PART II- SHIPPING LAW promote is the encouragement of shipbuilding and

investment in maritime commerce.

CHAPTER I. GENERAL CONCEPTS

1. MARITIME LAW; ADMIRALTY LAW 2.2 Statutory Provisions

1.1 Definition; Distinction [LIABILITY TO THIRD PERSONS]
-it is the system of laws which particularly relates ART. 587. The ship agent shall also be civilly liable for
to the affairs and business of the sea, to ships, their the indemnities in favor of third persons which may
crews and navigation, and to marine conveyance of arise from the conduct of the captain in the care of the
persons and property. goods which he loaded on the vessel; but he may
- Maritime Law and Admiralty Law are synonymous. exempt himself therefrom by abandoning the vessel
with all her equipment and the freight it may have
1.2 History; Largely judge made and evolved from earned during the voyage.
commercial practice
[COLLISION CASES]
2. CHARACTERISTICS OF MARITIME TRANSACTIONS; Art. 590.The co-owners of the vessel shall be civilly
REAL AND HYPOTHECARY liable in the proportion of their interests in the common
- “ that which distinguishes the Maritime from the civil fund for the results of the acts of the captain referred
law and even from the mercantile law in general is the to in Art. 587.
real and hypothecary nature of the former, and the Each co-owner may exempt himself from this liability by
many securitoes of a real nature that maritime the abandonment, before a notary, of the part of the
customsxxx vessel belonging to him.
“REAL” signifies that the extent of the liability of those
involved in maritime commerce and also the claims of Art. 837. The civil liability incurred by the shipowner in
their counterparties are both determined by the value the cases prescribed in this section, shall be understood
of the ship and its load, the very res or real property as limited to the value of the vessel with all her
involved in the endeavor. appurtenances and freight earned during the voyage.
A cursory examination will disclose that the
“HYPOTHECARY” implies that shipowner can free principle of limited liability of a shipowner or agent is
himself from liability arising from maritime commerce provided for in but three articles of the Code of
by hypothecating the ship in favor of the claiming Commerce - article 587 aforequoted and articles 590
parties. To hypothecate means to pledge as a security. and 837. Article 590 merely reiterates the principle
embodied in article 587, where the vessel is owned by
“As evidence of this “real” nature of the maritime several persons. Article 837 applies the same principle
law we have (1) the limitation of the liability of the in cases of collision, and it has been observed that said
agents to the actual value of the vessel and the freight article is but "a necessary consequence of the right to
money,and (2) the right to retain the cargo and the abandon the vessel given to the shipowner in article 587
embargo and detention of the vessel even in cases of the Code, and it is one of the many superfluities
where the ordinary civil law would not allow more than contained in the Code." (Lorenzo Benito, Lecciones 352,
a personal action against the debtor or person liable. quoted in Philippine Shipping Co. vs. Garcia, 6 Phil., 281,
“ The ral and hypothecary nature of maritime law 282.)
simply means that the liability of the carrier in In effect, therefore, only articles 587 and 590 are
connection with losses related to maritime contracts is the provisions contained in our Code of Commerce on
confined to the vessel, which is hypothecated for such the matter, and the framers of said code had intended
obligations or which stands as guaranty for their those provisions to embody the universal principle of
settlement. limited liability in all cases.

2.1 LIMITED LIABILITY RULE; Nature and Rationale 2.3 Scope; When not applicable
- “NO VESSEL, NO LIABILITY” - limited liabilty covers only:
-The shipowner;s liability is merely co-extensive (1) liability to third persons,
with his interest in the vessel such that a total loss (2) Acts of the captain, and
thereof results in its extinction. (3) Collisions.

RATIONALE: To offset against adverse conditions and to EXCEPTIONS TO LIMITED LIABILTY,

encourage shipbuilding and maritime commerce, it was (1) where the injury or death to a passenger is due
deemed necessary to confine the liability of the owner either to the fault of the shipowner, or to the
or agent arising from the operation of a ship to the concurring negligence of the shipowner and the captain,
vessel, equipment arising from the operation of a ship (2) Where the vessel is insured; and
to vessel, equipment, and freight, or insurance, if any. (3) In workmen’s compensation claims
(Monarch Insurance Co., Inc. v. CA, through Justice (4) Total destruction of the vessel does not affect
Sabino R. De Leon, Jr.) the liability of the owner for repairs of yhe vessel
completed before its loss.
In Yangco v. Laserna, through Justice Moran,it was
said that “The policy which the rule is designed to 2.4 Abandonment; When required; Exceptions
- GR. Abandonment of the vessel, its appurtenances and damages arising thereby.
freightage is an indispensablerequirement before the
shipowner or ship agent can enjoy the benefits of the 2.7.2. GOVT. OF THE PHIL. ISLANDS VS INSULAR
limited liability principle. MARITIME CO. [TOTAL DESTRUCTION DOES NOT AFFECT
REPAIR LIABILITIES]
EXCEPTIONS: Facts.
(1)When the vessel is totally lost in which case The Government of the Philippine Islands terminated
there is no vessel to abandon, abandonment is not repairs on the motor ship Insular on November 29, 1919.
required. Because of such total loss the liability of the The Insular suffered a total loss by fire on April 15,
shipowner or agent for damages is 1920. Collection of claim was attempted by the
extinguished. However, despite the total loss of the Government on April 30, 1921, that is, after the loss of
vessel, its insurance answers for the damages for which the vessel.
a shipowner or agent may be held liable.
(2)the right of abandonment of vessels, as a legal Held: That the loss of the vessel Insular did not
limitation of a shipowner's liability, does not apply to extinguish the obligation and that the owners of the
cases where the injury or average was occasioned by the vessel are still liable for the repairs.
shipowner's own fault. LIABILITY OF OWNERS OF A VESSEL FOR REPAIRS TO
VESSEL AFTER LOSS OF THE VESSEL. —
2.5 Computing the Limit of Liability
2.5.1 What are Included? The total destruction of the vessel does not affect the
2.5.2 “Offending Vessel” in Tug and Tow Scenario; liability of the owners for repairs on the vessel
Flotilla Rule completed before its loss.
As a general rule, the owners of a vessel and the
2.6 Procedure for Enforcement; Concursus Proceeding vessel itself are liable for necessary repairs. Naturally
the total destruction of the vessel extinguishes a
2.7 CASES maritime lien, as there is no longer any res to which it
2.7.1 LUZON STEVEDORING CORP VS CA [ NO can attach. But the total destruction of the vessel
ABANDONMENT, PETITIONER AT FAULT]] does not affect the liability of the owners for repairs
RULING: There is no question that the action arose from on the vessel completed before its loss.
a collision and the fault is laid at the doorstep of LSCO
"Cavite" of petitioner. Undeniably petitioner has not
2.7.3. DELA TORRE V. CA [Vessel lost not by the
abandoned the vessel. Hence petitioner can not invoke
owner]
the benefit of the provisions of Article 837 of the Code
of Commerce to limit its liability to the value of the
Facts
vessel, all the appurtenances and freightage earned
Roland, entered into an Agreement with Concepcion for
during the voyage.
the dry-docking and repair of LCT-Josephine. The vessel
was not returned to Concepcion after the repairs
because of the provision in the Preliminary Agreement
RULES IN CASE OF COLLISION; ABANDONMENT; that the same "should" be used by Roland for the first
EXCEPTIONS; two years. Before the vessel could be returned, it was
lost due to the negligence of Agustin to whom Roland
The rule is that in case of collision there should be
chose to sub-charter or sublet the vessel.
abandonment of the vessel by the shipowner or agent in
order to enjoy the limited liability provided for under Issue: Can Roland and Agustin invoke limited liability
said Article 837. doctrine?
The exception to this rule is when the vessel is totally Held. No.
lost in which case there is no vessel to abandon so
abandonment is not required. Because of such total loss Art 587 is clear on which indemnities may be confined or
the liability of the shipowner or agent for damages is restricted to the value of the vessel pursuant to the said
extinguished. Nevertheless, the shipowner or agent is Rule, and these are the — "indemnities in favor of third
personally liable for claims under the Workmen's persons which may arise from the conduct of the
Compensation Act and for repairs of the vessel before captain in the care of the goods which he loaded on the
its loss. vessel." Thus, what is contemplated is the liability to
third persons who may have dealt with the shipowner,
In case of illegal or tortious acts of the captain the the agent or even the charterer in case of demise or
liability of the shipowner and agent is subsidiary. In such bareboat charter.
instance the shipowner or agent may avail of the
provisions of Article 837 of the Code by abandoning the The only person who could avail of this is the shipowner,
vessel. Concepcion.

