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 624).

WHAT IS THE DUTY OF THE CAPTAIN UPON

ARRIVAL AT THE PORT OF DESTINATION REGARDING THE
DELIVERY OF THE CARGO?
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.
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
(Article 625).
1.

OTHER OFFICERS AND CREW

WHAT IS MARITIME PROTEST?

Maritime protest is a written statement
under oath, made by the master of a vessel, after
the occurrence of an accident or disaster in which
the vessel or cargo is lost or destroyed, with
respect to the circumstances attending such
occurrence. It is usually intended to show that the
loss or damage resulted from a peril of the sea, or
for some other cause for which neither the master
nor the owner was responsible, and concludes with
the protestation against any liability of the owner
for such loss or damage.
WHAT ARE THE INSTANCES WHERE PROTEST IS
REQUIRED?

WHO SHALL TAKE PLACE OF THE CAPTAIN IN

ABSENCE, SICKNESS OR DEATH OF THE

CASE OF
LATTER?

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
627).
(a) Contracts and Formalities - Article
634
WHO MAY ENLIST THE CREW?

1.
2.
3.

4.

When the vessel makes an arrival under

stress (Article 612);
Where the vessel is shipwrecked (Articles
612, 624 and 843);
Where the vessel has gone through a
hurricane or the captain believes that the
cargo has suffered damages or averages
(Article 624); and
Maritime collisions (Article 835)

WHEN AND
PROTEST BE FILED?

WHERE

SHOULD

MARITIME

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 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 (Article
634).
In case however, of Philippine vessels
operating in the coastwise trade or on the high
seas, no officer or member of the crew may be
hired who is not a citizen of the Philippines (Section
829, Tariff and Customs Code).
(b)

Duties and Liabilities Article 635

MAY A SAILOR CONTRACTED TO SERVE A VESSEL

RESCIND HIS CONTRACT?
A sailor 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.

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.

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.

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 624).

Furthermore, he shall lose the wages earned on

his first contract, to the benefit of the vessel for
which he had signed.

If, without obtaining said permission, the sailor

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.

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

2
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 (Article 635).
(c)

Rights - Articles 636 to 647

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:

WHAT IS THE DURATION OF THE SAILORS CONTRACT?

1.
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 636).
WHAT ARE THE GROUNDS FOR WHICH A SAILOR MAY
BE DISCHARGED BY THE CAPTAIN?

2.

Neither may the captain discharge a seaman

during the time of his contract except for just
cause, the following being considered as such:
1.
2.
3.
4.
5.

6.

The perpetration of a crime which disturbs

order on the vessel.
Repeated
insubordination,
want
of
discipline, or non-fulfillment of the service.
Repeated incapacity and negligence in the
fulfillment of the service he should render.
Habitual drunkenness.
Any occurrence which incapacitates the
seaman to perform the work entrusted to
him, with the exception of that provided in
Article 644.
Desertion.

3.

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 (Article 637).
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.
WHAT IS THE EFFECT ON THE CREW OF THE
REVOCATION OF THE VOYAGE OR CHANGE OF
DESTINATION?

4.

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 rendered to
the vessel up to the date of the revocation.
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.
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.
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

3
though the voyage should be shortened to a
nearer point, this shall not give rise to a reduction
in the wages agreed upon.

departure of ships or goods from some or

all the ports of such state until further
order.

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 638).

IN CASE THE VOYAGE IS REVOKED FOR A JUST

CAUSE, DO SAILORS HAVE A RIGHT TO BE PAID, IF SO,
HOW MUCH?

HOWEVER: If the revocation of the voyage

should arise from a just cause independent of the
will of the ship agent and charterers, and the
vessel should not have left the port, the members
of the crew shall have no other right than to
collect the wages earned up to the day on which
the revocation took place (Article 639).
WHAT ARE JUST CAUSES FOR THE REVOCATION OF THE
VOYAGE?
The following shall be just causes for the
revocation of the voyage.
1.
2.
3.
4.

5.

(B)

A declaration of war or interdiction of

commerce with the power to whose
territory the vessel was bound.
The blockade of the port of its destination,
or the breaking out of an epidemic after
the agreement.
The prohibition to receive in said port the
goods which make up the cargo of the
vessel.
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.
The inability of the vessel to navigate
(Article 640).

WHAT ARE: (A) INTERDICTION OF COMMERCE;

BLOCKADE; AND (C) EMBARGO?

(a)

(b)

(c)

Interdiction of commerce between two

countries is a government prohibition of
commercial intercourse, intended to bring
about an entire cessation for the time being
of all trade whatever.
Blockade is a circumvallation round a place
by which all foreign connection and
correspondence is, as far as human power
can effect it, to be cut off. It is the actual
investment of a port or place by a hostile
force fully competent, under ordinary
circumstances, to cut off all communication
therewith, so arranged or disposed as to be
able to apply its force to every point of
practicable access or approach to the port
or place so invested.
Embargo is a proclamation or order of
state, usually issued in time of war or
threatened hostilities,
prohibiting
the

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 shall
indemnify the crew for the damages suffered,
always without prejudice to the criminal liability
which may be proper (Article 641).
WHEN ARE SAILORS NOT ENTITLED TO BE
PAID WHENEVER THE VOYAGE IS REVOKED?
If the crew have been engaged on shares, they
shall not be entitled, by reason of the revocation,
delay, or greater extension of the voyage, to
anything but the proportionate part of the
indemnity which way be paid into the common
funds of the vessel by the persons liable for said
occurrences (Article 642).
In the foregoing case, a form of partnership is
formed between the ship owner and the sailors for
which both of them should share in the profits and
losses, and therefore, in case the voyage is
revoked or delayed, the sailors are not entitled to
anything other than a proportionate part of the
indemnity which may be paid to the common fund
of the vessel.
WHAT IS THE EFFECT OF TOTAL OR PARTIAL LOSS OF
THE VESSEL ON THE RIGHT OF THE CREW TO WAGES,
AND SHIP AGENT FOR ADVANCES MADE?

4
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 643)
(Note: last sentence which is bracketed has been
repealed by the Salvage Law, Section 8, Act No.
2616).
The aforesaid provision, however, has no
effect on the right of the crew under the
Employees Compensation provision of the Labor
Code of the Philippines (P.D. 412, as amended).
Thus, the widows of the captain, machinist and
patron of the a vessel who perished as a result of
the sinking of the vessel where they were working,
are entitled to compensation under the said law
(Enciso vs. Dy-Liaco, 57 Phil. 446; Abueg, et al. vs.
San Diego, 44 O.G. 80).

If a sailor 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
1.
2.

3.

4.

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 sailor 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 645).
UPON WHAT ASSETS DO THE CREW HAVE A LIEN FOR
UNPAID WAGES?

IS A SAILOR WHO FALLS SICK DURING THE VOYAGE

ENTITLED TO
ATTENTION?

WAGES

AND

COSTS

OF

MEDICAL

A sailor 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 the proceeds of the freightage
the cost of the attendance and cure (Article 644).
The sailor shall be entitled to the benefits
provided for by the Labor Code of the Philippines
(Abueg, et al. vs. San Diego, supra).
WHAT IS THE EFFECT OF THE DEATH OF THE SAILOR
DURING THE VOYAGE ON HIS RIGHT T WAGES NOT YET
RECEIVED?

The vessel with her engines, rigging,

equipment, and freightage shall be liable for the
wages earned by the crew engaged per month or
for the trip, the liquidation and payment to take
place between one voyage and the other.
After a new voyage has been undertaken,
credits of such kind pertaining to the preceding
voyage shall lose their right of preference (Article
646).
WHICH IS MORE SUPERIOR LIEN, THAT IN FAVOR OF
THE CREW FOR UNPAID WAGES OR THAT CREATED IN
FAVOR OF A MORTGAGEE?

The lien created in favor of the crew for their

wages take preferences over a lien created by
giving the ship as security for money borrowed.
The crew therefore, has a prior lien upon a ship
over the lien created by a chattel mortgage
(McMicking vs. El Blanco Espanol-Filipino, 13 Phil.
429), and the purchaser of the vessel would be
obliged to respect the lien created by unpaid
wages of the crew (Philippine Shipping Co. vs.
Garcia, 6 Phil. 281).

5
WHEN ARE OFFICERS AND CREW FREE FROM ALL
OBLIGATIONS THEY CONTRACTED?

ventures, unless there is an express authorization

from the principals (Article 651).

The officers and the crew of the vessel shall be

free from all obligations if they deem it proper, in
the following cases:

A.

ACCIDENTS AND DAMAGES IN MARITIME

COMMERCE
1. AVERAGES

1.

2.
3.

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.
If a disease should break out and be
officially declared an epidemic in the port
of destination.
If the vessel should change owner or
captain (Article 647).

(a.)Nature and Kinds - Articles 806 to 808

WHAT ARE CONSIDERED AS AVERAGES?
The following shall be considered averages:
1.

SUPERCARGOES, ARTICLES 649-651

2.
WHO IS A SUPERCARGO?
Supercargo is a person especially employed by the
owner of a cargo to take charge of and sell to the
best advantage merchandise which has been
shipped, and to purchase returning cargoes and to
receive freight, as he may be authorized.
WHAT ARE THE DUTIES OF A SUPERCARGO? WHAT IS
THE EFFECT OF DESIGNATION OF A SUPERCARGO ON
THE POWERS AND RESPONSIBILITIES OF THE CAPTAIN?

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. cdta
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 649).
WHAT TRANSACTIONS ARE NOT ALLOWED TO BE
ENTERED INTO BY SUPERCARGOES?

All extraordinary or accidental expenses

which may be incurred during the voyage
in order to preserve the vessel, the cargo,
or both.
Any damages or deteriorations which the
vessel may suffer from the time it puts to
sea from the port of departure until it casts
anchor in the port of destination, and
those suffered by the merchandise from
the time they are loaded in the port of
shipment until they are unloaded in the
port of their consignment (Article 806).

The petty and ordinary expenses incident to

navigation, such as those of pilotage of coasts and
ports, those of lighterage and towage, anchorage,
inspection, health, quarantine, lazaretto, and other
so-called port expenses, costs of barges and
unloading until the merchandise is placed on the
wharf, and any other usual expenses of
navigation, shall be considered ordinary expenses
to be defrayed by the shipowner, unless there is
an express agreement to the contrary (Article
807).
WHAT ARE THE KINDS OF AVERAGES?
Averages shall be:
1.
2.

Simple or particular.
General or gross (Article 808).
(1)

Neither shall they be permitted to invest in

the return trip more than the profits from the

OR

DEFINITIONS - ARTICLE 809

WHAT

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.

SIMPLE
PARTICULAR

ARE
AVERAGES?

SIMPLE

OR

PARTICULAR

Simple of particular averages shall include all

the expenses and damages caused to vessel or to
her cargo which have not inured to the common
benefit and profit of all persons interested in the
vessel and her cargo (Article 808). If a damage is
not general average, the same can be considered
a particular average.

6
As a general rule, simple or particular
averages shall include all the expenses and
damages caused to the vessel or to her cargo
which have not inured to the common benefit and
profit of all the persons interested in the vessel
and her cargo, and especially the following:
1.

The losses suffered by the cargo from the

time of its embarkation until it is unloaded,
either on account of inherent defect of the
goods or by reason of an accident of the
sea or force majeure, and the expenses
incurred to avoid and repair the same.
2. The losses and expenses suffered by the
vessel in its hull, rigging, arms, and
equipment, for the same causes and
reasons, from the time it puts to sea from
the port of departure until it anchors and
lands in the port of destination.
3. The losses suffered by the merchandise
loaded on deck, except in coastwise
navigation, if the marine ordinances allow
it.
4. The wages and victuals of the crew when
the vessel is detained or embargoed by
legitimate order or force majeure, if the
charter has been contracted for a fixed
sum for the voyage.
5. The necessary expenses on arrival at a
port, in order to make repairs or secure
provisions.
6. The lowest value of the goods sold by the
captain in arrivals under stress for the
payment of provisions and in order to save
the crew, or to meet any other need of the
vessel, against which the proper amount
shall be charged.
7. The victuals and wages of the crew while
the vessel is in quarantine.
8. The loss inflicted upon the vessel or cargo
by reason of an impact or collision with
another,
if
it
is
accidental
and
unavoidable.
If the accident should occur through
the fault or negligence of the captain, the
latter shall be liable for all the losses caused.
9.

Any loss suffered by the cargo through the

fault, negligence, or barratry of the
captain or of the crew, without prejudice to
the right of the owner to recover the
corresponding indemnity from the captain,
the vessel, and the freightage (Article
809).

EFFECTS - ARTICLE 810

WHO

BEARS
AVERAGES?

Since simple or particular averages do mot inure

to the common benefit, the owner of the goods
that suffered the damage bears the loss. Article
810 of the Code of Commerce provides that the
owner of the goods which gave rise to the expense
or suffered the damage shall bear the simple or
particular averages. This rule on simple or
particular average is consistent with the maxim
res perit domino.
However, under Article 732 of the Code of
Commerce, if the vessel or goods are
hypothecated by a loan on bottomry or
respondentia, the lender shall also bear the loss
in proportion to his interest.
(2)
(A)

AND

PARTICULAR

DEFINITIONS
ARTICLES 811, 817, 818

WHAT ARE GENERAL OR GROSS AVERAGES?

As a general rule, general or gross averages
shall include all the damages and expenses which
are deliberately caused in order to save the
vessel, its cargo, or both at the same time, from a
real and known risk, and particularly the following:
1.

2.

3.

4.

5.
6.

SIMPLE

GROSS
GENERAL

The goods or cash invested in the

redemption of the vessel or of the cargo
captured by enemies, privateers, or
pirates, and the provisions, wages, and
expenses of the vessel detained during the
time the settlement or redemption is being
made.
The goods jettisoned to lighten the vessel,
whether they belong to the cargo, to the
vessel, or to the crew, and the damage
suffered through said act by the goods
which are kept on board.
The cables and masts which are cut or
rendered useless, the anchors and the
chains which are abandoned, in order to
save the cargo, the vessel, or both.
The expenses of removing or transferring
a portion of the cargo in order to lighten
the vessel and place it in condition to
enter a port or roadstead, and the damage
resulting therefrom to the goods removed
or transferred.
The damage suffered by the goods of the
cargo by the opening made in the vessel in
order to drain it and prevent its sinking.
The expenses caused in order to float a
vessel intentionally stranded for the
purpose of saying it.

7
7.

The damage caused to the vessel which

had to be opened, scuttled or broken in
order to save the cargo.
8. The expenses for the treatment and
subsistence of the members of the crew
who may have been wounded or crippled
in defending or saying the vessel.
9. The wages of any member of the crew
held as hostage by enemies, privateers, or
pirates, and the necessary expenses which
he may incur in his imprisonment, until he
is returned to the vessel or to his domicile,
should he prefer it.
10. The wages and victuals of the crew of a
vessel chartered by the month, during the
time that it is embargoed or detained by
force majeure or by order of the
government, or in order to repair the
damage caused for the common benefit.
11. The depreciation resulting in the value of
the goods sold at arrival under stress in
order to repair the vessel by reason of
gross average.
12. The expenses of the liquidation of the
average.
(B)

WHAT
AVERAGE?

ESSENTIAL
REQUISITES - ARTICLES 813, 814,
860

2.
3.

There must be voluntary sacrifice of a part for the

benefit of the whole in order to justify general
average. For example, it may involve a voluntary
jettison or casting away of some portion of the
associated interests for the purpose of avoiding a
common peril from the whole to a particular
portion of those interests (Compagnie de
Commerce vs. Hamburg Amerika, supra). It cannot
involve a damage which resulted beyond the
contract of the captain and crew without any
intention on their part. As a matter of fact, the
Code of Commerce prescribes a procedure in
deciding whether a sacrifice should be made (See
Article 813).
Normally, the sacrifice is made though the jettison
of the cargo or part of the ship is thrown
overboard during the voyage. However, there can
also be general averages even if the sacrifice was
not made during the voyage in at least two cases:

GENERAL

1.

In A. Magsaysay, Inc. vs. Agan, No. L-6393, January

31, 1955, the Supreme Court adopted the
requisites of general averages stated by Senator
Tolentino in his commentaries on the Code of
Commerce:

2.

ARE

THE

REQUISITES

OF

1.
2.

There must be a common danger;

That for the common safety part of the
vessel or of the cargo or both is
sacrificed deliberately;
3. That from the expenses or damage
caused follows the successful saving of
the vessel and cargo; and
4. That the expenses or damages should
have been incurred or inflicted after
taking
proper
legal
steps
and
authority.
FIRST REQUISITE: COMMON DANGER
The requirement that there must be common
means:
1.

That both the ship and the cargo, after it

has been loaded, are subject to the same
danger, whether during the voyage, or in
the port of loading or unloading;

That the danger arises from the accidents

from the sea, dispositions of the authority,
or faults of men;
That the circumstances producing the peril
should be ascertained and imminent or
may rationally be said to be certain and
imminent (A. Magsaysay, Inc. vs. Agan,
supra).
SECOND REQUISITE: DELIBERATE SACRIFICE

Where the sinking of a vessel is necessary

to extinguish a fire in a port, roadstead,
creek or bay; and
Where cargo is transferred to lighten the
ship on account of a storm to facilitate
entry into the port. These cases are
covered by Articles 816, 817 and 818.

