Transportation Laws_Maritime Commerce_RGCNotes2016

MARITIME COMMERCE
VESSELS
A. Meaning; Status; Registration
i. PRESIDENTIAL DECREE No. 474 June
1, 1974: Maritime Industry Decree of
1974
Section 3. xxx
b. "Vessels" or "Watercraft" Any
barge, lighter, bulk carrier,
passenger ship freighter, tanker,
container ship, fishing boats or
other artificial contrivance
utilizing any source of motive
power, designed, used or capable
of being used as a means of
water transportation operating
either as common contract
carrier, including fishing vessels
covered under Presidential
Decree No. 43, except (1) those
owned and/or operated by the
Armed Forces of the Philippines
and by foreign governments for
military purposes, and (ii)
bancas, sailboats and other
waterborne contrivance of less
than three gross tons capacity
and not motorized.

Section 12. The Administrator shall;

a. Issue Certificate of Philippine
Registry for all vessels being used
in Philippine waters, including
fishing vessels covered by
Presidential Decree No. 43 except
transient civilian vessels of foreign
registry, vessels owned and/or
operated by the Armed Forces of
the Philippines or by foreign
governments for military purposes,
and bancas, sailboats and other
watercraft which are not
motorized, of less than three gross
tons;
ii. Republic Act No. 9295 May 03, 2004:
"Domestic Shipping Development
Act of 2004"
SEC. 3. Definition of Terms. xxx
(f) "Ship" or "Vessel" may be used
interchangeably and shall mean
any kind, class or type of craft or
artificial contrivance capable of
floating in water, designed to be
used, or capable of being used as
a means of water transport in the
domestic trade for the carriage of

passengers or cargo, or both,

utilizing its own motive power or
that of another;\

SEC. 10. Jurisdiction; Power; and

Duties of MARINA. - The MARINA shall
have the power and authority to:
(1) Register vessels;

(2) Issue certificates of public

convenience or any extensions or
amendments thereto, authorizing
the operation of all kinds. Classes
and types of vessels in domestic
shipping: Provided, That no such
certificate shall be valid for a
period of more than twenty-five
(25) years;

(3) Modify, suspend or revoke at

any time upon notice and
hearing, any certificate, license or
accreditation it may have issued
to any domestic ship operator;

(4) Establish and prescribe

routes, zones or areas of
operations of domestic ship
operators;

(5) Require any domestic ship

operator to provide shipping
services to any coastal area,
island or region in the country
where such services are
necessary for the development of
the area, to meet emergency
sealift requirements, or when
public interest so requires;

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(6) Set safety standards for

vessels in accordance with
applicable conventions and
regulations;

(7) Require all domestic ship

operators to comply with
operational and safety standards
for vessels set by applicable
conventions and regulations,
maintain its vessels in safe and
serviceable conditions, meet the
standards of safety of life at sea
and safe manning requirements,
and furnish safe, adequate,
efficient, reliable and proper
service at all times;

(8) Inspect all vessels to ensure

and enforce compliance with
safety standards and other
regulations;

(9) Ensure that all domestic ship

operators shall have the financial
capacity to provide and sustain
safe, reliable, efficient and
economic passenger or cargo
service, or both;

(10) Determine the impact which

any new service shall have to the
locality it will serve;

(11) Adopt and enforce such rules

and regulations which will ensure
compliance by every domestic
ship operator with required safety
standards and other rules and
regulations on vessel safety;

(12) Adopt such rules and

regulations which ensure the
reasonable stability of passengers
and freight rates and, if
necessary, to intervene in order
to protect public interest;

(13) Hear and adjudicate any

complaint made in writing
involving any violation of this law
or the rules and regulations of the
Authority;

(14) Impose such fines and

penalties on, including the
revocations of licenses of any
domestic ship operator who shall
fail to maintain its vessels in safe
and serviceable condition, or who
shall violate or fail to comply with
safety regulations;

(15) Investigate any complaint

made in writing against any
domestic ship operator, or any
shipper, or any group of shippers
regarding any matter involving
violations of the provisions of this
Act;

(16) Upon notice and hearing,

impose such fines, suspend or
revoke certificates of public
convenience or other license
issued, or otherwise penalize any
ship operator, shipper or group of
shippers found violating the
provisions of this Act; and

(17) Issue such rules and

regulations necessary to
implement the provisions of this
Act: Provided, That such rules and

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regulations cannot change or in

any way amend or be contrary to
the intent and purposes of this
Act.

iii. EO NO. 125-A April 13, 1987: G

EXECUTIVE ORDER NO. 125,
ENTITLED "REORGANIZING THE
MINISTRY OF TRANSPORTATION
COMMUNICATIONS. DEFINING ITS
POWERS AND FUNCTIONS, AND FOR
OTHER PURPOSES."
"Sec. 12. Maritime Industry Authority.
The Maritime Industry Authority is hereby
retained and shall have the following
functions:
(a) Develop and formulate plans,
policies, programs, projects,
standards, specifications and
guidelines geared toward the
promotion and development of
the maritime industry, the growth
and effective regulation of
shipping enterprises, and for the
national security objectives of the
country;
(b) Establish, prescribe and
regulate routes, zones and/or
areas of operation of particular
operators of public water
services;
(c) Issue Certificates of Public
Convenience for the operation of
domestic and overseas water
carriers;
(d) Register vessels as well as
issue certificates, licenses or
documents necessary or incident
thereto;
(e) Undertake the safety
regulatory functions pertaining to
vessel construction and operation
including the determination of
manning levels and issuance of
certificates of competency to
seamen;
(f) Enforce laws, prescribe and
enforce rules and regulations,
including penalties for violations
thereof, governing water
transportation and the Philippine
merchant marine, and deputize
the Philippine Coast Guard and
other law enforcement agencies