However, if the injury or damage is caused by the CHARTERER OR SUBCHARTERE CAN NEVER SET UP
shipowner's fault as where he engages the services of an LIMITED LIABILITY RULE;
inexperienced and unlicensed captain or engineer, he
“Even if the contract is for a bareboat or demise charter
cannot avail of the provisions of Article 837 of the Code
where possession, free administration and even
by abandoning the vessel. He is personally liable for the
navigation are temporarily surrendered to the
charterer, dominion over the vessel remains with the DEATH OF PASSENGERS ARISING FROM NEGLIGENCE OF
shipowner. Ergo, the charterer or the sub-charterer, CAPTAIN. — If the shipowner or agent may in any way
whose rights cannot rise above that of the former, can be held civilly liable at all for injury to or death of
never set up the Limited Liability Rule against the very passengers arising from the negligence of the captain
owner of the vessel. “ in cases of collisions or shipwrecks, his liability is
merely co-extensive with his interest in the vessel
2.7.4 CENTRAL SHIPPING CO. INC VS INSURANCE CO such that a total loss thereof results in its extinction.
OF NORTH AMERICA [Concurrence of fault] In arriving at this conclusion, the fact is not ignored
that the ill-fated S. S. Negros, as a vessel engaged in
The limited liability rule does not apply to situations in interisland trade, is a common carrier, and that the
which the loss or the injury is due to the concurrent relationship between the petitioner and the
negligence of the shipowner and the captain. It has passengers who died in the mishap rests on a contract
already been established that the sinking of M/V of carriage. But assuming that petitioner is liable for a
Central Bohol had been caused by the fault or breach of contract of carriage, the exclusively "real
negligence of the ship captain and the crew, as shown and hypothecary nature" of maritime law operates to
by the improper stowage of the cargo of logs. "Closer limit such liability to the value of the vessel, or to the
supervision on the part of the shipowner could have insurance thereon, if any. In the instant case it does
prevented this fatal miscalculation." As such, the not appear that the vessel was insured.
shipowner was equally negligent. It cannot escape
liability by virtue of the limited liability rule. 2.7.8 GOVT OF PHIL ISLANDS VS PHIL STEAMSHIP CO.
ADMIRALTY AND MARITIME LAW; COLLISION; SOLIDARY
2.7.5. ABOITIZ SHIPPING CORP VS CA
LIABILITY OF COLLIDING VESSELS. — Under articles 827
and 828 of the Code of Commerce, in case of a
There are exceptional circumstances wherein the ship
collision between two vessels at sea, both are
agent could still be held answerable despite the
solidarily liable for the loss of cargo carried by either,
abandonment of the vessel, (1) as where the loss or
not only in the case where both vessels may be shown
injury was due to the fault of the shipowner and the
to be actually blameworthy but also in the case where
captain. (2) it does not apply to cases where the injury
it is obvious that only one was at fault but the proof
or average was occasioned by the shipowner's own
does not show which.
fault. (3)Likewise, the shipowner may be held liable for
injuries to passengers if fault can be attributed to the RESPONSIBILITY OF VESSEL SURVIVING COLLISION. —
shipowner. Where two ships approaching each other at sea are
both negligently managed, with the result that a
As a general rule, a ship owner's liability is merely collision occurs and one is sunk with total loss of both
co-extensive with his interest in the vessel, except ship and cargo, the owner of the other vessel is liable
where actual fault is attributable to the shipowner. to any shipper of cargo aboard the sunken vessel to
Thus, as an exception to the limited liability doctrine, a the full extent of the value thereof; and it makes no
shipowner or ship agent may be held liable for damages difference that the negligence imputable to the two
when the sinking of the vessel is attributable to the vessels may have differed somewhat in character and
actual fault or negligence of the shipowner or its failure degree and that the negligence of the sunken ship was
to ensure the seaworthiness of the vessel. The instant somewhat more marked than that of the other.
petitions cannot be spared from the application of the
exception to the doctrine of limited liability in view of
2.7.9. LOPEZ VS DURUELO
the unanimous findings of the courts below that both
Facts
Aboitiz and the crew failed to ensure the seaworthiness
A person desirous of embarking on a ship which was
of the M/V P. Aboitiz. aE some distance away from the shore in a Philippine port
2.7.6. ALLIED BANKING CORP. VS CHENG YONG took passage upon a small motor boat, which was used
in conveying passengers and luggage to and fro between
Allied Bank's foreclosure of the chattel mortgage the shore and the shipside. Owing to the negligence of
constituted over the vessel "Jean III" was justified. thepatron or incompetence of the person in charge — so
On this score, we also rule that the loss of the the complaint averred — the boat approached too near
mortgaged chattel brought about by its sinking must be to the stern of the ship, with the result that the
borne not by Allied Bank but by the spouses Cheng. As propeller of the ship, which was still turning, struck the
owners of the fishing vessel, it was incumbent upon the motor boat and sunk it, injuring the plaintiff.
spouses to insure it against loss. Thus, when the vessel Held: Upon demurrer, that the failure of the
sank before the chattel mortgage could be foreclosed, complaint to allege that the plaintiff had made
uninsured as it is, its loss must be borne by the spouses protest according to article 835 of the Code of
Cheng. Commerce was no impediment to the maintenance of
a civil action, under articles 1902 and 1903 of the Civil
2.7.7 YANGCO VS LASERNA
Code, to recover damages for the tort.
May the shipowner or agent, notwithstanding the total
loss of the vessel as a result of the negligence of its
captain, be properly held liable in damages for the PROTEST. — The protest required by article 835 of the
consequent death of its passengers? Code of Commerce in case of collision between
vessels is not necessary to preserve the rights of a
CIVIL LIABILITY OF SHIPOWNER FOR INJURY TO OR person aboard a motor boat engaged in conveying
passengers between ship and shore who is injured in a 4. Maritime Torts, in General
collision between the motor boat and the larger -civil wrongs committed on navigable waters.
vessel. - any conduct which is tortuous under general law
and which is connected with the ship or its uses creates
a maritime lien, e.g collision claims and personal injury
2.7.10 PHIL. AMERICAN GENERAL INS. CO. VS CA
claims.
- Personal injuries resulting from defective
VESSELS' PROXIMATE CAUSE OF SINKING WAS ITS BEING
appliances, improper construction or negligence of the
TOP-HEAVY. — The proximate cause of the sinking of
ship’s crew give rise to maritime lien.
"MV Asilda" was its being top-heavy. Evidence shows
that approximately 2,500 cases of softdrink bottles
5. Admiralty jurisdiction
were stowed on deck. Several days after "MV Asilda"
-All actions in admiralty and maritime jurisdiction
sank, an estimated 2,500 empty Coca-Cola plastic cases
where the demands or claims exceeding P300,000, or
were recovered near the vicinity of the sinking.
if in Manila and exceeds P400,000, RTC has
Considering that the ship's hatches were properly
jurisdiction, if less, with the Metropolitan Trial Court,
secured, the empty Coca-Cola cases recovered could
Municipal Trial Court, or Municipal Circuit Trial Court
have come only from the vessel's deck cargo. It is
settled that carrying a deck cargo raises the
5.1 Importance
presumption of unseaworthiness unless it can be shown
that the deck cargo will not interfere with the proper
5.2 Torts: Maritime Locus and Maritime Nexus Criteria
management of the ship. However, in this case it was
established that "MV Asilda" was not designed to carry
5.3 Contracts: location Tests vs Subject Matter Tests
substantial amount of cargo on deck. The inordinate
5.3.1 International Harvester Co. Of the Philippines
loading of cargo deck resulted in the decrease of the
vs Aragon
vessel's metacentric height thus making it unstable. The
strong winds and waves encountered by the vessel are
but the ordinary vicissitudes of a sea voyage and as such Admiralty has jurisdiction over all maritime
merely contributed to its already unstable and contracts, in whatever form, wherever they were
unseaworthy condition. DEI executed or are to be performed, but not over
non-maritime contracts.
ART. 587 ON ABANDONMENT OF VESSEL; NOT
APPLICABLE WHERE SHIP AGENT IS ALSO LIABLE FOR THE
NEGLIGENT ACTS OF THE CAPTAIN IN THE CARE OF MARITIME CONTRACTS DEPEND ON THE SUBJECT
GOODS. — Art. 587, of the Code of Commerce is not MATTER THEREOF. — Whether or not a contract is
applicable to the case at bar. The ship agent is liable for maritime depends not on the place where the
the negligent acts of the captain in the care of goods contract is made and is to be executed, making the
loaded on the vessel. This liability however can be locality the test, but on the subject matter of the
limited through abandonment of the vessel, its contract, making the true criterion a maritime service
equipment and freightage as provided in Art. 587. or a maritime transaction.
Nonetheless, there are exceptional circumstances
wherein the ship agent could still be held answerable CONTRACT OF AFFREIGHTMENT; PROCEEDING "IN REM"
despite the abandonment, as where the loss or injury OR "IN PERSONAM." — Admiralty has jurisdiction of a
was due to the fault of the shipowner and the captain. proceeding in rem or in personam for the breach of a
The international rule is to the effect that the right of contract of affreightment, whether evidenced by a bill
abandonment of vessels, as a legal limitation of a of lading or a charter party. And typical of a controversy
shipowner's liability, does not apply to cases where the over contracts of affreightment is a suit of one party
injury or average was occasioned by the shipowner's against the other for loss of or damage to the cargo.
own fault. It must be stressed at this point that Art. 587 5.3.2 Crescent Petroleum vs MV Lok Maheshwari
speaks only of situations where the fault or negligence
is committed solely by the captain. Where the In a nutshell, this case is for the satisfaction of unpaid
shipowner is likewise to be blamed, Art. 587 will not supplies furnished by a foreign supplier in a foreign port
apply, and such situation will be covered by the to a vessel of foreign registry that is owned, chartered
provisions of the Civil Code on common carrier. and sub-chartered by foreign entities.