ARTICLE 816. In order that the goods

jettisoned may be included in the gross average
and the owners thereof be entitled to indemnity, it
shall be necessary insofar as the cargo is
concerned that their existence on board be proven
by means of the bill of lading; and with regard to
those belonging to the vessel, by means of the
inventory prepared before the departure in
accordance with the first paragraph of Article 812.
ARTICLE 817. If in lightening a vessel on
account of a storm, in order to facilitate its entry
into a port or roadstead, part of the cargo should
be transferred to lighters or barges and be lost,
the owner of said part shall be entitled to
indemnity, as if the loss had originated from a
gross average, the amount thereof being
distributed between the vessel and cargo from
which it came.
If, on the contrary, the merchandise
transferred should be saved and the vessel should

8
be lost, no liability may be demanded of the
salvage.
ARTICLE 818. If, as a necessary measure
to extinguish a fire in a port, roadstead, creek, or
bay, it should be decided to sink any vessel, this
loss shall be considered gross average, to which
the vessels saved shall contribute.
It should be noted that the loss can no
longer be considered a general average if the
thing was inevitably lost. Consistently, Rule IV of
the York-Antwerp Rules provides that loss or
damage sustained by cutting away wreck or parts
of the ship which have been previously carried
away or are effectively lost by accident shall not
be made good as general average.
THIRD REQUISITE: SACRIFICE MUST BE SUCCESSFUL
NO general contribution can be demanded if the
vessel and other cargo that are sought to be saved
were in fact not saved. Consistently, Article 860 of
the Code of Commerce provides:
ARTICLE 860. If,
notwithstanding the
jettison of merchandise, breakage of masts, ropes,
and equipment, the vessel shall be lost running
the same risk, no contribution whatsoever by
jettison of gross average shall be proper.
The owners of the goods saved shall not
be liable for the indemnification of those
jettisoned, lost, or damaged.
For example, goods belonging to Mr. A were
sacrificed to save the ship from sinking because of
a typhoon. There will be no general average
contribution if the ship still sank because of the
same typhoon. Hence, the sacrifice was not
successful in saving the ship.
However, if the ship was saved from the typhoon,
there will be liability for general average
contribution even if the vessel will be
subsequently lost for some other reason during
the voyage. Thus, Article 861 of the Code of
Commerce provides:
ARTICLE 861.
If, after the vessel has
been saved from the risk which gave rise to the
jettison, it should be lost through another accident
taking place during the voyage, the goods saved
and existing from the first risk shall continue liable
to contribution by reason of the gross average
according to their value in the condition in which
they may be found, deducting the expenses
incurred in saving them.
FOURTH REQUISITE:

COMPLIANCE WITH LEGAL STEPS

The expenses or damages should have been

incurred or inflicted after taking proper legal steps
and authority under Articles 813 to 815 of the
Code of Commerce which provide:
ARTICLE 813. In order to incur the
expenses and cause the damages corresponding
to gross average, there must be a resolution of the
captain, adopted after deliberation with the sailing
mate and other officers of the vessel, and after
hearing the persons interested in the cargo who
may be present.
If the latter shall object, and the captain
and officers or a majority of them, or the captain,
if opposed to the majority, should consider certain
measures necessary, they may be executed under
his responsibility, without prejudice to the right of
the shippers to proceed against the captain before
the competent judge or court, if they can prove
that he acted with malice, lack of skill, or
negligence.
If the persons interested in the cargo,
being on board the vessel, have not been heard,
they shall not contribute to the gross average,
their share being chargeable against the captain,
unless the urgency of the case should be such that
the time necessary for previous deliberations was
wanting.
ARTICLE 814. The resolution adopted to cause
the damages which constitute general average
must necessarily be entered in the log book,
stating the motives and reasons for the dissent,
should there be any, and the irresistible and
urgent causes which impelled the captain if he
acted of his own accord.
In the first case the minutes shall be
signed by all the persons present who could do so
before taking action, if possible; and if not, at the
first opportunity. In the second case, it shall be
signed by the captain and by the officers of the
vessel.
In the minutes, and after the resolution,
shall be stated in detail all the goods jettisoned,
and mention shall be made of the injuries caused
to those kept on board. The captain shall be
obliged to deliver one copy of these minutes to the
maritime judicial authority of the first port he may
make, within twenty-four hours after his arrival,
and to ratify it immediately under oath.
ARTICLE 815. The captain shall direct the
jettison, and shall order the goods cast overboard
in the following order:
1.

Those which are on deck, beginning with

those which embarrass the maneuver or
damage of the vessel, preferring, if
possible, the heaviest ones with the least
utility and value.

9
2.

Those which are below the upper deck,

always beginning with those of the
greatest weight and smallest value, to the
amount
and
number
absolutely
indispensable.
(C)

EFFECTS
ARTICLE 812

WHO BEARS THE GROSS OR GENERAL AVERAGE?

Gross or general average shall be borne by
those who benefited from the sacrifice. These
include the ship owner and the owners of the
cargoes that were saved. Contribution may also be
imposed on the insurers of the vessel or cargoes
that were saved as well as lenders on bottomry or
respondetia (Articles 732 and 859).
ARTICLE 812.
In order to satisfy the
amount of the gross or general averages, all the
persons having an interest in the vessel and cargo
therein at the time of the occurrence of the
average shall contribute.

HOW SHALL JETTISON BE MADE?

ARTICLE 815. The captain shall direct the
jettison, and shall order the goods cast overboard
in the following order:

2.

Those which are on deck, beginning with

those which embarrass the maneuver or
damage of the vessel, preferring, if
possible, the heaviest ones with the least
utility and value.
Those which are below the upper deck,
always beginning with those of the
greatest weight and smallest value, to the
amount
and
number
absolutely
indispensable.

ARTICLE 816. In order that the goods

jettisoned may be included in the gross average
and the owners thereof be entitled to indemnity, it
shall be necessary insofar as the cargo is
concerned that their existence on board be proven
by means of the bill of lading; and with regard to
those belonging to the vessel, by means of the
inventory prepared before the departure in
accordance with the first paragraph of Article 812.
(D)

JASON CLAUSES
RULES, RULE D)

(SEE

Although
the
Code
of
Commerce
provisions on averages are still in force, the parties
may, by stipulation in the charter party or any
written agreement, agree that the York-Antwerp
Rules shall be applied. In addition, the YorkAntwerp Rules may also be used to solve
controversies where no provision in the Code of
Commerce is in point because the said rules
embody the custom of maritime states. Jason
clause is a standard provision in maritime
commerce. It provides for uniform rules on
adjustment of averages in maritime accidents to
address the varied systems of determining the
same.
(B)

PROOF
AND
AVERAGES

LIQUIDATION

(1)

MODES
ARTICLES 846, 847, 848

OF

ARTICLE 846. Those interested in the

proof and liquidation of averages may mutually
agree and bind themselves at any time with
regard to the liability, liquidation, and payment
thereof. cdt

JETTISON - ARTICLES 815, 816

1.

adventure, but this shall not prejudice any

remedies which may be open against that party
for such fault.

YORK-ANTWERP

Rights to contribution in general average

shall not be affected, though the event which gave
rise to the sacrifice or expenditure may have been
due to the fault of one of the parties to the

In the absence of agreements, the following

rules shall be observed:
1. The proof of the average shall take place
in the port where the repairs are made, should any
be necessary, or in the port of unloading.
2. The liquidation shall be made in the port of
unloading, if it is a Philippine port.
3. If the average occurred outside of the
jurisdictional waters of the Philippines, or the
cargo has been sold in a foreign port by reason of
an arrival under stress, the liquidation shall be
made in the port of arrival.
4. If the average has occurred near the port
of destination, so that said port can be made, the
proceedings mentioned in Rules 1 and 2 shall be
held there.
ARTICLE 847. In the case where the
liquidation of the averages is made privately by
virtue of agreement, as well as when a judicial
authority intervened at the request of any of the
parties interested who do not agree thereto, all of
them shall be cited, and heard, should they not
have renounced this right.
Should they not be present or should the have
no legal representative, the liquidation shall be
made by the Consul in a foreign port, and where

10
there is none, by the competent judge or court,
according to the laws of the country and for the
account of the proper party.
When the representative is a person well
known in the place where the liquidation is made,
his intervention shall be admitted and shall
produce legal effects, even though he be
authorized only by a letter of the ship agent, the
shipper, or the insurer.
ARTICLE 848. Claims for averages shall
not be admitted if they do not exceed 5 per cent of
the interest which the claimant may have in the
vessel or in the cargo if it be gross average and 1
per cent of the goods damaged if particular
average, deducting in both cases the expenses of
appraisal, unless there is an agreement to the
country.
(2)

APPRAISAL OF GENERAL AVERAGE ARTICLES 855; 857

ARTICLE 855. The merchandise loaded

on the upper deck of the vessel shall contribute to
the gross average should they be saved; but there
shall be no right to indemnity if they should be lost
by reason of having been jettisoned for common
safety, except when the marine ordinances allow
their shipment in this manner in coastwise
navigation.
The same shall take place with that which
is on board and is not included in the bills of lading
or inventories, according to the cases.
In any case the shipowner and the captain
shall be liable to the shippers for the damages
from the jettison, if the storage on the upper deck
was made without the consent of the latter.
ARTICLE 857. After the appraisement of
the goods saved and of those lost which constitute
the gross average, has been concluded by the
experts, the repairs, if any, made on the vessel,
and in this case, the accounts of the same
approved by the persons interested or by the
judge or court, the entire record shall be turn over
to the liquidator appointed, in order that he may
proceed with the distribution of the average.
(3)

LIQUIDATION OF GENERAL AVERAGE ARTICLES 858, 865 TO 869

ARTICLE 858. In order to effect the

liquidation, the liquidator shall examine the
protest of the captain, comparing it, if necessary,
with the log book, and all the contracts which may
have been made among the persons interested in
the
average,
the
appraisements,
expert
examinations, and accounts of repairs made. If, as

a result of this examination, he should find any

defect in the procedure which might injure the
rights of the person interested or affect the liability
of the captain, he shall call attention thereof in
order that it may be corrected, if possible, and
otherwise he shall include it in the exordial of the
liquidation.
Immediately thereafter he shall proceed
with the distribution of the amount of the average,
for which purpose he shall fix:
1. The contributing capital, which he shall
determine by the value of the cargo, in accordance
with the rules established in Article 854.
2. That of the vessel in her actual condition,
according to the statement of experts.
3. The 50 per cent of the amount of the
freightage, deducting the remaining 50 per cent
for wages and maintenance of the crew.
After the amount of the gross average
been determined in accordance with
provisions of this Code, it shall be distributed
rata among the goods which are to cover
same. cdasia

has
the
pro
the

ARTICLE 865. The distribution of the

gross average shall not be final until it has been
agreed to, or in the absence thereof, until it has
been approved by the judge or court, after an
examination of the liquidation and a hearing of the
persons interested who may be present or of their
representatives.
ARTICLE 866. After the liquidation has
been approved, it shall be the duty of the captain
to collect the amount of the contributions, and he
shall be liable to the owners of the goods
averaged for the damages they may suffer
through his delay or negligence.
ARTICLE 867. If the person contributing
should not pay the amount of the contribution at
the end of the third day after having been required
to do so, the goods saved shall be proceeded
against, in the request of the captain, until
payment has been made from their proceeds.
ARTICLE 868. If the person interested in
receiving the goods saved should not give security
sufficient to answer for the amount corresponding
to the gross average, the captain may defer the
delivery thereof until payment has been made.
aisadc
(4) LIQUIDATION
OF
PARTICULAR
AVERAGE - ARTICLE 869

11
ARTICLE 869. The experts whom the
court or the person interested may appoint, as the
case may be, shall proceed with the examination
and appraisement of the averages in the manner
prescribed in Articles 853 and 854, Rules 2 to 7,
insofar as they are applicable.
ARRIVALS UNDER STRESS
WHAT IS ARRIVAL UNDER STRESS?
A definition of arrival under stress can be
derived from Article 819 of the Code of Commerce.
Under the said provision, arrival under stress is
the arrival of a vessel at the nearest and most
convenient port which was decided upon after
determining that there is well-founded fear of
seizure, privateers, or pirates or by reason of any
accident of the sea disabling it to navigate, or by
lack of provisions.
Lack of provision should not be due from the
failure to take necessary provisions according to
usage and customs.
WHY IS IT IMPORTANT TO DETERMINE
ARRIVAL IS UNDER STRESS OR NOT?

ARTICLE 820. An arrival shall not be

considered lawful in the following cases:
1. If the lack of provisions should arise from
the failure to take the necessary provisions for the
voyage according to usage and customs, or if they
should have been rendered useless or lost through
bad stowage or negligence in their care.
2. If the risk of enemies, privateers, or
pirates should not have been well known,
manifest, and based on positive and provable
facts.
3. If the defect of the vessel should have
arisen from the fact that it was not repaired,
rigged, equipped, and prepared in a manner
suitable for the voyage, or from some erroneous
order of the captain.
4. When malice, negligence, want of
foresight, or lack of skill on the part of the captain
exists in the act causing the damage.

WHETHER

Because as a general rule, the captain and the

ship owner are made liable for deviation from
route during the voyage. Arrival under stress is an
exception.
(A)

order that they may make use thereof in the

manner they may consider advisable.

CAUSES - ARTICLES 819 AND

820

WHAT ARE THE CAUSES FOR ARRIVAL UNDER

STRESS?
ARTICLE 819. If during the voyage the
captain should believe that the vessel can not
continue the trip to the port of destination on
account of the lack of provisions, well-founded fear
of seizure, privateers, or pirates, or by reason of
any accident of the sea disabling it to navigate, he
shall assemble the officers and shall summon the
persons interested in the cargo who may be
present, and who may attend the meeting without
the right to vote; and if, after examining the
circumstances of the case, the reason should be
considered well-founded, the arrival at the nearest
and most convenient port shall be agreed upon,
drafting and entering the proper minutes, which
shall be signed by all, in the log book.
The captain shall have the deciding vote,
and the persons interested in the cargo, may make
the objections and protests they may deem
proper, which shall be entered in the minutes in

(B)

FORMALITIES
819, 822

ARTICLES

WHAT FORMALITIES MUST BE OBSERVED IN

ARRIVAL UNDER STRESS?
ARTICLE 819. If during the voyage the
captain should believe that the vessel can not
continue the trip to the port of destination on
account of the lack of provisions, well-founded fear
of seizure, privateers, or pirates, or by reason of
any accident of the sea disabling it to navigate, he
shall assemble the officers and shall summon the
persons interested in the cargo who may be
present, and who may attend the meeting without
the right to vote; and if, after examining the
circumstances of the case, the reason should be
considered well-founded, the arrival at the nearest
and most convenient port shall be agreed upon,
drafting and entering the proper minutes, which
shall be signed by all, in the log book.
The captain shall have the deciding vote,
and the persons interested in the cargo, may make
the objections and protests they may deem
proper, which shall be entered in the minutes in
order that they may make use thereof in the
manner they may consider advisable.
ARTICLE 822.
If in order to make repairs
to the vessel or because there is danger that the
cargo may suffer damage, it should be necessary
to unload, the captain must request authorization
from the competent judge or court for the

12
removal, and carry it out with the knowledge of
the person interested in the cargo, or his
representative, should there be any.
In a foreign port, it shall be the duty, of the
Philippine Consul, where there is one, to give the
authorization.
In the first case, the expenses shall be for
account of the ship agent or owner, and in
second, they shall be chargeable against
owners of the merchandise for whose benefit
act was performed.

the
the
the
the

If the unloading should take place for both

reasons,
the
expenses
shall
be
divided
proportionately between the value of the vessel
and that of the cargo.
(C)

EXPENSE - ARTICLES 821,

822

ARTICLE 821. The expenses of an arrival

under stress shall always be for the account of the
shipowner or agent, but they shall not be liable for
the damages which may be caused the shippers
by reason of the arrival provided the latter is
legitimate.
Otherwise, the ship agent and the captain
shall be jointly liable.
ARTICLE 822. If in order to make repairs
to the vessel or because there is danger that the
cargo may suffer damage, it should be necessary
to unload, the captain must request authorization
from the competent judge or court for the
removal, and carry it out with the knowledge of
the person interested in the cargo, or his
representative, should there be any.
In a foreign port, it shall be the duty, of the
Philippine Consul, where there is one, to give the
authorization.
In the first case, the expenses shall be for
the account of the ship agent or owner, and in the
second, they shall be chargeable against the
owners of the merchandise for whose benefit the
act was performed.
If the unloading should take place for both
reasons,
the
expenses
shall
be
divided
proportionately between the value of the vessel
and that of the cargo.
RESPONSIBILITY OF CAPTAIN - ARTICLES 823 825
WHAT ARE RESPONSIBILITES OF THE CAPTAIN
IN CASE OF ARRIVAL UNDER STRESS?