to effectively discharge these

functions;
(g) Undertake the issuance of
licenses to qualified seamen and
harbor, bay and river pilots;
(h) Determine, fix and/or
prescribe charges and/or rates
pertinent to the operation of
public water transport utilities,
facilities and services except in
cases where charges or rates are
established by international
bodies or associations of which
the Philippines is a participating
member or by bodies or
associations recognized by the
Philippine Government as the
proper arbiter of such charges or
rates.
(i) Accredit marine surveyors and
maritime enterprises engaged in
shipbuilding, shiprepair,
shipbreaking, domestic and
overseas shipping ship
management and agency;
(j) Issue and register the
continuous discharge book of
Filipino seamen;
(k) Establish and prescribe rules
and regulations, standards and
procedures for the efficient and
effective discharge of the above
functions;
(l) Perform such other functions
as may now or hereafter be
provided by law."
iv. Code of Commerce: ARTICLE 585. For
all purposes of law not modified or
restricted by the provisions of this Code,
vessels shall continue to be considered as
personal property.
v. Tariff and Customs Code: Sec. 810.
Privileges Conferred by Certificate of
Philippine Registry. A certificate of
Philippine registry confers upon the vessel
the right to engage, consistently with law,
in the Philippine coastwise trade and
entitles it to the protection of the
authorities and the flag of the Philippines
in all ports and on the high seas, and at
the same time secures to it the same
privileges and subjects it to the same
disabilities as, under the laws of the
Philippines, pertain to foreign-built vessels

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transferred abroad to citizens of the

Philippines.
B. Acquisition of Vessels
i. Code of Commerce: ARTICLE 573.
Merchant vessels constitute property
which may be acquired and transferred by
any of the means recognized by law. The
acquisition of a vessel must appear in a
written instrument, which shall not
produce any effect with respect to third
persons if not inscribed in the registry of
vessels. The ownership of a vessel shall
likewise be acquired by possession in good
faith, continued for three years, with a just
title duly recorded. In the absence of any
of these requisites, continuous possession
for ten years shall be necessary in order to
acquire ownership. A captain may not
acquire by prescription the vessel of which
he is in command.
ARTICLE 574. Builders of vessels may
employ the materials and follow, with
respect to their construction and rigging,
the systems most suitable to their
interests. Ship owners and seamen shall
be subject to what the laws and
regulations of the public administration on
navigation, customs, health, safety of
vessels, and other similar matters.
ii. Civil Code: Article 712. Ownership is
acquired by occupation and by intellectual
creation.
Ownership and other real rights over
property are acquired and transmitted by
law, by donation, by testate and intestate
succession, and in consequence of certain
contracts, by tradition.
They may also be acquired by means of
prescription. (609a)
iii. Judicial and Voluntary Sale
Code of Commerce: ARTICLE 576. In
the sale of a vessel it shall always be
understood as included the rigging, masts,
stores and engine of a streamer
appurtenant thereto, which at the time
belongs to the vendor. The arms,
munitions of war, provisions and fuel shall
not be considered as included in the sale.
The vendor shall be under the obligation
to deliver to the purchaser a certified copy
of the record sheet of the vessel in the
registry up to the date of the sale.
ARTICLE 577. If the alienation of the
vessel should be made while it is on a
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 for the same
voyage shall be for his account. If the sale
is made after the vessel has arrived at the
port of its destination, the 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.
ARTICLE 578. If the vessel being on a
voyage or in a foreign port, its owner or
owners should voluntarily alienate it,
either to Filipinos or to foreigners
domiciled in the capital or in a port of
another country, the bill of sale shall be
executed before the consul of the Republic
of the Philippines at the port where it
terminates its voyage and said instrument
shall produce no effect with respect to
third persons if it is not inscribed in the
registry of the consulate. The consul shall
immediately forward a true copy of the
instrument of purchase and sale of the
vessel to the registry of vessels of the port
where said vessel is inscribed and
registered. In every case the alienation of
the vessel must be made to appear with a
statement of whether the vendor receives
its price in whole or in part, or whether he
preserves in whole or in part any claim on
said vessel. In case the sale is made to a
Filipino, this fact shall be stated in the
certificate of navigation. When a vessel,
being on a voyage, shall be rendered
useless for navigation, the captain shall
apply to the competent judge on court of
the port of arrival, should it be in the
Philippines; and should it be in a foreign
country, to the consul of the Republic of
the Philippines, should there be one, or,
where there is none, to the judge or court
or to the local authority; and the consul, or
the judge or court, shall order an
examination of the vessel to be made. If
the consignee or the insurer should reside
at said port, or should have
representatives there, they must be cited
in order that they may take part in the
proceedings on behalf of whoever may be
concerned.
ARTICLE 579. After the damage to the
vessel and the impossibility of her being
repaired, in order to continue the voyage
had been shown, its sale at public auction
shall be ordered, subject to the following
rules:
1. The hull of the vessel, its
rigging, engines, stores, and

Transportation Laws_Maritime Commerce_RGCNotes2016

other articles shall be appraised,

after making an inventory, said
proceedings to be brought to the
notice of the persons who may
wish to take part in the auction.
2. The order or decree ordering
the auction to be held shall be
posted in the usual places, an
announcement thereof to be
inserted in the Official Gazette
and in two of the newspapers of
the largest circulation of the port
where the auction is to be held,
should there be any. The period
which may be fixed for the
auction shall not be less than
twenty days.
3. These announcements shall be
repeated every ten days, and
their publication shall be made to
appear in the records.
4. The auction shall be held on
the day fixed, with the formalities
prescribed in the common law for
judicial sales.
5. If the sale should take place
while the vessel is in a foreign
country, the special provisions
governing such cases shall be
observed.

which appear to have been paid

or be due by virtue of an account
verified and approved by the
judge or court.
5. The rent of the warehouse
where the rigging and stores of
the vessel have been taken care
of, according to contract.
6. The salaries due the captain
and crew during its last voyage,
which shall be verified by means
of the liquidation to be made in
view of the lists and of the books
of account of the vessel,
approved by the chief of the
Bureau of Merchant Marine,
where there is one, and in his
absence by the consul or judge or
court.
7. The reimbursement for the
goods of the freight which the
captain may have sold in order to
repair the vessel, provided that
the sale has been ordered
through a judicial proceedings
held with the formalities required
in such cases, and recorded in the
certificate of registry of the
vessel.

3. The pilotage charges, tonnage

dues, and the other sea or port
charges, proven by means of
proper certificates of the officers
intrusted with the collection
thereof.

