notes on transportation

8/10/2019 Notes on Transportation

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1 S.A. PANDITA NOTES ON TRANSPORTATION

TRANSPORTATION

Maritime Law the system of laws which particularlyrelates to the affairs and business of the sea, to ships,their crews and navigation, and to marine conveyance ofpersons and property.

Real and Hypothecary nature the liability of the carrierin connection with losses related to maritime contractsis confined to the vessel, which is hypothecated for suchobligations or which stands as guaranty for theirsettlement.

Limited Liability Rule: No vessel, no liability the shipowners or agents liability is merely co -extensive with hisinterest in the vessel such that a total loss thereof resultsin its extinction. The total destruction of the vesselextinguishes maritime liens because there is no longerany res to which it can attach.

Note: The ship agent shall also be civilly liable forindemnities in favor of third persons but he may exempthimself by abandoning the vessel with all her equipmentand the freight it may have earned during the voyage.

Coverage of limited liability :

1. Liability to third person;

2. Acts of captain; and

3. Collisions.

If the vessel is co-owned , the limited co-owned, thelimited liability to third persons shall be satisfied by theco-owners.

Exceptions to limited liability :

1. Where the injury or death to a passenger is due eitherto the fault of the shipowner, or the concurringnegligence of the shipowner and the captain;

2. Where the vessel is insured; and

3. Workmens compensation claims.

The total destruction of the vessel extinguishes amaritime lien, as there is no longer any risk to which itcan attach, the total destruction of the vessel does notaffect the liability of the owner for repairs of the vesselcompleted before its loss.

The limited liability rule applies if the captain or the crewcaused the damage or injury .

The carrier or shipowner has the burden of showing thatit exercised extraordinary diligence in the transport of

the goods it had on board in order to invoke the limiteddoctrine.

Limited liability rule does not apply to insurance claims

Abandonment of the vessel, its appurtenances andfreightage is an indispensable requirement before the

shipowner or ship agent can enjoy the benefits of thelimited liability principle. If the carrier does not want toabandon the vessel, then he is still liable even beyond thevalue of the vessel.

Protest is the written statement by the master of thevessel or any authorized officer, attested by properofficer or a notary, to the effect that damages has beensuffered by the ship.

Requirements :

1. When the vessel makes an arrival under stress;

2. Where the vessel is shipwrecked;

3. Where the vessel has gone through a hurricane or thecaptain believes that the cargo has suffered damages oraverages; and

4. Maritime collisions.

In collisions, maritime protest must be made within24hrs after a collision and the circumstances of thecollision are declared or made known before acompetent authority at the point of accident or the firstport of arrival if in the Philippines or the Philippine consulin a foreign country.

Admiralty of Jurisdiction - the jurisdiction of courts oflaw over cases concerning ships.

RTC has jurisdiction in all actions in admiralty andmaritime jurisdiction where the demand or claimexceeds 300,000 pesos 0r, in Metro Manila, where suchdemand or claim exceeds 400,000 pesos. If the amountis less than the jurisdictional amount in RTC, the jurisdiction over admiralty and maritime lien cases arewith the Metropolitan Trial Courts, MTC or MCTC .

Test to determine whether a case comes within theadmiralty and maritime jurisdiction of a court :

1. Locational test

=> Maritime and admiralty jurisdiction, with a fewexceptions, is exercised only on contracts made upon thesea and to be executed thereon.

2. Subject matter test


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=> The criterion in determining whether a contract ismaritime depends on the nature and subject matter ofthe contract, having reference to maritime services andtransactions.

Penalty of forfeiture due to smuggling provided thefollowing conditions are present :

1. The vessel is used unlawfully in the importation orexportation of articles into or from the Philippines;

2. The articles are imported to or exported from any anyPhilippines port or place, except a port of entry; or

3. If the vessel has a capacity of less than 30 tons and isused in the importation of articles into any Philippinesport or place other than a port of the Sulu Sea, where theimportation in such vessel may be authorized by theCommissioner, with the approval of the department

head. Marine Pollution Decree of 1976 - it is hereby declareda national policy to prevent and control the pollution ofseas by the dumping of waste and other matter whichcreate hazards to human health, harm living resourcesand marine life, damage amenities, or interfere with thelegitimate uses of the seas within the territorial jurisdiction of the Philippines.

Prohibited acts under the law :

1. Discharge, dump, or suffer, permit the discharge of oil,noxious gaseous and liquid substances and other harmfulsubstances from or out of any ship, vessel, barge, or anyother floating craft, or other man-made structures at sea,by any method, means or manner, into or upon theterritorial and inland navigable waters of the Philippines;

2. Throw, discharge or deposit, dump, or cause, suffer orprocure to be thrown, discharged, or deposited eitherfrom or out of any ship, barge, or other floating craft orvessel of any kind, or from the shore, wharf,manufacturing establishment, or mill of any kind, anyrefuse matter of any kind or description whatever otherthan that flowing from streets and sewers and passingtherefrom in a liquid state into tributary of any navigablewater from which the same shall float or be washed intosuch navigable water; and

3. Deposit or cause, suffer or procure to be depositedmaterial of any kind in any place on the bank of anynavigable water, or on the bank of any tributary of anynavigable water, where the same shall be liable to bewashed into such navigable water, either by ordinary orhigh tides, or by storms or floods, or otherwise, whereby

navigation shall or may be impeded or obstructed orincrease the level of pollution of such water

Exceptions :

1. Cases of emergency imperiling life or property, orunavoidable accident, collision or stranding or in any

cases which constitute danger to human life or propertyor a real or property or a real threat to vessels, aircraft,platforms, or other man-made structure, or if dumpingappears to be the only of averting the threat;

2. If there is probability that the damage consequentupon such dumping will be less than would otherwiseoccur; and

3. Except as otherwise permitted by regulationsprescribed by the National Pollution Control Commissionor the Philippine Coast Guard.

Discharge includes, but is not limited to, any spilling,leaking, pumping, pouring, emitting, emptying ordumping but does not include discharge or effluent fromindustrial or manufacturing establishments, or mill of anykind.

Dumping means any deliberate disposal at sea and intonavigable waters of wastes or other matter from vessels,aircraft, platforms or other man-made structures at sea,including the disposal of wastes or other matter directlyarising from or related to the exploration, exploitation

and associated off-shore processing of sea bed mineralresources unless the same is permitted and/or regulatedunder the decree.

Oil any kind or in any form including but not limited to,petroleum, fuel oil, sludge, oil refuse , and oil mixed withwastes other than dredge spoil.

Navigable waters the waters of the Philippines,including the territorial sea and inland waters which arepresently, or be in the future susceptible for use bywatercraft.

Vessel every description of watercraft, or otherartificial contrivance used, or capable of being used, as ameans of transportation on water.

Refuse garbage, waste, wood residues, sand, limecinder ashes, offal, nightsoil, tar, dye stuffs, acids,chemicals and substances other than sewage andindustrial wastes that may cause pollution.

Passengers includes any person while embarking on,on board, or disembarking the ship.


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Maritime accident an event which involves a fire,explosion, grounding, collision/contact/capsizing/tilting,sinking and other similar occurrences resulting in death.

Vessel or watercraft any barge, lighter bulk carrier,passenger ship freighter, tanker, container ship, fishingboats, or other artificial contrivance utilizing any sourceof motive power designed, used or capable of being usedas a means of transportation operating either as acommon carrier, including fishing vessels, except :

i.) those owned and/or operated by the Armed Forces ofthe Philippines and by foreign governments for militarypurposes; and

ii.) banca, sailboats and other waterborne contrivance ofless than three gross tons capacity and not notarized.

Kinds of Vessels :

1. Passenger Ship I a ship which carries more thantwelve passengers.

2. Cargo Ship is any ship which is not a passenger ship.

3. Tanker is a cargo ship constructed or adapted for thecarriage in bulk of liquid cargoes of an inflammablenature.

4. Fishing Vessel a vessel used for catching fish, whales,seals, walrus or other living resources of the sea.

5. Nuclear Ship a ship provided with a nuclear powerplant.

6. New Ship a ship keel of which is laid or which is at asimilar stage of construction on or after the date ofcoming into force of the SOLAS 1974.

7. Existing Ship a ship which is not a new ship.

Gross Tonnage the measure of the overall size of a ship.

Net Tonnage the measure of the useful capacity of aship.

Vessels are considered personal property under the civillaw and common law, although occasionally referred toas a peculiar kind of personal property.

Vessels may be acquired or transferred by any meansrecognized by law. Thus, vessels may be sold, donatedand even be acquired through prescription.

The acquisition of a vessel must appear in a writteninstrument , which shall not produce any effect withrespect to third persons if not inscribed in the registry ofvessels.

