2 kinds of charter party?

1) Bareboat charter/ charter by demise

2 Kinds of Contracts of Transportation
2) Contract of affreightment
1) Carriage of Passengers

2) Carriage of Goods
2 Kinds of Contracts of Affreightment

Time charter and Voyage Charter

Who are parties to a Contract of Carriage

The common carrier and the passenger

Distinguish common carrier from private carrier.

Common carriers and private carriers may be distinguished as follows:

What are the 2 Kinds of Contracts of Carriage of Passengers?
1) Common carriers require extraordinary diligence in the carriage of goods;
1) Contract to carry
while private carriers require only ordinary diligence.
2) Contract of carriage
2) Common carriers are presumed to have acted negligently or have been at

fault in case of loss, destruction or deterioration of goods while there is no

When is a contract of carriage as regards trains perfected?
such presumption in private carriers. Thus, whoever alleges damage has the
It is perfected when:
burden of proving negligence against the private carrier.
(a) purchased a ticket/possesses sufficient fare with which to pay for his
3) Common carriers cannot stipulate that it is exempt from liability for
passage;
negligence of its employees; while in private carriers, the parties may validly
(b) presented himself at the proper place and in a proper manner to be
enter into such stipulation.
transported

(c) Bona fide intention to use facilities of the carrier.

What is towage?

When A vessel is hired to bring another vessel to another place

Who are the parties in a contract for the carriage of goods?

The shipper and the carrier

Define arrastre services.

It is the hauling of cargo. It comprehends the handling of cargo on the wharf

Art. 1732
Common carriers are persons, corporations, firms or associations engaged in or between the establishment of the consignee or shipper and the ship's
tackle.
the business of carrying or transporting passengers or goods or both, by

land, water or air, for compensation offering their services to teh public.
What are the functions of arrastre services?

(1) Receive, handle, care for, and deliver all merchandise imported and
What are the tests to determine WON a party is a common carrier?
exported, upon or passing over Government-owned wharves and piers in
According to First Philippine Industrial Corporation v. CA
the port
(a) He must be engaged in the business of carrying goods for others as a
(2) Record or check all merchandise which may be delivered to said port ant
public employment, and must hold himself out as ready to engage in the
shipside
transportation of goods for persons generally as a business and not as a
(3) Furnish light, and water services and other incidental service in order to
casual occupation.
undertake its arrastre service
(b) He must undertake to carry goods of the kind of which his business is

confined.
What is stevedoring?
(c) He must undertake to carry by the methods by which his business is
Involves the loading and unloading of coastwise vessels calling at the port.
conducted.

(d) Transportation must be fore hire.

What laws govern coastwise shipping?

(1) NCC (Art. 1732 - 1766) - primary law.

What is the true test of a common carrier?
(2) Code of Commerce - governs suppletorily in the absence of the CC
He must be engaged in the business of carrying goods for others as a public
provisions.
employment, and must hold himself out as ready to engage in the

transportation of goods for persons generally as a business and not as a

What laws govern carriage from foreign ports to PH ports?
casual occupation.
(1) NCC - primary law

(2) Code of Commerce - all matters not regulated by the CC

What are the characteristics of a common carrier?
(3) Carriage of Goods by Sea Act - suppletorily to the CC
(1) No distinction between one whose principal business is the

transportation of persons/goods and one who does such as an ancillary

What law governs carriage from PH ports to Foreign ports?
business (sideline)
(2) No distinction between regular or scheduled basis and one offering such Art. 1753. The law of the country to which the goods are to be transported
shall govern the liability of the common carrier for their loss, destruction or
service on an occasional, episodic or unscheduled business
deterioration.
(3) still a CC even if services offered to a limited clientele (between the

general public and a narrow segment of the general population)

What laws govern overland transportation?
(4) Still considered a CC even if he did not secure a Certificate of Public
(1) CC - primary law.
Convenience
(2) CoC - suppletorily.
(5) No distinction as to the means of transporting, as long as it is by land,

water or air
What laws govern air transportation?
(6) The Civil Code does not provide that the transportation should be by
(1) CC
motor vehicle
(2) CoC
(7) Still a CC even if he has no fixed and publicly know route, maintains no
(3) For international carriage - Convention for the Unification of Certain
terminals, and issues no tickets
Rules Relating to the International Carriage by Air or Warsaw Convention.
(8) pipeline operators are CCs - not necessarily motor vehicles (First

Philippine Industrial Corp. vs. CA)

What is the registered owner rule?

The registered owner of a vehicle is liable for any damage caused by the
What is a charter party?
negligent operation of the vehicle although the same was already sold or
A contract by which an entire ship or some principal part thereof is let by
conveyed to another person at the time of the accident.
the owner to another person for a specified time or use.

TRANSPORTATION NOTES


What are the obligations of the carrier?
(1) Duty to accept passengers and goods without discrimination
(2) Duty to seasonably deliver the goods or bring the passenger to its
destination
(3) Duty to deliver the goods to the proper person
(4) Duty to exercise extraordinary diligence in the performance of its duties.

What are the instances when carrier may validly refuse to accept goods?
(1) dangerous objects or substances including dynamites and other
explosives
(2) goods are unfit for transportation
(3) acceptance would result in overloading
(4) contrabands or illegal goods
(5) goods injurious to health
(6) goods will be exposed to untoward danger like flood, capture by enemies
and the like
(7) goods like livestock will be exposed to diseases
(8) strike
(9) failure to tender goods on time

What are the rules as to time of delivery of goods?

Where a carrier has made an express contract, the goods must be delivered
within a specified time otherwise he is liable for any delay (indemnity for
damages).
In the absence of any agreement, goods must be delivered at its
destination within a reasonable time:
(a) depending on the attending circumstances,
(b) nature of the goods;
(c) expected date of arrival in the BOL may be considered.

What are the two kinds of delay?

1) Excusable delay
2) Legally inexcusable delay

What is the effect if there is excusable delay?

Excusable delays in carriage suspend, but do not generally terminate, the
contract of carriage; when the cause is removed, the master must proceed
with the voyage and make delivery.
During the detention or delay, vessel continues to be liable as a common
carrier, not a warehouseman, and remains duty bound to exercise
extraordinary diligence.

What are the effects of inexcusable delay?

(1) carrier is still liable even if natural disaster cause the damage;
(2) the stipulation limiting the liability of the carrier is inoperative;
(3) liable for the damages caused by the delay and consignee may exercise
his right to abandon under under Art. 371 of COC.

What is the right to abandon?