8. The part of the price which has

not been paid to the said vendor,
the unpaid credits for materials
and labor in the construction of
the vessel, when it has not
navigated, and those arising from
the repair and equipment of the
vessels and from its provisioning
with victuals and fuel during the
last voyage. In order that the
credits provided for in this
subdivision may enjoy this
preference, they must appear by
contracts recorded in the registry
of vessels, or if they were
contracted for the vessel while on
a voyage and said vessel has not
returned to the port where it is
registered, they must be made
with the authorization required
for such cases and annotated in
the certificate of registration of
the vessel.

4. The salaries of the depositaries

and keepers of the vessel and
any other expenses for its
preservation from the time of
arrival at the port until the sale,

9. The amount borrowed on

bottomry on the hull, keel, tackle,
and stores of the vessel before its
departure, proven by means of
the contract executed according

ARTICLE 580. In all judicial sales of any

vessel for the payment of creditors, the
following shall have preference in the
order stated 2
1. The credit in favor of the public
treasury proven by means of an
official certificate of competent
authority.
2. The judicial costs of the
proceedings, according to an
appraisement approved by the
judge or court.

Transportation Laws_Maritime Commerce_RGCNotes2016

to law and recorded in the

registry of vessels; those
borrowed during the voyage with
the authorization mentioned in
the preceding subdivision,
satisfying the same requisites;
and the insurance premium,
proven by the insurance policy or
a certificate taken from the books
of the broker.
10. The indemnity due the
shipper for the value of the goods
shipped which were not delivered
to the consignees, or for averages
suffered for which the vessel is
liable, provided that either appear
in a judicial or arbitration
decision.
ARTICLE 581. If the proceeds of the sale
should not be sufficient to pay all the
creditors included in one number or
grade, the residue shall be divided
among them pro rata.
ARTICLE 582. After the bill of the
judicial sale at public auction has been
executed and inscribed in the registry of
vessels, all the other liabilities of the
vessel in favor of the creditors shall be
considered extinguished. But if the sale
should have been voluntary and should
have been made while the vessel was on
a voyage, the creditors shall preserve
their rights against the vessel until it
returns to the port of her registry, and
three months after the inscription of the
sale in the registry of vessel or the
arrival.
PERSONS PARTICIPATING IN MARITIME
COMMERCE
A. Shipowners and Ship Agents (Art. 585,
CCom on ownership)
B. Captains and Masters of Vessel
i.
Qualifications
ii.
Powers
ARTICLE 610. The following powers
shall be inherent in the position of
captain, master or patron of a vessel:
1. To appoint or make contracts
with the crew in the absence of
the ship agent, and to propose
said crew, should said agent be
present; but the ship agent may
not employ any member against
the captain's express refusal.
2. To command the crew and
direct the vessel to the port of its
destination, in accordance with

the instructions he may have

received from the ship agent.
3. To impose, in accordance with
the contracts and with the laws
and regulations of the merchant
marine, and when on board the
vessel, correctional punishment
upon those who fail to comply
with his orders or are wanting in
discipline, holding a preliminary
hearing on the crimes committed
on board the vessel on the seas,
which crimes shall be turned over
to the authorities having
jurisdiction over the same at the
first port touched.
4. To make contracts for the
charter of the vessel in the
absence of the ship agent or of its
consignee, acting in accordance
with the instructions received and
protecting the interests of the
owner with utmost care.
5. To adopt all proper measures to
keep the vessel well supplied and
equipped, purchasing all that may
be necessary for the purpose,
provided there is no time to
request
instruction from the ship agent.
6. To order, in similar urgent
cases while on a voyage, the
repairs on the hull and engines of
the vessel and in its rigging and
equipment, which are absolutely
necessary to enable it to continue
and finish its voyage; but if he
should arrive at a point where
there is a consignee of the vessel,
he shall act in concurrence with
the latter.
ARTICLE 611. In order to comply with
the obligations mentioned in the
preceding article, the captain, when he
has no funds and does not expect to
receive any from the ship agent, shall
obtain the same in the successive order
stated below:
1. By requesting said funds from
the consignee of the vessel or
correspondents of the ship agent.
2. By applying to the consignees
of the cargo or to those interested
therein. 3. By drawing on the ship
agent.

Transportation Laws_Maritime Commerce_RGCNotes2016

4. By borrowing the amount

required by means of a loan on
bottomry.
5. By selling a sufficient amount
of the cargo to cover the sum
absolutely indispensable for the
repair of the vessel and to enable
it to continue its voyage. cd In
these two last cases he must
apply to the judicial authority of
the port, if in the Philippines, and
to the consul of the Republic of
the Philippines if in a foreign
country, and where there is none,
to the local authority, proceeding
in accordance with the provisions
of Article 583, and with the
provisions of the law of civil
procedure.
iii.

Duties
ARTICLE 612. The following obligations
shall be inherent in the office of captain:
1. To have on board before
starting on a voyage a detailed
inventory of the hull, engines,
rigging, spare-masts, tackle, and
other equipment of the vessel;
the royal or the navigation
certificate; the roll of the persons
who make up the crew of the
vessel, and the contracts entered
into with them; the lists of
passengers; the bill of health; the
certificate of the registry proving
the ownership of the vessel and
all the obligations which
encumber the same up to that
date; the charter parties or
authenticated copies thereof; the
invoices or manifests of the
cargo, and the memorandum of
the visit or inspection by experts,
should it have been made at the
port of departure.
2. To have a copy of this code on
board.
3. To have three folioed and
stamped books, placing at the
beginning of each one a
memorandum of the number of
folios it contains, signed by the
maritime authority, and in his
absence by the competent
authority.
In the first book, which shall be
called "log book," he shall enter
day by day the condition of the