Types of acquisitive prescription :

1. Ordinary

2. Extra-ordinary

Ordinary prescription requires continuous possession ingood faith for three years . Extra-ordinary prescription,possessor is in bad faith, is ten years .

Requisites for Ordinary Prescription :

1. The person who claims ownership must be incontinuous possession;

2. Possession must be for a period of three years; and

3. Possession must be in good faith.

Co-owner, lessee, usufructuary, trustee cannot bepossessors in good faith in they are in possession as such.They recognize the ownership or right of anotherperson/s.

Sale of a vessel includes :

The rigging, masts, stores and engine of a steamer whichat the time belongs to the vendor.

Nationality of Vessels Vessels that are duly registeredin the Philippines are considered Philippine Flag vessels.

Flag of Convenience . UNCLOS provides that there mustbe a genuine link between the state and the ship in orderto confer nationality over the ship. In the absencethereof, it is reflected in either the absence of or minimalregulation of the registered vessels by the country wherethe vessels are registered. Philippines is not a Flag ofConvenience country.

Vessels are now registered in the Maritime IndustryAuthority . It is presumed that the person who isregistered owner of the vessel is presumed to be theowner of the vessel. The sale or transfer of the vessel isnot binding on third persons unless the same isregistered.

Domestic ownership ownership vested in citizens ofthe Philippines or corporations or associations organizedunder the laws of the Philippines at least 60% of thecapital stock or capital of which is wholly owned bycitizens of the Philippines.

Homeport the port where the vessel is registered orenrolled provided, registration shall be effected at theport where the principal office of the


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shipowner/operator is located and/or at the terminalport of the vessel.

Domestic Trade the carriage of passengers and/orcargoes between two or more ports and places in thePhilippines by the use of vessel either as common orcontract carrier or for exclusive company/own useincluding operations within bays and rivers and otherinland waterways.

Overseas Trade The transport of goods and/orpassengers vessel operations outside of the Philippineterritorial waters, including those calls at Philippine portsfrom the foreign ports and vice versa.

MARINA shall maintain a registry of vessels to be knownas REGISTER OF PHILIPPINE VESSELS. It shall be openfor inspection by the public. Separate registers shall bemaintained for overseas or domestic vessels.

Bareboat chartered ships may be registered in thePhilippines for international voyages.

Bareboat charter a contract for the lease of a ship fora stipulated period not less than 1 year, by virtue ofwhich the lessee has complete possession and control ofthe ship including the obligation to appoint the Masterand the other crew of the ship for the duration of thelease.

Ships Manifest . Manifest is a declaration of the entire

cargo. It is to furnish custom officers with a list to checkagainst, to inform the revenue officers what goods arebeing brought into a port of the country on a vessel.Hence, Manifest is not required if the vessel carries withit a bill of lading.

Manifest shall be required for cargo and passengerstransported from one place or port in the Philippines toanother only when one or both of such places is a port ofentry. It is imposed on every vessel from a foreign port.

Ships log/logbook the official record o f a ships voyagewhich its captain is obligated by law to keep wherein herecords the decisions he has adopted, a summary of theperformance of the vessel, and other daily events it is arespectable record that can be relied upon when theentries therein are presented in evidence.

A copy of an official entry in the logbook is legally bindingand serves as an exception to the hearsay rule.

Maritime lien a privileged claim on a vessel for someservice rendered to it to facilitate its use in navigation. Itis a special property right in a ship given to a creditor by

law as security for a debt or claim subsisting from themoment the debt arises with right to have the ship soldand debt paid out of the proceeds.

Preferred claims . Preferred mortgage lien should havepriority over all claims against the vessel, except thefollowing claims:

1. Expenses and fees allowed and costs taxed by thecourt and taxes due to the government;

2. Crews wages;

3. General Average;

4. Salvage; including contract salvage;

5. Maritime Liens arising prior in time to the recording ofthe preferred mortgage;

6. Damages arising out of tort; and7. Preferred mortgage registered prior in time.

Executory Contract Doctrine . A lien does not attach forbreach of an executory contract even though thecontract is the type which normally gives rise to a lien.Liability arises in admiralty for breach of contract but ifthe parties have performed his obligation, his remedyagainst the other is only for breach in an action inpersonam.

Waiver of Lien . Furnishers of repairs, supplies, towage,

use of dry dock or marine railway, or other necessaries,or the mortgagee, are not prevented from waiving theirright to a lien, or in the case of a preferred mortgage lien,to the preferred status of such lien, at any time byagreement or otherwise.

An action upon an obligation created by law must bebrought within 10 years from the time the right of actionaccrues. Hence, enforcement of a maritime lien imposedby special la prescribes in 10 years.

Laches may also lie if there was unreasonable delay on

the part of claimant in asserting its rights.Maritime liens for necessaries. Requirements for amaritime lien for necessaries which is enforceable bysuit in rem :

1. The necessaries must have been furnished to and forthe benefit of the vessel;

2. The necessaries must have been necessary for thecontinuation of the voyage of the vessel;

3. The credit must have been extended to the vessel;


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4. There must be necessity for the extension of thecredit; and

5. The necessaries must be ordered by personsauthorized to contract on behalf of the vessel.

The following persons shall be presumed to have

authority from the owner to procure repairs, supplies,towage, use of dry dock or marine railway, and othernecessaries for the vessel:

1. The managing owner;

2. Ships Husband;

3. Master; or

4. Any person to whom the management of the vessel atthe port of supply is entrusted.

Maritime Tort Civil wrongs committed on navigablewaters. As a general rule, any conduct which is tortuousunder the general law and which is connected with theship or its uses creates a maritime lien. It includes claimsand personal injury claims resulting from defectiveappliances, improper construction or negligence of theships crew give rise to marit ime lien.

Salvage lien . It may either be one arising ex contractu orthat imposed by Act No. 2616. Salvage is give preferencebecause of the benefit conferred in preserving the valueof the vessel and the cargo.

Subrogation. PNB vs. CA , a third person who satisfies theobligation to an original maritime lienor ma claim fromthe debtor because the third person is subrogated to therights of the maritime lienor over the vessel.

If the proceeds of the sale should not be sufficient to payall creditors included in one number or grade, theresidue shall be divided among them pro rata.

Who may constitute preferred ship mortgage?

Any citizen of the Philippines, or any association or

corporation organized under the laws of thePhilippines , at least 60% of the capital of which isowned by citizens of the Philippines may freelyconstitute a mortgage or any lien or encumbrance on hisor its vessels and its equipment with any bank or otherfinancial institutions, domestic or foreign.

Purpose : the loan secured by the ship mortgage must befor purpose of financing the construction, acquisition,purchase or initial operation of vessels. The purpose isimportant in determining the presence of preference.

Formal Requirements : The ship mortgage must berecorded or registered, otherwise the same is voidexcept as to the parties or their heir and assigns orpersons with actual notice.

Fleet Mortgage . There may be mortgage on two or morevessels. The mortgage may provide for separatedischarge of each vessel by the payment of a portion ofmortgage indebtedness. The amount of such portion ofsuch payment shall be endorsed upon the documents ofthe vessel.

Arrest and Foreclosure . Upon the default of the obligor,the preferred ship mortgaged may be foreclosed in a suitin admiralty. Upon filing of a petition for foreclosure, theCourt may order the arrest of the vessel upon ex-parteapplication duly supported by an affidavit of a personwho knows the facts and upon filing of a bond.

Foreclosure is only an alternative remedy . Themortgagee may likewise avail of the alternative remedyof specific performance in a suit in personam inadmiralty.

The shipowner is the person who is primarily liable fordamages sustained in the operation of the vessel.

Naviero indicates the person who is liable. It has beenconstrued to include the shipowner, ship agent and eventhe charterer who is considered s owner pro hac vice.

Ship Agent the person entrusted with the provisioningof the vessel, or who represents her in the port in whichshe happens to be. The ship agent is jointly and severallyliable with the owner.

Extent of Liability . The joint and several liability appliesto both for breach of contract and extra-contractualobligation such as tort. Indeed, the ship owner, eventhough he is not the owner, is liable in every way to thecreditor for losses and damages, without prejudice to hisright against the owner, the vessel and its equipment andfreight. The liability is subject to the limited liability rule.

The shipowner and ship agent are liable in certain caseseven if the captain has exceeded his authority if theproceeds of an obligation redounded to the benefit ofthe vessel.

Liability for extra-contractual obligations . Article 587imposes obligation in favor of third persons directly onthe shipowner and ship agent. The owner and ship agentare liable for the tortuous acts of his agent. Theshipowner and the ship agent, in turn, can make the


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captain liable for his negligence. This is based on thecontract of carriage.