In case of delay through the fault of the carrier, the consignee may refuse to
accept the goods or may leave the goods in the hands of the carrier. It must
be communicated to the carrier in writing.
Right must be exercised between the time of delay and before the arrival of
the goods at its destination.
Carrier must pay the full value of the goods as if they had been lost or
mislaid. (Art. 371)

Art. 1734
1734. Common carriers are responsible for the loss, destruction, or
deterioration of the goods, unless the same is due to any of the following
causes only:
(1) Flood, storm, earthquake, lightning, or other natural disaster or calamity;
(2) Act of the public enemy in war, whether international or civil;
(3) Act or omission of the shipper or owner of the goods;

(4) The character of the goods or defects in the packing or in the containers;
(5) Order or act of competent public authority.

Does the doctrine of proximate causation apply in common carriers?

Proximate Causation does not apply since common carrier is presumed to be
negligent. The injured passenger or owner of goods need not prove
causation to establish his case.

What is the doctrine of last clear chance?

When both parties involved in the accident were both negligent, the
negligence of the party will not be considered the proximate cause if the
other party has the last clear chance of avoiding the injury.

What are the requisites for fortuitous event to be a valid defense?

(1) The cause of the unforeseen and the unexpected occurrence, or of the
failure of the debtor to comply with his obligation, must be independent of
the human will;
(2) It must be impossible to foresee the event which constitutes the caso
fortuito, or if it can be foreseen, it must be impossible to avoid;
(3) The occurrence must be such as to render it impossible for the debtor to
fulfill his obligation in a normal manner;
(4) The obligor (debtor) must be free from any participation in or the
aggravation of the injury resulting to the creditor

Under the COGSA, when is the carrier not liable for wastage of goods?
(1) Wastage in bulk or weight or any damages arising from the inherent
defect, quality or vice of goods;
(2) Insufficiency of packing;
(3) Insufficiency or inadequacy of the marks or
(4) Latent defects not discoverable by due diligence.

What are the three reasons for the rule that the employer is liable for the
acts of its employee?
(1) Undertaking of the carrier requires that its passenger that full measure of
protection afforded by the exercise of high degree of care prescribed by law,
inter alia from violence and insults at the hands of strangers and other
passengers, but above all, from the acts of the carrier's own servants.
(2) The liability of the carrier for the servant's violation of duty to
performance of his contract to safely transport the passenger, delegating
therewith the duty of protecting the passenger with utmost care prescribed
by law.
(3) As between the carrier and the passenger, the former must bear the risk
of wrongful acts or negligence of the carrier's employees against passenger,
since it, and not the passenger, has the power to select and remove them.

Define baggages.
The term baggage has been defined to include whatever articles a passenger
usually takes with him for his own personal use, comfort and convenience

What are the obligations of the shipper, consignee and/or passenger?

(1) To pay the consideration in the form of freight or fare; and
(2) To exercise due diligence in avoiding damage or injury.

When is carrier not liable in case of loss of goods?

The carrier may be able to prove that the only cause of the loss of the goods
is any of the following:
1. Failure of the shipper to disclose the nature of the goods;
2. Improper marking or direction as to the destination;
3. mproper loading when he assumes such responsibility.

What is the doctrine of avoidable consequences?

Under this doctrine, the passenger is still required to lessen the damage or
injury even if the carrier is responsible for the loss or injury.

What is demurrage?
Demurrage is the compensation provided for the contract of affreightment
for the detention of the vessel beyond the time agreed on for loading and
unloading.

Does the common carrier have an obligation to third persons?

Yes.
In Kapalaran Bus Lines v. Coronado, the Court held that if common carriers
carefully observed the statutory standard of extraordinary diligence in
respect of their own passengers, they cannot help but simultaneously
benefit pedestrians and the owners and passengers of other vehicles who
are equally entitled to the safe and convenient use of our roads and
highways

What are the requisites for a valid stipulation limiting the liability of the
common carrier?
Art. 1744. A stipulation between the common carrier and the shipper or
owner limiting the liability of the former for the loss, destruction, or
deterioration of the goods to a degree less than extraordinary diligence shall
be valid, provided it be:
(1) In writing, signed by the shipper or owner;
(2) Supported by a valuable consideration other than the service rendered
by the common carrier; and
(3) Reasonable, just and not contrary to public policy.

Can the parties stipulate to lessen the degree of diligence in the carriage of
passengers?
There can be no stipulation lessening the utmost diligence that is owed to
passengers.
Art. 1757. The responsibility of a common carrier for the safety of
passengers as required in Arts. 1733 and 1755 cannot be dispensed with or
lessened by stipulation, by the posting of notices, by statements on tickets,
or otherwise. (Note: Absolute; extraordinary at all times.)

Define Seaworthy.
That strength, durability and engineering skill made a part of a ship's
construction and continued maintenance, together with a competent and
sufficient crew, which would withstand the vicissitudes and dangers of the
elemtns which might reasonably by expected or encountered during her
voyage without loss or damage to ther particular cargo.

Under the COGSA, what needs to be done to make the carrier seaworthy?
The carrier shall be bound BEFORE and at the beginning of the voyage to
exercise due diligence to (1) make the ship seaworthy;
(2) properly man, equip and supply the ship;
(3) make the holds, refrigerating and colling chambers and all other parts of
the ship in which goods are caried, fit and safe for their reception, carriage
and preservation.

What does seaworthiness include?

Seaworthiness includes:
(a) fitness of the vessel itself to withstand the rigors of the voyage,
(b) fitness of the vessel to store the cargoes and accommodate passengers
to be transported; and
(c) that it is adequately equipped and properlly manned.

When is deviation proper?

(a) When caused by circumstances over which neither the master nor the
owner of the ship has any control;
(b) When necessary to comply with a warranty, or to avoid a peril, whether
or not the peril is insured against;
(c) When made in good faith, and upon reasonable grounds of belief in its
necessity to avoid a peril; or
(d) When made in good faith, for the purpose of saving human life or
relieving another vessel in distress.

Define transshipment.
The act of taking cargo out of one ship and loading it into another; to
transfer goods from the vessel stipulated in the contract of affreightment to
another vessel before the place of destination named in the contract has
been reached.

What are the kinds of Bill of Lading?

1) Clean bill of lading
2) Foul bill of lading
3) Spent bill of lading
4) Through bill of lading
5) On board bill of lading
6) Received for shipment bill of lading
7) Custody bill of lading
8) Port bill of lading
9) Negotiable or non-negotiable bill of lading

What is the 3-fold nature of a bill of lading?

(1) as a receipt
(2) as a contract
(3) as a document of title which makes it a symbol of the goods.

When may a consignee be a party to the contract of carriage of goods?