atmosphere, the prevailing winds,

the courses taken, the rigging
carried, the power of the engines
used in navigation, the distances
covered, the maneuvers
executed, and other incidents of
navigation; he shall also enter the
damage suffered by the vessel in
her hull, engines, rigging, and
tackle, no matter what its cause
may be, as well as the
impairment and damage suffered
by cargo, and the effect and
importance of the jettison, should
there be any; and in cases of
serious decisions which require
the advice or a meeting of the
officers of the vessel, or even of
the crew and passengers, he shall
record the decisions adopted.
For the information indicated he
shall make use of the binnacle
book and of the steam of engine
book kept by the engineer. In the
second book called the
"accounting book," he shall
record all the amounts collected
and paid for the account of the
vessel, entering specifically
article by article, the source of
the collection and the amounts
spent for provisions, repairs,
acquisitions of equipment or
goods, fuel, food, outfits, wages,
and other expenses of whatever
nature they may be.
He shall furthermore enter
therein a list of all the members
of the crew, stating their
domiciles, their wages and
salaries, and the amounts they
may have received on account,
directly or by delivery to their
families. In the third book, called
"freight book," he shall record the
loading and discharge of all the
goods, stating their marks and
packages, names of the shippers
and of the consignees, ports of
loading and unloading, and the
freightage they give.
In this same book he shall record
the names and places of sailing of
the passengers, the number of
packages in their baggage, and
the price of passage.
4. Before receiving cargo, to
make with the officers of the crew

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and two experts, if required by

the shippers and passengers, an
examination of the vessel, in
order to ascertain whether it is
water-tight, with the rigging and
engines in good condition, and
with the equipment required for
good navigation, preserving
under his responsibility a
certificate of the memorandum of
his inspection, signed by all those
who may have taken part therein.
The experts shall be appointed,
one by the captain of the vessel
and another by those who
request its examination, and in
case of disagreement a third shall
be appointed by the marine
authority of the port or by the
authority, exercising his
functions.
5. To remain constantly on board
the vessel with the crew while the
cargo is being taken on board and
to carefully watch the stowage
thereof; not to consent to the
loading of any merchandise or
matter of a dangerous character,
such as inflammable or explosive
substances, without the
precautions which are
recommended for their packing,
handling and isolation; not to
permit the carriage on deck of
any cargo which by reason of its
arrangement, volume, or weight
makes the work of the sailors
difficult, and which might
endanger the safety of the vessel;
and if, on account of the nature of
the merchandise, the special
character of the shipment, and
principally 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 consent of the shippers
and of the ship agent.
6. To demand a pilot at the
expense of the vessel whenever
required by the navigation, and
principally when he has to enter a
port, canal, or river, or has to
take a roadstead or anchoring
place with which neither he nor
the officers and crew are
acquainted.

7. To be on deck on reaching land

and to take command on entering
and leaving ports, canals,
roadsteads, and rivers, unless
there is a pilot on board
discharging his duties. He shall
not spend the night away from
the vessel except for serious
causes or by reason of official
business.
8. To present himself, when
making a port in distress, to the
maritime authority if in the
Philippines and to the consul of
the Republic of the Philippines if
in a foreign country, before
twentyfour hours have elapsed,
and to make a statement of the
name registry, and port of
departure of the vessel, of its
cargo, and the cause of arrival
which declaration 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 his arrival in distress and
the reasons therefor. In the
absence of the maritime authority
or of the consul, the declaration
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 vessel in the registry of
vessels the obligations which he
may contract in accordance with
Article 583.
10. To place under good care and
custody all the papers and
belongings of any members of
the crew who might die on the
vessel, drawing up a detailed
inventory, in the presence of
passengers, or, in their absence,
of members of the crew as
witnesses.
11. To conduct himself according
to the rules and precepts
contained in the instructions of
the ship agent, being liable for all
that which he may do in violation
thereof.
12. To inform the ship agent from
the port at which the vessel
arrives, of the reason of his

Transportation Laws_Maritime Commerce_RGCNotes2016

arrival, taking advantage of the

semaphore, telegraph, mail, etc.,
as the case may be; to notify him
of the cargo he may have
received, stating the names and
domiciles of the shippers,
freightage earned, and amounts
borrowed on bottomry loan; to
advise him of his departure, and
of any operation and date which
may be of interest to him.
13. To observe the rules with
respect to situation, lights and
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
decision of the majority; and if
the boats are to be taken to, he
shall take with him, before
anything else, the books and
papers, and then the articles of
most value, being obliged to
prove, in case of the loss of the
books and papers, that he did all
he could to save them.
15. In case of wreck, to make the
proper protest in due form at the
first port of arrival, before the
competent authority or the
Philippine consul, within twentyfour hours, specifying therein all
the incidents of the wreck, in
accordance with subdivision 8 of
this article.
16. To comply with the obligations
imposed by the laws and
regulations on navigation,
customs, health, and others.
ARTICLE 622. If while on a voyage the
captain should learn of the appearance
of privateers or men of war against his
flag, he shall be obliged to make the
nearest neutral port, inform his agent or
shippers, and await an occasion to sail
under convoy, or until the danger is over
or he has received express orders from
the ship agent or the shippers.
ARTICLE 623. If he should be attacked
by a privateer, and, after having tried to
avoid the encounter and having resisted
the delivery of the effects of the vessel
or its cargo, they should be forcibly taken

away from him, or he should be obliged

to deliver them, he shall make an entry
thereof in his freight book and shall
prove the fact before the competent
authority at the first port he touches.
cdasia After the force majeure has been
proved, he shall be exempted from
liability.
ARTICLE 624. A captain whose vessel
has gone through a hurricane or who
believes that the cargo has suffered
damages or averages, shall make a
protest thereon before the competent
authority at the first port he touches,
within twenty-four hours following his
arrival and shall ratify it within the same
period when he arrives at his destination,
immediately proceeding with the proof of
the facts, and he may not open the
hatches until after this has been done.
The captain shall proceed in the same
manner, if, the vessel having been
wrecked; he is saved alone or with part
of his crew, in which case he shall appear
before the nearest authority, and make a
sworn statement of facts.
The authority or the consul shall verify
the said facts receiving sworn
statements of the members of the crew
and passengers who may have been
saved; and taking such other steps as
may assist in arriving at the facts he
shall make a statement of the result of
the proceedings in the log book and in
that of the sailing mate, and shall deliver
to the captain the original record of the
proceedings, stamped and folioed, with a
memorandum of the folios, which he
must rubricate, in order that it may be
presented to the judge or court of the
port of destination.
The statement of the captain shall be
accepted if it is in accordance with those
of the crew and passengers; if they
disagree, the latter shall be accepted,
always saying proof to the contrary.
ARTICLE 625. The captain, under his
personal responsibility as soon as he
arrives at the port of destination, should
get the necessary permission from the
health and customs officers, and perform
the other formalities required by the
regulations of the administration,
delivering the cargo without any
defalcation, to the consignee, and in a
proper case, the vessel, rigging, and
freightage to the ship agent.