ARTICLE 823. The

custody
and
preservation of the cargo which has been
unloaded shall be intrusted to the captain, who
shall be responsible for the same, except in cases
of force majeure.
ARTICLE 824. If the entire cargo or part
thereof should appear to be damaged, or there
should be imminent danger of its being damaged,
the captain may request of the competent judge
or court, or of the consul in a proper case, the sale
of all or of part of the former, and the person
taking cognizance of the matter shall authorize it,
after an examination and declaration of experts,
advertisements, and other formalities required by
the case, and an entry in the book, in accordance
with the provisions of Article 624.
The captain shall, in a proper case, justify
the legality of his conduct, under the penalty of
answering to the shipper for the price the
merchandise would have brought if they had
arrived in good condition at the port of destination.
ARTICLE 825. The
captain
shall
be
responsible for the damages caused by his delay,
if after the cause of the arrival under stress has
ceased, he should not continue the voyage.
If the cause of arrival should have been
the fear of enemies, privateers, or pirates, a
deliberation and resolution in a meeting of the
officers of the vessel and persons interested in the
cargo who may be present, in accordance with the
provisions contained in Article 819, shall precede
the departure.
3. COLLISIONS
DEFINE COLLISION.
Collision is defined as an impact or sudden contact
of a moving body with an obstruction in its line of
motion, whether both bodies are in motion or one
stationary and the other, no matter which, in
motion.
As applied to maritime commerce, collision is
therefore an impact or sudden contact of a vessel
with another whether both are in motion or
stationary.
Strictly speaking, collision refers to the contact of
two moving vessels. If one vessel is moving while
the other is stationary, the same is more
appropriately called allision. Nevertheless, for
purposes of applying the provisions of the Code of
Commerce, collision includes collision per se and
allision.
WHAT ARE THE 3 ZONES IN COLLISION?

13
In collision of vessels, there exists 3
DIVISION OF TIME or ZONES:
(A) FIRST DIVISION covers all the time up to the
moment when the risk of collision may be said
to have begun. Within this time zone, no rule
is applicable because none is necessary. Each
vessel is free to direct its course as it deems
best without reference to the movement of the
other vessel.
(B) SECOND DIVISION covers the time between the
moment when the risk of collision begins and
the moment when it has become a practical
certainty. The burden is on the vessel required
to keep away and avoid the danger
(C) THIRD DIVISION covers the time between the
moment of actual contact. This is the period
where error in extremis may occur, and the
rule is that the vessel which has forced the
privileged vessel into danger is responsible
even if sthe privileged vessel committed an
error within that zone (A. Urrutia & Co. vs.
Baco River Plantation, Co., No. 7675, March
25, 1913).
WHAT IS ERROR IN EXTREMIS?
Where a navigator, suddenly realizing that a
collision is imminent by no fault of his own, in
confusion and excitement of the moment does
something which contributes to the collision or
omits to do something by which the collision might
be avoided, such act or omission is ordinarily
considered in extremis and the ordinary rules of
strict accountability do not apply.
Thus, when it was during the time when the said
vessel was passing through the third zone that it
changed its course to port in order to avoid, if
possible, the collision, the act may be said to have
been done in extremis, and even if wrong, the
sailing vessel is not responsible for the result.

WHAT ARE THE CLASSES OF COLLISION?

CULPABLE - ARTICLES 826, 827 AND 831

IF A VESSEL SHOULD BE FORCED BY A THIRD
VESSEL TO COLLIDE WITH ANOTHER, WHAT IS THE
RESPONSIBILITY OF THE THIRD VESSEL?
If a vessel should be forced by a third vessel to
collide with another, the owner of the third vessel
shall indemnify the losses and damages caused,
the captain thereof being civilly liable to said
owner (Article 831).
WHO BEARS THE DAMAGE IN CASE A VESSEL SHOULD
COLLIDE WITH ANOTHER, THROUGH THE FAULT,
NEGLIGENCE, OR WANT OF SKILL OF THE CAPTAIN,
SAILING MATE, OR ANY OTHER MEMBER OF THE
COMPLEMENT?
If a vessel should collide with another, through
or the fault, negligence, or lack of skill of the
captain, sailing mate, or any other member of the
complement, the owner of the vessel at fault shall
indemnify the losses and damages suffered, after
an expert appraisal (Article 826).
WHO SHALL BEAR THE DAMAGE IN CASE THE
COLLISION IS IMPUTABLE TO BOTH VESSELS?
If the collision is imputable to both vessels,
each one shall suffer its own damages, and both
shall be solidarily responsible for the losses and
damages occasioned to their cargoes (Article 827).
NAUTICAL RULES IN DETERMINING WHETHER

Fortuitous
Culpable
Inscrutable

FORTUITOUS - ARTICLES 830, 832

WHO BEARS THE DAMAGE IN CASE
COLLISION IS THROUGH A FORTUITOUS EVENT?

If by reason of a storm or other cause of force

majeure, a vessel which is properly anchored and
moored should collide with those nearby, causing
them damages, the injury occasioned shall be
considered as particular average of the vessel run
into (Article 832).

COLLISION
IS
FORTUITOUS
NEGLIGENCE OF THE CAPTAIN:

(A)CLASSES AND EFFECTS

a.
b.
c.

WHAT KIND OF AVERAGE IS A DAMAGE CAUSED BY A

COLLISION DUE TO A STORM OR FORCE MAJEURE?

THE

If a vessel should collide with another, through

fortuitous event or force majeure, each vessel and
its cargo shall bear its own damages (Article 830).

OR

DUE

TO

THE

When two vessels collide while entering

the port, the latter vessel is presumed to
be at fault.
Smaller vessels should give right of way to
large vessels.
Vessels leaving the port should leave the
way clear for another which may be
entering the same port.
There is a presumption against the vessel
which sets sail in the night.
In case of collision between sailing vessel
and a steamship, the latter is presumed to
be at fault.

14

Steam vessels towing have a right of way

over steam vessels not towing

INSCRUTABLE FAULT - ARTICLE 828

WHAT IS THE DOCTRINE OF INSCRUTABLE
FAULT?

The doctrine of inscrutable fault means that the

court can see that a fault has been committed, but
is unable, from the conflict of testimony, or
otherwise to locate it. Hence, when it is impossible
to determine to what direct and specific acts the
collision is attributable, it is a case of damage
arising from a cause that is inscrutable.
WHO SHALL BEAR THE DAMAGE IN CASE IT
CANNOT BE DETERMINED WHICH IF THE TWO VESSELS
CAUSED THE COLLISION?
The provisions of the preceding article are
applicable to the use in which it cannot be
determined which of the two vessels has caused
the collision (Article 828). This is an extension of
Article 827, which applies when (a) both vessels
are shown to be blameworthy; or (b) there is no
proof as to which vessel was at fault. There is
solidary liability of the vessels, despite the fact
that one vessel is more negligent than the other.
IS THE DOCTRINE OF LAST CLEAR CHANCE
APPLICABLE IN THIS CASE?
The doctrine of last clear chance is not applicable
in this case where both vessels are blameworthy.
SUMMARY:
1.

FORTUITOUS:

2.

Vessels collide with each other

through fortuitous event or force
majeure each vessel and each
cargo bears its own damage.
A vessel which is properly
anchored and moored may collide
with those nearby by reason of
storm or force majeure vessel
run into suffers its own damage.

CULPABLE:

Collision due to fault, negligence

or lack of skill of the captain,
sailing mate, or any other member
of the complement owner of the
vessel at fault is liable for the
losses and damages.
Collision due to the fault of both
vessels each vessel suffers its

3.

own loss; and both owners shall be

jointly and severally liable for loss
or damage to cargoes.
Two vessels collide with each other
without their fault but by reason of
the fault if a third vessel owner
of the third vessel is liable.

INSCRUTABLE:

Where it cannot be determined

which of the two vessels is at fault
each of the vessel suffers its own
loss and both shall be solidarily
liable for losses and damages to
their cargoes.

(B) PRESUMPTION OF LOSS BY COLLISION ARTICLE 833

WHEN IS LOSS BY COLLISION PRESUMED?

A vessel which, upon being run into, sinks

immediately, as well as that which, having been
obliged to make a port to repair the damages
caused by the collision, is lost during the voyage
or is obliged to be stranded in order to be saved,
shall be presumed as lost by reason of collision
(Article 833).
(C) LIABILITIES
SHIP OWNER OR AGENT - ARTICLES 837, 838
WHAT IS THE LIMIT OF THE LIABILITY OF THE
SHIP OWNER IN CASES OF COLLISION?
The civil liability incurred by the shipowners in
the case prescribed 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 837).
WHAT CLAIM SHALL BE PREFERRED WHEN THE VALUE
OF THE VESSEL AND HER APPURTENANCES SHOULD
NOT BE SUFFICIENT TO COVER ALL LIABILITIES?

When the value of the vessel and her

appurtenances should not be sufficient to cover all
the liabilities, the indemnity due by reason of the
death or injury of persons shall have preference
(Article 838).
CAPTAIN, PILOT, OTHERS - ARTICLES 829, 834
WHAT IS THE REMEDY OF THE OWNER AGAINST
THE PERSONS CAUSING THE INJURY?
In the cases above mentioned the civil action
of the owner against the person causing the injury

15
as well as the criminal liabilities, which may be
proper, are reserved (Article 829).

WILL THE PRESENCE OF A PILOT AT THE TIME OF THE

COLLISION EXEMPT THE CAPTAIN FROM LIABILITY?

NOTES:

Liability for negligence in the absence

of contract is governed by Article 2176
of the Civil Code the provision on
quasi-delict. However, the liabilities of
ship owners and ship agents as well as
the captain or crew in collision cases is
still governed by the provisions of the
Code of Commerce on Collision
(National Development Company vs.
The Court of Appeals, et al., Nos. L49407 and L-49469, August 19, 1988,
164 SCRA 593, 603).

Although the liability with respect to

collision is not governed by quasidelict, liability in collision cases are
still negligence based. In other words,
courts are still called upon to
determine the negligence of the
persons involved in order to impose
liability. The person who caused the
injury is both criminally and civilly
liable under Article 829 of the Code of
Commerce.

In the determination of negligence, the

same test of a reasonable man in the
position of an expert that applies in
quasi-delict should also be applied
although with due consideration to the
expertise of the persons involved
including the carrier itself, the captain,
officers and crew of the vessel. Thus, it
is still required to determine if a
reasonable man with the same
expertise would have done what the
party in question did under the
circumstances. It is still relevant to
determine if the collision is sufficiently
foreseeable such that a reasonable
man with the same expertise could
have avoided the impact.

In some respect, however, the rules

that apply to quasi-delict cannot be
applied in collision case like:
The doctrine of the last clear chance
2. The
rule
on
contributory
negligence of the other vessel
(Article 827)
3. Proof that the plaintiff was
negligent will bar recovery from
the defendant in collision cases
even if the plaintiffs negligence
can be classified as merely
contributory
(Gorgonio
De
Sarasola vs. Yu Biao Sontua, G.R.
No. 22630, January 31, 1925).

If the vessels colliding with each other should

have pilots on board discharging their duties at
the time of the collision, their presence shall not
exempt the captains from the liabilities they incur,
but the latter shall have the right to be
indemnified by the pilots, without prejudice to the
criminal liability which the latter may incur (Article
834).
CONDITIONS; PROTESTS - ARTICLES 835, 836, 839
WHAT FORMAL REQUIREMENT MUST BE
FULFILLED TO BE ABLE TO RECOVER DAMAGES
CAUSED BY COLLISION? WHAT IS THE EFFECT OF
FAILURE TO COMPLY THEREWITH?
The action for the recovery of losses and
damages arising from collisions cannot be
admitted if a protest or declaration is not
presented within twenty-four hours before the
competent authority of the point where the
collision took place, or that of the first port of
arrival of the vessel, if in Philippine territory, and
to the consul of the Republic of the Philippines if it
occurred in a foreign country (Article 835).
With respect to damages caused to persons or
to the cargo, the absence of protest may not
prejudice the persons interested who were not on
board or were not in a condition to make known
their wishes (Article 836).
NOTES:

REASON FOR REQUIRING PROTEST: to

prevent fictitious collisions or
improper indemnities.
VESSELS TO WHICH RULES ON COLLISION
APPLY:
Collisions of sea-going
vessels; merchant vessels or
merchant ships; those run by
masters having a special training,
with elaborate apparatus of crew
and equipment.
OFFICERS TO WHOM PROTEST MUST BE
MADE: Competent authority where
the collision took place; or
competent authority at first port of
arrival, if in Philippine territory,
and to consul, if in a foreign port.

WHAT ARE THE INSTANCES WHERE PROTEST

IS REQUIRED?
1.

Vessel making arrival under stress (Article

612)

16
2.
3.

4.

Vessel is shipwrecked (Articles

and 843)
Vessel which has gone through a
or when the captain believes
cargo has suffered damages or
(Article 624)
Maritime collisions (Article 835)

612, 624
hurricane
that the
averages

WHAT ARE THE INSTANCES WHEN PROTEST AFTER A

COLLSION IS NOT NECESSARY?
1.
2.

3.

In case the basis of the action is quasidelict (Lopez vs. Duruelo, 52 Phil. 229).
In case of collision of a motor boat
engaged
in
conveying
passengers
between the ship and the shore, and a
larger vessel, since the provision on
collision is intended to cover collisions of
sea-going vessels (Lopez vs. Duruelo,
supra).
In case the person interested in the
damage was not on board or was not in a
condition to make known his wishes
(Article 836).

WHAT MUST THE PHILIPPINE CONSUL DO IN

CASE A PHILIPPINE VESSEL SHOULD HAVE A COLLISION
IN FOREIGN WATERS OR OPEN SEAS?
If the collision should take place between
Philippine vessels in foreign waters, or if having
taken place in the open seas, and the vessels
should make a foreign port, the Consul of the
Republic of the Philippines in said port shall hold a
summary investigation of the accident, forwarding
the proceedings to the Secretary of the
Department of Foreign Affairs for continuation and
conclusion (Article 839).
4.

SHIPWRECKS,
840 TO 843

WHAT IS THE LIABILITY OF THE SHIP CAPTAIN IN CASE

THE WRECK OR STRANDING OF THE VESSEL IS CAUSED
BY MALICE, NEGLIGENCE OR LACK OF SKILL OF THE
CAPTIAN?

The general rule is that the damage due to

shipwreck or stranding shall be borne by the
respective owners (Article 840), except in case of
malice, negligence or lack of skill of the captain, or
because the vessel put to sea was insufficiently
repaired and equipped, in which case the captain
shall be liable for the damage caused to the vessel
or the cargo. Thus, Article 841 provides that:
If the wreck or stranding should be
caused by the malice, negligence, or lack of skill of
the captain, or because the vessel put to sea was
insufficiently repaired and equipped, the ship
agent or the shippers may demand indemnity of
the captain for the damages caused to the vessel
or to the cargo by the accident, in accordance with
the provisions contained in Articles 610, 612, 614,
and 621 (Article 841).
WHO
SALVAGE?

SHALL

BEAR

THE

EXPENSES

OF

THE

The goods saved from the wreck shall be

specially bound for the payment of the expenses
of the respective salvage, and the amount thereof
must be paid by the owners of the former before
they are delivered to them, and with preference
over any other obligation if the merchandise
should be sold (Article 842).
IN CASE THE SHIPWRECK OCCURS WHILE THE
VESSEL IS IN A CONVOY, HOW SHOULD STHE SAVED
CARGO BE DISTRIBUTED?

ARTICLES

If several vessels sail under convoy, and any

of them should be wrecked, the cargo saved shall
be distributed among the rest in proportion to the
amount which each one is able to take.

Shipwreck has been defined as the demolition or

shattering of a vessel caused by her driving ashore
or on rocks and shoals in the midseas, or by the
violence of winds and waves in tempests.

If any captain should refuse, without

sufficient cause, to receive what may correspond
to him, the captain of the wrecked vessel shall
enter a protest against him, before two sea
officials, of the losses and damages resulting
therefrom, ratifying the protest within twenty-four
hours after arrival at the first port, and including it
in the proceedings he must institute in accordance
with the provisions contained in Article 612.
If it is not possible to transfer to the other
vessels the entire cargo of the vessel wrecked, the
goods of the highest value and smallest volume
shall be saved first, the designation thereof to be
made by the captain with the concurrence of the
officers of his vessel (Article 843).

DEFINE SHIPWRECK.

WHO SHALL BEAR THE DAMAGE SUFFERED BY THE

VESSEL AND
STRANDING?

HER

CARGO

DUE

TO

SHIPWRECK

OR

The losses and deteriorations suffered by a

vessel and her cargo by reason of shipwreck or
stranding shall be individually for the account of
the owners, the part which may be saved
belonging to them in the same proportion (Article
840).