If the cause of action is quasi-delict, there is vicariousliability on the part of the shipowner.

Powers of Ship Agent :

1. Can enter into contracts to provision the ship;

2. He can purchase necessary supplies and fuel that arenecessary for a particular voyage.

3. Representation of the vessel includes the right torepresent the vessel in any action in a court or tribunal.

Captain those who govern vessels that navigate thehigh seas or ships of large dimensions and importance,although they are engaged in the coastwise trade.

Masters those who command smaller ships engagedexclusively in the coastwise trade.

Qualifications of captains, masters or patrons :

1. Must be a Filipino;

2. Have the legal capacity to contract in accordance withthis code;

3. Prove the skill, capacity, and qualifications necessaryto command and direct the vessel. As established bymarine or navigation laws, ordinances or regulations;

and4. Must not be disqualified according to the same for thedischarge of the duties of the position.

3 distinct roles of the Captain:

1. He is a general agent of the shipowner;

2. He is also the commander and technical director of thevessel; and

3. He is a representative of the country under whose flaghe navigates.

Powers of the Captain or Master or Patron of a vessel:

1. To appoint or make contracts with the crew in theabsence of the ship agent, and to propose said crew,should said agent be present; but the ship agent may notemploy any member against the captains expressrefusal;

2. To command the crew and direct the vessel to the portof its destination, in accordance with the instructions hemay have received from the ship agent;

3. To impose, in accordance with the contracts and withthe laws and regulations of the merchant marine, andwhen on board the vessel, correctional punishment uponthose who fail to comply with his orders or are wantingin discipline, holding a preliminary hearing on the crimescommitted on board the vessel on the seas, which crimes

shall be turned over to the authorities having jurisdictionover the same at the first port touched;

4. To make contracts for the charter of the vessel in theabsence of the ship agent or of its consignee, acting inaccordance with the instructions received and protectingthe interest of the owner with utmost care;

5. To adopt all proper measures to keep the vessel wellsupplied and equipped, purchasing all that may benecessary for the purpose, provided there is no time torequest instruction from the ship agent;

6. To order, in similar urgent cases while on a voyage, therepairs on the hull and engines of the vessel and in itsrigging and equipment, which are absolutely necessaryto enable it to continue and finish its voyage; but if heshould arrive at a point where there is a consignee of thevessel, he shall act in concurrence with the latter.

To comply with his obligation, how may the captainraise funds ?

1. By requesting said funds from the consignee of thevessel or correspondents of the ship agent;

2. By applying to the consignees of the cargo or to thoseinterested therein;

3. By drawing on the ship agent;

4. By borrowing the amount required by means of a loanon bottomry;

5. By selling a sufficient amount of cargo to cover the sumabsolutely indispensable for the repair of the vessel andto enable it to continue its voyage.

Obligations which are inherent in the office of thecaptain:

1. To have board before starting on a voyage a detailedinventory of the hull, engines, rigging, spare-masts,tackle, and other equipment of the vessel; the royal orthe navigation certificate; the roll of the persons whomake up the crew of the vessel, and the contractsentered into with them; the lists of passengers; the billof health; the certificate of the registry proving theownership of the vessel and all the obligations whichencumber the same up to that date; the charter parties


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or authenticated copies thereof; the invoices or manifestof the cargo, and the memorandum of the visit orinspection by experts, should it have been made at theport of departure.

2. To have a copy of this code on board;

3. To have three folioed and stamped books, placing atthe beginning of each one memorandum of the numberof folios it contains, signed by the maritime authority,and in his absence by the competent authority.

4. Before receiving cargo, to make with the officers of thecrew and to experts; if required by the shippers andpassengers, an examination of the vessel, in order toascertain whether it is water-tight, with the rigging andthe engines in good condition, and with the equipmentrequired for good navigation, preserving under hisresponsibility a certificate of the memorandum of hisinspection, signed by all those who may have taken aparttherein;

The experts shall be appointed, one by the captain of thevessel and another by those who request itsexamination, and in case of disagreement a third shall beappointed by the marine authority of the port or by theauthority, exercising his authority;

5. To remain constantly on board the vessel with thecrew while the cargo is being taken on board and tocarefully watch the stowage thereof; not to consent to

the loading of any merchandise or matter of a dangerouscharacter, such as inflammable or explosive substances,without the precautions which are recommended fortheir packing, handling and isolation; not to permit thecarriage on deck of any cargo which by reason of itsarrangement, volume, or weight makes the work of thesailors difficult, and which might endanger the safety ofthe vessel; and if, on account of the nature of themerchandise, the special character of the shipment, andprincipally the favorable season in which it is undertaken,merchandise may be carried on deck, he must hear the

opinion of the officers of the vessel and have the consentof the shippers and of the ship agent;

6. To demand a pilot at the expense of the vesselwhenever required by the navigation, and principallywhen he has enter the port, canal, or river, or has to takethe roadstead or anchoring place with which neither henor the officers and crew are acquainted;

7. To be on deck on reaching land and to take commandon entering and leaving ports, canals, roadsteads, orrivers, unless there is a pilot on board discharging his

duties. He shall not spend the night away from the vesselexcept for serious causes or by reason of officialbusiness;

8. To represent himself, when making a port in distress,to the marine authority if in the Philippines and to theconsul of the Republic of the Philippines if in a foreigncountry, before 24 hours have elapsed, and to make astatement of the name registry, and port of departure ofthe vessel, of its cargo, and the cause of arrival whichdeclaration shall be visaed by the authority or the consul,if after examining the same it is found to be acceptable,giving the captain the proper certificate proving hisarrival in distress and the reasons therefor. In theabsence of the maritime authority or of the consul, thedeclaration must be made before the local authority;

9. To take the necessary steps before the competent

authority in order to record in the certificate of the vesselin the registry of vessels the obligations which he maycontract in accordance with Article 583;

10. To place under good care and custody all the papersand belongings of any members of the crew who mightdie on the vessel, drawing up a detailed inventory, in thepresence of passengers, or, in their absence, of themembers of the crew as witnesses;

11. To conduct himself according to the rules andpercepts contained in the instructions of the ship agent,being liable for all that which he may do in violationthereof;

12. To inform the ship agent from the port at which thevessel arrives, of the reason of his arrival, takingadvantage of the semaphore, telegraph, mail, etc., as thecase may be; to notify him of the cargo he may havereceived, stating the names and domiciles of theshippers, freightage earned, and amounts borrowed onthe bottomry loan; to advise him of his departure, and ofany operation and date which may be of interest to him;

13. To observe the rules with respect to situation, lightsand maneuvers in order to avoid collisions;

14. To remain on board, in case the vessel is in danger,until all hope to save it is lost, and before abandoning it,to hear the officers of the crew, abiding by the decisionof the majority; and if the boats are to be taken to, heshall take with him, before anything else, the books andpapers, and then the articles of the most value, beingobliged to prove, in case of the loss of the books andpapers, that he did all he could to save them;


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15. In case of wreck, to make the proper protest in dueform at the first port of arrival, before the competentauthority or the Philippine consul, within 24 hours,specifying therein all the incidents of the wreck, inaccordance with subdivision 8 of this article; and

16. To comply with the obligations imposed by the lawsand regulations on navigation, customs, health, andothers.

The kinds of books which must be carried by the captainon board the vessel :

1. In the first book, which shall called logbook, he shallenter day by day the condition of the atmosphere, theprevailing winds, the courses taken, the rigging carried,the power of the engines used in navigation, thedistances covered, the maneuvers executed, and otherincidents of navigation; he shall also enter the damagesuffered by the vessel in her hull, engines, rigging, andtackle, no matter what its cause may be, as well as theimpairment and damage suffered by cargo, and theeffect and importance of the jettison, should there beany; and in cases of serious decisions which require theadvice or a meeting of the officers of the vessel, or evenof the crew and passengers, he shall record the decisionsadopted. For the information indicated he shall make useof the binnacle book and of the steam of engine bookkept by the engineer;

2. In the second book called the accounting book, heshall record all the amounts collected and paid for theaccount of the vessel, entering specifically article byarticle, the source of the collection and the amountsspent for provisions, repairs, acquisitions of equipmentor goods, fuel, food, outfits, wages and other expensesof whatever nature they may be. He shall furthermoreenter therein a list of all the members of the crew, statingtheir domiciles, their wages and salaries, and theamounts they may have received on account, directly orby delivery to their families; and

3. In the third book, called freight book, he shall recordthe loading and discharge of all the goods, stating theirmarks and packages, names of the shippers, and thefreightage they give. In this same book he shall recordthe names and place of sailing of the passengers, thenumber of packages in their baggage, and the price ofpassage.