Transportation Laws_Maritime Commerce_RGCNotes2016

If by reason of the absence of the

consignee or on account of the
nonappearance of a legal holder of the
bills of lading, the captain should not
know to whom he is to legally make the
delivery of the cargo, he shall place it at
the disposal of the proper judge or court
or authority, in order that he may
determine what is proper with regard to
its deposit, preservation and custody.
iv.

Prohibited Acts
ARTICLE 613. A captain who navigates
for freight in common or on shares may
not make any separate transaction for
his own account; and should he do so,
the profit which may accrue shall belong
to the other persons interested, and the
losses shall be borne by him exclusively.

and shall be subject to the provisions of

the Penal Code.
ARTICLE 580 (see Judicial and
Voluntary Sale, Acquisition of Vessels)
ARTICLE 583. If while on a voyage the
captain should find it necessary to
contract one or more of the obligations
mentioned in subdivisions 8 and 9 of
Article 580, he shall apply to the judge or
court if he is in Philippine territory, and
otherwise to the consul of the Republic of
the Philippines, should there be one, and,
in his absence, to the judge or court or
proper local authority, presenting the
certificate of the registration sheet
treated of in Article 612 and the
instruments proving the obligation
contracted.
The judge or court, the consul, or the
local authority, as the case may be, in
view of the result of the proceedings
instituted, shall make a temporary
memorandum of their result in the
certificate, in order that it may be
recorded in the registry when the vessel
returns to the port of its registry, or so
that it can be admitted as a legal and
preferred obligation in case of sale before
its return, by reason of the sale of the
vessel on account of a declaration of
unseaworthiness.

ARTICLE 615. Without the consent of

the agent, the captain cannot have
himself substituted by another person;
and should he do so, besides being liable
for all the acts of the substitute and
bound to the indemnities mentioned in
the foregoing articles, the captain as well
as the substitute may be discharged by
the ship agent.
ARTICLE 617. The captain may not
contract loans on respondentia secured
by the cargo; and should he do so, the
contracts shall be void. Neither may he
borrow money on bottomry for his own
transactions, except on the portion of the
vessel he owns, provided no money has
been previously borrowed on the whole
vessel, and there does not exist any
other kind of lien or obligation
chargeable against the vessel.
If he may do so, he must state what
interest he has in the vessel. In case of
violation of this article, the principal,
interest, and costs shall be for the
personal account of the captain, and the
ship agent may furthermore discharge
him.
ARTICLE 621. A captain who borrows
money on the hull, engine, rigging or
tackle of the vessel, or pledges or sells
merchandise or provisions outside of the
cases and without the formalities
prescribed in this Code, shall be liable for
the principal, interests, and costs, and
shall indemnify for the damages he may
cause. He who commits fraud in his
accounts shall pay the amount defrauded

The omission of this formality shall make

the captain personally liable for the
credits prejudiced on his account.
v.

Liabilities
ARTICLE 614. A captain who, having
made an agreement to make a voyage,
fails to perform his undertaking, without
prevented by fortuitous accident or force
majeure, shall indemnify for all the losses
which he may cause without prejudice to
the criminal penalties which may be
proper.
ARTICLE 615. Without the consent of
the agent, the captain cannot have
himself substituted by another person;
and should he do so, besides being liable
for all the acts of the substitute and
bound to the indemnities mentioned in
the foregoing articles, the captain as well
as the substitute may be discharged by
the ship agent.
ARTICLE 619. The captain shall be liable
for the cargo from the time it is delivered
to him at the dock or afloat alongside the
at the port of loading, until he delivers it

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Transportation Laws_Maritime Commerce_RGCNotes2016

on the shore or on the discharging wharf

at the port of unloading, unless the
contrary has been expressly agreed
upon.
ARTICLE 620. The captain shall not be
liable for the damages caused to the
vessel or to the cargo by force majeure;
but he shall always be so for those
arising through his own fault, no
agreement to the contrary being valid.
Neither shall he be personally liable for
the obligations he may have contracted
for the repair, equipment, and
provisioning of the vessel, which shall
devolve upon the ship agent, unless the
former has expressly bound himself
personally or has signed a bill of
exchange or promissory note in his
name.
B. Harbor Pilots
C. Officers and Crew
ARTICLE 627. The sailing mate, as the
second chief of the vessel, and unless
the agent orders otherwise, shall take
the place of the captain in cases of
absence, sickness, or death, and shall
then assume all his powers, duties, and
responsibilities.
ARTICLE 628. The sailing mate must
provide himself with charts of the seas in
which he will navigate with the
astronomical tables and instruments for
observation which are in use and which
are necessary for the discharge of his
duties, being liable for the accidents
which may arise by reason of his
omission in this regard.
ARTICLE 629. The sailing mate shall
particularly and personally keep a book,
folioed and stamped on all its pages,
denominated "Binnacle Book" with a
memorandum at the beginning stating
the number of folios it contains, signed
by the competent authority, and shall
enter therein daily the distance, the
course travelled, the variations of the
needle, the leeway, the direction and
force of the wind, the condition of the
atmosphere and of the sea, the rigging
set, the latitude and longitude observed,
the number of furnace heated, the steam
pressure, the number of revolutions, and
under the title "incidents," the
maneuvers made, the meeting with
other vessels, and all the details and
incidents which. may occur during the
voyage.