17
(A)

SALVAGE
2616)

LAW

(ACT

NO.

WHAT IS SALVAGE AND ITS CONCEPT?

In general, salvage may be defined as a service
which 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 and secure
(Erlanger & Galinger vs. Swedish East Asiatic Co.,
Ltd., 34, Phil. 178 [1916]).
Salvage is founded on the equity of remunerating
private and individual services performed in
saving, in whole or in part, a ship or its cargo from
impending peril, or recovering them after actual
loss. It is a compensation for actual services
rendered to the property charged with it, and is
allowed for meritorious conduct of the salvor, and
in consideration of a benefit conferred upon the
person whose property he has saved. A claim of
salvage rests on the principle that, unless the
property is in fact saved by those who claim the
compensation, it cannot be allowed, however
benevolent their intention and however heroic
their conduct (ibid).

1.
2.

3.

WHEN CAN THERE BE A VALID SALVAGE?

1.

2.

WHAT IS A DERELICT?
It is a condition of a ship or her cargo which is
abandoned and deserted at sea by those who are
in charged of it, without any hope of recovering it,
or without any intention of returning it. If those in
charge of the property left it with the intention of
finally leaving it, it is derelict and the change of
their intention and an attempt to return to it will
not change its nature.

WHAT ARE THE KINDS OF SALVAGE?

When in case of shipwreck, the vessel or

its cargo shall be beyond the control of the
crew, or shall have been abandoned by
them, and picked up and conveyed to a
safe place by other persons, the latter
shall be entitled to a reward for the
salvage. Those who, not being included in
the above paragraph, assist in saving a
vessel or its cargo from shipwreck, shall be
entitled to a like reward (Section 1).
If the captain of the vessel, or the person
acting in his stead, is present, no one shall
take from the sea, or from the shores or
coast merchandise or effects proceeding
from a shipwreck or proceed to the
salvage of the vessel, without the consent
of such captain or person acting in his
stead (Section 2).

NOTES ON TOWAGE:

WHAT ARE THE RIGHTS OF A FINDER OF A DERILICT?

The finder who takes possession, with the
intention of saving the ship, gains a right of
possession over the same, which he can maintain
against the true owners. The owner thus abandons
temporarily his right of possession, which is
transferred to the finder who becomes bound to
preserve the property with good faith and bring it
to a safe place for the owners use; in return, he
acquires a right to be paid for his services a
reasonable and proper compensation out of the
property itself. He is not bound to part with the
possession thereof until he is paid or the property
is taken into the possession of the law preparatory
to the amount of salvage being legally asserted.

Voluntary, wherein the compensation is

dependent upon success. This is the most
ancient class of pure salvage.
Rendered upon a contract for a per diem
or per horam wage, payable at all events.
This is the most common upon the Great
Lakes.
Under a contract for a compensation
payable only in case of success (C.S.
Robinson, et al. vs. The Ship Alta, et al.,
No. 3488, August 10, 1907).

A vessel, though not abandoned, may be

the subject of a salvage, if at the time the
services were rendered, there was a
probable, threatening danger to the vessel
and its cargo. If the vessel towed is aided
in escaping a present or prospective
danger, the services is one of salvage and
the towage is merely incidental.
Distinction between a salvage and towage
is of importance to the crew of the
salvaging ship because if the contract is
one of towage, the crew does not have any
interest or right to the remuneration
pursuant to the contract; but if the service
rendered is one of salvage, the crew can
look to the salvaged vessel for its share.
The towing vessel cannot invoke cannot
invoke equity in quasi-contract of towage.
There is an express provision of law
(Article 2124 NCC) that is applicable to the
relationship of quasi-contract of towage,
where the crew is not entitled to
compensation separate from that of the
vessel.

18
WHAT ARE THE ELEMENTS OF SALVAGE?
1.
2.
3.

4.

There must be a marine peril;

The service is voluntarily rendered and is
not required as an existing duty or from a
special contract; and
There must be success in whole or in part
or that the service rendered contributed to
such success (Barrios vs. Go Thong &
Company, No. L-17192, March 30, 1963, 7
SCRA 535);
The vessel is shipwrecked beyond the
control of the crew or shall have been
abandoned (Section 1, Savage Law).

WHAT IS THE OBLIGATION OF A PERSON WHO

HAS SAVED OR PICKED UP A VESSEL OR MERCHANDISE
AT SEA IN THE ABSENCE OF THE CAPTAIN OF THE
VESSEL, OWNER OR REPRESENTATIVE?
He who shall save or pick up a vessel or
merchandise at sea, in the absence of the captain
of the vessel, owner, or a representative of either
of them, they being unknown, shall convey and
deliver such vessel or merchandise, as soon as
possible, to the Collector of Customs, if the port
has a collector, and otherwise to the provincial
treasurer or municipal mayor (Section 3).
WHAT IS THE RIGHT AND OBLIGATION OF THE OWNER
AFTER THE SALVAGE?

WHAT ARE THE DUTIES OF THE COLLECTOR OF

CUSTOMS, PROVINCIAL TREASURER OR MUNICIPAL
MAYOR AFTER THE SALVAGE?
The Collector of Customs, provincial
treasurer, or municipal mayor, to whom a salvage
is reported, shall order:
1.
2.

3.

After the salvage is accomplished, the owner or his

representative shall have a right to the delivery of
the vessel or things saved, provided that he pays,
or gives a bond to secure, the expenses and the
proper reward.
The amount and sufficiency of the bond, in
the absence of agreement, shall be determined by
the Collector of Customs or by the Judge of the
Court of First Instance of the province in which the
things saved may be found (Section 4).
If, while the vessel or things saved are at
the disposition of the authorities, the owner or his
representative shall claim them, such authorities
shall order their delivery to such owner or his
representative, provided that there is no
controversy over their value, and a bond is given
by the owner or his representative to secure the
payment of the expenses and the proper reward.
Otherwise, the delivery shall nor be made until the
matter is decided by the Court of First Instance of
the province (Section 6).

That the things saved be safeguard and

inventoried.
The sale at public auction of the things
saved which may be in danger of
immediate loss or of those whose
conservation is evidently prejudicial to the
interests of the owner, when no objection
is made to such sale.
The advertisement within the thirty days
subsequent to the salvage, in one of the
local newspapers or in the nearest
newspaper published, of all the details of
the disaster, with a statement of the mark
and number of the effects requesting all
interested persons to make their claims.

WHAT IS THE PROCEDURE TO BE FOLLOWED IF THERE

IS NO CLAIM OVER THE SLAVAGED GOODS?
No claim being presented in the three
months subsequent to the publication of the
advertisement prescribed in sub-section (c) of
Section five, the things save shall be sold at public
auction, and their proceeds, after deducting the
expenses and the proper reward shall be
deposited in the insular treasury. If three years
shall pass without anyone claiming it, one-half of
the deposit shall be adjudged to him who saved
the things, and the other half to the insular
government (Section 7).
WHO ARE THE PERSONS WHO HAVE NO RIGHT TO A
REWARD FOR A SALVAGE?
The following shall have no right to a
reward for salvage or assistance:

NOTES:

due by the owner to the salvor for the

services rendered upon the principle that
the service creates a property in the thing
being saved. The salvor becomes, for all
intents and purposes, a joint owner, and if
the property is lost, he must bear his share
like the other joint owners.
Where the ship or its cargo is saved
together, payment of compensation should
be charged against the ship and cargo in
the proportion of their respective value, as
in the case of general average.

The salvor has an interest in the property,

a lien, though this is not considered a debt

1.

The crew of the vessel shipwrecked or

which was is danger of shipwreck;

19
2.
3.

He who shall have commenced the

salvage in spite of opposition of the
captain or his representative; and
He who shall have failed to comply with
the provisions of Section three (Section 8).

and all the remainder of the crew the other

fourth of the reward, in proportion to their
respective salaries, in the absence of an
agreement to the contrary. The express of
salvage, as well as the reward for salvage
or assistance, shall be a charge on the
things salvaged on their value (Section
13).

WHAT ARE THE RULES AS TO REWARD?

1.

2.

3.

4.

5.

If, during the danger, an agreement is

entered into concerning the amount of the
reward for salvage or assistance, its
validity may be impugned because it is
excessive, and it may be required to be
reduced to an amount proportionate to the
circumstances (Section 9).
In a case coming under the last preceding
section, as well as in the absence of an
agreement, the reward for salvage or
assistance shall be fixed by the Court of
First Instance of the province where the
things salvaged are found, taking into
account principally the expenditures made
to recover or save the vessel or the cargo
or both, the zeal demonstrated, the time
employed, the services rendered, the
excessive express occasioned the number
of persons who aided, the danger to which
they and their vessels were exposed as
well as that which menaced the things
recovered or salvaged, and the value of
such things after deducting the expenses
(Section 10).
From the proceeds of the sale of the things
saved shall be deducted, first, the
expenses of their custody, conservation,
advertisement, and auction, as well as
whatever taxes or duties they should pay
for their entrance; then there shall be
deducted the expenses of salvage; and
from the net amount remaining shall be
taken the reward for the salvage or
assistance which shall not exceed fifty per
cent of such amount remaining (Section
11).
If in the salvage or in the rendering of
assistance different persons shall have
intervened the reward shall be divided
between them in proportion to the
services which each one may have
rendered, and, in case of doubt, in equal
parts. Those who, in order to save persons,
shall have been exposed to the same
dangers shall also have a right to
participation in the reward (Section 12).
If a vessel or its cargo shall have been
assisted or saved, entirely or partially, by
another vessel, the reward for salvage or
for assistance shall be divided between
the owner, the captain, and the remainder
of the crew of the latter vessel, so as to
give the owner a half, the captain a fourth,

E. SPECIAL CONTRACTS OF MARITIME COMMERCE

1.

CHARTER PARTIES

A. DEFINITION
WHAT IS CHARTER PARTY AND ITS CONCEPT?

A charter party is defined as a contract whereby

an entire ship, or some principal part of the ship, is
let by the owner thereof to a merchant or other
person for a specified time or use for the
conveyance of goods, in consideration of the
payment of freight (Caltex (Phil.), Inc. vs. Sulpicio
Lines, Inc., G.R. No. 131166, September 30, 1999,
315 SCRA 709).
The term charter party is taken from carta partita
which literally means divided document. Carta
partita refers to the ancient practice of writing out
the terms and conditions of a contract in duplicate
on one piece of parchment and then dividing it
down the middle thus providing each party with a
copy.
The charter contract is often referred to as a form
of mercantile lease for it involves a charterer,
who is most often a merchant himself, who desires
to lease a ship or vessel owned by another for the
transport of his goods for commercial purposes.
The charter may also involve the transportation of
persons from one port to another. The parties
thereto are therefore the charterer, or charter
party, and the ship owner.
B.

KINDS

WHAT ARE THE KINDS OF CHARTER PARTIES?

1.

THE BAREBOAT OR DEMISE CHARTER

A bareboat, also known as demise, is one

where the shipowner delivers the vessel to the
charterer with his crew who will get off the vessel
upon delivery thereof to the charterer. Thereafter,
it is the charterer who will provide his own crew for
the operation of the vessel during the period of
the charter. Thus the charterer becomes the owner
pro hac vice of the vessel since he mans the
vessel with his own set of master and crew,
effectively becoming the owner for the voyage or
service stipulated, subject however to any liability
for damages arising from negligence.

20
WHAT ARE THE EFFECTS OF A BAREBOAT
CHARTER?
The effect is that not only the entire
capacity of the ship is leased, but the ship itself,
and the possession is passed on to the charterer.
The entire control and management of the vessel
is given up to the charterer.
The shipowner loses his lien on the cargo,
but the lien is not destroyed, as it continues in
favor of the charterer when the goods are taken on
freight since the vessel is leased in its entirety to
the charterer.
The bareboat charterer assumes, to a
large extent, the customary rights and liabilities of
the ship owner in relation to third persons who
may have dealt with him or with the vessel. In this
latter instance, the master of the vessel is the
agent of the charterer or owner pro hac vice, and
not the general owner of the vessel who is liable
for the expenses of the voyage including the wage
of seamen.
WHAT IS OWNER PRO HAC VICE OF THE
VESSEL? IN WHAT KIND OF CHARTER PARTY DOES THIS
OBTAIN?
It is a demise charterer to whom the owner
of the vessel has completely and exclusively
relinquished possession, command, and navigation
of the vessel.
In this kind of charter, the charterer mans
and equips the vessel and assumes all
responsibility for its navigation, management and
operation. He thus acts as the owner of the vessel
in all important aspects during the duration of the
charter.
2.

CONTRACT OF AFFEIGHTMENT which is divided

into:
1.
2.

TIME CHARTER
VOYAGE CHARTER

In time charter, the vessel is leased to the

charterer for a fixed period of time stipulated
therein, while a voyage charter involves only a
single or particular voyage. In both the time and
voyage charters, the charterer hires the vessel
only, either for a determinate period of time or for
a single or consecutive voyage, with the ship
owner providing fosr the provisions of the ship,
wages of the master and crew, and the expenses
for the maintenance of the vessel.

contract of affreightment. It is only when the

charter includes both the vessel and the crew, as
in a bareboat or demise that a common carrier
becomes private, at least insofar as th particular
voyage covering the charter party is concerned.
IN CASE THE CHARTER PARTY IS CONSIDERED AS A
PRIVATE CARRIAGE, MAY THE PARTIES STIPULATE ON
THE LIABILIOTY FOR THE DAMAGE TO THE CARGO
SHIPPED?

In case a charter party is considered as a private

carriage, the parties may freely contract
respecting liability for damage to goods and other
matters. The basic principle is that the
responsibility for cargo loss falls on the one who
agreed to perform the duty involved. When so
agreed therefore, the charterer could be
responsible for the care of the cargo during the
voyage (Maritime Agencies and Services, Inc. vs.
Court of Appeals, 187 SCRA 346).
C.

WHAT IS THE IMPORTANCE OF A CONTRACT

OF CHARTER PARTY?
The contract of a charter party is important
because the rights and obligation of the parties
are determined principally by the provisions of the
charter party.
The application of the Civil Code provisions
on common carrier depends on the kind of charter
party
WHAT ARE THE FORMAL REQUISITES OF A
CHARTER PARTY?
A charter party must be drawn in duplicate
and signed by the contracting parties, and when
either does not know how or is not able to do so,
by two witnesses at his request.
The charter party shall contain, besides
the conditions freely stipulated, the following
circumstances:
1.
2.
3.
4.
5.

Generally, the character of the common carrier is

not affected by the charter party if the same is a

FORMS
EFFECTS - ARTICLES 652
657
AND

The kind, name, and tonnage of the

vessel.
Its flag and port of registry.
The name, surname, and domicile of the
captain.
The name, surname, and domicile of the
ship agent, if the latter should make the
charter party.
The name, surname, and domicile of the
charterer; and if he states that he is acting

21
by commission, that of the person for
whose account he makes the contract.
6. The port of loading and unloading.
7. The capacity, number of tons or the weight
or measurement which they respectively
bind themselves to load and to transport,
or whether the charter party is total.
8. The freightage to be paid, stating whether
it is to be a fixed amount for the voyage or
so much per month, or for the space to be
occupied, or for the weight or measure of
the goods of which the cargo consists, or
in any other manner whatsoever agreed
upon.
9. The amount of primage to be paid to the
captain.
10. The days agreed upon for loading and
unloading.
11. The lay days and extra lay days to be
allowed and the demurrage to be paid for
each of them (Article 652).

WHAT IS THE PROBATIVE VAUE OF A CHARTER PARTY

WHETHER DULY CERTIFIED BY A BROKER OR NOT?
The charter parties executed with the
intervention of a broker, who certifies to the
authenticity of the signatures of the contracting
parties because they were signed in his presence,
shall be full evidence in court; and if they should
be conflicting, that which accords with one which
the broker must keep in his registry, if kept in
accordance with law, shall govern.
The contracts shall also be admitted as
evidence, even though a broker has not taken part
therein, if the contracting parties acknowledge the
signatures to be the same as their own.
If no broker has intervened in the charter
party and the signatures are not acknowledged,
doubts shall be decided by what is provided for in
the bill of lading and in the absence thereof, by
the proofs submitted by the parties (Article 654).

WHAT IS PRIMAGE?
WHAT IS THE EFFECT OF CHARTER PARTIES EXECUTED
It is the customary compensation given to
the captain of the vessel for the use of his ropes.
Traditionally, it was the captain who provided the
ropes for the use of the vessel which he
commanded.
WHAT IS DEMURRAGE?
It is an amount stipulated in the charter
party to be paid by the charterer or shipper to the
shipowner for any delay in the sailing of his ship.
IS A CONTRACT OF TOWAGE A CHARTER
PARTY, A CONTRACT FOR THE CARRIAGE OF GOODS,
OR A CONTRACT FOR LEASE OF SERVICES?
It is a contract for the hire of services,
because what is towed is not shipped or placed on
board the towing vessel. However, if the barge
towed and its tugboat belongs to the same owner
and the barge is used continuously in the business
of transporting anothers goods, then the contract
is either one for the carriage of goods or a charter
party depending on the agreement of the parties.
WHAT IS THE EFFECT OF RECEIPT OF A CARGO
WITHOUT THE CHARTER PARTY BEING SIGNED?
If the cargo should be received without the
charter party having been signed, the contract
shall be understood as executed in accordance
with what appears in the bill of lading, the sole
evidence of title with regard to the cargo for
determining the rights and obligations of the ship
agent, of the captain, and of the charterer (Article
653).