Liability of Captains and Masters . The captain shall becivilly liable to the ship agent, and the latter to thirdpersons who have made contracts with the former;

1. For all the damages suffered by the vessel and its cargoby reason of want of skill or negligence on his part. If themisdemeanor or crime has been committed, he shall beliable in accordance with the Penal Code;

2. For all the thefts committed by the crew, reserving hisright of action against the guilty parties;

3. For the losses, fines, and confiscations imposed anaccount of violation of customs, police, health, andnavigation laws and regulations.

4. For the losses and damages caused by mutinies onboard the vessel or by reason of faults committed bycrew in the service and defense of the same, if he doesnot prove that he made timely use of all his authority toprevent or avoid them;

5. For those caused by the misuse of the powers and non-

fulfillment of the obligations pertaining to him inaccordance with Articles 610 and 612;

6. For those arising by reason of his going out of hiscourse or taking a course which he should not have takenwithout sufficient cause, in the opinion of the officers ofthe vessel, at a meeting with the shippers orsupercargoes who may be on board;

No exceptions whatsoever shall exempt him from thisobligation

7. For those arising by reason of his voluntarily enteringa port other than that of his destination, outside of thecases or without the formalities referred to in Article612;

8. For those arising by reason of the non-observance ofthe provisions contained in the regulations on situationof lights and maneuvers for the purpose of preventingcollisions.

Pilot is a person duly qualified, and licensed, to conducta vessel into or out of ports, or in certain waters. Itincludes: 1.) those whose duty it is to guide vessels into

or out of ports, or in particular waters, and 2.) thoseentrusted with the navigation of vessels in high seas.Generally, a person taken on board at a particular placefor the purpose of conducting a ship through a river, roador channel, or from a port.

Compulsory pilotage States possessing harbors haveenacted laws or promulgated rules requiring vesselsapproaching their ports to take on board pilots licensedunder the local law.


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Duties and responsibilities of Pilot and PilotsAssociation :

1. Pilot shall be held responsible for the direction of avessel from the time he assumes his work as a pilotthereof until he leaves it anchored or berthed safely, freefrom the shoal; provided, that his responsibility shallcease at the moment the master neglects or refuses tocarry out his instructions; and

The pilot supersede the master for the time being in thecommand and navigation of the ship, and his orders mustbe obeyed in all matters connected with her navigation.He becomes the master pro hac vice and should give alldirections as to speed, course, stopping, and reversing,anchoring, towing and the like. And when a licensed pilotis employed in a place where pilotage is compulsory, it ishis duty to insist on having effective control of the vessel,

or to decline to act as pilot.A pilot is personally liable for damages caused by his ownnegligence or default to the owners of the vessel, and tothird parties for damages sustained in a collision. Suchnegligence of the pilot in the performance of dutyconstitutes a maritime tort.

Note : The fact that the pilot is a member of anassociation does not make the association jointly andseverally liable. Article 2180 of the CC does not applybecause there is no employer-employee relationship.

The Code of Commerce provides that:

The complement of a vessel shall be understood as allpersons on board , from the captain to the cabin boy,necessary for the management, maneuvers, and service.The complement shall include the crew, the sailingmates, engineers, stokers and other employees on boardnot having specific designations BUT it shall not includethe passengers or the persons whom the vessel istransporting .

Minimum safe manning . It is not enough that the

officers manning the merchant vessel have all thequalifications imposed by the Philippine MerchantMarine Officers Act and other special laws or regulations.It is also required that there is sufficient number ofofficers and crew that are serving in the vessel.

Other Officers and crew under the Code of Commerce :

1. Sailing Mate or Chief Mate;

2. Second Mate;

3. Marine Engineer;

4. Crew; and

5. Supercargoes.

Chief Mate or Sailing Mate The second chief of thevessel. The second in command, next only to the captainof the vessel.

What are the requisites to be a sailing mate?

1. To have the qualifications required by the marine ornavigation laws or regulations; and

2. Not to be disqualified in accordance therewith for thedischarge of his duties.

What are the duties of a Sailing Mate?

1. To watch over the preservation of the hull and riggingof the vessel, and to take charge of the preservation of

the tackle and equipment which make up her outfit,suggesting to the captain the repairs necessary and thereplacement of the goods and implements which arerendered useless and are lost;

2. To take care that cargo is well-arranged, keeping thevessel always ready for maneuver.

3. To preserve order, discipline, and good service amongthe crew, requesting the necessary orders andinstructions of the captain, and giving him promptinformation of any occurrence which the intervention ofhis authority may be necessary;

4. To assign to each sailor the work he is to do on board,in accordance with the instruction received and to seethat it is promptly and accurately carried out; and

5. To take charge under inventory of the rigging and allthe equipment of the vessel, if it should be laid up, unlessthe ship agent has ordered otherwise.

Supercargoes - shall discharge on board the vessel theadministrative duties which the ship agent or theshippers may have assigned to them; they shall keep an

account and record of their transactions in a book whichshall have the same conditions and requisites as requiredfor the accounting book of the captain, and they shallrespect the latter in his capacity as chief of the vessel.

The powers and responsibilities of the captain shallcease, when there is a supercargo, with regard to thatpart of the administration legitimately conferred uponthe latter, but shall continue in force for all acts whichare inseparable from his authority and office.


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Supercargoes may not, without special authorization oragreement, make any transaction for their own accountduring the voyage, with the exception of the ventureswhich, in accordance with the custom of the port ofdestination, they are permitted to do.

Neither shall they be permitted to invest in the returntrip more than the profits from the ventures, unlessthere is an express authorization from the principals.

Charter Party a contract whereby an entire ship, orsome principal part of the said ship, is let by the ownerthereof to a merchant or the person for a specified timeor the use for the conveyance of goods, in considerationof the payment of freight.

Kinds of Charter Parties:

1. Bareboat or Demise Charter; and

2. Contract of Affreightment;

a.) Time Charter; and

b.) Voyage Charter.

Bareboat Charter or Demise , the shipowner leases to thecharterer the whole vessel, transferring to the latter theentire command, possession and consequent controlover the vessels navigation, including the master andthe crew, who thereby become the charterers servants.

In a time charter , the vessel is leased to the charterer fora fixed period of time, whereas in a voyage charter isleased for a single or particular voyage. In both the timeand voyage charters, which are said to be contracts ofaffreightment, the charterer hires the vessel only, eitherfor a determinate period of time or for a single orconsecutive voyage, with the shipowner providing forthe provisions of the ship, the wages of the master andcrew, and the expenses for the maintenance of thevessel.

What is the effect of charter on character of carrier?

Generally, the character of the common carrier as is notaffected by the charter party if the same is a contract ofaffreightment.

Who may make charter?

The owner or owners of the vessel , either in whole or inmajority part, who have legal control and possession ofthe vessel, may validly enter into charter parties with acharterer. A third person called a broker may intervenein the execution of the charter between the principals.

*Charterer may subcharter the entire vessel to a thirdperson but only in the event that there is no prohibitionin the original charter regarding any subcharter.

*Part Owners of the vessel are not precluded fromchartering the same for their own commercial purposes.

*Ship Agent is not allowed to make contracts for a newcharter unless he is properly or duly authorized by theowner, or by virtue if an authority given by a resolutionof the majority of the co-owners.

*Captain or Master , it is one of his inherent powers ofthe captain or master of the vessel to enter into valid andbinding charter parties, but only in the event of absenceof the ship agent or consignee, and only if the saidcaptain or master acts in accordance with theinstructions of the agent or owner and protects thelatters interest.

Requisites of a valid charter party:

1. Consent of the contracting parties;

2. An existing vessel which should be placed at thedisposition of the shipper;

3. Freight; and

4. Compliance with the formal requirements prescribedunder Art. 652 of the Code of Commerce which includethe requirement that the charter party must be 1.) in

writing, 2.) drawn in duplicate and 3. ) signed by theparties.

Primage referred to in paragraph 9 refers to paymentfor the use of the equipment belonging to the captain.

Port of Unloading . The port of destination where thecargoes will be unloaded must be stipulated in theCharter Party. However, the parties may also providethat the charterer is given the option of discharge at oneor more ports within a geographic range.

Demurrage a sum of money due by express contractfor the detention of the vessel in loading or unloading,beyond the time allowed for that purpose in the charterparty.

Lay Days The period stipulated for loading andunloading.

Computation of lay days . The stipulated lay days do notbegin to run against the consignee until the vessel hasarrived at berth or other usual and customary place for


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loading or unloading, and is in actual readiness todischarge its cargo in accordance with its legal obligation.

If no lay day is provided for in the charter party, it isunderstood that the charterer will unload and dischargethe cargoes within a reasonable time or with reasonablediligence.