ARTICLE 630. In order to change the

course and to take the one most
convenient for a good voyage of the
vessel, the sailing mate shall come to an
agreement with the captain. If the latter
should object, the sailing mate shall
state to him the proper observations in
the presence of the other officers of the
sea. If the captain should still insist on
his negative decision, the sailing mate
shall make the proper protest, signed by
him and by one other officer, in the log
book, and shall obey the captain, who
alone shall be responsible for the
consequences of his decision.
ARTICLE 631. The sailing mate shall be
responsible for all the damages caused
to the vessel and the cargo by reason of
his negligence or want of skill without
prejudice to the criminal liability which
may arise, if a felony or misdemeanor
has been committed. aisadc
ARTICLE 632. The following shall be the
obligations of the second mate:
1. To watch over the preservation
of the hull and rigging of 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 the
replacement of the goods and
implements which are rendered
useless and are lost.
2. To take care that the cargo is
well arranged, keeping the vessel
always ready for maneuver.
3. To preserve order, discipline,
and good service among the
crew, requesting the necessary
orders and Instructions of the
captain, and giving him prompt
information of any occurrence in
which the intervention of his
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 see that it is
promptly and accurately carried
out.
5. To take charge under inventory
of the rigging and all the
equipment of the vessel, if it
should be laid up, unless the ship
agent has ordered otherwise.

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Transportation Laws_Maritime Commerce_RGCNotes2016

With regard to engineers the

following rules shall govern:
1. In order to be taken on
board as a marine
engineer forming part of
the complement of a
merchant vessel, it shall
be necessary to have the
qualifications which the
laws and regulations
require, and not be
disqualified in accordance
therewith for the
discharge of his duties.
Engineers shall be
considered officers of the
vessel but they shall have
no authority or
intervention except in
matters referring to the
motor apparatus.
2. When there are two or
more engineers on board
a vessel, one of them
shall be the chief, and the
other engineers and all
the personnel of the
engines shall be under his
orders; he shall also have
charge of the motor
apparatus, the spare
parts, the instruments
and tools pertaining
thereto, the fuel, the
lubricating material and,
finally, whatever is
entrusted to an engineer
on board a vessel.
3. He shall keep the
engines and boilers in
good condition and state
of cleanliness, and shall
order what may be proper
in order that they may
always be ready to work
with regularity, being
liable for the accidents or
damages which his
negligence or want of skill
may cause to the motor
apparatus, to the vessel
and to the cargo, without
prejudice to the criminal
liability which may be
proper if there has been a
felony or misdemeanor.
4. He shall not make any
change in the motor
apparatus, or proceed to

repair the averages he

may have noticed in the
same, or change the
normal speed of its
movement without the
prior authorization of the
captain., to whom, if he
should object to their
being made, he shall
state the proper
observations in the
presence of the other
engineers or officers; and
if, notwithstanding this,
the captain should insist
on his objection, the chief
engineer shall make the
proper protests, entering
the same in the engine
book, and shall obey the
captain, who, alone shall
be responsible for the
consequences of his
decision.
5. He shall inform the
captain of any average
which may occur in the
motor apparatus, and
shall advise him
whenever it may be
necessary to stop the
engines for some time, or
when any other incident
occurs in his department
of which the captain
should be immediately
informed, besides
frequently advising him of
the consumption of fuel
and lubricating material.
6. He shall keep a book or
registry called the "engine
book," in which shall be
entered all the date
referring to the work of
the engines, such as, for
example, the number of
furnaces heated, the
vacuum in the condenser,
the temperature, the
degree of saturation of
the water in the boilers
the consumption of fuel
and lubricating material,
and under the heading of
"noteworthy
occurrences," the
averages and
maladjustments which
occur in the engines and

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Transportation Laws_Maritime Commerce_RGCNotes2016

boilers, the causes

thereof and the means
employed to repair the
same likewise, the force
and direction of the wind,
the rigging set and the
speed of the vessel shall
be stated, taking the
information from the
Binnacle Book.

i.
ii.
iii.

ARTICLE 633. The second mate shall

take command of the vessel in case of
the inability or disqualification of the
captain and the sailing mate, assuming
in such case their powers and
responsibility.
Sailing Mate
Article 627 Article 631
Second Mate
Article 632 Article 633
Crew or Sailors
ARTICLE 634. The captain may make up
the crew of his vessel with such number
of men as he may consider proper, and
in the absence of Filipino sailors, he may
take on foreigners residing in the
country, the number thereof not to
exceed one-fifth of the crew.
If in foreign ports the captain should not
find a sufficient number of Filipino
sailors, he may complete the crew with
foreigners, with the consent of the consul
or marine authorities.
The agreement which the captain may
make with the members of the crew and
others who go to make up the
complement of the vessel, to which
reference is made in Article 612, must be
reduced to writing in the account book,
without the intervention of a notary
public or clerk of court ("escribano"),
signed by the parties thereto and visaed
by the marine authority if they be
executed in Philippine territory or by the
consuls or consular agents of the
Republic of the Philippines if executed
abroad, stating therein all the obligations
which each one contracts and all the
rights he acquires said authorities taking
care that these obligations and rights are
recorded in a clear and definite manner
which give no room for doubts or claims.
The captain shall take care to read to
them the articles of this Code which
concern them, stating in said document
that they were read. If the book contains

the requisites prescribed in Article 612,

and there should not appear any signs of
alterations in its entries, it shall be
admitted as evidence in questions which
may arise between the captain and the
crew with respect to the agreements
contained therein and the amounts paid
on account of the same. Every member
of the crew may demand of the captain a
copy, signed by the latter, of the
agreement and of the liquidation of his
wages, as they appear in the book.
a. Duties and Liabilities
ARTICLE 635. A seaman who has been
contracted to serve on a vessel may
not rescind his contract or fail to
comply therewith except by reason of a
legitimate impediment which may have
happened to him.
Neither may he transfer from the
service of one vessel to another without
obtaining the written permission of the
captain of the vessel on which he may
be. If, without obtaining said
permission, the seaman who has signed
for one vessel should sign for another
one, the second contract shall be void,
and the captain may choose between
forcing him to fulfill the service to which
he first bound himself, or at his
expense to look for a person to
substitute him. Furthermore, he shall
lose the wages earned on his first
contract, to the benefit of the vessel for
which he had signed. A captain who,
knowing that a seaman is in the service
of another vessel, should have made a
new agreement with him without
having required of him the permission
referred to in the preceding paragraphs,
shall be subsidiarily responsible to the
captain of the vessel to which the
seaman first belonged, for that part of
the indemnity, referred to in the third
paragraph of this article, which the
seaman may not be able to pay.
b. Rights
ARTICLE 644. A seaman who falls sick
shall not lose his right to wages during
the voyage, unless the sickness is the
result of his own fault. At any rate, the
costs of the attendance and cure shall
be defrayed from the common funds, in
the form of a loan. If the sickness
should come from an injury received in
the service or defense of the vessel, the
seaman shall be attended and cured at
the expense of the common funds
deducting, before anything else, from