BY THE CAPTAIN IN THE ABSENCE OF THE SHIP AGENT

AND IN VIOLATION OF THE INSTRUCTIONS OF THE
LATTER?

Charter parties executed by the captain in the

absence of the ship agent shall be valid and
effective, even though in executing them he
should have acted in violation of the orders and
instructions of the ship agent or shipowner; but
the latter shall have a right of action against the
captain for indemnification of damages (Article
655).
WHAT IS THE DATE OF LOADING AND UNLOADING
WHEN THE CHARTER PARTY FAILS TO STATE THE SAME?
If in the charter party the time in which the
loading and unloading are to take place is not
stated, the usages of the port where these acts
take place shall be observed. After the stipulated
or the customary period has passed, and there is
no express proviso in the charter party fixing the
indemnity for the delay, the captain shall be
entitled to demand demurrage for the lay days
and extra lay days which may have elapsed in
loading and unloading (Article 656).
WHAT IS THE OBLIGATION OF THE CAPTAIN
SHOULD THE VESSEL BECOME UNSEAWORTHY DURING
THE VOYAGE? WHAT IS THE CONSEQUENCE OF FAILURE
TO FULFILL SUCH OBLIGATION ON THE PART OF THE
CAPTAIN?
If during the voyage the vessel should be
rendered unseaworthy, the captain shall be
obliged to charter at his expense another one in
good condition to receive the cargo and carry it to

22
its destination, for which purpose he shall be
obliged to look for a vessel not only at the port of
arrival but also in the neighborhood within
distance of 150 kilometers.
If the captain, through indolence or malice,
should not furnish a vessel to its destination, the
shippers, after requiring the captain to charter a
vessel within an inextendible period, may charter
one and petition the judicial authority to
summarily approve the charter party which they
may have made.
The same authority shall judicially ("por la
via de appremio") compel the captain, to carry
out, for his account and under his responsibility,
the charter made by the shippers.
If the captain, notwithstanding his
diligence, should not find a vessel for the charter,
he shall deposit the cargo at the disposal of the
shippers, to whom he shall communicate the facts
on the first opportunity which presents itself, the
freight being adjusted in such cases by the
distance covered by the vessel, with no right to
any indemnification whatsoever (Article 657).
d)
RIGHTS
AND
OBLIGATIONS
SHIPOWNERS - ARTICLES 669 678

OF

WHAT ARE THE OBLIGATIONS OF THE SHIP OWNER

OR THE CAPTAIN IN CHARTER PARTIES?
The shipowner or the captain shall observe in
charter parties the capacity of the vessel or that
expressly designated in its registry, a difference
greater than 2 per cent between that stated and
her true capacity not being permissible.
If the shipowner or the captain should
contract to carry a greater amount of cargo than
the vessel can carry in view of her tonnage, they
shall indemnify the shippers whose contracts they
do not fulfill for the losses they may have caused
when by reason of their default, according to the
following cases, viz:
1.

2.

If the vessel has been chartered by one

shipper only, and there should appear to be
an error or fraud in her capacity, and the
charterer should not wish to rescind the
contract, when he has a right to do so, the
freightage shall be reduced in proportion to
the cargo which the vessel can not receive,
the person from whom the vessel is chartered
being furthermore obliged to indemnify the
charterer for the losses he may have caused
him.
If, on the contrary there should be several
charter parties, and by reason of want of
space all the cargo contracted for cannot be
loaded, and none of the charterers desires to

3.

rescind the contract, preference shall be given

to the person who has already loaded and
arranged the freight in the vessel, and the rest
shall take the places corresponding to them in
the order of the dates of their contracts.
Should there be no priority, the charterers
may load, if they wish, in proportion to the
amounts of weight or space for which each
may have contracted, and the person from
whom the vessel was chartered shall be
obliged to indemnify them for losses and
damages.

WHEN MY ANOTHER VESSEL BE SUBSTITUTED FOR

THE ONE CHARTERED?
If the person from whom the vessel is
chartered, after receiving a part of the freight,
should not find sufficient to make up at least
three-fifths of the amount which the vessel may
hold, at the price he may have fixed, he may
substitute for the transportation another vessel
inspected and declared suitable for the same
voyage, the expenses of transfer and the increase
in the price of the charter, should there be any,
being for his account. Should he not be able to
make this change, he shall undertake the voyage
at the time agreed upon; and should no time have
been fixed, within fifteen days from the time the
loading began, unless otherwise stipulated.
If the owner of the part of the freight
already loaded should procure some more at the
same price and under similar or proportionate
conditions to those accepted for the freight
received, the person from whom the vessel is
chartered or the captain can not refuse to accept
the rest of the cargo; and should he do so, the
shipper shall have a right to demand that the
vessel put to sea with the cargo which it may have
on board (Article 670).
WHEN IS SUBSTITUTION
ALLOWED IN CHARTER PARTIES?

OF

VESSELS

NOT

After three-fifths of the vessel has been

loaded, the person from whom she is chartered
may not, without the consent of the charterers or
shippers, substitute the vessel designated in the
charter party by another one, under the penalty of
making himself thereby liable for all the losses and
damages occurring during the voyage to the cargo
of those who did not consent to the change
(Article 671).
WHEN THE WHOLE VESSEL HAS BEEN CHARTERED,
MAY THE CAPTAIN ACCEPT CARGO FROM OTHER
PERSONS?
If the vessel has been chartered in whole, the
captain may not, without the consent of the

23
charterer, accept cargo from any other person;
and should he do so, said charterer may oblige
him to unload it and to indemnify him for the
losses suffered thereby (Article 672).
WHAT IS THE LIABILITY OF THE PERSON FROM WHOM

on the voyage out or on the return trip, if carried

for the account of third persons.
The same shall be done if a vessel, having
been chartered for the round trip, should not be
given any cargo on its return (Article 675).

THE VESSEL IS CHARTERED FOR VOLUNTARY DELAY

CAUSED BY THE CAPTAIN?

The person from whom the vessel is chartered

shall be liable for all the losses caused to the
charterer by reason of the voluntary delay of the
captain in putting to sea, according to the rules
prescribed, provided he has been requested,
notarially or judicially, to put to sea at the proper
time (Article 673).
WHAT

IS THE
CHARTERER
CARRY
CONTRACTED FOR?

CONSEQUENCE
MORE
CARGO

SHOULD THE
THAN
THAT

If the charterer should carry to the vessel

more cargo than that contracted for, the excess
may be admitted in accordance with the price
stipulated in the contract, if it can be well stowed
without injuring the other shippers; but if in order
to load it, the vessel would be thrown out of trim,
the captain must refuse it or unload it at the
expense of its owner.

WHEN WILL THE CAPTAIN LOSE THE FREIGHT?

The captain shall lose the freightage and shall
indemnify the charterers if the latter should prove,
even against the certificate of inspection, if one
has been made at the port of departure, that the
vessel was not in a condition to navigate at the
time of receiving the cargo (Article 676).
WHAT IS THE EFFECT OF A DECLARATION OF WAR OR
BLOCKADE ON THE CHARTER PARTY?
The charter party shall subsist if a declaration
of war or a blockade should take place during the
voyage, the captain not having any instructions
from the charterer.
In such case the captain must proceed to
the nearest safe and neutral port, requesting and
awaiting orders from the shipper, and the
expenses and salaries paid during the detention
shall be paid as general average.

In the same manner, the captain may,

before leaving the port, unload merchandise
clandestinely placed on board, or transport them,
if he can do so with the vessel in trim, demanding
by way of freightage the highest price which may
have been stipulated for said voyage (Article 674).

If, by orders of the shipper, the cargo

should be discharged at the port of arrival, the
freightage for the voyage out shall be paid in full
(Article 677).

WHAT SHOULD BE DONE IN CASE THE VESSEL

WHAT SHOULD BE DONE SHOULD THE CPATAIN

FAIL TO RECEIVE INSTRUCTION FROM THE SHIPPER
DESPITE THE LAPSE OF TIME?

HAS BEEN CHARTERED TO RECEIVE CARGO IN ANOTHER

PORT?

If the vessel has been chartered to receive the

cargo in another port, the captain shall appear
before the consignee designated in the charter
party; and, should the latter not deliver the cargo
to him, he shall inform the charterer and wait his
instructions, the lay days agreed upon or those
allowed by custom in the port beginning to run in
the meantime, unless there is an express,
agreement to the contrary.
Should the captain not receive an answer
within the time necessary therefor, he shall make
efforts to find freight; and should he not find any
after the lay days and extra lay days have
elapsed, he shall make a protest and return to the
port where the charter was made.
The charterer shall pay the freightage in
full, discounting that which may have been earned
on the merchandise which may have been carried

If the time necessary, in the opinion of the

judge or court, to receive the orders of the shipper
should have elapse, without the captain having
received any instructions, the cargo shall be
deposited, and it shall be liable for the payment of
the freightage and expenses on its account during
the delay, which shall be paid from the proceeds
of the part first sold (Article 678).
SUMMARY:
RIGHTS OF THE SHIPOWNER:
1.

Where the cargo received is not sufficient to

make up at least three-fifths of the amount
which the vessel may hold, he may substitute
another vessel inspected and declared
suitable for the voyage. The expenses of
transfer and the increase in the price of the
charter, if any, shall be paid by him. But the
shipowner does not have this right of

24

2.

3.
4.
5.

6.
7.

substitution where three-fifths of the vessel

has been filled.
To collect freightage in accordance with the
price stipulated for cargo in excess if that
agreed upon if such excess can be properly
stowed.
To refuse and unload at the expense of the
owner excess cargo that cannot be properly
stowed.
To unload merchandise clandestinely placed
on board, o to transport them if he can do so,
demanding the highest freightage.
To find freight to take the place of freight not
received if the vessel has been chartered to
receive cargo in another port, after he
receives no cargo from the consignee and
after he receives no answer from the
charterer.
To receive freightage in full, discounting that
which may have been earned on the
merchandise carried as substitute.
To
have
the
charter
party
subsist
notwithstanding the declaration of war or a
blockade during the voyage, and to receive in
such cases, the freightage in full where the
shipper orders that the cargo should be
discharged at the port of arrival.
OBLIGATIONS OF SHIPOWNERS:

1.

2.

3.

4.

5.

To observe in the charter parties, the capacity

of the vessel, and to indemnify the shippers
whose contracts are not fulfilled for the losses
they may have suffered by the failure of the
shipowner to observe the capacity of the
vessel. In such cases, there may be one or
more charterers.
To undertake the voyage at the time agreed
upon with fifteen days from the time the
loading began if no time is stipulated, even if
the shipowner should not find cargo sufficient
to make up at least three-fifths of the amount
which the vessel may hold, where he fails his
right to change vessel.
Where the shipowner should not find cargo
sufficient to make up at least three-fifths of
the amount which the vessel may hold to
accept other cargo procured by the owner of
the freight already loaded under the same
price and conditions.
Not to change the vessel after three-fifths of
the vessel has been loaded, without the
consent of the charterers or shippers.
Otherwise, the shipowner shall be liable for
the losses and damages occurring during the
voyage to the cargo of those who did not give
their consent.
If the vessel has been chartered in whole, not
to accept cargo from any other person without
the consent of the charterer. Otherwise, the

6.
7.

8.

captain shall answer for the losses suffered

and be required to unload.
To answer for losses arising from delay in
putting to sea. But the charterer must request
the same, judicially or notarially.
To have the vessel in a condition to navigate
at the time of receiving the cargo. Otherwise,
the captain shall lose the freightage and shall
indemnify the charterers.
In case of declaration of war or blockade
during the voyage, where the captain has not
received any instructions form the chartrer for
the captain to proceed to the nearest safe and
neutral port, requesting and awaiting orders
from the shipper.

E).

OBLIGATIONS OF CHARTERERS - ARTICLES 679

687
MAY THE CHARTERER, AS A MATTER OF RIGHT, SUB
CHARTER THE WHOLE OR PART OF THE VESSEL?
The charterer of an entire vessel may subcharter the whole or part thereof on such terms as
he may consider most convenient, the captain not
being allowed to refuse to receive on board the
freight delivered by the second charterers,
provided that the conditions of the first charter are
not change, and that the price agreed upon is paid
in full to the person from whom the vessel is
chartered, even though the full cargo is not
embarked, with the limitation established in the
next article (Article 679).
WHAT IS THE LIABILITY IF THE CHARTERER WHO
DOES NOT COMPLETE THE FULL CARGO HE BOUND
HIMSELF TO SHIP?
A charterer who does not complete the full
cargo he bound himself to ship shall pay the
freightage of the amount he fails to ship, if the
captain does not take other freight to complete
the load of the vessel, in which case the first
charterer shall pay the difference, should there be
any (Article 680).
WHAT IS THE LIABILITY OF THE CHARTERER FOR
LAODING GOODS DIFFERENT FROM THOSE MENTIONED
AT THE TIME OF THE EXECUTION OF THE SHARTER
PARTY?
If the charterer should load goods different
from those stated at the time of executing the
charter party, without the knowledge of the person
from whom the vessel was chartered or of the
captain, and should thereby give rise to losses, by
reason of confiscation, embargo, detention, or
other causes, to the person from whom the vessel
was chartered or to the shippers, the person
giving rise thereto shall be liable with the value of
his shipment and furthermore with his property,

25
for the full indemnity to all those injured through
his fault (Article 681).
WHAT IS THE LIABILITY OF THE PARTIES FOR
CARRYING GOODS FOR ILLICIT COMMERCE?
If the merchandise should have been shipped
for the purpose of illicit commerce, and were taken
on board with the knowledge of the person from
whom the vessel was chartered or of the captain,
the latter, jointly with the owner of the same, shall
be liable for all the losses which may be caused
the other shippers; and even though it may have
been stipulated, they can not demand any
indemnity whatsoever from the charterer for the
damaged caused to the vessel (Article 682).
IN CASE THE VESSEL IS BEING REPAIRED, MY THE
SHIPPER BE REQUIRED TO WAIT UNTIL THE VESSEL IS
REPAIRED? WHO SHOULD BEAR THE EXPENSES OF
UNLOADING THE CARGO?

In case of making a port to repair the hull,

machinery, or equipment of the vessel, the
shippers must await until the vessel is repaired,
being permitted to unload it at their own expense
should they deem it proper.
If, for the benefit of the cargo subject to
deterioration, the shippers or the court, or the
consul, or the competent authority in a foreign
country, should order the merchandise to be
unloaded, the expenses of unloading and
reloading shall be for the account of the former
(Article 683).
WHAT IS THE RESPONSIBILITY OF THE
CHARTERER FOR FREIGHT SHOULD HE UNLOAD THE
VESSEL
BEFORE
ARRIVING
AT
THE
PORT
OF
DESTINATION?
If the charterer, without the occurrence of any
of the cases of force majeure mentioned in the
foregoing article, should wish to unload his
merchandise before arriving at the port of
destination, he shall pay the full freightage, the
expenses of the arrival made at his request, and
the losses and damages caused the other
shippers, should there be any (Article 684).
WHAT MUST BE PAID BY THE SHIPPER SHOULD HE
UNLOAD THE GOODS BEFORE STARTING THE VOYAGE?
In charters for transportation of general
freight, any of the shippers may unload the
merchandise before the beginning of the voyage,
paying one-half of the freightage, the expense of
stowing and restowing the cargo, and any other
damage which for his reason he may cause the
other shippers (Article 685).

WHEN IS THE CAPTAIN ENTITLED TO THE

PAYMENT OF THE FREIGHT AND OTHER EXPENSES FOR
THE CONSIGNEE?
After the vessel has been unloaded and the
cargo placed at the disposal of the consignee, the
latter must immediately pay the captain the
freightage due and the other expenses for which
said cargo may be liable.
The primage must be paid in the same
proportion and at the same time as the freightage,
all the changes and modifications to which the
latter should be subject also governing the former
(Article 686).
WHEN MAY NOT THE CHARACTERS AND
SHIPPERS ABANDON THE GOODS FOR THE PAYMENT OF
FREIGHT AND OTHER EXPENSES? WHEN CAN THEY
MAKE SUCH ABANDONMENT?
The charterers and shippers may not abandon
merchandise damaged on account of inherent
defect or fortuitous event, for the payment of the
freightage and other expenses.
The abandonment shall be proper,
however, if the cargo should consist of liquids and
they have leaked out, nothing remaining in the
containers but one-fourth part of their contents
(Article 687).
SUMMARY:
OBLIGATIONS OF THE CHARTERER:
1.
2.

3.

4.

5.