Deadfreight where the charterer failed to occupy theleased portion of the vessel, he may thereby be madeliable by the shipowner for the deadfreight thatoccurred.

Effect of bill of lading . If a bill of lading was issued by theshipowner to the charterer, the charter party stillgoverns their rights and the bill of lading may be used asproof of receipt of the goods. As between the parties, thebill of lading is still a proof of receipt of the goods but theterms and conditions of the contract are in the charterparty.

Bottomry is a contract whereby the owner of a shipborrows for the use equipment or repair of the vessel,for a definite term, and pledges the ship as security, withthe stipulation that if the ship is lost during the voyage orduring the limited time on account of the perilsenumerated, the lender shall lose his money.

Respondentia where the goods, or some part thereof,are hypothecated as security for a loan, the repaymentof which is dependent upon maritime risks.

Distinguish Bottomry or Respondentia from Simple loan

Bottomry or Respondentia Simple loan1. The rate of interest isnot subject to the UsuryLaw on account of theextraordinary risksinvolved

1. The rate of interestmust not exceed theceiling fixed by the UsuryLaw

2. There must be a marinerisk, the existence of whichmust be duly established

2. there need not besuch risks involved

3. It must be executed inaccordance with form andmanner required in theCode of Commerce

3. The formal requisitesregarding contracts ingeneral would apply

4. It must be recorded inthe registry of vessels inorder to bind third persons

4. No such registration isrequired

5. Preference is extendedto the last lender if therebe several lenders, on thetheory that were it not for

5. The first lender, as ageneral rule, enjoyspreference oversubsequent ones

the last lender, then priorlenders would not havebeen benefited from thepreservation of thesecurity

When simple loan applies?

If the lender should prove that he loaned an amountwhich is larger than the value of the object liable for thebottomry loan due to fraudulent means employed by theborrower, the loan shall be valid only for the amount atwhich the object is appraised by experts, and the surplusprincipal shall be repaid as if it were a simple loan, withlegal interest thereon.

Who has the authority to constitute loan on bottomry?

The shipowner may secure a loan on bottomry upon hisship, although in the case where he is only a part owner,any bottomry that he may contract shall be limited onlyto the extent of his interest in the vessel.

Who has the authority to constitute loan onrespondentia?

The cargo owner shall have the right to enter into a loanon respondentia involving his cargo. The captain may notcontract a loan on respondentia, if he does, such a loanwould be void and the principal interest, and costs of the

contract shall be chargeable to his private account, andhe may be discharged altogether as ship captain by theshipowner.

Form or the loans on bottomry and respondentia:

1. By means of a public instrument;

2. By means of a policy signed by the contracting partiesand the broker taking part therein; and

3. By means of a private instrument.

The loans may be constituted jointly or separately:

1. On the hull of the vessel;

2. On the rigging;

3. On the equipment, provisions, and fuel;

4. On the engine, if the vessel is a steamer; and

5. On the merchandise loaded.

Averages in General:


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1. All extraordinary or accidental expenses which may beincurred during the voyage in order to preserve thevessel, the cargo, or both.

2. Any damage or deteriorations which the vessel maysuffer from the time it puts to sea from the port ofdeparture until it casts anchor in the port of destination,and those suffered by the merchandise from the timethey are loaded in the port of shipment until they areunloaded in the port of their consignment.

Classification of Averages:

1. General or Gross Average; and

2. Simple or Particular average.

Simple Average it shall include all the expenses anddamages caused to the vessel or to her cargo which havenot inured to the common benefit and profit of allpersons interested in the vessel and her cargo. If thedamage caused is not a general average, the same can beconsidered particular average.

Who shall borne the damages?

The owner of the goods that suffered the damage bearsthe loss.

General Average It shall include all the damages andexpenses which are deliberately caused in order to savethe vessel, its cargo or both at the same time, from real

and known risk.Requisites of General Average:

1. There must be a common danger;

2. That for the common safety part of the vessel or thecargo or both is sacrificed deliberately;

3. That from the expenses or damages caused follows thesuccessful saving of the vessel and cargo; and

4. That the expenses or damage should have beenincurred or inflicted after taking proper legal steps andauthority.

Common Danger both the ship and the cargo, after hasbeen loaded, are subject to the same danger, whetherduring the voyage, or in the port of loading or unloading;that the danger arises from the accidents of the sea,dispositions of the authority, or faults of men, providedthat the circumstances producing the peril should beascertained and imminent or may rationally be said to becertain and imminent.

Deliberate Sacrifice There must be voluntary sacrificeof a part for the benefit of the whole in order to justifygeneral average contribution.

Successful sacrifice . No general contribution can bedemanded if the vessel and other cargo that are soughtto be saved were in fact not saved.

Art. 860 . If, notwithstanding of merchandise, breakageof masts, ropes and equipment, the vessel shall be lostrunning the same risk, no contribution whatsoever by jettison of gross average shall be proper.

The owners of the goods saved shall not be liable for theindemnification of those jettisoned, lost, or damaged.

The proper steps and authority for making the sacrifice:

In order to incur the expenses and cause the damagescorresponding to gross average,

1. There must be a resolution of the captain;

2. Adopted after deliberation with the sailing mate andother officers of the vessel; and

3. After hearing the persons interested in the cargo whomay be present.

If there is an objection, the captain should considercertain measures necessary, they may be executedunder his responsibility, without prejudice to the rightsof the shippers to proceed against the captain before thecompetent judge or court, if they can prove that he actedwith malice, lack of skill, or negligence.

If the persons interested in the cargo, being on board thevessel, have not been heard, they shall not contribute tothe gross average, their share being chargeable againstthe captain, unless the urgency of the case should besuch that the time necessary for previous deliberationswas wanting.

The order in case the captain shall direct the jettisonand shall order the goods cast overboard :

1. Those which are on deck, beginning with those whichembarrass the maneuver or damage of the vessel,preferring, if possible, the heaviest ones with the leastutility and value; and

2. Those which are below the upper deck, alwaysbeginning with those of the greatest weight and smallestvalue, to the amount and number absolutelyindispensable.

Who bears general average?


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The gross or general average shall be borne by those whobenefited from the sacrifice. Contribution may also beimposed on the insurers of the vessel or cargoes thatwere saved as well as lenders on bottomry orrespondentia.

Insurers . Insurers of the vessel, of the freightage and ofthe cargo shall be obliged to pay for the indemnificationof the gross average, insofar as is required of each one ofthe object. Insurer is also liable for any general averagein the proportion to the contribution attaching to hispolicy value where said value is less than the contributingvalue of the thing insured.

Lenders on bottomry and respondentia shall suffer, inproportion to their respective interest, the generalaverage which may take place in the goods on which theloan is made.

Who is entitled to indemnity ?

The owner of the goods which were sacrificed is entitledto receive the general average contribution.

However, the following goods, even if sacrificed, arenot covered:

1. Goods carried on deck, unless the rule, special law orcustoms of the place allow the same;

2. Goods that are not recorded in the books or records ofthe vessel; and

3. Fuel for the vessel if there is more than sufficient forthe voyage.

What is the effect of negligence of the common carrier ?

Common carriers cannot limit their liability for injury orloss of goods when such injury or loss was caused by itsown negligence.

Apportionment. After the amount of the gross averagehas been determined in accordance with the provisionsof the code, it shall be distributed pro rata among thegoods which are to cover- the same.

Art. 846. Those interested in the proof and liquidationof averages may mutually agree and bind themselves atany time with regard to the liability, liquidation, andpayment thereof.

In the absence of agreements , the followingsrules shall apply:

1. The proof of the average shall take place in the portwhere the repairs are made, should any be necessary, orin the port of unloading;

2. The liquidation shall be made in the port of unloading,if it is a Philippine port;

3. If the average occurred outside the jurisdictionalwaters of the Philippines, or the cargo has been sold in aforeign port by reason of an arrival under stress, theliquidation shall be made in the port of arrival; and

4. If the average has occurred near the port ofdestination, so that said port can be made, theproceedings mentioned in Rules 1 and 2 shall be heldthere.

Collision an impact or sudden contact of a moving bodywith an obstruction in its line of motion, whether both

bodies are in motion or one stationary and the other, nomatter which, in motion. Strictly speaking, it refers to thecontact of two moving vessels.

3 divisions of zones in collision:

1. Covers all the time up to the moment when the riskof collision may be said to have began . Within this zone,no rule is applicable because none is necessary. Eachvessel is free to direct its course as it deems best withoutreference to the movements of the other vessel;

2. Covers the time between the moment when the riskof collision begins and the moment when it has becomea practical certainty ;

3. Covers the time of actual collision.

What is Error in Extremis?

