MARITIME LAW

PERSONS WHO TAKE PART IN MARITIME COMMERCE

1. Ship-owners and ship agents

2. Captains and masters of the vessel
3. Officers and Crews of the vessel
4. Supercargoes (Sundiang, Sr. & Aquino, 2011)

1. Ship-owners and ship agents

Ship-owner - the person in possession, management, control over the vessel, and the right to
direct her navigation. While in their possession, the ship owners also receive freight earned
and paid.

Ship agents - The person entrusted with provisioning or representing the vessel in the port
in which it may be found. Hence, whether acting as agent of the owner of the vessel or as
agent of the charterer, he will be considered as the ship agent and may be held liable as such,
as long as he is the one that provisions or represents the vessel (Macondray & Co., Inc. v.
Provident Insurance Corp, G.R. No. 154305, Dec. 9, 2004).

Civil Liabilities of Ship-owners and agents

Damages suffered by a 3rd person for tort committed by the captain
Contracts of the captain, whether authorized or not, to repair, equip and provision the
vessel, provided that the amount claimed was invested for the benefit of the vessel (Art.
586)
Indemnities in favor of third persons which may arise from the conduct of the captain in
the care of the goods which the vessel carried, as well as for the safety of the passengers
transported
Damages to the goods loaded on the vessel without prejudice to their right to free
themselves from liability by abandoning the vessel to the creditors (Art. 587)
Damages in case of collision due to fault or negligence or want of skill of the captain.
Damages for the acts of the captain. (Art. 618)

Notes:
Liable jointly and severally
Not liable for an obligation contracted by the captain in excess of the latters
powers and privileges pertaining to him. However, if the amount claimed were
used for the benefit of the vessel, the ship owner or ship agent is liable

2. Captains and masters of the vessel

NATURE

DOCTRINE OF LIMITED LIABILITY (No vessel, no liability)

The liability of ship owners is limited to the amount of interest in said vessel such that where
vessel is entirely lost, the obligation is extinguished.

Interest extends to:

1. Vessel itself
2. Equipments
3. Freightage
4. Insurance proceeds

Rationale:
To offset against innumerable hazards and perils in sea voyage and to encourage ship building
and maritime commerce. By abandonment, the ship owner and ship agent exempt themselves
from liability, thus avoiding the possibility of risking his whole fortune in the business.

Cases in which the doctrine of limited liability is allowed:

1. Civil liability of the Ship agent or ship owner for the indemnities in favor of third persons;
(CC, Art. 587)
2. Civil liability of the co-Owners of the vessel for the results of the acts of the captain; (CC, Art.
590)
3. If the vessel and her cargo be totally Lost, by reason of capture or shipwreck, all the rights
shall be extinguished, both as regards the right of the crew to demand wages and the right of
the ship agent to recover the advances made; (CC, Art. 643) or
4. Extinction of civil liability incurred by the ship owner or agent in cases of maritime collisions
(CC, Art. 837).

Exceptions to the doctrine of limited liability:

1. Repairs and provisioning of the vessel before the loss of the vessel; (CC, Art. 586)
2. Insurance proceeds. If the vessel is insured, the proceeds will go to the persons entitled to
claim from the ship owner; (Vasquez vs. CA, G.R. No. L-42926, Sept. 13, 1985)
3. When the ship owner is guilty of fault or negligence;
4. Vessel was not abandoned
5. Private carrier; or
6. Voyage is not maritime in character.

VESSEL

Definition

A thing engaged in navigation, whether coastwise or on the high seas, including floating docks,
pontoons, dredges, scows and any other floating apparatus destined for the services of the
industry or maritime commerce.
Local and foreign military vessels, bancas and other watercrafts of less than 3 tons gross
capacity and small watercrafts engaged in river and bay traffic are not

Acquisition of Vessel

1. Prescription:
Acquisition must appear in a written instrument;
 which shall not produce any effect to third persons if not inscribed in the registry of
vessels and
shall be acquired by possession in good faith, continued for 3 years
with a just title duly recorded.
In the absence of any of these, continuous possession for 10 years shall be necessary to
acquire ownership.

