6. Proyección didáctica
6.8. Actividades y recursos
A. CONCEPT OF MARITIME LAW
• Maritime law is the 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.”
• Primary law on maritime commerce: New Civil Code provisions on common carriers Suppletory laws: Code of Commerce and special laws (Salvage Law, COGSA, Ship Mortgage Decree of 1978, etc.) ALPHA PHI BETA
• Maritime laws apply only to maritime trade and sea voyages.
• Characteristics of Maritime Transaction
1. Real – similar to transactions over real property with respect to effectivity against third persons which is done through registration. The evidence of real nature is shown by:
a. The limitation of the liability of the agents to the actual value of the vessel and the freight money; and
b. The right to retain the cargo and embargo and detention of the vessel. (Luzon Stevedoring Corp. vs. CA)
2. Hypothecary – the liability of the owner is limited to the value of the vessel itself. (Doctrine of Limited Liability)
• 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 stands as the guaranty for their settlement. (Aboitiz Shipping Corp.
vs. General Accident Fire and Life Assurance Corp.)
B. LIMITED LIABILITY RULE
Art. 587, Code of Commerce. The ship agent shall also be civilly liable for the indemnities in favor of third persons which may arise from the conduct of the captain in the care of the goods which he loaded on the vessel; but he may exempt himself therefrom by abandoning the vessel with all her equipment and the freight it may have earned during the voyage.
Art. 590. The co-owners of the vessel shall be civilly liable in the proportion of their contribution to the common fund for the results of the acts of the captain, referred to in Art.
587. ALPHA PHI BETA
Each co-owner may exempt himself from this liability by the abandonment, before a notary, of that part of the vessel belonging to him.
Art. 643. If the vessel and her cargo should be totally lost, by reason of capture or wreck, all rights shall be extinguished, both as regards the crew to demand any wages whatsoever, and as regards the ship agent to recover the advances made.
If a portion of the vessel or of the cargo, or of both, should be saved, the crew engaged on wages, including the captain, shall retain their rights on the salvage, so far as they go, on the remainder of the vessel as well as on the amount of the freightage of the cargo saved; but sailors who are engaged on shares shall not have any right whatsoever on the salvage of the
ALPHA PHI BETA FRATERNITY ALPHA PHI BETA FRATERNITY ALPHA PHI BETA FRATERNITY
ALPHA PHI BETA FRATERNITY – – – – SAN BEDA LAW SCHOOL SAN BEDA LAW SCHOOL SAN BEDA LAW SCHOOL SAN BEDA LAW SCHOOL
Contributed by: Ivin Ronald D.M. Alzona [2007] REV based on Atty. Villanueva-Castro’s Course Outline 45
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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.
Art. 837. The civil liability incurred by the shipowners in the cases prescribed in this section, shall be understood as limited to the value of the vessel with all her appurtenances and freight earned during the voyage.
• Article 837 applies the principle of limited liability in cases of collision while Articles 587 and 590 embody the universal principle of limited liability in all cases.
• Cases where applicable:
1. Art. 587 – civil liability for indemnities to third persons ALPHA PHI BETA
2. Art. 590 – indemnities from negligent acts of the captain (NOT the shipowner or agent)
3. Art. 837 – collision
4. Art. 643 – liability for wages of the captain and the crew and for advances made by the ship agent if the vessel is lost by shipwreck or capture
1. CONCEPT
•
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 stands as the guaranty for their settlement. It has its origin by reason of the conditions and risks attending maritime trade in its earliest years when such trade was replete with innumerable and unknown hazards since vessels had to go through largely uncharted waters to ply their trade. It was designed to offset such adverse conditions and encourage people and entities to venture into maritime commerce despite the risks and the prohibitive cost of shipbuilding. Thus, the liability of the vessel owner and agent arising from the operation of such vessel were confined to the vessel itself, its equipment, freight, and insurance, if any, which limitation served to induce capitalists into effectively wagering their resources against the consideration of the large profits attainable in their trade. ALPHA PHI BETA•
“NO VESSEL, NO LIABILITY,” expresses in a nutshell the limited liability rule (Monarch Ins. Co. vs. CA).• The Supreme Court ruled in Monarch Ins. Co. vs. CA that the limited liability rule does not apply if the carrier failed to overcome the presumption of negligence.
2. EXCEPTIONS TO THE RULE
• GEN. RULE: The liability of shipowner and ship agent is limited to the amount of interest in said vessel such that where vessel is entirely lost, the obligation is extinguished.