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Transportation Laws_Maritime Commerce_RGCNotes2016

the proceeds of the freightage the cost

of the attendance and cure.
ARTICLE 645. If a seaman should die
during the voyage, his heirs will be
given the wages earned and not
received according to his contract and
the cause of his death, namely
If he died a natural death and was
engaged on wages, that which may
have been earned up to the date of his
death shall be paid. If the contract was
for a fixed sum for the whole voyage,
half the amount earned shall be paid if
the seamen died on the voyage out,
and the whole amount if he died on the
return voyage.
And if the contract was on shares and
death occurred after the voyage was
begun, the heirs shall be paid the entire
portion due the seaman; but if the
latter died before the departure of the
vessel from the port, the heirs shall not
be entitled to claim anything.
If death occurred in the defense of the
vessel, the seaman shall be considered
as living, and his heirs shall be paid, at
the end of the voyage, the full amount
of wages or the integral part of the
profits which may be due him as to
others of his class. In the same manner,
the seaman captured while defending
the vessel shall be considered present
so as to enjoy the same benefits as the
rest; but should he have been captured
on account of carelessness or other
accident not related to the service, he
shall only receive the wages due up to
the day of his capture.
ARTICLE 636. If there is no fixed
period for which a seaman has been
contracted he may not be discharged
until the end of the return voyage to
the port where he enlisted.
ARTICLE 637. Neither may the captain
discharge a seaman during the time of
his contract except for just cause, the
following being considered as such:
1. The perpetration of a crime
which disturbs order on the
vessel.
2. Repeated insubordination,
want of discipline, or nonfulfillment of the service.

3. Repeated incapacity and

negligence in the fulfillment of
the service he should render.
4. Habitual drunkenness.
5. Any occurrence which
incapacitates the seaman to
perform the work entrusted to
him, with the exception of that
provided in Article 644.
6. Desertion. The captain may,
however, before getting out on a
voyage and without giving any
reason, refuse to permit a
seaman whom he may have
engaged to go on board, and
leave him on land, in which case
he will be obliged to pay him his
wages as if he had rendered
services. This indemnity shall be
paid from the funds of the vessel
if the captain should have acted
for reasons of prudence and in
the interest of the safety and
good services of the farmer.
Should this not be the case, it
shall be paid by the captain
personally.
After the voyage has begun, during
the same, and until the conclusion
thereof, the captain may not
abandon any member of his crew on
land or on sea, unless, by reason of
some crime, his imprisonment and
delivery to the competent authority
in the first port touched should be
proper, a matter obligatory for the
captain.
ARTICLE 638. If, after the crew has
been engaged, the voyage is revoked
by the will of the ship agent or of the
charterers before or after the vessel
has put to sea, or if the vessel is for the
same reason given a destination
different from that fixed in the
agreement with the crew, the latter
shall be indemnified on account of the
rescission of the contract, according to
the cases follows:
1. If the revocation of the voyage
should be decided upon before
the departure of the vessel from
the port, each sailor engaged
shall be given one month's
salary, besides what may be due
him, in accordance with his
contract, for the services

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Transportation Laws_Maritime Commerce_RGCNotes2016

rendered to the vessel up to the

date of the revocation.
2. If the agreement should have
been for a fixed amount for the
whole voyage, that which may be
due for said month and days shall
be determined in proportion to
the approximate number of days
the voyage should have lasted, in
the judgment of experts, in the
manner established in the law of
Civil Procedure; and if the
proposed voyage should be of
such short duration that it is
calculated at approximately one
month, the indemnity shall be
fixed for fifteen days, discounting
in all cases the sums advanced.
3. If the revocation should take
place after the vessel has put to
sea, the seamen engaged for a
fixed amount for the voyage shall
receive in full the salary which
may have been offered them as if
the voyage had terminated; and
those engaged by the month
shall receive the amount
corresponding to the time they
might have been on board and to
the time they may require to
arrive at the port of destination,
the captain being obliged,
furthermore, to pay the seamen
in both cases, the passage to the
said port or to the port of sailing
of the vessel, as may be
convenient for them.
4. If the ship agent or the
charterers of the vessel should
give it a destination different
from that fixed in the agreement,
and the members of the crew
should not agree thereto, they
shall be given by way of
indemnity half the amount fixed
in case No. 1, besides what may
be owed them for the part of the
monthly wages corresponding to
the days which have elapsed
from the date of their
agreements. If they accept the
change, and the voyage, on
account of the greater distance
or of other reasons, should give
rise to an increase of wages, the
latter shall be adjusted privately
or through amicable arbitrators in
case of disagreement. Even
though the voyage should be

shortened to a nearer point, this

shall not give rise to a reduction
in the wages agreed upon. If the
revocation or change of the
voyage should come from the
shippers or charterers, the agent
shall have a right to demand of
them the indemnity which may
be justly due.
ARTICLE 640. The following shall be
just causes for the revocation of the
voyage.
1. A declaration of war or
interdiction of commerce with the
power to whose territory the
vessel was bound.
2. The blockade of the port of its
destination, or the breaking out
of an epidemic after the
agreement.
3. The prohibition to receive in
said port the goods which make
up the cargo of the vessel.
4. The detention or embargo of
the same by order of the
government, or for any other
reason independent of the will of
the ship agent.
5. The inability of the vessel to
navigate. cdasia
ARTICLE 641. If, after a voyage has
been begun, any of the first three
causes mentioned in the foregoing
article should occur, the sailors shall be
paid at the port which the captain may
deem advisable to make for the benefit
of the vessel and cargo, according to
the time they may have served
thereon; but if the vessel is to continue
its voyage, the captain and the crew
may mutually demand the enforcement
of the contract. In case of the
occurrence of the fourth cause, the
crew shall continue to be paid half
wages, if the agreement is by month;
but if the detention should exceed
three months, the contract shall be
rescinded and the crew shall be paid
what they should have earned
according to the contract if the voyage
had been concluded. And if the
agreement should be for a fixed sum
for the voyage, the contract must be
complied within the terms agreed upon.
In the fifth case, the crew shall have no
other right than to collect the wages
earned; but if the disability of the
vessel should have been caused by the
negligence or lack of skill of the
captain, engineer, or sailing mate, they