2. Sale
If made while it is on voyage the freightage which it earns from the time it receives its
last cargo shall pertain entirely to the purchaser, and the payment of the crew and other
persons who make up its complement shall be for his account.
If made after vessel arrived at port of its destination freightage shall pertain to the
vendor, and the payment of the crew and other individuals who make up its complement
shall be for his account, unless the contrary is stipulated in either case.

Registration of Vessel through the Maritime Industry Authority (MARINA)

SALVAGE LAW

Definition:
1. Services one person renders to the owner of a ship or goods, by his own labor, preserving
the goods or the ship which the owner or those entrusted with the care of them have
either abandoned in distress at sea, or are unable to protect or secure.
2. Compensation allowed to persons by whose voluntary assistance a ship at sea or her
cargo or both have been saved in whole or in part from impending sea peril, or such
property recovered from actual peril or loss, as in cases of shipwreck, derelict or
recapture.

Requisites:
1. Valid object of salvage;
2. Object must have been exposed to marine peril (not perils of the ship);
3. Services rendered voluntarily (neither an existing duty nor out of a pre-existing
contract);
4. Services are successful, total or partial.

Subject of Salvage:
1. Ship itself;
2. Jetsam goods which are cast into the sea, and there sink and remain under water;
3. Floatsam or Flotsam goods which float upon the sea when cast overboard;
4. Ligan or Lagan goods cast into the sea tied to a buoy, so that they may be found again
by the owners

Taking passengers from a sinking ship, without rendering any service in rescuing the
vessel, is not a salvage service, being a duty of humanity and not for reward.

Persons not qualified to a reward for salvage:

1. Crew of the vessel saved;
2. Person who commenced Salvage in spite of opposition of the Captain or his
representative;
 3. In accordance with Sec. 3 of the Salvage Law, a person who fails to deliver a salvaged
vessel or cargo to the Collector of Customs.

Rules on Salvage Award

1. Fixed by RTC in the absence of agreement or where the latter is excessive (Sec. 9)
The reward should constitute a sufficient compensation for the outlay and effort
of the salvors and should be liberal enough to offer an inducement to others to
render services in similar emergencies in the future.
2. If sold (no claim being made within 3 months from publication)
a. Proceeds, after deducting expenses and the salvage claim, shall go to the owner
b. If he does not claim it within 3 years, 50% of the said proceeds shall go to the
salvors, and the other half to the government (Secs. 11-12)
3. If a vessel is the salvor, the reward shall be distributed as follows:
a. 50% to ship owner;
b. 25% to captain;
c. 25% to officers and crew in proportion to their salaries (Sec. 13)

Derelict Ship or her cargo which is abandoned and deserted at sea by those who were in
charge of it, without any hope of recovering it, or without any intention of returning to it

The intention of those in charge must be ascertained. If those in charge left with the
intention of returning, or of procuring assistance, the property is not derelict, but if they
quitted the property with the intention of finally leaving it, it is derelict and a change of
their intention and an attempt to return will not change its nature (Erlanger & Galinger
vs. Swedish East Asiatic Co. Ltd.).
If it is clear that the intention to return is slight, the salvage which was done thereafter is
considered valid.

Towage - contract whereby one vessel, usually motorized, pulls another from one place to
another, for compensation. It is a contract for services rather than a contract of carriage.

LOANS ON BOTTOMRY AND RESPONDENTIA

A loan in which under any condition whatever, the repayment of the sum loaned, and of the
premium stipulated, depends upon the safe arrival in port of the goods on which it is made or of
the price they may receive in case of accident (Code of Commerce, Art. 719).

