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Jul 9, 2008


A. Real and Hypothecary Nature

  • limitation of liability of agents (and owners) to the actual value of the vessel and freight money - abandonment of the vessel is required EXCEPT if the vessel is totally lost
  • right to retain the cargo and the embargo and detention of vessel
B. Acts and Conduct of Captain

- the common carrier and/or ship agent (solidary) are liable to third persons EXCEPT when there is abandonment (no liability)
- co-owner also liable to third persons UNLESS he renounces, before a notary, his interest in the vessel

C. Loss of Vessel

- all rights are extinguished
- if partial loss of vessel only, captain and crew on wages have a right to salvage the ship and goods. HOWEVER, sailors on shares have a right to the cargo only EXCEPT if they worked for salvage, in which case they are entitled to compensation for their salvage service.

D. Collisions

- Liability of ship owner is limited to the value of the vessel and its appurtenances and freight.

E. Exceptions to Limited Liability Rule
  1. injury or death to passenger due to fault of shipowner or concurring negligence of shipowner and captain
  2. vessel is insured
  3. workmen's compensation claims
  4. expenses for repairs and provisioning of the ship prior to departure

A. Protest
- a condition precedent to make owner of the vessel liable in case of collision

B. Type of Property

- Vessels are personal property but they partake of the nature of real property because of their value and importance to world commerce.
- The person registered as owner is presumed the owner of the vessel.
- The sale of vessels must be registered to the Maritime Industry Authority in order to affect third persons.

C. Manifest

- a declaration of the entire cargo
- distinguish from a bill of lading, which is only a declaration of particular cargo

D. Ship Mortgage

(1) PURPOSE: construction, acquisition, purchase of vessels, initial operatio of vessels


  • mortgage recorded with the Coast Guard
  • affidavit of good faith
  • no stipulation that the mortgagee waives preferred status of the mortgage
- not covered by preferred mortgage
  • court fees and taxes
  • crew's wages
  • general averages
  • maritime lien prior to the registration of mortgage
  • salvage
  • damages for tort
  • preferred mortages registered prior in time


- suit in rem in admiralty
- vessel is arrested (replevin to recover possession) and made a party
- applicant files a bond
- filed with the Regional Trial Court


- suit in rem
- allege credit and prove it

  • for the benefit of the vessel
  • necessary for the continuation of the voyage
  • credit is extended to the vessel
  • necessity of such extension of credit
  • the extension of credit is ordered by authorized persons
Determine if Maritime Lien Exists
  • depends on the law of the country where the supplies were furnished which must be pleaded and proved
  • Lauritzen-Romero-Rhobitis trilogy of cases
- multiple-contact test:
  1. place of wrongful act
  2. law of the flag
  3. allegiance or domicile of the injured person
  4. allegiance of the owner
  5. place of contract
  6. inaccessibility of foreign forum
  7. law of the forum
  • factors provided in the Restatement of Conflict of Laws
- if no choice of law:
  1. place of contracting
  2. place of negotiation
  3. place of performance
  4. location
  5. domicile or residence of parties


A. Ship Owner
- primarily liable

B. Ship Agent
- solidarily liable with ship owner
  • capacity to trade
  • recorded in the merchant's registry of the province
- POWERS: discharge duties of the captain
- LIMITATION ON POWERS: needs resolution of the majority of the co-owners UNLESS previously this authority is included in the certificate of appointment
- If the ship agent enters into contract of insurance without authority, he shall be held subsidiarily liable with the insurer.
- REIMBURSEMENT AND LIABILITIES: accion ejectuva (expenses or profits) -- resolution of majority and signatures of persons who voted

C. Part Owners
- if more than one, presumed partners
- vote of majority; if none, the owner with the largest interest; if equal, then divided by lot

D. Sale
- by public auction UNLESS owners unanimously agree otherwise
- owner of vessel is preferred

E. Discharge of Captain and Crew
  • Before Voyage: salary earned, no indemnity EXCEPT express and specific agreement
  • During Voyage: salaries until return to port UNLESS cause of discharge
  • Contract for Definite Period: no discharge EXCEPT subordination in serious matters, robbery, theft, habitual drunkenness, damage to ship caused by malice or manifest/proven negligence
  • Captain is Owner: no discharge UNLESS return his interest
F. Captains and Masters

  1. Filipinos
  2. legal capacity
  3. skill, capacity, and qualifications necessary to perform their jobs
  4. not disqualified
  1. general agent of shipowner
  2. commander and technical director of the vessel
  3. representative of the country under whose flag he navigates
G. Pilotage
- reponsible for damages/injuries due to his fault EXCEPT force majeure
- COLLISIONS: colliding vessel deemed prima facie responsible so burden of proof is on it


A. Bareboat
- whole vessel is chartered but the charterer provides the crew
- becomes a private carrier
- charterer is the owner pro hac vice and therefore liable to third persons

B. Contract of Affreightment
- the vessel, together with its crew, is leased
- common carrier
- liability to third persons rests with the shipowner

  • Time
  • Voyage
Requisites of a Valid Charter Party
  1. consent
  2. existing vessel which should be placed at the disposition of the shipper
  3. freight
  4. drawn in duplicate and signed by the parties
C. Demurrage
- charterer is responsible for sum of money in case vessel is detained in port beyond the period allowed in the contract

D. Dead Freight
- charterer failed to occupy the leased portion of the vessel


Distinguish from Simple Loan
  • RATE OF INTEREST: Bottomry is not subject to Usury Law while Simple Loan is subject to a fixed ceiling rate in the Usury Law.
  • EXISTENCE OF MARINE RISK: This is required in Bottomry but not in Simple Loan.
  • REGISTRATION: Bottomry must be registered in the registry of vessels in order to affect third persons while Simple Loan needs no registration.
  • REQUISITES: Bottomry is govered by the Code of Commerce while Simple Loan by obligations and contracts.
  • PREFERENCE: In Bottomry, last lender is given preference while Simple Loan, the first lender.


A. Simple Average
- not inured to the common benefit of all persons interested
- shipowner bears loss

B. General Average
- all damages are deliberately caused to save the vessel or the cargo

  1. common danger which must be imminent and real
  2. for the common safety, part of the vessel or cargo is deliberately sacrificed
  3. successful saving of the vessel or cargo
  4. taking of legal steps and authority
- those who benefited bears the loss
- owners of goods sacrificed are entitled to indemnity EXCEPT:
  • goods carried on deck
  • goods not recorded in the books
  • fuel for the vessel if there is more than enough for the voyage

- even owner of a third vessel liable if it forced a vessel to hit another
- no applicability of "last clear chance" rule: if both parties are negligent, both must answer for the damage- no applicability of "contributory negligence" rule

A. Third Person at Fault
- indemnify others
- ship captain is civilly liable to the owner
- abandonment and limited liability rules apply

B. Doctrine of Inscrutable Fault
- if cannot determine who is at fault: both vessels bear the loss
- but shipper may go after the owner and captain if both have been negligent

C. Protest
- required of the captain only, not the passenger


  1. captain must determine if there is a well-founded fear of seizure, etc.
  2. assemble the officers
  3. summon all persons interested if present but they shall have no vote
  4. officers determine danger and vote on it. The captain has the deciding vote.
  5. enter into agreement and all protests/objections entered into logbook


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