PRESUMPTION IN CASE OF LOSS. — Under Art. 1733 of Under Batas Pambansa Bilang 129, as amended
the Civil Code, "(c)ommon carriers, from the nature of by Republic Act No. 7691, RTCs exercise exclusive
their business and for reasons of public policy, are original jurisdiction "(i)n all actions in admiralty and
bound to observe extraordinary diligence in the maritime where the demand or claim exceeds two
vigilance over the goods and for the safety of the hundred thousand pesos (P200,000) or in Metro Manila,
passengers transported by them, according to all the where such demand or claim exceeds four hundred
circumstances of each case . . . ." In the event of loss of thousand pesos (P400,000)." Two (2) tests have been
goods, common carriers are presumed to have acted used to determine whether a case involving a contract
negligently. FELMAN, the shipowner, was not able to comes within the admiralty and maritime jurisdiction of
rebut this presumption. a court — the locational test and the subject matter
test. The English rule follows the locational test
wherein maritime and admiralty jurisdiction, with a few
3. Maritime Contracts, in General exceptions, is exercised only on contracts made upon
the sea and to be executed thereon. This is totally
MEANING OF WORD VESSEL. — The word "vessel "
rejected under the American rule where the criterion in (Spanish, "buque," "nave") used in the Third Section of
determining whether a contract is maritime depends on
Title IV, Book Third, of the Code of Commerce,
the nature and subject matter of the contract, having
dealing with collisions, does not include all ships,
reference to maritime service and craft or floating structures of any kind without
transactions. In International Harvester Company of limitation. The provisions of said section do not apply
the Philippines v. Aragon, we adopted the American
to minor craft engaged in river and bay traffic.
rule and held that "(w)hether or not a contract is
maritime depends not on the place where the contract
is made and is to be executed, making the locality the As a general rule,the provisions which relate
test, but on the subject matter of the contract, making exclusively to maritime and not to fluvial navigation;
the true criterion a maritime service or a maritime and that the word 'ship,' when it is found in these
transaction." provisions, ought to be understood in the sense of a
vessel serving the purpose of maritime navigation or
seagoing vessel, and not in the sense of a vessel
A contract for furnishing supplies like the one involved devoted to the navigation of rivers."
in this case is maritime and within the jurisdiction of
admiralty. 6 It may be invoked before our courts
through an action in rem or quasi in rem or an action in It is therefore clear that a passenger on a boat like
personam. "Articles 579 and 584 [of the Code of the Jison, in the case before us, is not required to make
Commerce] provide a method of collecting or enforcing protest as a condition precedent to his right of action
not only the liens created under Section 580 but also for for the injury suffered by him in the collision described
the collection of any kind of lien whatsoever." 8 In the in the complaint. In other words, article 835 of the Code
Philippines, we have a complete legislation, both of Commerce does not apply.
substantive and adjective, under which to bring an
action in rem against a vessel for the purpose of 1.2 Reasonable Observer Test
enforcing liens. The substantive law is found in Article Lozman v. City of Riviera [ Floating Home is not a
580 of the Code of Commerce. The procedural law is to vessel]
be found in Article 584 of the same Code. The result is,
therefore, that in the Philippines any vessel — even The definition of “transportation,” the conveyance of
though it be a foreign vessel —found in any port of this persons or things from one place to another, must be
Archipelago may be attached and sold under the applied in a practical way. Consequently, a structure
substantive law which defines the right, and the does not fall within the scope of the statutory phrase
procedural law contained in the Code of Commerce by unless a reasonable observer, looking to the home’s
which this right is to be enforced. 9 . . . But where physical characteristics and activities, would consider it
neither the law nor the contract between the parties designed to a practical degree for carrying people or
creates any lien or charge upon the vessel, the only way things over water.
in which it can be seized before judgment is by pursuing
the remedy relating to attachment under Rule 59 [now But for the fact that it floats, nothing about Lozman’s
Rule 57] of the Rules of Court. home suggests that it was designed to any practical
degree to transport persons or things over water. It had
no steering mechanism, had an unraked hull and
CHAPTER II. MERCHANT VESSELS rectangular bottom 10 inches below the water, and had
(ART 573-585 CODE OF COMMERCE) no capacity to generate or store electricity. It also
lacked self-propulsion, differing significantly from an
1. GENERAL CONCEPT:DEFINITION ordinary houseboat.
- Vessel or watercraft is any barge, lighter, bulk
carrier, passenger ship freighter, tanker, container This view of the statute is consistent with its text,
ship, fishing boat or other artificial contrivance precedent, and relevant purposes. The statute’s
utilizing any source of motive power, designed, used language, read naturally, lends itself to that
or capable of being used as a means of transportation interpretation: The term “contrivance” refers to
operating either as a common contract carrier, something “employed in contriving to effect a
EXCEPT, purpose”; “craft” explains that purpose as “water
(i) those owned and operated by the Armed carriage and transport”; the addition of “water” to
Forces of the Philippines and by foreign governments “craft” emphasizes the point; and the words, “used, or
for military purposes, and capable of being used, as a means of transportation on
(ii) Bancas, sailboats and other waterborne water,” drive the point home.
contrivance of less than three gross toms capacity and
not motorized. (PD No. 474 and PD no. 43) 1.3 Are Oil Rigs considered Vessels in Admiralty?
Yes.
1.1 Lopez vs Duruelo
-Protests related to Art 835 deals with collisions 1.4 Dead Ship Doctrine
involving sea-going vessels and cannot be applied to -is a principle in applied in Maritime law whereby
small boats engaged in river and bay traffic. admiralty law is no longer made applicable to a ship
LOPEZ v. DURUELO whose purpose has so changed that it is no longer
considered a vessel as it has no further navigation
function. HELD. Yes.
Vessels are considered personal property under
1.5 Importance of determining “Merchant Vessel” Status
the civil law and the common law.
1.6 Definition of “Vessel” by “Convention on the Vessels are subject to mortgage agreeably to the
International Regulations for Preventing Collisions at provisions of the Chattel Mortgage Law.
Sea(COLREGS)” The only difference between a chattel mortgage of
a vessel and a chattel mortgage of other personality is
that it is not now necessary for a chattel mortgage of
2. DOCTRINE OF VESSEL PERSONIFICATION a vessel to be noted in the registry of the register of
The most fundamental concept justifying maritime deeds, but it is essential that a record of documents
liens and in rem arrest procedure is that a vessel is a affecting the title to a vessel be entered in the record
legal entity distinct from its owner. This legal fiction, of the Collector of Customs at the port of entry.
also known as the theory of vessel personification, Otherwise a mortgage on a vessel is generally like