To pay freightage in full even if the charterer

does not complete the full cargo he bound
himself to ship.
To answer with the value of his shipment and
other property for the losses suffered by the
shipowner, captain, or other shippers arising
from confiscation, embargo, detention, or
other causes, where the charterer loads goods
different from those stated at the time of the
execution of the charter party.
To be jointly liable with the captain for losses
which may be caused to the other shippers
where the charterer ships goods for the
purpose of illicit commerce with the
knowledge of the shipowner or captain.
In the case of making a port to repair the hull,
machinery or equipment of the vessel, to wait
until the vessel is repaired or to pay for the
expenses of loading should the charterer
choose to unload.
Where the charterer unloads goods before
arriving at the port of destination without the
occurrence of the cases of force majeure
mentioned in Article 683, to pay (1) the
expenses of arrival, (2) the freightage in full,

26

6.

7.

8.

and (3) for the damages and losses caused to

other shippers, if any.
Where the charterer unloads before the
beginning of voyage, (1) to pay one-half of the
freightage, (2) to pay for the expenses of
stowing and restowing the cargo, and (3) to
pay any other damage which for this reason
he may cause to other shippers.
To pay freightage, other expenses and the
primage after the vessel has been unloaded
abd the cargo placed at the disposal of the
consignee.
Not to abandon merchandise damaged on
account of inherent defect or fortuitous event,
for the payment of the freightage and other
expenses.
F) RESCISSION - ARTICLE 688 TO 692

WHEN
MAY
THE
CHARTER
PARTY
RESCINDED UPON REQUEST OF THE CHARTERER?

When the delay does not exceed thirty

days, the shippers shall pay the full freightage for
the voyage out.
Should the delay exceed thirty days, they
shall only pay the freightage in proportion to the
distance covered by the vessel (Article 688).
WHEN MAY A CHARTER PARTY BE RESCINDED
UPON REQUEST OF THE PERSON FOR WHOM THE
VESSEL IS CHARTERED?
At the request of the person from whom the
vessel is chartered the charter party may be
rescinded:
1. If the charterer, at the termination of
the extra lay days, does not place the cargo
alongside the vessel.

BE

A charter party may be rescinded at the

request of the charterer:
1.
If before loading the vessel he
should not agree with that stated in the certificate
of tonnage, or if there should be an error in the
statement of the flag under which she sails.
2.
If the vessel should not be placed
at the disposal of the charterer within the period
and in the manner agreed upon.
3.
If after the vessel has put to sea,
she should return to the port of departure, on
account of risk from pirates, enemies, or bad
weather, and the shippers should agree to unload
her.
In the second and third cases the person
from whom the vessel was chartered shall
indemnify the charterer for the voyage out.
4.
If the charter should have been
made by the months, the charterers shall pay the
full freightage for one month, if the voyage is for a
port in the same waters, and for two months, if for
a port in different waters.
From one port to another of the Philippines
and adjacent islands, the freightage for one month
only shall be paid.
5.
If the vessel should make a port
during the voyage in order to make urgent repairs,
and the charterers should prefer to dispose of the
merchandise.

In such case the charterer must pay half

the freight stipulated, besides the demurrage due
for the lay days and extra lay days.
2. If the person from whom the vessel was
chartered should sell it before the charterer has
begun to load it, and the purchaser should load it
for his own account.
In such case the vendor shall indemnify
the charterer for the losses he may suffer.
If the new owner of the vessel should not
load it for his own account, the charter party shall
be respected, and the vendor shall indemnify the
purchaser if the former did not inform him of the
charter pending at the time of making the sale
(Article 689).
UPON WHAT GROUNDS MAY A CHARTER PARTY
BE RESCINDED?
The charter party shall be rescinded and all
actions arising therefrom shall be extinguished, if,
before the vessel puts to sea from the port of
departure, any of the following cases should occur:
1.
A declaration of war or interdiction
of commerce with the power to whose ports the
vessel was to make its voyage.
2.
A condition of blockade of the port
of destination of said vessel, or the breaking out of
an epidemic after the contract was executed.
3.
The prohibition to receive at the
said port the merchandise constituting the cargo
of the vessel.
4.
An indefinite detention, by reason
of an embargo of the vessel by order of the

27
government, or for any other reason independent
of the will of the ship agent.

law, then to the extent thereof (only)

the provision of the bill of lading is
void.

5.
The inability of the vessel to
navigate, without fault of the captain or ship
agent.
The unloading shall be made for the
account of the charterer (Article 690).

(B)LOANS
ON
BOTTOMRY
RESPONDENTIA
1.

AND

LOAN ON BOTTOMRY, DEFINED

WHAT IS BOTTOMRY AND ITS CONCEPT?

WHO

SHALL BE LIABLE FOR DAMAGES

SHOULD THE VESSEL FAIL TO PUT TO SEA BY REASON
OF CLOSING OF THE PORT OF DEPARTURE OR OTHER
TEMPORARY CAUSE?

If the vessel cannot put to sea on account of

the closing of the port of departure or any other
temporary cause, the charter shall remain in force,
with neither one of the contracting parties having
a right to claim damages.
The subsistence and wages of the crew
shall be considered as general average.
During the interruption, the charterer may
at the proper time and for his own account, unload
and load the merchandise, paying demurrage if he
delays the reloading after the cause for the
detention has ceased (Article 691).
WHEN
RESCINDED?
THEREOF?

IS

WHAT

CHARTER PARTY PARTIALLY

ARE
THE
CONSEQUENCES

A charter party shall be partially rescinded,

unless there is an agreement to the contrary, and
the captain shall only be entitled to the freightage
for the voyage out, if, by reason of a declaration of
war, closing of ports, or interdiction of commercial
relations during the voyage, the vessel should
make the port designated for such a case in the
instructions of the charterer (Article 692).
THE FOLLOWING CLAUSES IN CHARTER
PARTIES, NOT BEING CONTRARY TO LAW, MORALS,
GOOD CUSTOMS, PUBLIC ORDER AND PUBLIC POLICY,
ARE VALID STIPULATIONS:
a

Jason clause a stipulation in a

charter party that in case of a
maritime accident for which the
shipowner is not responsible by law,
contract or otherwise, the cargo
shippers, consignees or owners shall
contribute with the shipowner in
general average.
Clause payment a clause in a
charter party providing that the
Carriage of Goods by Sea Act (COGSA)
shall apply, subject to the extent that
any term of the bill of lading is
repugnant to the COGSA or applicable

Bottomry, in maritime law, is a contract whereby

the owner of the ship borrows for the use,
equipment or repair of the vessel, for a definite
term, and pledges the ship (or the keel or bottom
of the ship pars pro toto) as security, with the
stipulation that if the ship is lost during the voyage
or during the limited time on account of the perils
enumerated, the lender shall lose his money.
2.

LOAN ON RESPONDENTIA, DEFINED

WHAT IS RESPONDENTIA?

A loan on respondentia is one made on the goods

laden on board the ship, and which are to be sold
or exchanged in the course of the voyage, the
borrowers personal responsibility being deemed
the principal security for the performance of the
contract. The lender must be paid his principal and
interest, although the ship perishes, provided that
the goods are saved. The goods, or some part
thereof, are hypothecated as security for a loan,
the repayment of which is dependent upon
maritime risks. The usual form of a loan on
respondentia is that of a bond. In this kind of
maritime loan, it is the borrowers personally
responsibility which is deemed to be the principal
security for the performance of the contract,
hence the term respondentia.
WHAT IS THE RATIONALE BEHIND THIS KIND OF
LOANS?
The rationale is to encourage people to
invest/participate in maritime commerce (similar
to the reason behind the doctrine of limited
liability); such that if the security for the loan
(goods or vessel) is lost, the obligation to pay the
loan is extinguished.
HOW ARE LOANS ON BOTTOMRY AND
RESPONDENTIA DISTINGUISHED FROM SIMPLE LOAN?
The loan on bottomry or respondentia may be
distinguished from simple loan in the following
manner:
1.

In bottomry or respondentia, the rate of

interest is not subject to the Usury Law on
account of the extraordinary risks involved
whereas in simple loan, the rate of interest

28
must not exceed the ceiling fixed by the
Usury Law.
2. In bottomry or respondentia, there must
necessarily be a marine risk the existence
of which must be duly established whereas
in simple loan, there need not be such
risks involved.
3. The loan on bottomry or respondentia
must be executed in accordance with form
and manner required in the Code of
Commerce whereas in simple loan, the
formal requisites regarding contracts in
general would apply.
4. The loan on bottomry or respondentia
must recorded in the registry of vessels in
order to bind third persons whereas no
registration is required in the case of a
simple loan.
5. In the loan on bottomry or respondentia,
preference is extended to the last lender,
then prior lenders would not have
benefited from the preservation of the
security, whereas in a simple loan, the first
lender, as a general rule, enjoys
preference over subsequent ones.
6. An ordinary loan or may not have
collateral, while a loan on bottomry or
respondentia must have collateral.
7. The collateral of an ordinary loan may be
any property, real or personal, while the
collateral of a loan on bottomry or
respondentia must have a vessel or cargo
subject to maritime risks.
8. An ordinary loan is absolutely repayable,
while payment of a loan on bottomry or
repondentia depends upon the safe arrival
qat the port of the collateral of the loan.
9. An ordinary loan need not to be writing but
interest shall not be due unless expressly
stipulated in writing, while a loan on
bottomry or respondentia must be
recorded in writing.
10. The loss of the collateral if any, in an
ordinary loan does not extinguish the
same, while the loss of the collateral in
loan
on
bottomry
or
respondentia
extinguishes the same.
SPECIAL FEATURES OF LOANS ON BOTTOMRY
AND RESPONDENTIA:
c

These contracts must at least be in

writing; otherwise, they can not be
the basis of judicial action. In order
to affect third persons and entitle
it to preferential credit treatment,
the contract should be inscribed in
the certificate of registry and
seconded in the registry of
vessels.

e
f

g
3.

The captain may not borrow on

bottomry or respondentia except
on his own interest or portion
thereof, otherwise, the contract is
void.
The usury laws are inapplicable to
these contracts.
Should the goods upon which the
money is taken not be subjected to
risk,
the
contract
shall
be
considered a simple loan.
More recent loans are preferred
than prior loans.

CHARACTER OF LOAN - ARTICLE 719

WHAT IS THE CHARACTER OF A LOAN
IN BOTTOMRY OR 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, shall
be considered a loan on bottomry or respondentia
(Article 719).
The character of this kind of loan is that it is real,
unilateral and aleatory contract, thus:
1. Delivery of the amount loaned is
necessary for the perfection of the
contract;
2. Although there are reciprocal
benefits, the contract produces
obligations only for one party, the
borrower who must return the
amount borrowed plus premium;
and
3. The lender really runs known risks.
WHAT IS THE REAL NATURE OF A LOAN ON
BOTTOMRY OR LOAN ON RESPONDENTIA?
A loan on bottomry or a loan on
respondentia is not merely a simple loan of money
called mutuum, but it is also in the nature of
insurance. That is why the right on the part of the
creditor to recover the loan is premised on the
safe arrival of the vessel or the cargo at the port of
destination. If the vessel or cargo fails to reach the
port of destination safely, the creditor loses his
right to recover the loan. The reason is that the
creditor is acting not only as a lender, but at the
same time, also an insurer of the vessel or cargo
given as collateral for the loan.
4.

FORMS AND REQUISITES - ARTICLES 720 722

WHAT ARE THE FORMAL REQUIREMENTS OF

LOANS ON BOTTOMRY OR RESPONDENTIA?

29
Loans on bottomry or respondentia may be
executed:
1.
2.
3.

By means of a public instrument.

By means of a policy signed by the
contracting parties and the broker taking
part therein.
By means of a private instrument.

Under whichever of these forms the

contract is executed, it shall be entered in the
certificate of the registry of the vessel and shall be
recorded in the registry of vessels, without which
requisites the credits of this kind shall not have,
with regard to other credits, the preference which,
according to their nature, they should have,
although the obligation shall be valid between the
contracting parties.
The contracts made during a voyage shall
be governed by the provisions of Articles 583 and
611, and shall be effective with regard to third
persons from the date of their execution, if they
should be recorded in the registry of vessels of the
port of registry of the vessel before the lapse of
eight days following its arrival. If said eight days
should elapse without the record having been
made in the corresponding registry, the contracts
made during the voyage of a vessel shall produce
no effect with regard to third persons, except from
the day and date of their inscription.
In order that the policy of the contracts
executed in accordance with No. 2 may have
binding force, they must conform to the registry of
the broker who took part therein. With respect to
those executed in accordance with No. 3 the
acknowledgment of the signature shall be
required.
Contracts which are not reduced to writing
shall not give rise to judicial action (Article 720).
WHAT MUST BE STATED IN A CONTRACT ON
BOTTOMRY OR RESPONDENTIA?
In a contract on bottomry or respondentia the
following must be stated:
1.
2.
3.
4.
5.
6.
7.

The kind, name, and registry of the vessel.

The name, surname, and domicile of the
captain.
The names, surnames, and domiciles of
the person giving and the person receiving
the loan.
The amount of the loan and the premium
stipulated.
The time for repayment.
The goods pledged to secure repayment.
The voyage during which the risk is run
(Article 721).

HOW MAY CONTRACTS ON BOTTOMRY OR

RESPONDENTIA WHICH ARE MADE TO ORDER, BE
TRANSFERABLE?
The contract may be made to order, in which
case they shall be transferable by indorsement,
and the indorsee shall acquire all the rights and
shall incur all the risks corresponding to the
indorser (Article 724).
5.

ON WHAT CONSTITUTED - ARTICLES 724 725

WHAT MAY CONSTITUTE AS SECUTIRY FOR A

LOAN ON BOTTOMRY OR RESPONDENTIA?
The loans
separately:
1.
2.
3.
4.
5.

On
On
On
On
On

the
the
the
the
the

may be

constituted

jointly

or

hull of the vessel.

rigging.
equipment, provisions, and fuel.
engine, if the vessel is a steamer.
merchandise loaded.

If the loan in constituted on the hull of the

vessel, the rigging, equipment and other goods,
provisions, fuel, steam engines, and the freightage
earned during the voyage on which the loan is
made shall also be considered as included in the
liability for the loan.
If the loan is made on the cargo, all that
which constitutes the same shall be subject to the
repayment; and if on a particular object of the
vessel or of the cargo, only the object concretely
and specifically mentioned shall be liable (Article
724).
MAY LOANS ON BOTTOMRY BE MADE ON THE
SALARIES OF THE CREW OR ON PROFITS?
No loans on bottomry may be made on the
salaries of the crew or on the profits expected
(Article 725).
The reason for this rule is that the salaries of
the crew are not part of the capital of the ship
owner, nor are future profits or commercial effects
that could be given as collateral.
6.

AMOUNT -ARTICLES 723, 726 725

HOW SHALL THE VALUE OF THE PRINCIPAL LOAN

BE DETERMINED?
Loans may be made in goods and in
merchandise, fixing their value in order to
determine the principal of the loan (Article 723).
WHAT MAY CONSTITUTE AS SECURITY FOR A
LAON ON BOTTOMRY OR RESPONDENTIA?

30
The loans
separately:
1.
2.
3.
4.
5.

On
On
On
On
On

the
the
the
the
the

may be

constituted

jointly

or

hull of the vessel.

rigging.
equipment, provisions, and fuel.
engine, if the vessel is a steamer.
merchandise loaded.

If the loan in constituted on the hull of the

vessel, the rigging, equipment and other goods,
provisions, fuel, steam engines, and the freightage
earned during the voyage on which the loan is
made shall also be considered as included in the
liability for the loan. cdta
If the loan is made on the cargo, all that
which constitutes the same shall be subject to the
repayment; and if on a particular object of the
vessel or of the cargo, only the object concretely
and specifically mentioned shall be liable (Article
724).

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
617).
IF THE CAPTAIN HAS NO FUNDS TO COMPLY WITH HIS
OBLIGATION, HOW SHALL HE OBTAIN FUNDS?
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.
2.

No loans on bottomry may be made on the

salaries of the crew or on the profits expected.
7.

3.
4.

BY WHOM - ARTICLES 728, 617, 611, 583

5.
WHO

SHALL BE BOUND BY THE LOAN

OBTAINED BY THE CAPTAIN AT THE PLACE OF
RESIDENCE OF THE OWNERS OF THE VESSEL?

The loan which the captain takes at the point

of residence of the owners of the vessel shall only
affect that part thereof which belongs to the
captain, if the other owners or their agents should
not have given their express authorization therefor
or should not have taken part in the transaction.
If one or more of the owners should be
requested to furnish the amount necessary to
repair or provision the vessel, and they should not
do so within twenty-four hours, the interest which
the parties in default may have in the vessel shall
be liable for the loan in the proper proportion.
Outside of the residence of the owners the
captain may contract loans in accordance with the
provisions of Articles 583 and 611 (Article 728).
WHAT CONTRACTS ON
RESPONDENTIA ARE PROHIBITED?