(1) the relationship of agency between the consignee and the
shipper/consignor;
(2) the unequivocal acceptance of the bill of lading delivered to the
consignee, with full knowledge of its contents; or
(3) availment of the stipulation pour atrui,
*when the consignee, a third person, demands before the carrier the
fulfillment of the stipulation made by the consignor/shipper in the
consignee's favor, specifically the delivery of the goods/cargoes shipped.

What are the three kinds of limiting stipulations in a BoL?

(1) Exempting the carrier from any and all liability for loss or damage
occasioned by its own negligence
INVALID as it is contrary to public policy.
(2) Providing for an unqualified limitation to such liability to an agreed
valuation;
INVALID as it is contrary to public policy.
(3) Limiting the liability of the carrier to an agreed valuation unless the
shipper declares a higher value and pays a higher rate of freight.
VALID

What stipulations are considered unreasonable, unjust and contrary to

public policy?
Art. 1745. Any of the following or similar stipulations shall be considered
unreasonable, unjust and contrary to public policy:
(1) that the goods are transported at the risk of the owner or shipper;
(2) that the common carrier will not be liable for any loss, destruction, or
deterioration of the goods;
(3) that the common carrier need not observe any diligence in the custody
of the goods;
(4) that the common carrier shall exercise a degree of diligence less than
that of a good father of a family, or of a man of ordinary prudence in the
vigilance over the movables transported;
(5) that the common carrier shall not be responsible for acts or omission of
his or its employees;
(6) that the common carrier's liability for acts committed by thieves, or of
robbers who do not act with grave or irresistible threat, violence or force, is
dispensed with or diminished;
(7) That the common carrier is not responsible for the loss, destruction or
deterioration of goods on account of the defective condition of the car,
vehicle, ship, airplane or other equipment used in the contract of carriage.

What are the requisites for validity of stipulations reducing diligence?

(1) that the stipulation be in writing and signed by both parties;
(2) that the stipulation be supported by a valuable consideration other than
the service rendered by the common carrier; and
(3) that the stipulation be reasonable, just and not contrary to law.

In an action for breach of contract, what must the claimant establish?

(1) the existence of a perfected contract;
(2) the breach thereof by the other contracting party
(3) the damages which he/she sustained due to the breach.

In overland transportation and coastwise shipping, when must the claim

for damages be filed?
Under Art. 366 of the Code of Commerce, an action for damages is barred if
the goods arrived in damaged condition and no claim is filed by the shipper
within the following period:
1. Immediately if damage is apparent;
2. within twenty four (24) hours from delivery if damage is not apparent.

T or F: Non-filing of claim in overland transportation bars recovery.

True.
Non-filing of the claim bars recovery. The filing of the claim with the carrier
within the time limitation therefor constitutes a condition precedent to the
accrual of a right of action against a carrier for damages caused to the
merchandise.

In a contract of carriage, when may attorney's fees be awarded?

(1) when exemplary damages are awarded;
(2) when the defendant's act or omission has compelled the plaintiff to
litigate with third persons or to incur expenses to protect his interest;
(3) in case of a clearly unfounded civil action or proceeding against the
plaintiff;
(4) where the defendant acted in gross and evident bad faith in refusing to
satisfy the plaintiff's valid, just and demandable claim;
(5) in case of a clearly unfounded civil action or proceeding against the
plaintiff;
(6) where the defendant acted in gross and evident bad faith in refusing to
satisfy the plaintiff's valid, just and demandable claim;

What does moral damages include?

Includes physical suffering, mental anguish, fright, serious anxiety,
Being conditions precedent, their performance must precede a suit for
besmirched reputation, wounded feelings, moral shock, social humiliation
enforcement and the vesting of the right to file the suit does not take place
and similar injury.
until the happening of the conditions.

What are the conditions for award of moral damages?

T or F: The requirement of filing a claim also applies to misdelivery.
(1) There must be injury, whether physical, mental or psychological clearly
False.
sustained from the claimant;
No application in cases wherein the goods entrusted to the carrier are not
(2) There must be a culpable act or omission factually established;
delivered by the carrier to the consignee. In such cases, there can be no
(3) The wrongful act or omission of the defendant is the proximate cause of
question of a claim for damages suffered by the goods while in transport, for the injury sustained by the claimant; and
the claim for damages arises exclusively out of the the failure to make
(4) The award of damages is predicated on any of the cases stated in Art.
delivery.
2219.

In international carriage of goods by the sea, when must the claim be

What are the factors to be considered that could affect the award of moral
filed?
damages?
When to file claim:
(1) The extent of humiliation may also determine the amount of moral
(1) if the damage is apparent, the claim should be filed immediately upon
damages that can be awarded
discharge of the goods; or
(2) The extent of pain and suffering likewise determines the award
(2) within 3 days from delivery, if damage is not apparent.
(3) Official, political, social and financial standing of the offended party and

the business and financial position of the offender affect the amount of
True or False:
damages
In international carriage of goods by the sea, filing of claim is also
(4) The age of the claimant.
mandatory.

False.
What are nominal damages?
Filing of claim is not condition precedent. Thus, regardless of whether the
It is adjudicated in order that the right of plaintiff may be vindicated or
notice of loss or damage has been given, the shipper can still bring an action recognized, and not for the purpose of indemnifying the plaintiff for any loss
to recover said loss or damage within one year after the delivery of the
suffered by him.
goods or the date when the goods should have been delivered

True or False: Nominal damages and actual damages may be awarded at

What are the damages that may be recovered in case of breach?
the same time.
(1) Actual or compensatory
No. Nominal damages cannot coexist with actual damages. There is no loss
(2) Moral;
in nominal damages, unlike in actual and temperate damages, loss is present
(3) Nominal;
which is proven and not proven but rather ascertained by the court,
(4) Temperate or moderate;
respectively.
(5) Liquidated; and
(6) Exemplary or corrective.
The award of nominal damages is also justified in the absence of competent

proof of the specific amounts of actual damages suffered.

Is proof of pecuniary loss necessary in the award of damages?

Article 2216 provides that no proof of pecuniary loss is necessary in order

What are temperate damages?
that moral, nominal, temperate, liquidated or exemplary damages may be
More than nominal but less than compensatory damages, may be recovered
adjudicated. The assessment of such damages, except liquidated ones, is left when the court finds that some pecuniary loss has been suffered but its
to the discretion of the court, according to the circumstances of each case.
amount cannot, from the nature of the case, be provided with certainty.
However, proof of pecuniary loss is necessary if actual or compensatory

damages are being claimed

What are liquidated damages?