pervades all aspects of U.S. admiralty law and remains other chattel mortgages as to its requisites and
essential to the proper functioning of our country’s validity.
maritime industry.
2.1 United States vs Steamship Rubi
Facts. 4. BLUE WATER VESSEL VS. BROWN WATER VESSEL
Insular Collector of Customs in imposed an BLUE WATER VESSEL BROWN WATER VESSEL
administrative fine on the steamship Rubi for bringing -”brown water” meant to
unmanifested cargo (opium and morphine) into the port describe Inland
of Manila. trial judge dismissed the petition on the waterways, inside the land
ground that "there was no knowledge on the part of the boundaries of the country.
master of the vessel of the opium and morphine, and so
far as he was concerned it was not cargo. He being the
master of the vessel, who should make manifests of all 5. VESSEL ARREST; PROCEDURE
cargo, could not manifest that which he did not know
of, and the vessel could not know more or have SECTION 11. Arrest of Vessels. — Upon the
knowledge of more than he had, for his knowledge was filing of the petition for the judicial foreclosure of
that of the vessel. a Preferred Ship Mortgage, or immediately
thereafter, the applicant may apply ex-parte for
Held. Vessel is liable.
In order to bring the vessel within the penalizing clause an order for the arrest of the mortgaged vessel or
of the law it would be necessary to show some vessels and the judge shall immediately issue the
knowledge and intent for the carrying of unmanifested same, provided that it is made to appear by
cargo, or such carelessness as to create the presumption
of knowledge or intention, which does not appear from affidavit of the applicant, or of some other person
the evidence in this case, but on the contrary the who personally knows the facts that a default in
evidence clearly discloses that the defendant vessel, the mortgage has occurred and that applicant files
through its specific agent mentioned in the law, had no
knowledge of such cargo. The law does not contemplate a bond executed to the adverse party in an amount
penalizing the inanimate vessel or its owner for doing to be fixed by the judge, not exceeding the
that of which it had no knowledge. applicant's claim, conditioned that the latter will
pay all the costs which may be adjudged to the
3. VESSELS ARE PERSONAL PROPERTY
ART 585. For all purposes of law not modified or adverse party and all damages which he may
restricted by the provisions of this Code, vessels shall sustain by reason of such arrest, if the court shall
continue to be considered as personal property. finally adjudge that the applicant was not entitled
(Code of Commerce)
thereto.
3.1 Rubiso and Calixo v. Rivera [1917] SECTION 12. Discharge of Order of
Arrest; Counterbond. — At any time after an order
- “ships or vessels, whether moved by steam, or by sail,
partake, to a certain extent, of the nature and of arrest has been granted, the party whose vessel
conditions of real property, on account of their value or vessels had been arrested, or the person
and conditions of real property, on account of their appearing in his behalf, may, upon reasonable
value and importance in the world of commerce.” e.g.
transfer of vessels should be in writing and must be notice to the applicant, apply to the judge who
recorded in the appropriate registry. granted the order, or to the judge of the court in
which the action is pending, for an order
discharging the order of arrest. That judge shall
3.2 Phil. Refining Co. Vs Jarque
ISSUE: Are vessels personal property, which can be the order the discharge of the arrest if a cash deposit is
subject of a chattel mortgage?
made, or counterbond executed to the creditor is
filed, on behalf of the adverse party, with the clerk
or judge of the court where the application is made 5.1 CRESCENT PETROLEUM LTD. VS MV LOK
in an amount double the value of the claim to MAHESGWARI
secure the payment of any judgment that the
creditor may recover in the action. Upon the filing 5.2 QUASHA ASPERILLA ANCHETA VALMONTE PENA &
of such counterbond, copy thereof shall forthwith MARCOS VS HON. JUAN
be served on the creditor or his lawyer. Upon
A PROPERTY UNDER CUSTODIA LEGIS; EXTENT OF
discharge of the order of arrest, the property
COURT'S JURISDICTION; CASE AT BAR. — Indeed,
arrested or seized shall be delivered to the party petitioner should have maintained its action in
making the deposit or giving the counterbond, or respondent's court. After all, a court which has in its
the person appearing in his behalf, the deposit or possession, control or equivalent dominion, property or
funds involved in litigation may exercise exclusive
counterbond aforesaid standing in place of the jurisdiction over such property or funds to determine
vessel or vessels released. Should such deposit or the rights therein, such as questions respecting the
counterbond for any reason be found to be, or title, possession or control, management and
disposition thereof and another court of concurrent or
become insufficient, and the party furnishing the
coordinate jurisdiction cannot interfere with such
same fails to file an additional co-counterbond, the possession or control (21 C.J.S. 755-757). The rights to
attaching creditor may apply for a new order of be determined by said court necessarily include the
arrest or seizure. attorney's fees due to the lawyers who represented the
parties.
SECTION 13. Discharge of Order of Arrest for
Improper or Irregular Issuance. — The party whose
vessel/s has been arrested may also, at any time 5.3 COMMISIONER OF CUSTOMS VS CA
either before or after the release of the arrested
vessel, or before any arrest or seizure has been 5.4. SISTER SHIPS; SUSCEPTIBILITY TO ARREST
effected, upon reasonable notice to the creditor, Art 3 Sec 3. of International Convention on Arrest of
apply to the judge who granted the order, or to the Seagoing Ships
judge of the court in which the action is pending, “xxx and if a ship has been arrested in any such
jurisdiction, or bail or other security has been given in
for an order to discharge the order of arrest or such jurisdiction either to release a ship or to avoid a
seizure on the ground that the same was threatened arrest, any subsequent arrest of the ship or
improperly or irregularly issued. After hearing, the of any ship in the same ownership by the same claimant
for the maritime claim shall be set aside, and the ship
judge shall order the discharge of the order of released by the Court or other appropriate judicial
arrest or seizure if it appears that it was authority of that State,xxx”
improperly or irregularly issued and the defect is
not cured forthwith. 6. MARITIME LIENS
6.1 Distinguished from Non-Maritime Liens; Importance
SECTION 14. Extrajudicial Foreclosure. — 6.1.1 Conflict of Law Problem in Enforcing Maritime
The provisions of the Chattel Mortgage Law on the Lien; Test
6.1.1.1 Crescent Petroleum vs MV Lok Maheshwari
remedy of extra-judicial foreclosure of mortgages The various tests used in the U.S. to determine whether
in so far as they are not inconsistent herewith shall a maritime lien exists are the following:
still apply. For the purpose of taking possession of One. "In a suit to establish and enforce a maritime lien
the vessel or vessels, the foreclosing creditor may for supplies furnished to a vessel in a foreign port,
secure from a judge of the Court of First Instance whether such lien exists, or whether the court has or
will exercise jurisdiction, depends on the law of the
of the province where the vessel may be found or
country where the supplies were furnished, which
where the creditor or debtor resides an order for must be pleaded and proved."
the arrest or seizure of the vessel. Upon such order
Two. The Lauritzen-Romero-Rhoditis trilogy of cases,