The third zone covers the period in which errors inextremis occur; and the rule is that the vessel which hasforced the privileged vessel into danger is responsibleeven if the privileged vessel has committed an errorwithin that zone.

Thus, it is during the time when the vessel was passingthrough the third zone that it changed its course to portin order to avoid, if possible, the collision, the act may besaid to have been done in extremis, and, even if wrong,the sailing vessel is not responsible for the result.

COLREGS. The existing international agreement withrespect to collision in high seas. It is the InternationalRegulations for Preventing Collisions at Sea which wasformulated by the International Maritime Organizations.


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What is the rule on liability with respect to collision?

Collision is not governed by quasi-delict. Liability incollision cases are still negligence based. In other words,courts are still called upon to determine the negligenceof the persons involved in order to impose liability.

The rule on contributory negligence and the doctrine oflast clear chance is not applicable in collision cases. Eachmust suffer its own damage if both of them are negligent.

Specific rules under the Code of Commerce:

1. One Vessel at Fault . If a vessel should collide withanother through or the fault, negligence, or lack of skillof the captain, sailing mate, or any other member of thecomplement, the owner of the vessel at fault shallindemnify the losses and damages suffered, after anexpert appraisal.

2. Both Vessel at Fault. If the collision is imputable toboth vessels, each one shall suffer its own damages, andboth shall be solidarily responsible for the losses anddamages occasioned to their cargoes.

3. Party at Fault cannot be determined (InscrutableFault). Each party shall also bear his own damage in casesin which it cannot be determined which of the twovessels has caused the collision. They are also solidarilyresponsible for the losses and damages occasioned totheir cargoes.

4. Cause is Fortuitous Event. If a vessel should collidewith another, through fortuitous event or force majeure,each vessel and its cargo shall bear its own damages.

5. Third Person at Fault. If a vessel should be forced by athird vessel to collide with another, the owner of thethird vessel shall indemnify the losses and damagescaused, the captain thereof being civilly liable to saidowner.

What happens if the vessel sinks on the way to port?

A vessel, upon being run into, sinks immediately, as wellas that which, having been obliged to make a port torepair the damages caused by collision, is lost during thevoyage or is obliged to be stranded in order to be saved,shall be presumed as lost by reason of collision .

What is the rule if there is presence of pilots on board?

Art. 834. If the vessels colliding with each other shouldhave pilots on board discharging their duties at the timeof the collision, their presence shall not exempt thecaptains from the liabilities they incur, but the latter shall

have the right to be indemnified by the pilots, without prejudice to the criminal liability which the latter mayincur.

What is the extent of liability when the value of the shipand its appurtenances should not be sufficient to coverall liabilities?

When the value of the ship and its appurtenances shouldnot be sufficient to cover all liabilities, the indemnity dueby reason of death or injury of persons shall have

preference.

Note: The passenger can file 3 cases at once but cannotask for damages in 3 cases, only 1.

What is the rule if the collision happened in foreignwaters?

If the collision should take place between Philippinesvessels in foreign waters, or if having taken place in theopen seas, and the vessels should make a foreign port,the Consul of the Republic of the Philippines in said portshall hold a summary investigation of the accident,

forwarding the proceedings to the Secretary of theDepartment of Foreign Affairs for continuation andconclusion.

Protest. Collision is one of the cases when protest isnecessary.

The action for the recovery of losses and damages arisingfrom the collisions cannot be admitted if a protest ordeclaration is not presented within 24 hours before thecompetent authority of the point where the collisiontook place, or that of the first port of arrival of the vessel,if in the Philippine territory, and to the Consul of theRepublic of the Philippines if it occurred in a foreigncountry.

With respect to damages caused to persons or to cargo,the absence of protest may not prejudice the personsinterested who were not on board or were not in acondition to make known their wishes.

Note: Protest does not apply to small boat engaged inriver and bay traffic and inland navigation.

What are the instances when protest is mandatory?

Requirement of protest applies to:

1. All persons engaged in traffic upon the waters of thePhilippines; and


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2. That the defendant has as much right to insist uponcompliance with this provision of the code where thedamages were done to a boat operated by theGovernment as if such boat had been operated by aprivate individual or company.

Does the limited liability rule apply in collision cases?

Yes. The real and hypothecary nature of maritime lawlimits the liability of the shipowner and ship agent to thevalue of the vessel in collision cases.

Arrival under stress It is the arrival of a vessel at thenearest and most convenient port which was decidedupon after determining that there is well-founded fear ofseizure, privateers, or pirates or by reason of anyaccident of the sea disabling it to navigate.

What are the steps to be taken in the determination of

the propriety of an arrival under stress (When is arrivalunder stress proper)?

1. The captain should determine during the voyage ifthere is well founded fear of seizure, privateers andother valid grounds;

2. The captain shall then assemble the officers;

3. The captain shall summon the persons interested inthe cargo who may be present and who may attend butwithout right to vote;

4. The officers shall determine and agree if there is wellfounded reason after examining the circumstances. Thecaptain shall have the deciding vote;

5. The agreement shall be drafted and the properminutes shall be signed and entered in the log book; and

6. Objections and protest shall likewise be entered in theminutes.

Note: The lawfulness of the arrival under stressdetermines if damages will be shouldered by theshipowner and ship agent.

When is arrival under stress improper?

1. If the lack of provision should arise from the failure totake the necessary provisions for the voyage accordingto usage and customs, or if they should have beenrendered useless or lost through bad stowage ornegligence in their care;

2. If the risk of enemies, privateers, or pirates should nothave been well-known, manifest, and based on positiveand provable facts.

3. If the defect of the vessel should have arisen from thefact that it was not repaired, rigged, equipped, andprepared in a manner suitable for the voyage, or fromsome erroneous order of the captain; and

4. When malice, negligence, want of foresight, or lack ofskill on the part of the captain exist in the act causingdamage.

Who shall be liable for the expenses?

If the arrival under stress is proper, the shipowner andthe ship agent will only be liable for the expenses for thesame arrival. On the other hand, the shipowner and theship agent will be liable for the same expenses and, inaddition, they shall be solidarily liable for damagescaused to the cargoes by such arrival under stress.

What are the rules when there in unloading of cargoes

to make repairs?If in order to make repairs to the vessel or because thereis danger that the cargo may suffer damage, it should benecessary to unload, the captain must:

1. Request authorization from the competent judge orcourt for the removal, and carry it out with theknowledge of the person interested in the cargo, or hisrepresentative, should there be any. The expenses shallbe for the account of the ship agent or owner;

2. In a foreign port, it shall be the duty of the PhilippineConsul, where there is one, to give the authorization.They shall be chargeable against the owners of themerchandise for whose benefit the act was performed.

If the unloading should take place for both reasons, theexpenses shall be divided proportionately between thevalue of the vessel and that of the cargo.

Who shall take custody of the cargo?

The custody and preservation of the cargo which hasbeen unloaded shall be entrusted to the captain, who

shall be responsible for the same, except in cases of forcemajeure.

What is the liability of the captain?

The captain shall be responsible for the damages causedby his delay, if after the cause of the arrival under stresshas ceased, he should not continue the voyage.

If the cause of arrival should have been the fear ofenemies, privateers, or pirates, a deliberation andresolution in a meeting of the officers of the vessel and


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person interested in the cargo who may be present, inaccordance with the provisions contained in Article 819,shall precede the departure.

Shipwreck the demolition or shattering of a vesselcaused by her driving ashore or on rocks and shoals inthe midseas, or by the violence of winds and waves intempests.

Salvage a service which one person renders to theowner of a ship or goods, by his own labor, preservingthe goods or the ship which the owner or thoseentrusted with the care of them have either abandonedin distress at sea, or are unable to protect and secure.

Kinds of Salvage Services:

1. Voluntary , wherein the compensation is dependentupon success;

2. Rendered under a contract for a per diem or perhoram wage, payable at all events; and

3. Under a contract payable only in cases of success .

What is the rule when other persons saved the vessel orits cargo?

When in case of shipwreck, the vessel or its cargo shallbe beyond the control of the crew, or shall have beenabandoned by them, and picked up and conveyed to asafe place by other persons, the latter shall be entitled to

a reward for the salvage. Other person who assist insaving the vessel or its cargo from the shipwreck shall beentitled to a similar reward.

Elements in order for a salvage claim to be valid:

1. There must be a marine peril;

2. The service is voluntarily rendered and is not requiredas an existing duty or from a special contract;

3. There must be success in whole or in part or that theservice rendered contributed to such success; and

4. The vessel is shipwrecked beyond the control of thecrew or shall have been abandoned.

Who are the person not entitled to SalvageCompensation?