Those agreed by the parties to a contract, to be paid in case of breach

When may actual or compensatory damage be awarded?
thereof.
Only for the pecuniary loss suffered by him as he has duly proved; not only

the value of the loss suffered, but also that of the profits which the obligee
Can the court change the amount of liquidated damages?
failed to obtain
Ordinarily, the court cannot change the amount of liquidated damages

agreed upon by the parties. However, Art. 2227 of the Civil Code provides
What are the two kinds of actual damages?
that liquidated damages, whether intended as an indemnity or a penalty,
1. the loss of what a person already possesses (dao emergente);
shall be equitably reduced if they were iniquitous or unconscionable.
2. the failure to receive as a benefit that would have pertained to him (lucro
cesante).
What are the requisites for the award of exemplary or corrective

damages?

1. They may be imposed by way of example in addition to compensatory

damages, and only after the claimant's right to them has been established.
2. They cannot be recovered as a matter of right, their determination
depending upon the amount of compensatory damages that may be
awarded to the claimant.
3. The act must be accompanied by bad faith or done in wanton, fraudulent,
oppressive or malevolent manner.

What are the laws governing maritime transportation?

Laws governing
(1) Civil Code - primarily governs
(2) Code of Commerce
(3) Special laws
CoC and special laws only apply suppletorily.
Example of special laws:
o Salvage law
o Carriage of Goods by Sea Act
o Ship Mortgage Decree
(4) Treaties and conventions
The PH adopts the generally accepted principles of international law as
part of the law of the land.
Example:
o UNCLOS
o International Conventions for the Safety of Life at Sea (SOLAS 1974)
o Tonnage Convention 1969
o Convention for the international Regulations on the Prevention of
Collisions at Sea 1972

What is the limited liability rule?

Means that the liability of a shipowner for damages in case of loss is limited
to the value of his vessel.

What are the exceptions to the limited liability rule?

(1) Where the injury or death to a passenger is due either to the fault or the
shipowner, or to concurring negligence of the shipowner and the captain;
(2) Where the vessel is insured;
(3) In Workmen's compensation claims.

What is a protest?
Is the written statement by the master of a vessel or any authorized officer,
attested by proper officer or a notary, to the effect that damages has been
suffered by the ship

When is a protest required?

1. When the vessel makes an arrival under stress
2. Where the vessel is shipwrecked
3. Where the vessel has gone through a hurricane or the captain believe that
the cargo has suffered damages or averages
4. Maritime collisions

When is a protest not required?

1. when it does not fall under the four cases requiring protests.
2. when what is involved is not a vessel

What are the two tests to determine whether case is one of admiralty or
maritime?
(1) Locational test
English rule follows the locational test
Maritime and admiralty jurisdiction, with a few exceptions, is exercised
only on contract made upon the sea and to be executed thereon.
(2) Subject matter test
Americal rule
Depends on the nature and subject matter of the contract, having
reference to martime service and transaction.

What are the requisites for forfeiture due to smuggling?

The penalty of forfeiture is imposed on any vessel engaged in smuggling
under the Tariff and Custom Code, provided the following conditions are
present:

(1) the vessel is "used unlawfully in the importation or exportation of articles

into or from the PH;
(2) the articles are imported to ro exported from "any PH port or place,
except a port of entry," or
(3) If the vessel has a capacity of less than 30 tons and is "used in the
importation of articles into any PH port or place other than a port of the
Sulu sea, where importation may be authorized by the Commissioner, with
the approval of the department head

What is a vessel?
A vessel or watercraft is defined under PD No. 447 as any barge, lighter, bulk
carrier, passenger ship freighter, tanker, container ship, fishing boats, or
other artificial contrivance utilizing any source of motive power, designed
use or capable of being used as a means of transportation operating either
as a common carrier, including fishing vessels covered under PD No. 43,

What are not considered as vessels?

1. Those owned and/or operated by the Armed Forces of the Philippines and
by the Foreign Government for its Military Purpose.
2. Bancas, sailboat and other waterbone contrivance of less than three tons
capacity and not motorized.

What materials should be used in constructing a vessel?

CoC provides that Builders of vessels may employ the materials and follow
the systems most suitable to their interest.

What are the requisites for ordinary acquisitive prescription?

(1) Person who claims ownership must be in continuous possession;
(2) Possession must be for a period of 3 years; and
(3) Possession must be in good faith.

What is a logbook?
A ship's logbook is the official record of the ship's voyage which its captain is
obligated by law to keep wherein he records:
(a) the decisions he has adopted,
(b) a summary of the performance of the vessel
(c) and other daily events.

Who may constitute a ship mortgage?

(a) any citizen of the PH; or
(b) any association or corporation at least 60% of the capital is owned by
citizens of the PH.

When is a valid mortgage given the preferred status?

A valid mortgage shall have preferred status if:
(1) The mortgage is recorded with the Philippine Coast Guard
(2) There is an affidavit of good faith
(3) The mortgage does not stipulate that the mortgagee waives the
preferred status thereof.

What are considered as preferred claims as regards preferred mortgage

liens?
Preferred mortgage lien should have priority over all claims against the
vessel, except the following claims in the order stated:
(1) Expenses and fees allowed and costs taxed by the court and taxes due to
the Government;
(2) Crew's wages
(3) General average
(4) Salvage, including contract of salvage
(5) Maritime liens arising prior to the recording of the preferred mortgage;
(6) Damages arising out of tort; and
(7) Preferred mortgage registered prior in time.

What is the executory contract doctrine?

A lien does not attach for breach of an executory contract even though the
contract is the type which normally gives rise to a lien.

What are the requirements for maritime liens for necessaries?

(1) Must have been furnished to and for the benefit of the vessel.
(2) Must have been necessary for the continuation of the voyage of the
vessel
(3) Credit must have been extended to the vessel;
(4) There must be necessity for the extension of the credit;
(5) Must be ordered by persons authorized to contract on behalf of the
vessel.

Who are authorized to contract for repairs, supplies, wages, etc.?

For repairs, supplies, towage, use of dry dock or marine railways
(a) managing owner
(b) ship's husband (agent of the vessel)
(c) master; or
(d) any person to whom the management of the vessel at the port of supply
is entrusted.

What is a maritime tort?

Civil wrongs committed on navigable waters.

Who are the persons who take part in maritime commerce?

(a) Shipowners and Ship Agents;
(b) Captains and Masters of Vessels;
(c) Officers and Crew of Vessels.

Distinguish between the shipowner and the ship agent.

The shipowner is the person primarily liable for damages sustained in the
operation of the vessel. He is the owner of the vessel.
A ship agent is entrusted primarily with provisioning of the vessel, or who
represents the vessel in the port in which she happens to be.