of seizure or arrest being issued, the sheriff shall which replaced such single-factor methodologies as the
immediately take possession of the vessel or law of the place of supply.
vessels for the purpose of foreclosure and sale. The In Lauritzen v. Larsen, a Danish seaman, while
vessel may only be released in accordance with the temporarily in New York, joined the crew of a ship of
provisions of Section 13 of this Act, or when the Danish flag and registry that is owned by a Danish
citizen. He signed the ship's articles providing that the
debtor pays the outstanding obligation.
rights of the crew members would be governed by
Danish law and by the employer's contract with the contract. Indeed, when the parties entered into a
Danish Seamen's Union, of which he was a member. contract for supplies in Canada, they could not have
While in Havana and in the course of his employment, intended the laws of a remote country like the
he was negligently injured. He sued the shipowner in a Philippines to determine the creation of a lien by the
federal district court in New York for damages under the mere accident of the Vessel's being in Philippine
Jones Act. In holding that Danish law and not the Jones territory.
Act was applicable, the Supreme Court adopted
a multiple-contact test to determine, in the absence of 6.2 Executory Contracts Doctrine
a specific Congressional directive as to the statute's 6.3. Assignment and Subrogation
reach, which jurisdiction's law should be applied. The PNB vs CA
following factors were considered: (1) place of the
wrongful act; (2) law of the flag; (3) allegiance or Those who provide credit to a master of a vessel for the
domicile of the injured; (4) allegiance of the purpose of discharging a maritime lien also acquire a
defendant shipowner; (5) place of contract; (6) lien over the said vessel. Under American
inaccessibility of foreign forum; and (7) law of the jurisprudence, "(f)urnishing money to a master in good
forum. faith to obtain repairs or supplies or to remove liens, in
order to forward the voyage of the vessel, raises a lien
Three. The factors provided in Restatement (Second) just as though the things (for which) money was
of Conflicts of Law have also been applied, especially obtained to pay for had been furnished by the
in resolving cases brought under the Federal Maritime lender." Likewise, "(a)dvances to discharge maritime
Lien Act. Their application suggests that in the absence liens create a lien on the vessel, and one advancing
of an effective choice of law by the parties, the forum money to discharge a valid lien gets a lien of equal
contacts to be considered include: (a) the place of dignity with the one discharged."
contracting; (b) the place of negotiation of the
contract; (c) the place of performance; (d) the location There is no reason why these doctrines cannot be given
of the subject matter of the contract; and (e) the persuasive application in the instant case considering
domicile, residence, nationality, place of incorporation that they do not violate or contravene any of our
and place of business of the parties. existing laws. Moreover, as pointed out by the appellate
court, these doctrines are in accord with our provisions
on subrogation particularly Art. 1302, paragraph 2 of
the New Civil Code which provides that there is legal
IN THE CASE AT BAR;
subrogation "when a third person, not interested in the
Finding guidance from the foregoing decisions, the fulfillment in the obligation, pays with the express or
Court cannot sustain petitioner Crescent's insistence on tacit approval of the debtor."
the application of P.D. No. 1521 or the Ship Mortgage
Under these doctrines, a person who extends credit for
Decree of 1978 and hold that a maritime lien exists.
the purpose of discharging a maritime lien is not
First. Out of the seven basic factors listed in the case entitled to the said lien "where the funds were not
of Lauritzen, Philippine law only falls under one — the furnished to the ship on the order of the master and
law of the forum. All other elements are foreign — there was no evidence that the money was actually used
Canada is the place of the wrongful act, of the to pay debts secured by the lien."
allegiance or domicile of the injured and the place of
contract; India is the law of the flag and the allegiance 6.4 Enforceability During Corporate Rehabilitation
of the defendant shipowner. Balancing these basic Negros Navigation Co. Vs CA
interests, it is inconceivable that the Philippine court
has any interest in the case that outweighs the interests ISSUE: Arguing that in in rem proceedings to enforce
of Canada or India for that matter. maritime liens, the vessels alone may be impleaded as
defendants, hence THI has the substantive statutory
Second. P.D. No. 1521 or the Ship Mortgage Decree of right under PD 1521 to insist on the vessel’s
1978 is inapplicable following the factors under responsibility because it is an in rem proceeding against
Restatement (Second) of Conflict of Laws. Like the the ship itself. Should maritime liens over the vessels of
Federal Maritime Lien Act of the U.S., P.D. No. 1521 or Negros Navigation Co. (NNC) be upheld?
the Ship Mortgage Decree of 1978 was enacted primarily
to protect Filipino suppliers and was not intended to
create a lien from a contract for supplies between HELD. NO.
foreign entities delivered in a foreign port.
True enough, a maritime lien is not affected by
Third. Applying P.D. No. 1521 or the Ship Mortgage bankruptcy or reorganization. However, in the instant
Decree of 1978 and rule that a maritime lien exists case, we are not dealing with bankruptcy or
would not promote the public policy behind the reorganization; rather, we are confronted with NNC's
enactment of the law to develop the domestic shipping rehabilitation. If we follow the argument of THI and
industry. Opening up our courts to foreign suppliers by allow the continued enforcement of its claims against
granting them a maritime lien under our laws even if NNC, we would, in effect, violate provisions of PD
they are not entitled to a maritime lien under their laws 902-A. To reiterate, the rationale behind PD 902-A is
will encourage forum shopping. to effect a feasible and viable rehabilitation of an
ailing corporation.
Finally. The submission of petitioner is not in keeping
with the reasonable expectation of the parties to the There is no conflict between PD 1521 and
 PD 902-A. The Manila RTC acting as a rehabilitation necessary, and the court proceeds to enforce such lien
court merely suspended the proceedings in the in the manner provided by law precisely as though the
admiralty case in the Cebu RTC. It did not divest the property had been seized upon attachment. (Roller v.
Cebu RTC of its jurisdiction over the maritime Holly, 176 U.S. 398, 405; 44 L. ed. 520)."
claims of THI against NNC. The preferred maritime
lien of THI can still be enforced upon the The reason for the rule is obvious. An attachment
termination of the rehabilitation proceedings, or if proceeding is for the purpose of creating a lien on the
it such be unsuccessful, upon the dissolution of the property to serve as security for the payment of the
corporation. creditors' claim. Hence, where a lien already exists, as
in this case a maritime lien, the same is already
equivalent to an attachment. Moreover, since the
_Rizal Commercial Banking Corporation v. property subject of the action for the enforcement of
Intermediate Appellate Court, enumerates the the maritime liens was already in the possession of
guidelines in the treatment of claims involving private respondent, there is no need for seizure for the
corporations undergoing rehabilitation, viz.: court to obtain jurisdiction over the res.