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Transportation Laws_Maritime Commerce_RGCNotes2016

shall indemnify the crew for the

damages suffered, always without
prejudice to the criminal liability which
may be proper.
ARTICLE 643. If the vessel and her
cargo should be totally lost, by reason
of capture or wreck, all rights shall be
extinguished, both as regards the crew
to demand any wages whatsoever, and
as regards the ship agent to recover
the advances made. If a portion of the
vessel or of the cargo, or of both,
should be saved, the crew engaged on
wages, including the captain, shall
retain their rights on the salvage, so far
as they go, on the remainder of the
vessel as well as on the amount of the
freightage of the cargo saved; but
sailors who are engaged on shares shall
not have any right whatsoever on the
salvage of the hull, but only on the
portion of the freightage saved. If they
should have worked to recover the
remainder of the shipwrecked vessel
they shall be given from the amount of
the salvage an award in proportion of
the efforts made and to the risks,
encountered in order to accomplish the
salvage.
ARTICLE 647. The officers and the
crew of the vessel shall be free from all
obligations if they deem it proper, in
the following cases: 1. If, before
beginning the voyage, the captain
attempts to change it, or a naval war
with the power to which the vessel was
destined occurs. 2. If a disease should
break out and be officially declared an
epidemic in the port of destination. 3. If
the vessel should change owner or
captain
D. Supercargoes
ARTICLE 649. Supercargoes shall
discharge on board the vessel the
administrative duties which the ship
agent or the shippers may have assigned
to them; they shall keep an account and
record of their transactions in a book
which shall have the same conditions
and requisites as required for the
accounting book of the captain, and they
shall respect the latter in his capacity as
chief of the vessel. cdtai
The powers and responsibilities of the
captain shall cease, when there is a
supercargo, with regard to that part of
the administration legitimately conferred
upon the latter, but shall continue in

force for all acts which are inseparable

from his authority and office.
ARTICLE 650. All the provisions
contained in the second section of Title
III, Book II, with regard to capacity,
manner of making contracts, and
liabilities of factors, shall be applicable to
supercargoes.
ARTICLE 651. Supercargoes may not,
without special authorization or
agreement, make any transaction for
their own account during the voyage,
with the exception of the ventures which,
in accordance with the custom of the
port of destination, they are permitted to
do. Neither shall they be permitted to
invest in the return trip more than the
profits from the ventures, unless there is
an express authorization from the
principals.
E. Complement of the Ship
ARTICLE 648. By the complement of a
vessel shall be understood all the
persons on board, from the captain to
the cabin boy, necessary for the
management, maneuvers, and service,
and therefore, the complement shall
include the crew, the sailing mates,
engineers, stokers and other employees
on board not having specific
designations; but it shall not include the
passengers or the persons whom the
vessel is transporting.
LIMITED LIABILITY RULE
A. Abandonment
ARTICLE 587. The ship agent shall also
be civilly liable for the indemnities in
favor of third persons which may arise
from the conduct of the captain in the
care of the goods which he loaded on the
vessel; but he may exempt himself
therefrom by abandoning the vessel with
all her equipments and the freight it may
have earned during the voyage.
B. When Applicable
ARTICLE 587 (see above)
ARTICLE 590. The co-owners of a vessel
shall be civilly liable in the proportion of
their interests in the common fund, for
the results of the acts of the captain,
referred to in Article 587. Each co-owner
may exempt himself from this liability by
the abandonment, before a notary, of the
part of the vessel belonging to him.
ARTICLE 837. The civil liability incurred
by the shipowners in the case prescribed

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Transportation Laws_Maritime Commerce_RGCNotes2016

in this section, shall be understood as

limited to the value of the vessel with all
its appurtenances and freightage earned
during the voyage.
ARTICLE 643. If the vessel and her
cargo should be totally lost, by reason of
capture or wreck, all rights shall be
extinguished, both as regards the crew
to demand any wages whatsoever, and
as regards the ship agent to recover the
advances made.
If a portion of the vessel or of the cargo,
or of both, should be saved, the crew
engaged on wages, including the
captain, shall retain their rights on the
salvage, so far as they go, on the
remainder of the vessel as well as on the
amount of the freightage of the cargo
saved; but sailors who are engaged on
shares shall not have any right
whatsoever on the salvage of the hull,
but only on the portion of the freightage
saved. If they should have worked to
recover the remainder of the
shipwrecked vessel they shall be given
from the amount of the salvage an award
in proportion of the efforts made and to
the risks, encountered in order to
accomplish the salvage.
C. Exceptions
D. How Claims are Satisfied
IV. RISKS, DAMAGES, and ACCIDENTS in
MARITIME COMMERCE

A. Averages
i.
Definition
ii.
Ordinary or Petty Expenses
iii.
Simple or Particular Average
iv.
General Average
1.
Requisites,
inclusions
2.
Formalities
3.
Jettison
4.
Jason Clause
B. Maritime Protest
i.
When Proper
C. Collision
i.
Doctrine of Inscrutable Fault
ii.
Rules on Collision of Vessels
iii.
Doctrine of Error in Extrimis
D. Salvage Law (see page 277, Chavez)
V. SPECIAL CONTRACTS OF MARITIME
COMMERCE
A. Charter Party
i.
Kinds
ii.
Effects
iii.
Formal and Substantial
Requirements
iv.
Right to Rescind
B. Bill of Lading
i.
Definitions
ii.
Functions or 3-fold character
of BOL
iii.
Kinds of BL
iv.
Period of Bringing a Claim
C. Loans on Bottomry and
Respondentia

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