True or False: The ship agent is secondarily liable for breach of contract
and extra-contractual obligations such as tort.
False.
Under the CoC, the ship agent is solidarly liable with the owner. The solidary
liability applies both for breach of contract and extra-contractual obligations
such as tort.

Distinguish between captain and master.

Generally, the two are synonymous and used interchangeably in the CoC.
However, technically, the master is the person having command of the ship.
This term is used both for domestic trade and international trade. While a
captain is a person authorized by the MARINA to act as officer and/or in
command of a boat or has the qualification/license to act as such.

What are the three distinct roles of a captain?

1. He is a GENERAL AGENT OF THE SHIPOWNER;
2. He is a COMMANDER and TECHNICAL DIRECTOR of the vessel (most
important role for this has something to do with the operation and
preservation of the vessel during its voyage and the protection of the
passengers, if any, and crew and cargo);
3. He is a REPRESENTATIVE OF THE COUNTRY under whose flag he navigates.

As general agent of the shipowner, the captain is authorized to do the

following:
a. Has authority to sign bills of lading;
b. Carry goods aboard and deal with the freight earned;
c. Agree upon rates and decide whether to take cargo;
d. Has legal authority to enter into contracts with respect to the vessel and
the trading of the vessel, subject to applicable limitations established by
statute, contract or instructions and regulations of the shipowner.
All aforementioned functions verily commits to the captain the governance,
care, and management of the vessel. Clearly then, the captain is vested with
both MANAGEMENT and FIDUCIARY functions.

Who is a pilot?

In maritime law, a person duly qualified, and licensed, to conduct a vessel

into or out of ports, or in certain waters.

What is compulsory pilotage?

States possessing harbors enacted laws or promulgated rules requiring
vessels approaching their ports to take on board pilots licensed under local
law. In the Philippines, compulsory pilotage is being implemented in the Port
of Manila, the latter being within the Manila Pilotage District.

In addition to the ship captain, who are also considered as involved in

maritime commerce?
(1) Sailing mate or Chief Mate;
(2) Second Mate
(3) Marine Engineer
(4) Crew
(5) Supercargoes

What are the just causes for revocation of the voyage?

(1) Declaration of war or interdiction of commerce with the power to whose
territory the vessel was bound.
(2) Blockade of the port of destination or breaking out of an epidemic after
the agreement.
(3) Prohibition to receive in said port the goods which make up the cargo of
the vessel
(4) Detention or embargo of the same by order of the government or for any
other reason independent of the will of the ship againt.
(5) Inability of the vessel to navigate.

Who are authorized to make a charter?

1) The Owner or owners of a vessel who have legal control and possession of
the vessel.
2) The charterer who may subcharter the entire vessel to a third vessel if the
same is not prohibited in the original charter.
3) The part owners who enjoy preference in the charter of the vessel over
other persons
4) The ship agent provided he is duly authorized by the owner;
5) The captain, but only when:
a. In case the ship agent or consignee is absent; and
b. Only if the captain or master acts in accordance with the instructions of
the agent or owner;
c. And protects the latter's interest.

May a captain enter into a charter party?

Generally no. However, he may enter into a charter party when:
a. In case the ship agent or consignee is absent; and
b. Only if the captain or master acts in accordance with the instructions of
the agent or owner;
c. And protects the latter's interest.

What are the requisites of a valid charter party?

(a) consent of the contracting parties
(b) existing vessel, which should be placed at the disposition of the shipper;
(c) freight; and
(d) compliance with the formal requirements prescribed under Art. 652 of
the CoC which are:
1. in writing;
2. drawn in duplicate; and
3. signed by the parties.
And when either does not know (how to sign), or is not able to do so, by
two witnesses at his request.

What is primage?
Payment for the use of the equipment belonging to the captain.

When shall freight accrue?

GENERAL RULE: Freight shall accrue according to the conditions sitpulated in
the contract.
If there is no stipulation to that effect, or there is but the same is
ambiguous, these rules shall apply:

(a) freight shall begin to run from the day of loading on the vessel;
(b) in charters with a fixed period, the freight shall begin upon that very day;
and
(c) if the freight is charged according to weight, the payment thereof shall be
made according to the gross weight, including the weight of the containers.

What is a safe ports clause?

When an option is given to the charterer, the shipowner may protect
himself by including a "safe-port clause: in the Charter Party whereby he
reserves the right to decline to risk his vessel in an unsafe port.

What are the rights and obligations of a shipowner/captain in a charter

party?
(1) To receive the cargo which had been contracted to be transported.
(2) To observe the capacity of the vessel or that which is indicated expressly
in the registry, a margin greater than two percent between that represented
and her actual capacity which is not allowable.
(3) To pay the loss incurred by the shipper whose cargo is refused on
account of the receipt by the shipowner of a greater amount of cargo
belonging to other persons as form of indemnity. If there is only one shipper
and there was apparent fraud or error I the vessel's capacity, the charterer
may opt to have the freight reduced if he does not choose to rescind the
charter, with a further right to be indemnified.
(4) If there are several charter parties and there is lack of space and not all
can be accommodated, preference shall be given to the person who is first
in loading his cargo; and the other shall have preference in the order of the
dates of their charter. In the absence of priority, the charterers may choose
to load in proportion to the amounts of weight or space that they may have
contracted, with a right ot be indemnified for the loss.
(5) To effect a substitution of the vessel which had been initially chartered
with that of another, so long as the substitute vessel had been duly
inspected and is seaworthy.
Furthermore, after 3/5 of the vessel is loaded, the shipowner may not
substitute chartered vessel with anotherr one unless he procures the
consent of the charterers or the shippers. Otherwise, he runs the risk of
answering for all damages suffered during the voyage by those who did not
give their consent.
(6) Captain may not, if the vessel has been chartered in whole, accept cargo
from any other person unless the consent of the charterer is obtained.
Otherise, the captain may be compelled by the charterer to unload the said
cargo and pay to the charterer any damage that he may suffer on account
thereof;
(7) Shipowner may also be generally held liable for damages incurred by the
charterer due to the voluntary delay of the captain in putting to sea,
provided he was requested, by way of notarial or judicial notice, to put to
sea at the proper time.

What are the rights and obligations of the charterer in a charter party?
(1) Right to subcharter the vessel to a third person only if he is so authorized
by the shipowner. Otherwise he shall be liable to the shipowner for any
damage caused to the latter by virtue of the subcharter.
(2) To indemnify the shipowner should the charterer load goods different
from that contracted upon without the knowledge of the shipowner which
results to damage due to confiscation, embargo, detention and other
causes
(3) To be jointly liable with the shipowner or captain to the other shippers if
illicit cargo is shipped with the knowledge of the shipowner or captain
(4) Charterers and shippers cannot abandon the goods damaged due to
inherent defects or by reason of fortuitous event. Abandonment may be
proper however if the cargo, consiting of liquid. May have leaked out and
none remains except of their contents.