1. All claims against corporations, partnerships, or

associations that are pending before any court, 6.6 PREFERENCE AND CONCURRENCE OF LIENS
tribunal, or board, without distinction as to whether or 6.6.1 Inverse Order Rule (Qui Prior Est Tempore, Potior
not a creditor is secured or unsecured, shall be Est Jure: Last in Time, First in Right)
suspended effective upon the appointment of a
management committee, rehabilitation receiver, 6.6.2 Special Time Rules
board, or body in accordance with the provisions of
Presidential Decree No. 902-A. 6.6.2.1 Order of Preference per Ship Mortgage Decree
(PD No. 1521)
2. Secured creditors retain their preference over
unsecured creditors, but enforcement of such SECTION 17. Preferred Maritime Lien, Priorities,
preference is equally suspended upon the appointment Other Liens. — (a) Upon the sale of any mortgaged
of a management committee, rehabilitation receiver,
board, or body. In the event that the assets of the vessel in any extra-judicial sale or by order of a district
corporation, partnership, or association are finally court of the Philippines in any suitin rem in admiralty
liquidated, however, secured and preferred credits for the enforcement of a preferred mortgage lien
under the applicable provisions of the Civil Code will
thereon, all pre-existing claims in the vessel, including
definitely have preference over unsecured ones.
any possessory common-law lien of which a lienor is
6.5 Writ of Attachment Not Necessary to Enforce Lien deprived under the provisions of Section 16 of this
Quasha vs Hon Juan Decree, shall be held terminated and shall thereafter

JURISDICTION OVER THE RES; WHERE PROPERTY IS attach, in like amount and in accordance with the
BURDENED BY LIEN; WRIT OF' ATTACHMENT NOT priorities established herein to the proceeds of the
NECESSARY TO OBTAIN JURISDICTION OVER THE sale. The preferred mortgage lien shall have priority
PROPERTY; RATIONALE.— As regards jurisdiction over
over all claims against the vessel, except the following
the res, We hold that respondent acquires jurisdiction
over it. Where a property is burdened by a lien, a writ of claims in the order stated:
attachment is no longer necessary in order that
(1) expenses and fees allowed and costs taxed by
jurisdiction over the property may be obtained by the
court. The reason for the rule is obvious. An attachment the court and taxes due to the Government;
proceeding is for the purpose of creating a lien on the
(2) crew's wages;
property to serve as security for the payment of the
creditors' claim. Hence, where a lien already exists, as (3) general average;
in the case, a maritime lien, the same is already
equivalent to an attachment. Moreover, since the (4) salvage; including contract salvage;
property subject of the actions for the enforcement of
the maritime liens was already in the possession of (5) maritime liens arising prior in time to the
private respondent, there is no need for seizure for the recording of the preferred mortgage;
court to obtain jurisdiction over the res.
(6) damages arising out of tort; and
In the Banco Español case, it was clarified: (7) preferred mortgage registered prior in
"In an ordinary attachment proceeding, if the time.
defendant is not personally served, the preliminary
seizure is to be considered necessary in order to confer (b) If the proceeds of the sale should not be sufficient
jurisdiction upon the court. In this cast the lien on the to pay all creditors included in one number or grade,
property acquired by seizure; and the purpose of the the residue shall be divided among them pro rata. All
proceeding is to subject the property to that lien. If a
lien already exists, whether created by mortgage, credits not paid, whether fully or partially shall subsist
contract, or statute, the preliminary seizure is not as ordinary credits enforceable by personal action
against the debtor. The record of judicial sale or sale by 8.3 Ship Manifest
8.4 Ship Mortgage
public auction shall be recorded in the Record of 8.4.1 Ship Mortgage Decree
Transfers and Encumbrances of Vessels in the port of 8.4.1.1 POLIAND INDUSTRIAL LTD VS NAIONAL
documentation. DEVELOPMENT COMPANY