BOTTOMRY

OR

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

By requesting said funds from the

consignee of the vessel or correspondents
of the ship agent.
By applying to the consignees of the cargo
or to those interested therein.
By drawing on the ship agent.
By borrowing the amount required by
means of a loan on bottomry.
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.

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
(Article 611).
WHAT FORMALITIES SHOULD THE CAPTAIN FOLLOW IF
THE CAPTAIN SHOULD CONTRACT ONE OR MORE OF
THE OBLIGATIONS MENTIONED IN SUBDIVISIONS 8 AND
9 OF ARTICLE 580?

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

31
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.
The omission of this formality shall make
the captain personally liable for the credits
prejudiced on his account (Article 583).
8.

The same procedure shall be observed

with regard to the goods taken as loan, if they
were not loaded (Article 727).
WHAT IS THE ORDER OF
LOANS ON BOTTOMRY?

PREFERENCE OF

Loans made during the voyage shall have

preference over those made before the clearing of
the vessel, and they shall be graduated in the
inverse order of their dates.

EFFECTS OF CONTRACT - ARTICLES 719, 729,

726, 727 AND 730

The loans for the last voyage shall have

preference over prior ones.

WHEN IS A LOAN CONSIDERED BOTTOMRY OR

RESPONDENTIA?

Should several loans have been made at

the same port of arrival under stress and for the
same purpose, all of them shall be paid pro rata
(Article 730).

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, shall
be considered a loan on bottomry or respondentia
(Article 719).

F. BILL OF LADING
1. CONTENTS - ARTICLES 706, 707, 713, 714
WHAT MUST A BILL OF LADING CONTAIN:

WHAT ARE THE INSTANCES WHERE THE CONSTRACT IS

CONSIDERED A SIMPLE LOAN AND NOT A LOAN ON
BOTTOMRY OR RESPONDENTIA?

Should the goods on which money is taken not

be subjected to risk, the contract shall be
considered a simple loan, with the obligation on
the part of the borrower to return the principal and
interest at the legal rate, if that agreed upon
should not be lower (Article 729).

The captain of the vessel and the shipper shall

have the obligation of drawing up the bill of lading
in which shall be stated:
1.
2.
3.
4.
5.

WHAT IS THE CONSEQUENCE IF THE LENDER SHOULD

PROVE THAT THE AMOUNT OF THE LOAN IS LARGER
THAN THE VALUE OF THE COLLATERAL?

If the lender should prove that he loaned an

amount larger than the value of the object liable
for the bottomry loan, on account of fraudulent
measures employed by the borrower, the loan
shall be valid only for the amount at which said
object is appraised by experts.

6.
7.

The name, registry, and tonnage of the

vessel.
The name of the captain and his domicile.
The port of loading and that of unloading.
The name of the shipper.
The name of the consignee, if the bill of
lading is issued in the name of a specified
person.
The quantity, quality, number of packages
and marks of the merchandise.
The freightage and the primage stipulated
(Article 706).
TO WHOSE ORDER MAY A BILL OF LADING BE
ISSUED?
The bill of lading may be issued:

The surplus principal shall be returned

with legal interests for the entire time required for
repayment (Article 726).
WHAT IS THE CONSEQUENCE IF THE FULL AMOUNT OF
THE LOAN CONTRACTED IS MORE
NECESSARY TO LOAD THE VESSEL?

THAN

WHAT

1.
2.
3.

To bearer,
to order,
or in the name of a specified person
(Article 706).

IS

If the full amount of the loan contracted in

order to load the vessel should not be used for the
cargo, the balance shall be returned before
clearing.

WHAT IS THE OBLIGATION OF THE PERSON TO

WHOSE ORDER THE BILL OF LADING WAS ISSUED?
WHAT IS THE RIGHT OF THE SHIPPER?
The person in whose name the bill of lading
was issued must sign the same within twenty-four

32
hours after the cargo has been received on board,
the shipper being entitled to demand the
unloading at the expense of the captain should the
latter not sign it, and, in every case, the losses
and damages suffered thereby (Article 706).
HOW MANY COPIES MUST THE BILL OF LADING
BE MADE?

Four true copies of the original bill of lading

shall be made, and all of them shall be signed by
the captain and the shipper. Of these, the shipper
shall keep one and send another to the consignee;
the captain shall take two, one for himself and
another for the ship agent.

WHO BEARS THE EXPENSES ARISING FROM

EXAMINATION OF THE CARGO IN SUCH A CASE?

THE

The expenses arising from the examination of

the cargo shall be defrayed by the ship agent,
without prejudice to the right of action of the latter
against the first captain if he ceased to be such
through his own fault. Should said examination not
be made, it shall be understood that the new
captain accepts the cargo as it appears from the
bills of lading issued (Article 714).
2. PROBATIVE VALUE - ARTICLES 709, 710
WHAT IS THE PROBATIVE VALUE OF A BILL OF LADING

There may also be drawn up as many

copies of the bill of lading as may be considered
necessary by the person interested; but when they
are issued to order or to bearer, they shall be
stated in all the copies, be they the first four or the
subsequent ones, the destination of each one,
stating whether it is for the agent, for the captain,
for the shipper, or for the consignee. If the copy
sent to the latter should have a duplicate, this
circumstance and the fact that it is not valid
except in default of the first one must be stated
therein (Article 707).
WHAT IS THE OBLIGATION OF THE CAPTAIN IF
BEFORE THE DELIVERY OF THE CARGO A NEW BILL OF
LADING IS DEMANDED BECAUSE OF LOSS OF STHE
PREVIOUS ONE? WHAT IS THE CONDITION OF THE
ISSUANCE OF THE NEW BILL OF LADING?

If before the delivery of the cargo a new bill of

lading should be demanded of the captain, on the
allegation that the failure to present the previous
ones is due to their loss or to any other just cause,
he shall be obliged to issue it, provided that
security for the value of the cargo is given to his
satisfaction,
but
without
changing
the
consignment,
and
stating
therein
the
circumstances prescribed in the last paragraph of
Article 707, under penalty, should he not so state,
of being held liable for said cargo if improperly
delivered through his fault (Article 713).
WHAT IS THE RIGHT OF THE SHIPPER IF BEFORE THE
VESSEL IS PUT TO SEA, THE CAPTAIN SHOULD DIE OR
SHOULD CEASE TO HOLD HIS POSITION?
If before the vessel puts to sea the captain
should die or should cease to hold his position
through any cause, the shippers shall have the
right to demand of the new captain the ratification
of the first bills of lading, and the latter must do
so, provided that all the copies previously issued
be presented or returned to him, and it should
appear from all examination of the cargo that they
are correct (Article 714).

DRAWN UP IN ACCORDANCE WITH THE PROVISIONS OF

THE CODE OF COMMERCE?

A bill of lading drawn up in accordance with

the provisions of this title shall be proof as
between all those interested in the cargo and
between the latter and the insurers, proof to the
contrary being reserved for the latter (Article 709).
IN CASE THE BILLS OF LADINGS DO NOT AGREE,
WHICH BILL OF LADING SHALL BE UPHELD?
If the bills of lading do not agree, and no
change or erasure can be observed in any of them,
those possessed by the shipper or consignee
signed by the captain shall be proof against the
captain or ship agent in favor of the consignee or
shipper; and those possessed by the captain or
ship agent signed by the shipper shall be proof
against the shipper or consignee in favor of the
captain or ship agent (Article 710).
G. PASSENGERS ON SEA VOYAGE
1.

NATURE OF CONTRACT - ARTICLE

695

WHAT IS THE NATURE OF A CONTRACT OF

RIGHT TO PASSAGE?
A contract of right to passage is personal in
nature. Thus, the Code of Commerce provides: The
right to passage, if issued to a specified person,
may not be transferred without the consent of the
captain or of the consignee (Article 695).
2.

OBLIGATIONS OF
ARTICLES
693,
694,700

PASSENGER 699,
704,

HOW SHALL THE PASSAGE PRICE BE

DETERMINED IF THE SAME HAS NOT BEEN AGREED
UPON?

33
If the passage price has not been agreed
upon, the judge or court shall summarily fix it,
after a declaration of experts (Article 693).
WHAT IS

THE RIGHT OF THE CAPTAIN IF

CONSTRACT IS RESCNDED BEFORE OR AFTER
COMMENCEMENT OF THE VOYAGE?

2.

THE
THE

If the contract is rescinded, before or after the

commencement of the voyage, the captain shall
have a right to claim payment of what he may
have furnished the passengers (Article 699).
WHAT IS THE RIGHT OF THE CAPTAIN IN ORDER TO
COLLECT THE PASSAGE-MONEY AND EXPENSES OF
SUSTENANCE?
The captain, in order to collect the passagemoney and expenses of sustenance, may retain
the goods belonging to the passenger, and in case
of the sale of the same he shall be given
preference over other creditors acting the same
way as in the collection of freightage (Article 704).

3.

WHAT MUST THE CAPTAIN DO IF THE PASSENGER

SHOULD NOT ARRIVE ON BAORD AT THE FIXED TIME OR
SHOULD LEAVE THE VESSEL WITHOUT PERMISSION?
Should the passenger not arrive on board at
the time fixed, or should leave the vessel without
permission from the captain when the latter is
ready to leave the port, the captain may continue
the voyage and demand the full passage price
(Article 694).

4.

WHO SHALL HAVE THE POWER TO PRESERVE ORDER

AND DISCIPLINE ON BOARD THE VESSEL?
In all matters pertaining to the preservation of
order and discipline on board the vessel
passengers shall be subject to the orders of the
captain, without any distinction whatsoever
(Article 700).
3.

RIGHTS
OF
PASSENGERS
-ARTICLES 697, 698

4.

If before the voyage is begun it is

suspended through the exclusive fault of
the captain or ship agent, the passengers
shall have the right to a refund of their
fares and to recover losses and damages;
but if the suspension is due to fortuitous
events, or to force majeure, or to any
other cause independent of the captain or
ship agent, the passengers shall only be
entitled to the return of the fare (Article
697).

RESPONSIBILITIES OF CAPTAIN ARTS. 701, 702, 705, 612,

703; ARTICLE 1754, CIVIL CODE

WHAT ARE THE OBLIGATIONS OF THE CAPTAIN

WITH REGARD TO TO THE CONVENIENCE AND
SUBSISTENCE OF PASSENGERS DURING VOYAGE?
1.

WHAT ARE THE RIGHTS OF PASSENGERS IF

THE VOYAGE IS NOT COMPLETED?
1.

In case a voyage already begun should be

interrupted, the passengers shall be
obliged to pay the fare in proportion to the
distance covered, without right to recover
for losses and damages if the interruption
is due to fortuitous event or to force
majeure, but with a right to indemnity if
the interruption should have been caused
by the captain exclusively. If the
interruption should be caused by the
disability of the vessel, and a passenger
should agree to await the repairs, he may
not be required to pay any increased price
of passage, but his living expenses during
the stay shall be for his own account
(Article 698).
In case of delay in the departure of the
vessel, the passengers have the right to
remain on board and to be furnished with
food for the account of the vessel unless
the delay is due to fortuitous events or to
force majeure. If the delay should exceed
ten days, passengers requesting the same
shall be entitled to the return of the fare;
and if it is due exclusively to the fault of
the captain or ship agent, they may also
demand indemnity for losses and damages
(Article 698).
A vessel exclusively devoted to the
transportation of passengers must take
them directly to the port or ports of
destination, no matter what the number of
passengers may be, making all the stops
indicated in its itinerary (Article 698).

2.

The convenience or the interest of the

passengers shall not obligate or empower
the captain to stand in shore or enter
places which may take the vessel out of
her course, or to remain in the ports he
must or in under necessity of touching for
a period longer than that required by the
needs of navigation (Article 701).
In the absence of an agreement to the
contrary, it shall be understood that the
subsistence of the passengers during the
voyage is included in the price of the
passage; but should it be for the account
of the latter, the captain shall be under
obligation, in case of necessity, to furnish
the supply of food necessary for their
sustenance at a reasonable price (Article
702).

34
3.

In case of the death of a passenger during

the voyage, the captain shall be
authorized, with regard to the body, to
take
the
steps
required
by
the
circumstances, and shall carefully take
care of the papers and goods which may
be on board belonging to the passenger,
observing the provisions of case No. 10 of
Article 612 with regard to members of the
crew (Article 705).

WHAT ARE THE INHERENT OBLIGATIONS IN THE

OFFICE OF THE CAPTAIN?
The following obligations shall be inherent in
the office of captain:
1.

2.
3.

4.

5.

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.
To have a copy of this code on board.
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.
Before receiving cargo, to make with the
officers of the crew 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.
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 twenty-four 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

35

11.

12.

13.
14.

15.

16.

absence, of members of the crew as

witnesses.
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.
To inform the ship agent from the port at
which the vessel arrives, of the reason of
his 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.
To observe the rules with respect to
situation, lights and maneuvers in order to
avoid collisions.
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.
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 twenty-four
hours, specifying therein all the incidents
of the wreck, in accordance with
subdivision 8 of this article.
To comply with the obligations imposed by
the laws and regulations on navigation,
customs, health, and others (Article 612).
HOW IS A PASSENGER CONSIDERED INSOFAR

AS THE GOODS
CONCERNED?

HE

CARRIES

ON

BOARD

H.
CARRIAGE
OF
GOODS
BY
(COMMONWEALTH ACT NO. 65; PUBLIC
521, 74TH US CONGRESS)

SEA
ACT
ACT NO.

WHAT IS THE PRINCIPAL PURPOSE OF THE CARRIAGE

OF GOODS BY SEA ACT?
The principal purpose of the COGSA is to bring
about uniformity to ocean bills of lading and to
give effect to the Brussels Treaty (Preamble,
Commonwealth Act. No. 65).
WHAT CONTRACTS ARE COVERED BY THE COGSA?
COGSA is applicable to all contracts for the
carriage of goods by sea to and from Philippine
ports in foreign trade (Section 1). COGSA does not
apply to purely domestic transport.
NOTES:
To know whether which law is applicable to a
contract for the carriage of goods by sea:
a.
b.
c.

Distinguish whether the carrier is a

common carrier or
Where the vessel is going:
1.

2.

From the Philippines to a

foreign country: apply laws of
such foreign country (Article
1753, Civil Code);
From a foreign country to the
Philippines:

If

common

carrier:

ARE

A passenger shall be considered a shipper insofar

as the goods he carries on board are concerned,
and the captain shall not be responsible for what
the former may keep under his immediate and
special custody, unless the damage arises from an
act of the captain or of the crew (Article 703).
WHAT RULES SHALL APPLY TO THE PASSENGERS
BAGGAGE?
1.

to
2003
concerning
the
responsibility
of
hotel-keepers
shall be applicable (Article 1754
Civil Code).

The provisions of Articles 1733 to

1753
shall
apply
to
the
passengers baggage which is not
under his custody or in that of his
employees. As to other baggage,
the rules in Articles 1998 and 2000

primarily
governed by the Civil Code
then COGSA if
applicable (e.g., foreign trade)
Code
of
Commerce

If private carrier:
-

COGSA
more
specific
Code
of
Commerce
Civil
Code
(provisions
not
dealing
with

36
common
carriers,
e.g.,
torts, contracts)
IN

WHAT
SITUATIONS
PRIMARILY APPLY?

DOES

1.
2.
3.

COGSA

To provide the carrier an opportunity to look

for the lost goods;
To discover who is at fault;
In case of transshipment, to determine, when
and where the damage occurred.
NOTES:

Where the parties expressly stipulate that COGSA

shall
govern
their
respective
rights
and
obligations.

CAN COGSA APPLY TO DOMESTIC TRADE?

Generally, no, unless the parties agree otherwise.

WHAT APPLICATION DOES COGSA HAVE IN CARRIAGE

OF PASSENGERS?

None, COGSA applies only to carriage of goods.

WHAT IS THE PRESCRIPTIVE PERIOD UNDER SECTION 3
(6)?
The carrier and the agent shall be discharged from
liability, in respect of loss or damage unless suit is
brought within year from:
1.
2.

In case of damaged goods: From the time the

delivery of the goods was made.
In case of non-delivery (i.e., lost goods): From
the date the gods should have been delivered.

The shipper, consignee or legal holder of a bill

of lading may invoke the prescriptive period
although the proviso in Section 3 (6) gives the
impression that it is the shipper alone who can
invoke the same.
The prescriptive period does not apply to the
action by an insurer as subrogee of the
consignee.
Stipulation in a bill limiting the carriers
liability contrary to Section 3 (8) is void,
example: provision in the bill excepting the
owner from liability for loss or damage of
cargo unless a written notice thereof was
given to the carrier within 30 days.
Such provision is contrary to the provision of
the COGSA since Section 3 provides that even
if a notice of loss or damage is not given as
required, that fact shall not prejudice the right
of the shipper to bring a suit within 1 year
after delivery of the goods.
Notice requirements:
COGSA:

Section 3 (6) If loss or

damage
is
apparent:
protest as soon as the
goods are received.