Common Requisites:
1. Borrows money for use, equipment or repair of vessel
2. For a definite term
3. With extraordinary interest called premium
4. Secured by pledge of vessel or portion thereof (in bottomry) or goods (respondentia)
5. Loan repayment depends or conditioned on the safe arrival of the vessel (bottomry) or
goods (respondentia)
6. Obligation to repay extinguished if vessel is lost due to specific marine perils in the
course or voyage within a limited time, or if pledged goods are lost

Formal Requirements:
1. By means of public instrument
 2. Policy signed by the contracting parties and the broker taking part therein
3. Private instrument

LOAN ON LOAN ON
BOTTOMRY RESPONDENTIA
Definition
Loan made by Loan taken on security
shipowner or ship of the cargo laden on a
agent guaranteed by vessel, and repayable
vessel itself and upon safe arrival of
repayable upon arrival cargo at destination.
of vessel at (Art. 719)
destination. (Art. 719)

Who may contract

Shipowner or ship Only the owner of the
agent. Outside of the cargo.
residence of the
owners - the captain.

BOTTOMRY/ ORDINARY LOAN

RESPONDENTIA (MUTUUM)
Not subject to Usury Subject to Usury Law
Law
Liability of the Not subject to any
borrower is contingent contingency (absolute
on the safe arrival of liability)
the vessel or cargo at
destination

The last lender is a The first lender is a

preferred creditor preferred creditor

MARINE INSURANCE LOAN ON

BOTTOMRY OR
RESPONDENTIA
Indemnity is paid after the Indemnity is paid in
loss has occurred advance by way of
a loan
In case of loss of the vessel In case of loss of
due to a risk insured the vessel due to a
against, the obligation of marine peril, the
the insurer becomes obligation of the
absolute borrower to pay is
extinguished
Consensual contract Real contract

GENERAL RULE: The obligation of the borrower to pay the loan is extinguished if the goods
given as security are absolutely lost by reason of an accident of the sea, during the voyage
designated, and if it is proven that the goods were on board.

Exceptions to the Hypothecary Nature:

1. Loss due to inherent defect
2. Loss due to the barratry on the part of the captain
 3. Loss due to the fault of malice of the borrower
4. Vessel was engaged in contraband
5. Cargo loaded on the vessel be different in form that agreed upon

WHEN LOAN ON BOTTOMRY OR RESPONDENTIA REGARDED AS SIMPLE LOAN

1. Lender loaned an amount larger than the value of the object due to fraudulent means
employed by the borrower. (ART.726)
2. Full amount of the loan is not used for the cargo or given on the goods if all of them
could not have been loaded, the balance will be considered a simple loan. (ART.727)
3. If the effects on which the money is taken is not subjected to any risk. (ART.729)

ACCIDENTS IN MARITIME COMMERCE

1. Averages
2. Arrival Under Stress
3. Collision
4. Shipwreck

Averages
1. An extra-ordinary or accidental expense incurred during the voyage in order to preserve the
cargo, vessel or both; and
2. All damages or deterioration suffered by the vessel from departure to the port of destination,
and to the cargo from the port of loading to the port consignment (Art. 806)

Classes of Averages
1. Particular or Simple Average
(i) Damage or expenses caused to the vessel or cargo that did not inure to common benefit,
and
(ii) borne by respective owners (Art. 809)
2. Gross or General Average
2.1. Damage or expenses deliberately caused in order to save the vessel, its cargo or both from
real and known risk (Art. 811)
All the persons having an interest in the vessel and the cargo therein at the time of the
occurrence of the average shall contribute to satisfy this average (Art. 812)

Requisites:
2.3.1. Common danger present
2.3.2. Arising from accidents of sea, disposition of authority
2.3.3. Peril imminent and ascertained
2.3.4. Part of vessel or cargo deliberately sacrificed
2.3.5. Intended to save vessel or cargo or both
2.3.6. Successful saving of vessel or cargo
2.3.7. Proper legal steps and authority taken

Procedure for recovery:

2.4.1There must be an assembly of the sailing mate and other officers with the captain
including those with interests in the cargo
2.4.2Resolution of the captain
The resolution must be entered in the logbook, with reasons and motives and the votes for
and against the resolution

2.4.5. The minutes shall be signed by the parties

2.4.6. The captain shall deliver a copy of the minutes to the maritime judicial authority of the
first port he may make, within 24 hours after his arrival, and to ratify it immediately under oath
(Art. 813-814)