What are the grounds for rescission at the request of the charterer?
(1) If before the 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 sales;
(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.
(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.
(5) If the vessel should make a port during the voyage in order to make
urgent reparis, and the charterers should prefer to dispose of the
merchandise;

What are the grounds for rescission at the request of the person from
whom the vessel is chartered from?
(1) If the charterer, at the termination of the extra lay days, does not place
the cargo alongside the vessel;
(2) If the person fro 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;

What are the grounds for rescission when the vessel cannot be put to sea?
(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 erason of an embargo of the vessel by order
of the government, or for any other reason independent of the will of the
ship agent;
(5) The inability of the vessel to navigate, without fault of the captain or ship
agent.

Distinguish bottomry/respondentia from simple loan.

1) In bottomry, rate of interest is not subject to Usury Law while in simple
loan, it is subject to usury law;
2) In bottomry, there must be a marine risk, in simple loan, no need;
3) In bottomry, it must be executed in the form and manner required under
the CoC; while simple loans are only governed by the rules regarding
contracts in general;
4) Must be recorded in the registry of vessels in order to bind third persons,
while no such registration is required for a simple loan.

What are the Freedoms of Air?

(1) Right or privilege by one State to fly across another state without
landing.
(2) Right of privilege by one State to land in the territory of another state for
non-traffic purposes.
(3) Right or privilege by one state to put down in the territory of another
state traffic coming from the home State of the carrier.
(4) Right or privilege by one State to take on traffic of another State destined
for the home State of the carrier.
(5) Right or privilege by one State to put down or take on traffic from
another State coming from or destined to a third State.

What does due diligence in air transportation include?

(a) the obligation to make sure that the aircraft is airworthy,
(b) that the vessel has competent captain and crew, and
(c) that the captain and his crew exercised extraordinary diligence in
operating the aircraft.

Under the civil aviations regulations, an operator may deny transportation

to passengers under these circumstances.
(1) refuses to comply with the instructions regarding exit seating restrictions
prescribed by the CAAP; or
(2) has handicap that can be physically accommodated only by an exit row
seat.


Define maritime law.
Maritime law is that system of laws which particularly relates to the affairs
and business of the sea, to ships, their crews and navigation and to marine
conveyance of persons and property.

Distinguish maritime from admiralty.

The terms admiraly and maritime law are synonymous but technically,
admiralty originally referred to matters involving torts and contracts on the
high seas; while maritime law includes all activities on the high seas and
similar activities on navigable water.

What laws govern maritime transportation?

(1) Civil Code - primarily governs
(2) Code of Commerce
(3) Special laws
CoC and special laws only apply suppletorily.
Example of special laws:
o Salvage law
o Carriage of Goods by Sea Act
o Ship Mortgage Decree
(4) Treaties and conventions
The PH adopts the generally accepted principles of international law as
part of the law of the land.
Example:
o UNCLOS
o International Conventions for the Safety of Life at Sea (SOLAS 1974)
o Tonnage Convention 1969
o Convention for the international Regulations on the Prevention of
Collisions at Sea 1972

What does the real and hypothecary nature of maritime law mean?
The real and hypothecary nature of maritime law simply means that the
liability of the carrier in connection with losses related to maritime contracts
is confined to the vessel, which is hypothecated for such obligations or
which stands as the guaranty for their settlement
Real because similar to transactions over real property where to effect
against third persons, registration is necessary. Hypothecary because the
liability of the owner of the vessel is limited to the value of the vessel itself.

What does the limited liability rule mean?

This means that the liability of a shipowner or ship agent for damages in
case of loss is limited to the value of his interest in the vessel. No vessel, no
liability.

Coverage of the limited liability rule

(a) liability to third persons
(b) acts of the captain
(c) collissions

When limited liability rule does not apply

(1) injury or death due to fault of shipowner or concurring negligence of
shipowner and captain;
(2) vessel is insured
(3) workmen's compensation claims.

Persons who take part in maritime commerce

(a) Shipowner who is primarily liable for damages sustained in the operation
of the vessel
(b) Ship agents who are entrusted with the provisioning of the vessel or
representing the vessel in the port in which it may be found.
(c) Captain who governs the vessel that navigate the high seas or ships in the
coastwise trade.
(d) Masters of Vessels who command smaller ships engaged exclusively in
the coastwise trade.
(e) Officers and Crew of the vessel such as:
a. Sailing mate or Chief Mate
b. Second Mate

c. Marine Engineer
d. Crew
e. Supercargoes

What is a protest?
A protest is the written statement by the master of a vessel or any
authorized officer, attested by proper officer or a notary, to the effect that
damages has been suffered by the ship.

When is a protest required?

1. When the vessel makes an arrival under stress
2. Where the vessel is shipwrecked
3. Where the vessel has gone through a hurricane or the captain believe that
the cargo has suffered damages or averages
4. Maritime collisions

Kinds of Charter Party

(1) Bareboat or Demise Charter
(2) Contract of Affreightment which may either be a Time Charter or Voyage
Charter.

Maritime Lien
A maritime lien is a privileged claim on a vessel for some service rendered to
it to facilitate its use in navigation.

Liability of a shipowner and ship agent

The shipowner and the ship agent are liable for the following:
(1) For the acts of the captain and for obligations contracted by the latter to
repair, equp and provision the vessel;
(2) For indemnities in favor of third persons which may arise from the
conduct of the captain in the care of the goods which he loaded on the
vessel;

Powers of the Ship Agent

(1) May discharge the duties of the captain of the vessel;
(2) Shall designate and come to terms with the captain, and shall contract in
the name of the owners, who shall be bound in all that refer to repairs,
details of equipment, armament provisions of food and fuel, freight of the
vessel, and in general, in all that relate to the requirements of navigation.

Limitation on the powers of the Ship Agent

(1) May not order a new voyage or
(2) make contracts for a new charter or
(3) insure the vessel, without authorization of its owner, or resolution of the
majority of the co-owners, unless these powers were granted to him in the
certificate of appointment.

Obligations of a ship agent

(1) Duty to account the results of each voyage of the vessel without
prejudice to always having the books and correspondence relating to the
vessel and to its voyage at their disposal.
(2) Indemnify the captain for all the expenses he may have incurred with
funds of his own or of others, for the benefit of the vessel.