1. The crew of the vessel shipwrecked or which was indanger of shipwrecked;

2. He who shall have commenced the salvage in spite ofopposition of the captain or of his representatives; and

3. He who shall have failed to comply with the provisionsof section 3.

Derelict a ship or her cargo which is abandoned anddeserted at sea by those who were in charge of it,without any hope of recovering it ( sine spe recuperandi )or without any intention of returning to it ( sine animorevertendi ).

Note: The vessel sought to be salvaged is shipwreckedbeyond the control of the crew or abandoned, is presentwhen the vessel is considered a derelict.

Jetsam, Flotsam and Ligan are, unless abandoned, stillthe property of their original owners.

Jetsam are goods that were thrown off a ship whichwas in danger.

Flotsam are goods that floated off the ship while theship was in danger or when it sank.

Ligan are goods left at sea on the wreck or tied to abuoy so that they can be recovered later.

What is the basis of entitlement to salvage reward?

A salvage reward should neither be too liberal nor toostingy. It should constitute a sufficient compensation forthe outlay and effort of the salvors.

Quantum Meruit is NOT applicable . Compensationshould not be viewed by admiralty courts merely as payon the principle of quantum meruit or as a remunerationpro opera et labore, but as a reward given for perilousservices, voluntarily rendered, and as an inducement tomariners to embark in such dangerous enterprise to savelife and property .

What are the basis of compensation to be rewarded forsalvage services?

1. The labor expended by the salvors in rendering thesalvage service;

2. The promptitude, skill, and energy displayed inrendering the service and saving the property;

3. The value of the property employed by the salvors inrendering the service, and the danger to which suchproperty was exposed;

4. The risk incurred by the salvors in rescuing theproperty from the impending peril;

5. The value of the property salvaged; and


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6. The degree of danger from which the property wasrescued.

What are the rights and obligations of salvors andowners ?

1. If the ship and its cargo are saved together by the

salvor, the salvage allowance should be charged againstthe ship and cargo in the proportion of their respectivevalues, as in the case of general average; and neither isliable for the salvage due from other. Thus, in a personalaction which is brought against the owner of the ship, theliability of the latter is limited to such part of the salvagecompensation due for the entire service as isproportionate to the value of the ship. Not only is thesalvage charge a separate and divisible burden asbetween the ship and cargo, but also as betweenportions of the cargo belonging to different owners;

2. The salvor has a right of possession of a derelict forpurposes of a salvage claim;

3. When a vessel is found at sea, deserted, and has beenabandoned by the master and crew without theintention of returning and resuming possession, she is, inthe sense of the law, derelict, abandoned, and the finderwho takes possession with the intention of saving hergains a right of possession which he can maintain againstthe true owner. However, while the salvor has the rightto retain the abandoned vessel or cargo until the salvageis completed without interference from other persons, itwould not be so if the salvor has inadequate means. Insuch case, the salvor is bound to accept additionalassistance from other salvors who may offer theirservices;

4. The owner of the vessel which is a derelict does notrenounce his right to the property. There is nopresumption of an intention to abandon such propertyrights on the part of such owner under the Salvage Law.What the owner abandons temporarily is his right ofpossession, which is thereby transferred to the salvor

who becomes bound to preserve the property with goodfaith and bring it to a place of safety for the owners use;

5. The salvor who saves or picks up a vessel ormerchandise at sea, in the absence of the ship captain,shipowner, or a representative of either of them, theybeing unknown, shall convey and deliver the vessel ormerchandise as soon as possible, to the collector ofcustoms, if the port has a collector, and otherwise to theprovincial treasurer or municipal mayor;

6. The owner or his representative shall have a right tothe delivery of the vessel or things saved after thesalvage is accomplished, provided that he pays, or givesa bond to secure the expenses and the proper reward.The amount and sufficiency of the bond, in the absenceof agreement, shall be determined by the collector of

customs or by the judge of the Court of First Instance ofthe province where the things saved may be found;

7. If the owner does not make any claim within 3 monthsafter the publication by the authorities of a salvagereport, the things saved shall be sold at a public auction,the proceeds of which shall be deposited in the NationalTreasury after deducting the expenses and the properreward to which the salvor is entitled. If 3 years lapseswithout claim thereon, the salvor shall be entitled to halfof the deposit as his reward and the other half shallpertain to the government;

8. The owner of the saving vessel is also entitled to thesalvage reward for the use of his vessel in renderingsalvage services even though he may not have beenpresent at the time the salvage service is awarded to theowners of the salving vessel on account of the danger towhich the service exposes their property, and the riskwhich they run of loss in suffering their vessels engagedin such perilous undertaking; and

9. Reward is due not only to the owners of the salvingvessel but the captain and crew as well. Thus, if a vessel

or its cargo shall have been assisted or saved, entirely orpartially, by another vessel, the reward for salvage orassistance shall be divided between the owner, thecaptain, and the remainder of the crew of the lattervessel, so as to give the owner a half, the captain afourth, and all the remainder of the crew other fourth ofthe reward, in proportion to their respective salaries, inthe absence of an agreement to the contrary.

Maritime Lien. A salvor has an interest in the propertybut it never goes, in the absence of a contract expresslymade upon the idea of debt due from the owner to the

salvor but upon the principle that the service creates aproperty in the thing saved.

COGSA Carriage Of Goods by Sea Act

The law of the country to which the goods are to betransported shall govern the liability of the commoncarrier for their loss, destruction or deterioration.

Note: COGSA can be applied in the Philippines, i.e. thecollision happened locally (the vessel travels from one


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city to another City), provided it is not contrary to ourlaw.

Goods includes goods, wares, merchandise, andarticles of every kind whatsoever. However, it does notinclude live animals and cargo which by the contract ofcarriage is stated as being carried on deck and is socarried.

Who are the parties in a carriage of goods ?

1. Carrier; and

2. Shipper.

Note: International carriers are required to exerciseextraordinary diligence in the performance of theircontractual obligations.

What are the responsibilities of the carrier under

COGSA?

1. The carrier shall be bound before and at the beginningof the voyage to exercise due diligence to

a.) Make the ship seaworthy;

b.) Properly man, equip, and supply the ship; and

c.) Make the holds, refrigerating and coolingchambers, and all other parts of the ship in which goodsare carried, fit and safe for their reception, carriage, andpreservation.

2. The carrier shall properly and carefully load, handle,stow, carry, keep, care for, and discharge the goodscarried.

3. After receiving the goods into his carrier, or the masteror agent of the carrier, shall, on demand of the shipper,issue to the shipper a bill of lading showing among otherthings

a.) The loading marks necessary for identificationof the goods as the same are furnished in writing by theshipper before the loading of such goods starts, providedsuch marks are stamped or otherwise shown clearlyupon the goods if uncovered, in such a manner as shouldordinarily remain legible until the end of the voyage;

b.) Either the number of packages or pieces, orquantity or weight, as the case may be, as furnished inwriting by the shipper; and

c.) The apparent order and conditions of thegoods: provided, that no carrier, master, or agent of thecarrier, shall be bound to state or show in the bill of

lading any marks, number, quantity, or weight which hehas reasonable ground for suspecting not accurately torepresent the good actually received or which he has hadno reasonable means of checking.

4. The shipper shall be deemed to have guaranteed tothe carrier the accuracy at the time of shipment of themarks, number, quantity, and weight, as furnished byhim; and the shipper shall indemnify the carrier againstall loss, damages, and expenses arising or resulting frominaccuracies in such particulars. The right of the carrierto such indemnity shall in no way limit his responsibilityand liability under the contract of carriage to any personother than the shipper.

The term Contract of carriage applies only to contractsof carriage by sea covered by a bill of lading or any similardocument of title, insofar as such document relates to

the carriage of goods by sea, including any bill of ladingor any similar document as aforesaid issued under orpursuant to a charter party from the moment at whichsuch bill of lading or similar document of title regulatesthe relations between a carrier and a holder of the same.

When does a notice of claim be filed? When does itprescribe?

The notice of claim must be made within three (3) daysfrom delivery if the damage is not apparent. It is notmandatory. However, the prescriptive period of one (1)year from the delivery for the filing of the case is acondition precedent or mandatory.

Note: The 1 year prescriptive period does not apply tocases of misdelivery or conversion.

What are the defenses and immunities available to thecommon carrier ?

1. Neither the carrier not the ship shall be liable for theloss or damage arising or resulting from unseaworthinessunless caused by want of due diligence on the part of thecarrier to make the ship seaworthy and to secure that the

ship is properly manned, equipped, and supplied, and tomake the holds, refrigerating and cooling chambers, andall other parts of the ship in which goods are carried fitand safe for their reception, carriage, and preservation.Whenever loss or damage has resulted fromunseaworthiness, the burden of proving the exercise ofdue diligence shall be on the carrier or other personclaiming exemption.

