1. Does the limited liability rule apply in cases of collision of maritime vessels?

Explain by giving example.

2. a.) Explain the meaning of Arrival Under Stress. *
b.) What are the legal steps to be taken to determine the propriety of Arrival
Under Stress?
3. Who will shoulder the expenses to unload the cargo in the case of arrival under
stress in order to make repair to the ship or to save the cargo from damages, or
both and why?
4. a.) What is the meaning of “Shipwreck”?
b.) Who will bear the damages and deterioration to the vessel and cargoes in
the case of a shipwreck and why?
5. a.) Can a ship caption enter into contracts of Loan on Bottomry and
Respondentia?
b.) What is the order or preference of payment in the case of Loans on Bottomry
and Respondentia and why?
6. a.) What are the effects of the Loan on Bottomry and Loan on Respondentia is
larger than the collateral because of fraud?
b.) In the case of Loans on Bottomry and Loan on Respondentia, if the
cargo/vessel is lost, the lender shall lose the principal sum loaned. State the five
instances wherein the loss of the vessel/cargo does not extinguish the loan.
7. Is the rule on liability of the parties for the damages to the vessels and cargoes in
case of collision due to fortuitous event, the same with the rule on collision
wherein the fault is undeterminable?

PROBLEMS:

1. Vessels A and B collided. As a result of such collision, the following damages

were sustained: Vessel A, 10 million pesos and 5 million pesos damages
sustained by its cargoes. Vessel B, 15 million pesos and 10 million pesos to its
cargoes. It was proven during the trial that the proximate cause of the collision
was the negligence of the captain of the vessel A while the captain of the vessel
B was found guilty of contributory negligence. State the amount the
party/parties would be liable for the damages sustained by vessels and for
damages sustained by their respective cargoes?

2. To ensure that M/B Jolo is seaworthy, its owner had it repaired on March 16,
2005 and the owner incurred unpaid bill repair to Mr. Enrico the amount of
P100,000.00. On May 7, 2005, M/V Jolo collided with M/V Mary due to the fault
of the former. M/V Jolo sank in water too deep for salvage operations. M/V
Maru was partially damaged in the amount of P1,000,000.00. After filing the
required protest, the owner of M/V Maru and Mr. Enrico filed suits against the
owner of M/V Jolo for recovery of P1,000,000 and P100,000 respectively. The
owner of M/V Jolo pleaded limited liability as a defense. Can there be recovery
of the amounts being claimed by M/V Maru and Mr. Enrico?
3. Peter borrowed P5M from Paul and they both executed a Loan on
Respondentia in favor of Paul covering the trip of "MV Panay" from Manila to
Iloilo. Jason the shipowner also executed a Loan on Bottomry for P50M also with
Paul as a lender without stipulating the extent of coverage of the voyage. After
the "MV Panay" left Manila, it encountered a storm and cargoes of Peter were
jettisoned to save the vessel. The vessel was saved and some of the cargoes of
Peter were later salvaged. On its way back to Manila, "MV Panay" sank beyond
recovery. Are the borrowers Peter and Jason liable to pay their respective loans
to Paul?

4. Vessels A and B collided because of strong hurricane. Vessel A suffered

damages worth 1M and vessel b worth 2M. The cargoes of the shippers X, Y, Z
suffered damages worth 50,000, 60,000, and 70,000 respectively. Who will bear
the losses and how much?

LEGAL OPINIONS
1.MV Maru was loaded with sacks of rice and Guimaras mangoes at Iloilo port
for transportation to Zamboanga City. The mangies were expected to be ripe on
February 14, 2014. On February 12, when MV Maru was ailing near Bohol, the
ship captain, Capt. Bernard received an information that rebels in Zamboanga
will capture the cre and seize the vessel the moment MV Maru enters the water
of Zamboanga between February 12 to 20 2014. The ship captain is seeking your
legal advice as what action he will take regarding the voyage, the cargo, and the
expenses that may be incurred between February 12 to 20 onward.