Inherent powers of the captain, master or patron of the vessel

(1) to appoint or make contracts with the crew in the absence of the ship
agent; and to propose said crew, should said agent be present; but the ship
agent may not employ any member against the captain's express refusal;
(2) to command the crew and direct the vessel to the port of destination, in
accordance with the instructions he may have received from the ship agent;
(3) To impose correctional punishment upon those who fail to comply with
his orders or are wanting in discipline, holding a preliminary hearing on the
crimes committed on board the vessel on the seas, which crimes shall be
turned over to the authorities having jurisdiction over the same at the first
port touched;
(4) To make contracts for the charter of the vessel in the absence of the ship
agent or of its consignee;
(5) To adopt all proper measures to keep the vessel well supplied and
equipped, purchasing all that may be necessary for the purpose, provided

there is no time to request from the ship agent;

(6) To order, in urgent cases, the repairs on the hull and engines of the
vessel which are absolutely necessary to enable it to continue and finish the
voyage.

If the captain has no funds to cover the obligations mentioned above, how
shall he obtain the same?
In successive order, he shall obtain it as follows:
(1) Requesting the funds from the consignee of the vessel or correspondents
of the ship agent;
(2) Applyint to the consignees of the cargo or to those interested therein;
(3) By drawing on the ship agent;
(4) By borrowing the amount required by means of a loan on bottomry.
(5) By selling a sufficient amount of the cargo to cover the sum absolutely
indispensable for the repair of the vessel.

Requirement before captain may apply for loan on bottomry or sell the
cargo:
apply to the judicial authority of the port if in PH, to consul if in foreign
country, and when there is none, to the local authority;

Obligations inherent in the captain

(1) To have on board before starting the voyage a detailed inventory of the
hull, engines, etc;
(2) A copy of the CoC on board;
(3) To have three folioed and stamped books which are the logbook, the
accounting book, and the freight book;
(4) Before recieivng cargo, to examine the vessel and ascertain whether it is
water-tight;
(5) To remain constantly on board the vessel while the cargo is being taken
on board and to carefully watch the stowage thereof;
(6) To demand a pilot at the expense of the vessel whenever required by
navigation and when he has to enter a port which he is not acquainted with;
(7) To be on deck when reaching land to take command on entering and
leaving ports;
(8) Present himself when making a port in distress to the maritime authority

What is a loan on bottomry?

A contract whereby the owner of a 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) 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.

What is a loan on respondentia?

This is a loan taken out on the goods or some part thereof as security, the
repayment of which is dependent upon maritime risks.

Distinguish Bottomry/Respondentia from simple loan

(1) Rate of interest is not subject to usury law; while loan is subject to usury
law;
(2) Bottomry requires a marine risk; no such interest is involved;
(3) Bottomry must be executed in the form and manner required by the
CoC; general rules on contract apply
(4) Must be recorded in the registry to bind third persons; need no
registration;
(5) Preference is extended to the last lender if there be several lenders; in
simple loan, the prior lender enjoys preference over subsequent ones.

When is a loan on bottomry/respondentia considered a simple loan?

(1) When the lender has loaned an amount larger than the value of the
object liable for the bottomry loan due to the fraudulent means employed
by the borrower;
(2) When the full amount of the loan is not used for the cargo, the balance
shall be considered as simple loan which should be returned prior to the
commencement of the voyage.

What are averages?

These are the extraordinary or accidental expenses which may be incurred

during the voyage in order to preserve the vessel, the cargo or both.
It may also be any damage or deterioration which the vessel may suffer
from the time it puts to sea until it casts anchor in the port of destination
and those suffered by the merchandise from the time it were loaded until
they are unloaded in the port of consignment.

Classification of average:
(1) General or Gross average; and
(2) Simple or particular average.

Simple average
Includes damages and expenses which have not inured to the common
benefit and profit of all the persons interested in the vessel.

Illustrations of simple average

defect of the goods or by reason of accident of the sea or force majeure;
(2) losses suffered by the vessel in its hull, rigging, arms and equipment for
the same cause and reasons stated above
(3) losses suffered by the merchandise loaded on deck, except in coastwise
navigation if the marine ordinances allow it;
(4) wages and victuals of the crew when detained or embargoed by
legitimate order of force majeure;
(5) necessary expenses on arrival at a port in order to make repairs or secure
provisions;
(6) victuals and wages of the crew while in quarantine;
(7) any loss suffered by the cargo through the fault, negligence or barratry of
the captain or of the cew.

Requisites of general average

(1) common danger
(2) for the common safety part of the vessel, or the cargo or both is
sacrificed deliberately;
(3) that from the expenses or damages caused follows the successful saving
of the vessel and cargo;
(4) that the expenses or damages have been incurred or inflicted after taking
proper legal steps and authority.

How is sacrificed in averages made?

Normally, through jettison of the cargo or part of the ship. But there can still
be general average even if the sacrifice was not made during the voyage in
these cases:
(a) where the sinking of the vessel is necessary to extinguish a fire in a port;
(b) where cargo is transferred to lighten the ship on account of a storm to
facilitate entry into a port.

Legal Steps involved in average

(1) there must be a resolution of the captain and officers adopted after
deliberation with the sailing mate and other officers; and
(2) after hearing the persons interested in the cargo who may be present.
(3) The resolution must be entered into the log book, stating the motives,
cause for dissent and irresistible and urgent causes which impelled the
captain to act of his own accord.

Rules on jettison
Goods shall be cast overboard in the following order:
(1) those which are on deck, beginning with those which:
a. embarrass the maneuver or damage of the vessel, preferring the heaviest
ones with least utility and value;
(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;

Who bears general average?

It shall be borne by those who benefited from the sacrifice, which include
the shipowners and owners of the cargoes that were saved. Contributions
may also be imposed on the insurers of the vessel or cargoes that were
saved as well as the lenders on bottomry or respondentia.


What goods are, even if sacrificed, not covered by general average?
(1) goods carried on deck unles the rule, special law, or customs of the place
allow the same;
(2) goods that are not recorded in the books or records of the vessel; and
(3) fuel for the vessel if there is more than sufficient fuel for the voyage.

How is apportionment of general average made?

The value of each of the contributing interests is multiplied by a fraction
which has as its numerator the sum of the general average expense and has
as its denominator the sum of the contributing values.

What are the rules in the proof and liquidation of average?

GR: The mutual agreement with regard to liability, liquidation and payment
shall govern.

Doctrine of inscrutable fault

The doctrine provides that in cases where the court sees that there is fault
but is unable or it is impossible to determine which of the vessel is at fault,
each vessel shall be considere at fault at they shall suffer their own losses
and shall be solidarily liable for the losses and damages occassioned to their
cargoes.