ARTICLE 378 THEREOF GOVERNS THE SALE OF VESSELS

IN A FOREIGN PORT; NOT APPLICABLE IN CASE AT BAR. —
6.6.2.2 Common Law (Damage Lien Preferred, Voyage NDC cites Articles 578 and 580 of the Code of Commerce
Rule, Calendar year rule) to bolster its argument that the foreclosure of the
vessels extinguished all claims against the vessels
including POLIAND's claim. Article 578 of the Code of
7. CARRIER’S LIEN Commerce is not relevant to the facts of the instant
7.1 OVERSEAS FACTOR INC VS SOUTH SEA SHIPPING case because it governs the sale of vessels in a foreign
FREIGHT INCLUDED IN GOODS' PURCHASE PRICE; port. Said provision outlines the formal and registration
CARRIER'S LIEN EXIST IF FREIGHT WAS NOT PAID. — The requirements in order that a sale of a vessel on voyage
fact that the freight was already included in the or in a foreign port becomes effective as against third
purchase price of the goods paid by the purchaser to the persons. On the other hand, the resolution of the
appellees did not free the cargo of rice from the instant case depends on the determination as to which
carrier's lien as provided for in article 665 of the Code of creditor is entitled to the proceeds of the foreclosure
Commerce, if the freight has not yet been fully paid by sale of the vessels. Clearly, Article 578 of the Code of
the charterer. Commerce is inapplicable.
7.2 OUANO VS CA PRESIDENTIAL DECREE NO. 1521 (SHIP MORTGAGE
DECREE OF 1978); PREFERRED MORTGAGE LIEN;
FREIGHT CHARGES' LIEN ON CARGO FOR UNPAID SECTION 17 THEREOF REPEALED ARTICLE 580 OF THE
FREIGHT; UNCONDITIONAL RELEASE OF CARGO CODE OF COMMERCE. — Article 580, while providing for
CONSTITUTES WAIVER THEREOF. — even on the the order of payment of creditors in the event of sale of
assumption that petitioner had a lien on the cargo for a vessel, had been repealed by the pertinent provisions
unpaid freight, the same was deemed waived when the of Presidential Decree (P.D.) No. 1521, otherwise known
goods were unconditionally released to the consignee at as the Ship Mortgage Decree of 1978. In particular,
the port of destination. A carrier has such a lien only Article 580 provides that in case of the judicial sale of a
while it retains possession of the goods, so that delivery vessel for the payment of creditors, the debts shall be
of the goods to the consignee or a third person satisfied in the order specified therein. On the other
terminates, or constitutes a waiver of, the lien. The lien hand, Section 17 of P.D. No. 1521 also provides that in
of a carrier for the payment of freight charges is nothing the judicial or extrajudicial sale of a vessel for the
more than the right to withhold the goods, and is enforcement of a preferred mortgage lien constituted in
inseparably associated with its possession and accordance with Section 2 of P.D. No. 1521, such
dependent upon it. The shipowner's lien for freight is preferred mortgage lien shall have priority over all
not in the nature of a hypothecation which will remain a pre-existing claims against the vessel, save for those
charge upon the goods after he has parted with claims enumerated under Section 17, which have
possession, but is simply the right to retain them until preference over the preferred mortgage lien in the
the freight is paid, and is therefore lost by an order stated therein. Since P.D. No. 1521 is a
unconditional delivery of the goods to the consignee. subsequent legislation and since said law in Section 17
CASE OF OVERSEAS FACTORS, INC. INAPPLICABLE. — thereof confers on the preferred mortgage lien on the
Petitioner's invocation of Overseas Factors, Inc., et al. vessel superiority over all other claims, thereby
vs. South Sea Shipping Co., et al., (4 SCRA 400 [1962]) engendering an irreconcilable conflict with the order of
therefore, is ineffectual and unavailing. In said case, preference provided under Article 580 of the Code of
the cargo was still in the possession of the carrier whose Commerce, it follows that the Code of Commerce
officers and crew refused to unload the same unless the provision is deemed repealed by the provision of P.D.
balance of the freight was paid. In this case before us, No. 1521, as the posterior law.
the cargo had already been unconditionally delivered to IF IT IS CONSTITUTED FOR THE PURPOSE STATED UNDER
the consignee SMCI without protest. SECTION 2 THEREOF, THE MORTGAGE OBTAINS A
7.3 Who Bears Costs Arising from Retention of Cargo in PREFERRED STATUS. — If the mortgage on the vessel is
the Exercise of Carrier’s Lien? constituted for the purpose stated under Section 2, the
mortgage obtains a preferred status provided the formal
8. OWNER OF MERCHANT’S VESSEL requisites enumerated under Section 4 are complied
8.1 Acquisition with. Upon enforcement of the preferred mortgage and
8.1.1 Prescription eventual foreclosure of the vessel, the proceeds of the
8.1.2 Sale sale shall be first applied to the claim of the mortgage
8.2 Registration creditor unless there are superior or preferential liens,
as enumerated under Section 17[.]
RUBISO VS RIVERA
ITS PROVISION ON THE ORDER OF PREFERENCE IN THE
8.3 MARINA Rules SATISFACTION OF THE CLAIMS AGAINST THE VESSEL IS
8.2.2 Flags of Convenience; Open Registers MORE APPLICABLE COMPARED TO THE CIVIL CODE
PROVISIONS ON THE CONCURRENCE AND PREFERENCE one of the vessels, both the owner and the operating
OF CREDITS. — The provision of P.D. No. 1521 on the company (casa naviera) directly in charge of the
order of preference in the satisfaction of the claims offending vessel are liable for the damage done.
against the vessel is the more applicable statute to the
OBLIGATIONS; APPORTIONABILITY OF OBLIGATION;
instant case compared to the Civil Code provisions on JOINT AND SEVERAL LIABILITY OF TORTFEASORS. —
the concurrence and preference of credit. General The rule that joint obligations are apportionable
legislation must give way to special legislation on the
unless otherwise specially provided has no application
same subject, and generally be so interpreted as to
to obligations arising from tort (ex delicto). Persons
embrace only cases in which the special provisions are who cooperate in the tortious infliction of damage are
not applicable.
jointly and severally liable.
MARITIME LIEN ARISING PRIOR IN TIME TO THE
RECORDING OF THE PREFERRED MORTGAGE IS 1.2.1.2 National Development Co. Vs CA
CONSIDERED TO BE SUPERIOR TO THE LATTER. — Before MERCANTILE LAW; CODE OF COMMERCE; COLLISION OF
POLIAND's claim may be classified as superior to the VESSELS; LIABILITY FOR DAMAGES SUFFERED. — More
mortgage constituted on the vessel, it must be shown to specifically, Article 826 of the Code of Commerce
be one of the enumerated claims which Section 17, P.D. provides that where collision is imputable to the
No. 1521 declares as having preferential status in the personnel of a vessel, the owner of the vessel at fault,
event of the sale of the vessel. One of such claims shall indemnify the losses and damages incurred after
enumerated under Section 17, P.D. No. 1521 which is an expert appraisal. But more in point to the instant
considered to be superior to the preferred mortgage case is Article 827 of the same Code, which provides
lien is a maritime lien arising prior in time to the that if the collision is imputable to both vessels, each
recording of the preferred mortgage. Such maritime lien one shall suffer its own damages and both shall be
is described under Section 21, P.D. No. 1521[.] . . . solidarily responsible for the losses and damages
Under the aforequoted provision, the expense must be suffered by their cargoes.
incurred upon the order of the owner of the vessel or its
authorized person and prior to the recording of the ship PRIMARY LIABILITY OF SHIPOWNER OF CARRIER. —
mortgage. Under the law, it must be established that Significantly, under the provisions of the Code of
the credit was extended to the vessel itself. Commerce, particularly Articles 826 to 839, the
shipowner or carrier, is not exempt from liability for
EXPENSE ON THE VESSEL INDISPENSABLE TO THE damages arising from collision due to the fault or
MAINTENANCE AND NAVIGATION OF THE VESSEL MAY negligence of the captain. Primary liability is imposed
PROPERLY BE TREATED AS A MARITIME LIEN FOR on the shipowner or carrier in recognition of the
NECESSARIES. — As stated in Section 21, P.D. No. 1521, universally accepted doctrine that the shipmaster or
a maritime lien may consist in "other necessaries spent captain is merely the representative of the owner who
for the vessel." The ship modification cost may properly has the actual or constructive control over the conduct
be classified under this broad category because it was a of the voyage (Yeung Sheng Exchange and Trading Co. v.
necessary expenses for the vessel's navigation. As long Urrutia & Co., 12 Phil. 751 [1909]).
as an expense on the vessel is indispensable to the
maintenance and navigation of the vessel, it may APPLICABILITY OF THE CODE OF COMMERCE; NOT
properly be treated as a maritime lien for necessaries REPEALED NOR LIMITED BY THE CARRIAGE OF GOODS BY
under Section 21, P.D. No. 1521. With respect to the SEA ACT. — There is, therefore, no room for NDC's
claim for salary and wages of the crew, there is no interpretation that the Code of Commerce should apply
doubt that it is also one of the enumerated claims under only to domestic trade and not to foreign trade. Aside
Section 17, P.D. No. 1521, second only to judicial costs from the fact that the Carriage of Goods by Sea
and taxes due the government in preference and, thus, Act (Com. Act No. 65) does not specifically provide for
having a status superior to DBP's mortgage lien. the subject of collision, said Act in no uncertain terms,
restricts its application "to all contracts for the carriage
of goods by sea to and from Philippine ports in foreign
8.4.2 MARINA RULES trade." Under Section 1 thereof, it is explicitly provided
8.5 Other Code of Commerce Provisions that "nothing in this Act shall be construed as repealing
any existing provision of the Code of Commerce which is
CHAPTER III - PERSONS IN MARITIME COMMERCE now in force, or as limiting its application." By such
(ARTS 586-651) incorporation, it is obvious that said law not only
recognizes the existence of the Code of Commerce, but
1. SHIPOWNERS AND SHIPAGENTS more importantly does not repeal nor limit its
1.1 Partowners (Proprietario) application.

