agent either in
prosecution or defense of owner’s rights
or interests; agent may seek
reimbursement from principal
The agreement between principal and agent does
not solely determine liability of agent, but that
every agreement is deemed to incorporate the law.
Husbanding agent:
General agent of the owner in relation to the ship,
with powers, among others, to engage the vessel
for general freight and the usual conditions, and
settle for freight and adjust averages with the
merchant
596 Ship agent may discharge duties of captain, subject
to 609
If two or more co-owners apply for the position of
captain:
1. Vote by members
2. Largest interest
3. By lot
597 Ship agent shall (1) designate and come terms with
the captain and (2) contract in name of owners in
all that relate to requirements of navigation
598 GR: Ship agent may not (1) order new voyage, (2)
contract new charter, or (3) insure vessel without
authority or resolution of owner/s
XPN: These powers are granted hi, in the certificate
of appointment
EFFECT OF INSURING W/OUT AUTH: Subsidiarily
liable
599 Ship agent managing for an association
1. Render to associates an account of the
results of each voyage
600 After approval of the account of managing agent by
majority:
Co-owners shall pay in proportion to their interest,
w/out prejudice to civil or criminal actions minority
may constitute
601 Profits, if any:
Co-owners may demand from managing agent the
amt corresponding to their interests thru executory
action
Requisite: acknowledgment of the signatures of the
managing agent appearing on the instrument, as
confession of his debt
602 Indemnification by agent to captain:
For all expenses captain incurred (thru own funds
or of others) for the benefit of the vessel
603 Discharging captains and members of crew whose
contracts are not for a definite period or voyage
: BEFORE VESSEL SETS OUT TO SEA
1. Ship agent may discharge
2. Paying them the salaries earned acc to
their contracts
3. Without indemnity
4. Unless there is an express and specific
agreement thereto
604 Discharging captains and members of crew:
DURING THE VOYAGE
1. Receive their salary until their return to
port where contract was made
2. Unless there is just cause for the
discharge: salaries earned as of the time
of the discharge
605 Discharging captains and members of crew whose
contracts are not for a definite period or voyage
1. MAY NOT be discharged until after
fulfillment of contracts
2. XPN: By reason of unsubordination in
serious matters, theft, robbery, habitual
drunkenness, damage caused to vessel,
cargo thru malice or manifest or proven
negligence
606 Discharging of captain who is a co-owner with no
special agreement under 607
1. GR: May NOT be discharged
2. XPN: Any cause and unless ship agent
returns to him the amount of his interest
therein, which, in the absence of
agreement, shall be appraised by experts
appointed
607 Captain who is co-owner obtained command thru
special agreement contained in the articles of
association:
1. GR: MAY NOT be deprived of office
2. XPN: causes mentioned in 605
637 Discharge of captain AFTER VOYAGE HAS BEGUN
 1. GR: MAY NOT be discharged
2. XPN: By reason of some crime, his
imprisonment and delivery to the
competent authority in the first port
touched is proper
608 Voluntary sale of vessel:

Contract between agent and captain shall

terminate

RESERVATION: Right of captain to the indemnity

which may pertain to him according to agreements
made with ship agent

Vessel sold shall remain subject to the security of

payment of said indemnity, if after the action
against vendor has been instituted, vendor is found
insolvent

SECTION TWO: Captain and masters of vessels