Arrival under stress

Arrival of the vessel at the nearest and most convenient port which was
decided upon after determining that there is well-founded fear of:
(a) seizure;
(b) privateers or pirates
(c) or by reason of any accident of the sea disabling it to navigate.

Steps in determining propriety of an arrival under stress

In the absence of such agreement, the following rules shall apply:
(1) Captain should determine during the voyage if ther is well-founded fear
(1) proof of the average shall take place in the port where the repairs are
of seizure, privateers and other valid grounds;
made, should any be necessary or in the port of unloading;
(2) Captain shall assemble the officers;
(2) liquidation shall be made in the port of unloading, if it is a PH port;
(3) Captain shall summon the persons interested in the cargo who may
(3) If the average occurred outside of the jurisdictional waters of the Ph or
attent but without a right to vote;
the cargo has been sold in a foreign port by reason of an arrival under stress, (4) Officers shall determine and agree if there is well founded reason.
the liquidation shall be made in the port of arrival;
Captain shall have deciding vote;
(4) If the average has occurred near the port of destination, so that said port (5) Agreement shall be drafted and the proper minutes shall be signed and
can be made, the proceedings in 1 and 2 shall be held there.
entered in the log book.

(6) Objections and protests shall likewise be entered in the minutes.

Collision

An impact or sudden contact of a moving body with an obstruction in its line When is arrival not considered lawful?
of motion, whether both bodies are in motion or one stationary and the
(1) if the lack of provisions should arise from the failure to take the
other in motion.
necessary provisions for the voyage or if they should have been rendered
An impact or sudden contact of a vessel with another whether both are in
useless or lost through bad stowage or negligence in their care;
motion or one stationary.
(2) if the risk of enemies, privateers or pirates should not have been well
known, manifest and based on positve and provable facts;
Zones in collission
(3) if the defect of the vessel should have arisen because it was not repaired,
(1) First division covers all the time up to the moment when the risk of
rigged or equipped in a manner suitable for voyage or from some erroneous
collision may be said to have begun;
order of the captain.
a. No rule is applicable since each vessel is free to direct its course as it
(4) When malice, negligence want of foresight or lack of skill on the part of
deems best.
the captain caused the damage.
(2) Second division covers the time between the moment when the risk of

collision begins and the moment when it has become a practical certainty;
Shipwreck
a. The burden is on the vessel required to keep away and avoid the danger
The demolition or shattering of a vessel caused by her driving ashore or on
(3) Third division covers the actual contact.
rocks and shoals in midseas, or by the violence of winds and waves in
a. Covers the period when error in extremis occur
tempests.

Error in extremis
Salvage
This rule provides that the vessel which has forced the privileged vessel into Salvage is the service which one person renders to the owner of the ship or
danger is responsible even if the privileged vessel has commited an error
goods by his own labor, preserving the goods or the ship whith the owner or
within the third zone of collision of the point when there is actual contact.
those entrusted with the care of them have either abandoned in distress at

sea, or are unable to protect and secure.

Applicable law governing collisions

(1) Liabilities of shipowners, ship agents and captain and crew shall be
Kinds of Salvage
goverend by the provisions of the Code of Commerce on collision;
(1) voluntary, where compensation is dependent upon success;
(2) With respect to collision in the high seas - it is the International
(2) rendered under a contract for a per diem or per horam wage, payable at
Regulations for Preventing Collisions at Sea (COLREGS);
all events; or
(3) under a contract for a compensation payable only in case of success.
Civil Code is silent on this matter.

Requirements for valid salvage claim

Rules as to collision
(1) there must be a marine peril;
Liability of the carriers involved shall depend if only one vessel is at fault, or (2) service is voluntarily rendered and is not required as an existing duty or
both vessels are at fault or if the entity at fault cannot be determined.
from a special contract;
(1) If one vessel is at fault - the owner of the vessel at fault shall indemnify
(3) there must be success in whole or in part or that the service rendered
the losses and damages suffered, after expert appraisal;
contributed to such success; and
(2) If both at fault - each shall suffer its own damages and shall be solidarily
(4) the vessel is shipwrecked beyond the control of the crew or shall have
liable for the lossess and damages occassioned to their cargoes;
been abandoned.
(3) If it cannot be determined - both shall suffer its own damages and shall

be solidarily liable for the losses and damages occassioned to their cargoes.
Persons not entitled to salvage compensation
(4) If theird person is at fault - if a third vessel forced another to collide with (1) the crew of the vessel shipwrecked or which was in danger of being
another vessel, then the owner of the third vessels shall be liable for the
shipwrecked;
loss.
(2) he who shall have commenced the salvage in spite of opposition of the

captain or his representatives; and

(3) he who shall have failed to comply with Section 3 of the Salvage Law or
the obligation to inform and deliver the vessel or merchandise to the
Collector of Customs.

Derelict
A ship or her cargo which is abandoned and deserted at sea by those who
were in charge of it, without any hope of recovering it (sine spe recuperandi)
or without any intention of returning to it (sine animo revertendi).

Define: jetsam, flotsam and ligan.

(1) Jetsam are goods which were thrown off a ship which was in danger;
(2) Flotsam are goods that floated off the ship while the ship was in danger
or when it sank.
(3) Ligan are goods left at sea on the wreck or tied to a bouy so that they can
be recovered later.

What is the basis of compensation of salvage claim?

Not as quantum meruit or as remuneration pro opere et labore but as a
reward given for perilous service. It should be given considering the
following circumstances:
(1) labor expended by the salvors;
(2) promptitude, skill and energy displayed;
(3) value of the property employed by the salvors in rendering the service
and the danger to which such propety was exposed;
(4) risk incurred by the salvors in rescuing the property;
(5) value of the property salved; and
(6) degree of danger from which the property was rescued.

Rights and obligations of salvors

(1) salvors shall have a lien on the property salvaged where he is not bound
to part with the possessio of the vessel salvaged or the cargo saved until his
due compensation;
(2) If both ship and cargo were salved, salvage allowance should be charged
against the ship and cargo in proportion to their respective values;
(3) Salvor has a right of possession of a derelict for purposes of salvage
claim;
(4) To accept additional assistance from other salvors win case the salvor
has inadequate means to save the ship.

Rights and obligations of owners

(1) Right to the vessel or things saved after paying salvage claim;
(2) If the owner does not make any claim within 3 months after the
publication by the authorities of a salvage report, the things salvaged shall
be deposited in the National Treasury;
(3) If 3 years lapsed without a claim therefot, the salvor shall be entiteld to
half of the deposit as his reward, the other half shall pertain to the State.