1.2 Shipagents (Naviero); Difference with Ordinary LIABILITY FOR LOSS OF GOODS; SOLIDARY LIABILITY OF
Agent THE OWNER AND AGENT OF THE OFFENDING VESSEL. —
1.2.1 Solidary Liability with Shipowners It is well settled that both the owner and agent of the
1.2.1.1 Versoza vs Lim offending vessel are liable for the damage done where
both are impleaded; that in case of collision, both the
DOCTRINES: LIABILITY OF OWNER AND OPERATING owner and the agent are civilly responsible for the acts
COMPANY. — Where a collision occurs between two of the captain; that while it is true that the liability of
seagoing vessels, caused exclusively by the the naviero in the sense of charterer or agent, is not
carelessness of the navigating officers in charge of expressly provided in Article 826 of the Code of
Commerce, it is clearly deducible from the general
doctrine of jurisprudence under the Civil Code but more
specially as regards contractual obligations in Article 2.5 Code of Commerce Provisions on Captain
586 of the Code of Commerce. Moreover, the Court held 2.5.1 Sweet Lines v. CA
that both the owner and agent (Naviero) should be
declared jointly and severally liable, since the
obligation which is the subject of the action had its 3. PILOT
origin in a tortious act and did not arise from contract. 3.1 Master and Pilot
Consequently, the agent, even though he may not be 3.1.1 Master pro Hac Vice; Limitation
the owner of the vessel, is liable to the shippers and 3.2 Shipowner and Pilot
owners of the cargo transported by it, for losses and 3.3.Pilot and Pilot Association
damages occasioned to such cargo, without prejudice, 3.4 Compulsory Pilotage
however, to his rights against the owner of the ship, to FAR EASTERN SHIPPING V CA
the extent of the value of the vessel, its equipment, and
the freight. 3.5.Liability of Pilot and Pilot Association
3.5.1 High Standard of Care
WHERE LIABILITY FOR LOSS OF GOODS CANNOT BE
LIMITED. — MCP's contention is devoid of merit. The
declared value of the goods was stated in the bills of
lading and corroborated no less by invoices offered as 4. OFFICERS AND CREW
4.1 Regulation of Merchant Marine Profession and
evidence during the trial. Besides, common carriers, in
Employment
the language of the court in Juan Ysmael & Co., Inc. v.
Barretto et al., (51 Phil. 90 [1927]) "cannot limit its 4.2Minimum Safe Manning
4.3 Crew Negligence vs Crew imcompetence;
liability for injury to a less of goods where such injury or
Importance of Distinction
loss was caused by its own negligence." Negligence of
4.5 Fleet Seaman Doctrine
the captains of the colliding vessel being the cause of
the collision, and the cargoes not being jettisoned to 4.6 Code of Commerce Provisions
4.7 Officers (Deck and Engine)
save some of the cargoes and the vessel, the trial court
4.8 Ratings (Deck and Engine)
and the Court of Appeals acted correctly in not applying
the law on averages (Articles 806 to 818, Code of
Commerce).
5. SUPERCARGO (SOBRECARGO)

6. PURSER
1.3 Powers
1.4 Limitations of Powers 7. SUPERNUMERARY

1.5 General Duties CHAPTER IV -- MARITIME CONTRACTS;

1.5.1 Duty to Account CHARTERPARTIES
1.5.2 Duty to Provide Seaworthy Vessel; Doctrine of (ART 652-718)
Unseaworthiness
1.5.3 Reimbursement and Liabilities 1. DEFINITION AND CONCEPT
1.5.3.1 Doctrine/Principle of Maintenance and Cure 1.1 Implied Terms
1.1.1 Seaworthiness
1.6 Discharge of Captain and Crew Santiago Lighterage Corporation vs CA
1.6.1 Yu Con vs Ipil

1.6.2 Wing Kee Compadoring Co. Vs the Bark 1.1.2 Reasonable Dispatch
“Monongahela” 1.1.3 Against Improper Deviation

1.6.3 Walter Smith &Co. Vs Cadwaller Gibson Lumber 2. KINDS

2.1 Bareboat Charter
1.6.4 Manila Steamship Co vs Insa Abdulhaman 2.1.1 Beneficial Owner vs Disponent Owner; Owner Pro
Hac Vice
1.6.5 Yu Biao Santua & Co. Vs Osorio 2.1.2 LITONJUA SHIPPING VS NATIONAL SEAMEN BOARD

2.2 Time Charter

2. CAPTAINS, MASTERS AND SKIPPERS 2.3 Voyage Charter
2.1 Concept; Distinction 2.4 Special Types: Slot or Space Charter, Cross Charter,
2.2 Qualifications trip Charter, Tonnage Contract, etc
2.3 Powers, Functions and Duties
2.3.1 “Captain Goes Down with His Ship” PHILAM INSURANCE CO. VS HEUNG-A SHIPPING CORP
2.3.2. INTER-ORIENT MARITIME ENTERPRISES V. NLRC

2.4 Discretion of Captain or Master

Inter-orient Maritime Enterprises vs NLRC 3. EFFECT ON CARRIER’S CHARACTER
4. PERSON WHO MAY MAKE CHARTERPARTY

5. REQUISITES; FORM

6. RELATED CONCEPTS AND OTHER TYPICAL

CHARTER CLAUSES
6.1 Safe Port/ Safe Berth Clause
6.2 Cancellation Clause
6.3 Jupiter Clause
6.4 Freight and Hire
6.5 Deadfreight
6.6 Laytime and Notice of readiness
6.7 Demurrage Clause
6.8 Dispatch Clause
6.9 Inclusion/exclusion of Sundays and Holidays in
Computing Laytime
6.10 Cesser Clause
6.11 F.I.O.S Clause
6.12 Arbitration Clause
NATIONAL UNION FIRE INSURANCE CO. OF PITTSBURG VS
STOLT NIELSEN PHILS.

7. CHARTER PARTY RIGHTS AND OBLIGATIONS OF;

7.1 SHIP OWNER OR CAPTAIN
7.2 CHARTERER

8. CHARACTER OF BILL OF LADING IN CHARTERPARTY

ARRANGEMENTS

9. CODE OF COMMERCE PROVISIONS

9.1 Subcharterer
9.2 O’Farrel y Cia vs Manila Electric Co

9.3 Caltex Phils vs Sulpicio Lines

10. CHARTERPARTY CHAIN

11. CHARTERPARTY INDEMNITY