WHAT RULES GOVERN CASES OF MISDELIVERY

OR CONVERSION?
The one-year prescriptive period in Section 3 (6)
applies only where there is loss or damage. Loss
contemplates only where no delivery at all was
made by the carrier of the goods because the
same had perished, gone out of commerce, or
disappeared in such a way that their existence is
unknown or they cannot be recovered. Hence, in
case of misdelivery (delivery to wrong persons) or
conversion of the goods, the rules on prescription
found in the Civil Code shall apply, that is, 10
years for contracts; 4 years for tortious
obligations.
IS THE PRESCRIPTIVE PERIOD UNDER THE
COGSA INTERRUPTED FROM THE TIME OF THE
MAKING OF EXTRA-JUDICIAL DEMAND OR FILING OF
JUDICIAL ACTION AS PROVIDED BY ARTICLE 115 OF
THE CIVIL CODE?

If not apparent protest

within 3 days after delivery.
Code of commerce: Article 366If apparent protest at the
time of the delivery
If not apparent protest
within 24 hours after receipt
WARSAW: Article 26:
In case of damage of
baggage protest within 3
days from receipt
In case of damage of
goods protest within 7
days from receipt
In case of delay protest
within
14
days
from
receipt.

No. The one-year period provided under

the COGSA is a special prescriptive period, uniform
worldwide.

WHAT IS THE RATIONALE BEHIND THE 3-DAY

NOTICE
AND
RELATIVELY
SHORT
PERIOD
OF
PRESCRIPTION?

Failure to comply with the 3-day notice

requirement under the COGSA does not affect
the right of the ship owner to bring action
provided he brings the same within 1 year.
This must be distinguished from the notice
requirement in the WARSAW Convention and

37

Code of Commerce, where notice requirement

is a condition precedent for the right of action
against the ship owner to accrue.
Amount recoverable in case of loss: $500.00
per package, even if not stipulated.
The plaintiff cannot dispute said limitation on
the ground that it was not freely and fairly
agreed upon or that it is against public policy
because the law itself provides for said
limitation; thus the same is deemed read into
their contract.
Package here means individual packaging of
the goods (does not cover one container van.
Parties may agree to an amount of liability less
than &500.00 under Section 4 (5). By
providing that $500.00 is the maximum
liability, the law does not disallow an
agreement for liability at a lesser amount.
Moreover, Article 1749 of the Civil Code
expressly allows the limitation of the carriers
liability.

WHEN SHALL A
BE ISSUED?

FOR WHAT LOSSES AND DAMAGES ARE THE CARRIER

AND THE SHIP NOT LIABLE?
1.

Neither the carrier nor the ship shall be

liable for loss or damage arising or
resulting from unseaworthiness unless
caused by want of due diligence on the
part of the carrier to make the ship
seaworthy, and to secure that the ship is
properly manned, equipped, and supplied,
and to make to the holds, refrigerating and
cool chambers, and all other parts of the
ship in which goods are carried fit and safe
for
their
reception,
carriage,
and
preservation in accordance with the
provisions of paragraph (1) of section 3.
Whenever loss or damage has resulted
from unseaworthiness, the burden of
proving the exercise of due diligence shall
be on the carrier or other persons claiming
exemption under the section.

2.

Neither the carrier nor the ship shall be

responsible for loss or damage arising or
resulting from

SHIPPED BILL OF LADING

After the goods are loaded the bill of

lading to be issued by the carrier, master, or agent
of the carrier to the shipper shall, if the shipper so
demands, be a "shipped" bill of lading Provided,
That if the shipper shall have previously taken up
any document of title to such goods, he shall
surrender the same as against the issue of the
"shipped" bill of lading, but at the option of the
carrier such document of title may be noted at the
port of shipment by the carrier, master, or agent
with name or name the names of the ship or ships
upon which the goods have been shipped and the
date or dates of shipment, and when so noted the
same shall for the purpose of this section be
deemed to constitute a "shipped" bill of lading (No.
7, Section 3).
MAY THE CARRIER BE RELIEVED FROM
LIABILITY
FOR
LOSS
OR
DAMAGE
CAUSED
BY
NEGLIGENCE, FAULT OR FAILURE IN THE FULFILLMENT
OF ITS DUTIES AND OBLIGATIONS?

1.

2.
3.
4.
5.
6.
7.
8.
9.
10.

Any clause, covenant, or agreement in a

contract of carriage relieving the carrier or the
ship from liability for loss or damage to or in
connection with the goods, arising from
negligence, fault, or failure in the duties and
obligations provided in this section, or lessening
such liability otherwise than as provided in this
Act, shall be null and void and of no effect. A
benefit of insurance in favor of the carrier, or
similar clause, shall be deemed to be a clause
relieving the carrier from liability (No. 8, Section
3).
RIGHTS AND IMMUNITIES:

11.
12.
13.

14.

Act, neglect, or default of the

master, mariner, pilot, or the
servants of the carrier in the
navigation or in the management
of the ship;
Fire, unless caused by the actual
fault or privity of the carrier;
Perils, dangers, and accidents of
the sea or other navigable waters;
Act of God;
Act of war,
Act of public enemies;
Arrest or restraint of princes,
rulers, or people, or seizure under
legal process;
Quarantine restrictions;
Act or omission of the shipper or
owner of the goods, his agent or
representative;
Strikes or lockouts or stoppage or
restraint of labor from whatever
cause, whether partial or general;
Provided, That nothing herein
contained shall be construed to
relieve a carrier from responsibility
for the carrier's own acts;
Riots and civil commotions;
Saving or attempting to save life
or property at sea;
Wastage in bulk or weight or any
other loss or damage arising from
inherent defect, quality, or vice of
the goods;
Insufficiency of packing;

38

3.

15. Insufficiency of inadequacy of

marks;
16. Latent defects not discoverable by
due diligence; and
17. Any other cause arising without
the actual fault and privity of the
carrier and without the fault or
neglect of the agents or servants
of the carrier, but the burden of
proof shall be on the person
claiming the benefit of this
exception to show that neither the
actual fault or privity of the carrier
nor the fault or neglect of the
agents or servants of the carrier
contributed to the loss or damage.

maximum shall not be less than the figure above

named. In no event shall the carrier be liable for
more than the amount of damage actually
sustained.

Any deviation in saving or attempting to

save life or property at sea, or any
reasonable deviation shall not be deemed
to be an infringement or breach of this Act
or of the contract of carriage, and the
carrier shall not be liable for any loss or
damage resulting therefrom: Provided,
however, That if the deviation is for the
purpose of loading cargo or unloading
cargo or passengers it shall, prima facie,
be regarded as unreasonable (Section 4).

Goods of an inflammable, explosive, or

dangerous nature to the shipment whereof the
carrier, master or agent of the carrier, has not
consented with knowledge of their nature and
character, may at any time before discharge be
landed at any place or destroyed or rendered
innocuous by the carrier without compensation,
and the shipper of such goods shall be liable for all
damages and expenses directly or indirectly
arising out of or resulting from such shipment. If
any such goods shipped with such knowledge and
consent shall become a danger to the ship or
cargo, they may in like manner be landed at any
place, or destroyed or rendered innocuous by the
carrier without liability on the part of the carrier
except to general average, if any (Section 4, No.
6).

WHAT ARE THE LOSSES OR DAMAGES FOR

WHICH THE SHIPPER SHALL NOT BE LIABLE?
The shipper shall not be responsible for
loss or damage sustained by the carrier or the ship
arising from any cause without the act, fault, or
neglect of the shipper, his agents, or servants
(Section 4, No. 3).
WHAT IS THE LIMIT OF THE LIABILITY OF THE CARRIER
OR THE SHIP FOR THE LOSS OR DAMAGE TO THE
GOODS TRANSPORTED?

Neither the carrier nor the ship shall in any event

be or become liable for any loss or damage to or in
connection with the transportation of goods in an
amount exceeding $600 per package lawful
money of the United States, or in case of goods
not shipped in packages, per customary freight
unit, or the equivalent of that sum in other
currency, unless the nature and value of such
goods have been declared by the shipper before
shipment and inserted in the bill of lading. This
declaration, if embodied in the bill of lading, shall
be prima facie evidence, but shall not be
conclusive on the carrier.
By agreement between the carrier,
master, or agent of the carrier, and the shipper
another maximum amount than that mentioned in
this paragraph may be fixed: Provided, That such

Neither the carrier nor the ship shall be

responsible in any event for loss or damage to or
in connection with the transportation of the goods
if the nature or value thereof has been knowingly
and fraudulently misstated by the shipper in the
bill of lading (Section 4, No. 5).
WHAT MAY BE DONE TO GOODS OF
INFLAMMABLE, EXPLOSIVE, OR DANGEROUS NATURE IN
CASE THE CARRIER, MASTER OR AGENT OF THE
CARRIER HAS NOT KNOWLINGLY CONSENTED TO THE
CARRIAGE THEREOF?

SURRENDER OF RIGHTS AND IMMUNITIES AND

INCREASE OF RESPONSIBILITIES AND LIABILITIES:
MAY THE CARRIER SURRENDER ANY OF HIS
RIGHTS
AND
IMMUNITIES
OR
INCREASE
HIS
RESPONSIBILITIES?
A carrier shall be at liberty to surrender in whole or
in part all or any of his rights and immunities or to
increase any of his responsibilities and liabilities
under this Act, provided such surrender or
increase shall be embodied in the bill of lading
issued to the shipper.
The provisions of this Act shall not be
applicable to charter parties; but if bills of lading
are issued in the case of a ship under charter
party, they shall comply with the terms of this Act.
Nothing in this Act shall be held to prevent the
insertion in a bill of lading of any lawful provision
regarding general average (Section 5).
Note that what the law allows the carrier
to do is to increase any of his responsibilities but
not to unilaterally diminish the same. He is also

39
allowed to surrender any of his rights and
immunities but not to unilaterally increase his
rights and immunities.
SPECIAL CONDITIONS:
WHILE THE CARRIER CANNOT UNILATERALLY DIMINISH
HIS RESPONSIBILITIES NOR INCREASE HIS RIGHTS AND
IMMUNITIES, MAY THE CARRIER AND THE SHIPPER
AGREE ON THE TERMS OF RESPONSIBILITY AND
LIABILITY OF THE CARRIER AS WELL AS THE RIGHTS
AND IMMUNITIES OF THE CARRIER WITH RESPECT TO
THE GOODS SHIPPED OR HIS OBLIGATION AS TO
SEAWORTHINESS?

Notwithstanding the provisions of the preceding

sections, a carrier, master or agent of the carrier,
and a shipper shall, in regard to any particular
goods be at liberty to enter into any agreement in
any terms as to the responsibility and liability of
the carrier for such goods, and as to the rights and
immunities of the carrier in respect of such goods,
or his obligation as to seaworthiness (so far as the
stipulation regarding seaworthiness is not contrary
to public policy), or the care or diligence of his
servants or agents in regard to the loading,
handling stowage, carriage, custody, care, and
discharge of the goods carried by sea: Provided,
That in this case no bill of lading has been or shall
be issued and that the terms agreed shall be
embodied in a receipt which shall be a nonnegotiable document and shall be marked as such.
Any agreement so entered into shall have
full legal effect: Provided, That this section shall
not apply to ordinary commercial shipments made
in the ordinary course of trade but only to other
shipments where the character or condition of the
property to be carried or the circumstances, terms,
and conditions under which the carriage is to be
performed are such as reasonably to justify a
special agreement (Section 6).
MAY THE CARRIER AND THE SHIPPER
STIPULATE ON THE RESPONSIBILITY OF THE CARRIER
PRIOR TO THE LOADING OF THE CARGO AND
SUBSEQUENT TO THE DISCHARGE THEREOF FROM THE
SHIP?
Nothing contained in this Act shall prevent a
carrier or a shipper from entering into any
agreement, stipulation, condition, reservation, or
exemption as to the responsibility and liability of
the carrier or the ship for the loss or damage to or
in connection with the custody and care and
handling of goods prior to the loading on and
subsequent to the discharge from the ship on
which the goods are carried by sea (Section 7).
DOES

THE COGSA AFFECT THE RIGHTS AND

OBLIGATIONS OF THE CARRIER UNDER SPECIFIC LAW?

The provisions of this Act shall not affect the rights

and obligations of the carrier under the provisions
of the Shipping Act, 1916, or under the provisions
of section 4281 to 4289, inclusive, of the Revised
Statutes of the United States, or of any
amendments thereto; or under the provisions of
any other enactment for the time being in force
relating to the limitation of the liability of the
owners of seagoing vessels (Section 8).
MAY THE COMMON CARRIER DISCRIMINATE BETWEEN
COMPETITING SHIPPERS?
Nothing contained in this Act shall be construed as
permitting a common carrier by water to
discriminate between competing shippers similarly
place in time and circumstances, either (a) with
respect to the right to demand and receive bills of
lading subject to the provisions of this Act; or (b)
when issuing such bills of lading, either in the
surrender of any of the carrier's rights and
immunities or in the increase of any of the
carrier's responsibilities and liabilities pursuant to
section 6, title I, of this Act or (c) in any other way
prohibited by the Shipping Act, 1916, s amended
(Section 9).
WHEN IS THE WEIGHT STATED IN THE BILL OF LADING
NOT A PRIMA FACIE EVIDENCE
AGAINST
THE
CARRIER
NOR
GUARANTEED BY THE SHIPPER?

OF ITS ACCURACY
DEEMED
TO
BE

Where under the customs of any trade the weight

of any bulk cargo inserted in the bill of lading is a
weight ascertained or accepted by a third party
other than the carrier or the shipper, and the fact
that the weight is so ascertained or accepted is
stated in the bill of lading, then, notwithstanding
any thing in this Act, the bill of lading shall not be
deemed to be prima facie evidence against the
carrier of the receipt of goods of the weight so
inserted in the bill of lading, and the accuracy
thereof at the time of shipment shall not be
deemed to have been guaranteed by the shipper
(Section 11).
TO WHAT CONTRACTS SHALL THE COGSA NOT APPLY?
This Act shall apply to all contracts for carriage of
goods by sea to or from ports of the United States
in foreign trade. As used in this Act the term
"United States" includes its districts, territories,
and possessions: Provided, however, That the
Philippine legislature may by law exclude its
application to transportation to or from ports of
the Philippine Islands. The term "foreign trade"
means the transportation of goods between the
ports of the United States and ports of foreign
countries. Nothing in this Act shall be held to apply
to contracts for carriage of goods by sea between

40
any port of the United States or its possessions,
and any other port of the United States or its
possession: Provided, however, That any bill of
lading or similar document of title which is
evidence of a contract for the carriage of goods by
sea between such ports, containing an express
statement that it shall be subject to the provisions
of this Act, shall be subjected hereto as fully as if
subject hereto as fully as if subject hereto by the
express provisions of this Act: Provided, further,
That every bill of lading or similar document of
title which is evidence of a contract for the
carriage of goods by sea from ports of the United
States, in foreign trade, shall contain a statement
that it shall have effect subject to the provisions of
this Act (section 13).
WHEN
MAY
SUSPENDED?

THE

PROVISIONS

OF

COGSA

OTHERS TERMS:
1. WHAT IS BARRATRY?
These
are
destructive
acts
committed by the crew against the vessel.
2. HOW DO YOU DISTINGUISH BARRATRY FROM
MUTINY?
Mutiny is the act committed by the
crew against the captain for the purpose of
taking over the command of the vessel,
while barratry is committed not for the
purpose of taking over the command of
the vessel.

BE

Upon the certification of the Secretary of

Commerce that the foreign commerce of the
United States in its competition with that of foreign
nations is prejudiced the provisions, or any of
them, of Title I of this Act, or by the laws of any
foreign country or countries relating to the
carriage of goods by sea, the President of the
United States, may, from time to time, by
proclamation, suspend any or all provisions of Title
I of this Act for such periods of time or indefinitely
as may be designated in the proclamation. The
President may at any time rescind such
suspension of Title I hereof, and any provisions
thereof which may have been suspended shall
thereby be reinstated and again apply to contracts
thereafter made for the carriage of goods by sea.
Any proclamation of suspension or rescission of
any such suspension shall take effect on a date
named therein, which date shall be not less than
ten days from the issue of the proclamation.
Any contract for the carriage of goods by sea,
subject to the provisions of this Act, effective
during any period when title I hereof, or any part
thereof, is suspended, shall be subject to all
provisions of law now or hereafter applicable to
that part of Title I which may have thus been
suspended (Section 14).

3. WHAT IS A LOOKOUT?
It is a member of the crew who is
assigned to serve as a lookout, that is, to
watch the direction where the vessel is
heading for and to observe the oncoming
vessels for the guidance of the ship
navigator.
4. WHAT IS TRANSSHIPMENT?
In maritime law, transshipment is
defined as the act of taking cargo out of
one ship and loading it in another, or the
transfer of goods from one vessel
stipulated in the contract of affreightment
to another vessel before the place of
destination named in the contract has
been reached,, or the transfer for further
transportation
from
one
ship
or
conveyance to another.
There is transshipment even if the
two vessels belong to the same owner.
-o00o-