2. Neither the carrier nor the ship shall be responsible forloss or damage arising or resulting from


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a.) Act, neglect, or default of the master, mariner, pilot,or servants of the carrier in the navigation or in themanagement of the ship;

b.) Fire, unless caused by actual fault or privity of thecarrier;

c.) Perils, dangers, and accidents of the sea or othernavigable water;

d.) Act of God;

e.) Act of War;

f.) Act of Public Enemies;

g.) Arrest or restraint of princes, rulers, or people, orseizure under legal process;

h.) Quarantine restrictions;

i) Act or omission of the shipper or owner of the goods,his agent or representatives;

j.) Strikes or lockouts or stoppage or restraint of laborfrom whatever cause, whether partial or general:Provided, that nothing herein contained shall beconstrued to relieve a carrier from responsibility for thecarriers own acts;

k.) Riots and civil commotions;

l.) Saving or attempting to save life or property at sea;

m.) Wastage in bulk or weight or any other loss ordamage arising from inherent defect, quality, or vice ofthe goods;

n.) Insufficiency or packing;

o.) Insufficiency or inadequacy of marks;

p.) Latent defects not discoverable by due diligence; and

q.) Any other cause arising without the actual fault andprivity of the carrier and without the fault or neglect ofthe agents or servant of the carrier, but the burden ofproof shall be on the person claiming the benefit of thisexception to show that neither the actual fault or privityof the carrier nor the fault of the agents or servants ofthe carrier contributed to the loss or damage.

3. The shipper shall not be responsible for loss or damagesustained by the carrier or the ship arising or resultingfrom any cause without the act, or neglect of the shipper,his agent, or his servant; and

4. Any deviation in saving or attempting to save life orproperty at sea, or any reasonable deviation shall not bedeemed to be an infringement or breach or this Act or ofthe contract of carriage, and carrier shall not be liable forany loss or damage resulting therefrom: Provided,however, That if the deviation is for the purpose of

loading or unloading cargo or passenger it shall, primafacie, be regarded as unreasonable.

Deviation is a breach of the contract of carriage. Thismay mean breach of an express stipulation as to route ofthe voyage. In the absence of stipulation , the voyagemay be taken to be the normal route of sailing betweenport of loading and the port of discharge, as defined bygeography and by trade customs which parties are takento have incorporated by reference.

The shipowner and the ship agent MAY WAIVE THE

BENEFIT OF THE DEFENSES in its favor provided not onlyunder COGSA but also under other laws.

Civil Aviation - Refers to the operation of any civil aircraftfor the purpose of general aviation operations, aerialwork or commercial air transport operations.

Aeronautics/ Aviation - Refers to the Science and act offlight.

Aircraft - any machine that can derive support in theatmosphere from the reactions of the air other than thereactions of the air against the earth's surface. It also

shall refer to Civil aircraft only and will not include Stateor Public aircraft.

Philippine Aircraft - means an aircraft registered in thePhilippines in accordance with the requirements of theCivil Aviation Authority Act of 2008.

Note: The Chicago Convention provides that Aircrafthave the nationality of the State in which they areregistered. Also, an aircraft cannot be validly registeredin more than one State, but its registration may bechanged from one State to another.

What is the TRUE TEST of whether one is a commoncarrier by air?

Whether he holds out that he will carry for hire, so longas he has room, goods of everyone bringing goods to himfor carriage, not whether he is carrying as a publicemployment or whether he carries to a fixed place.

How does a registration established?

The Civil Aviation Authority shall:


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1. Establish and maintain a system for the nationalregistration of aircraft in the Philippines.

2. Establish and maintain a system for the registration ofliens, mortgages or other interests in aircraft or aircraftengines; and

3. Have sole authority to register aircraft and liens,mortgages or other interests in aircraft or aircraftengines.

What are the requirements to make an aircraft eligiblefor registration?

1. The Aircraft is owned by or leased to a citizen orcitizens of the Philippines or corporations or associationsorganized under the laws of the Philippines at least sixtyper centum (60%) of whose capital is owned by Filipinocitizens; and

2. The aircraft is not registered under the laws of anyforeign country.

EXCEPTIONS:

Foreign- owned or registered aircraft may be registeredif utilized by members of aero clubs organized forrecreation , sport or the development of flying skills as aprerequisite to any aeronautical activities of such clubswithin the Philippine airspace.

Note: An application for aircraft registration shall be

made in writing, signed and sworn to by the owner orlessee of any aircraft or aircraft engine eligible forregistration.

Who shall issue a Certificate of Registration?

The DIRECTOR GENERAL upon considering theapplication for registration, find the aircraft or aircraftengine eligible for registration, such aircraft shall beregistered under the provisions of this Act and the ownerthereof shall be issued a Certificate of Registration .

How is a registration revoked?

Any Certificate of registration may be revoked by theAuthority for any cause which renders the aircraftineligible for registration.

State of Registry - refers to the State on whose registerthe aircraft is entered.

Note: All aircraft conveyance of Philippine Registry shallbe registered with the Civil Aviation Authority of thePhilippines (CAAP).

Note: The requirements for registration are similar to therequirements in Land Registration.

Air Commerce or Commercial Air Operation Refers toand includes scheduled or non-scheduled air transportservices for pay or hire, the navigation of aircraft infurtherance of a business, the navigation of aircraft fromone place to another for operation in the conduct of abusiness, or an aircraft operation involving the transportof passengers, cargo or mail for remuneration or hire.

What are the types of Air Transportation?

1. Domestic Air Commerce - means and includes aircommerce within the limits of the Philippine territory.

2. Domestic Air Transport - means air transportationwithin the limits of the Philippine territory.

3. Foreign Air Transport - refers to air transportationbetween the Philippines and any place outside it orwholly outside the Philippines.

4. International Commercial Air Transport - the carriageby aircraft of persons or property for remuneration orhire or the carriage of mail between any two (2) or morecountries.

Who are the persons involved in Air Transportation andregulated by CAAP?

1. AIR CARRIER OR OPERATOR-the one who undertakes,

whether directly or indirectly, or by a lease or any otherarrangements, to engage in air transportation services orair commerce. Air Carriers may either be a Philippine AirCarrier or a Foreign Air Carrier .

2. Philippine Air Carrier - an aircraft who is a citizen ofthe Philippines.

3. Foreign Air Carrier - means any operator, not being aPhilippine air operator, which undertakes, whetherdirectly or indirectly or by lease or any otherarrangement, to engage in commercial air transport

operations within borders or airspace of the Philippines,whether on a scheduled or chartered basis.

4. Airman - individual who engages, as the person incommand or as pilot, mechanic, aeronautical engineer,flight radio operator or member of the crew, in thenavigation of aircraft while under way and any individualwho is directly in charge of inspection, maintenance,overhauling, or repair of aircraft, aircraft engine,propellers, or appliances; and individual who serves inthe capacity of aircraft dispatcher or air traffic controloperator.


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What are the duties of the Civil Aeronautics Board?

1. The CAB shall have the general supervision andregulation of, the jurisdiction and control over, aircarriers, general sales agents, cargo sales agents, andairfreight forwarders as well as their property, propertyrights, equipment, facilities, and franchise, in so far asmay be necessary.

2. It shall have the authority to regulate airtransportation to recognize and preserve the inherentadvantages of, assure the highest degree of safety in andfoster sound economic conditions in such transportation,and to improve the relations between, and coordinatetransportation by air carriers.

WHO MAY CHARTER AN AIRCRAFT?

1. By a person for his own use (including a direct air

carrier when such aircraft is engaged solely for thetransportation of company personnel or commercialtraffic in cases of emergency);

2. By a representative (or representatives acting jointly)of a group for the use of such group (provided no suchrepresentative is professionally engaged in theformation of groups for transportation or in thesolicitation or sale of transportation services); or

3. By an airfreight forwarder holding a currently effectivepermit.

What are the different classifications of Charter ofAircraft?

1. On-route - service performed by an air carrierbetween points between which said carrier is authorizedto provide service pursuant to its certificate of publicconvenience and necessity or foreign air carrier permit;Provided, however, that passenger charter trips by anyall-cargo carrier are not considered to be on-routewhether or not performed between points designed toreceive service by such carrier in its certificate or permit.

2. Off-route - any charter which is not on-route.

3. Pro-rata charter - a charter where the cost of which isdivided among the passengers transported.

4. Single entity charter - a charter the cost of which isborne by the charterer and not by individual passengers,directly or indirectly.

5. Mixed charter - a charter the cost of which is borne, orpursuant to contract may

notes on transportation

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