The interest extends to:
1. The vessel itself 2. Equipment 3. Freightage; and 4. Insurance proceeds
ALPHA PHI BETA FRATERNITY ALPHA PHI BETA FRATERNITY ALPHA PHI BETA FRATERNITY
ALPHA PHI BETA FRATERNITY – – – – SAN BEDA LAW SCHOOL SAN BEDA LAW SCHOOL SAN BEDA LAW SCHOOL SAN BEDA LAW SCHOOL
Contributed by: Ivin Ronald D.M. Alzona [2007] REV based on Atty. Villanueva-Castro’s Course Outline 46
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• EXCEPTIONS:
1. Injury or damage due to shipowner or to the concurring negligence of the shipowner and the captain.
2. The vessel is insured
3. Claims under Workmen’s Compensation
4. Expenses for repair on vessel completed before loss
5. In case there is no total loss and the vessel is not abandoned.
• The limited liability rule applies if the captain or the crew caused the damage or injury. For instance, the shipowner’s or shipagent’s liability is limited to the value of the vessel if the damage was caused by the unseaworthiness of the vessel caused by the negligence of the captain or crew during the voyage. (Aboitiz Shipping Corp. vs. GAFLAC) However, if the failure to maintain the unseaworthiness of the vessel can be ascribed to the shipowner alone or the shipowner concurrently with the captain, then the limited liability principle cannot be invoked.
• The carrier is liable for the damages to the full extent and not up to the value of the vessel if it was established that the carrier was guilty of negligence in allowing the captain and crew to play mahjong during the voyage, in failing to maintain the ship as seaworthy and in allowing the ship to carry more passengers than it was allowed to carry.
• The limited liability doctrine applies not only to the goods but also in all cases like death or injury to passengers. ALPHA PHI BETA
• The rights of a vessel owner or agent under the limited liability rule are akin to those of the rights of shareholders to limited liability under our Corporation laws.
In both insolvency of a corporation and the sinking of a vessel, the claimants or creditors are limited in their recovery to the remaining value of accessible assets.
(Aboitiz Shipping Corp. vs. GAFLAC)
• But the provisions of the Code of Commerce invoked by appellant have no room in the application of the Workmen's Compensation Act which seeks to improve, and aims at the amelioration of, the condition of laborers and employees. It is not the liability for the damage or loss of the cargo or injury to, or death of, a passenger by or through the misconduct of the captain or master of the ship; nor the liability for the loss of the ship as a result of collision; nor the responsibility for wages of the crew, but a liability created by a statute to compensate employees and laborers in cases of injury received by or inflicted upon them, while engaged in the performance of their work or employment, or the heirs and dependents of such laborers and employees in the event of death caused by their employment. Such compensation has nothing to do with the provisions of the Code of Commerce regarding maritime commerce. It is an item in the cost of production which must be included in the budget of any well managed industry. (Abueg vs. San Diego)
3. ABANDONMENT
• Abandonment of the vessel, its appurtenances and the freightage is an indispensable requirement before the shipowner or shipagent can enjoy the benefits of the limited liability principle. If the carrier does not want to abandon the vessel, then he is still liable even beyond the value of the vessel.
• Abandonment – is the act of the insured by which, after a constructive total loss, he declares the relinquishment to the insurer of his interest in the thing insured.
(Sec. 138, ICP)
ALPHA PHI BETA FRATERNITY ALPHA PHI BETA FRATERNITY ALPHA PHI BETA FRATERNITY
ALPHA PHI BETA FRATERNITY – – – – SAN BEDA LAW SCHOOL SAN BEDA LAW SCHOOL SAN BEDA LAW SCHOOL SAN BEDA LAW SCHOOL
Contributed by: Ivin Ronald D.M. Alzona [2007] REV based on Atty. Villanueva-Castro’s Course Outline 47
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• Right of Shipowner or Ship agent to abandon vessel; Instances:
1. In case of civil liability from indemnities to third persons (Art. 587)
2. In case of leakage of at least ¾ of the contents of a cargo containing liquids (Art. 687); and
3. In case of constructive loss of the vessel (Sec. 138, Insurance Code)
Shipowner/ Ship Agent Consignee
1. Transfer of ownership of the vessel from shipowner to the shippers or
2. Carrier should pay the shipper the market value of the goods at the point of destination.
• How claims are satisfied under the Limited Liability Rule
All claims should be collated before they can be satisfied from what remains of the insurance proceeds and freightage at the time of the loss. No claimant can be given precedence over the others by the simple expedience of having filed or completed its action earlier than the rest. Thus, execution of judgment in earlier completed cases, even those already final and executory, must be stayed pending completion of all cases occasioned by the subject sinking. Then and only then can all such claims be simultaneously settled, either completely or pro-rata should the insurance proceeds and freightage be not enough to satisfy all claims (Aboitiz Shipping Corporation vs. General Accident Fire and Life Assurance Corporation, Ltd.).
C. VESSELS
• "Vessels" or Watercraft" – Any barge, lighter, bulk carrier, passenger ship, freighter, tanker, container ship, fishing boats or other artificial contrivance utilizing any source of motive power, designed, used or capable of being used as a means of water transportation operating either as common contract carrier, including fishing vessels covered under Presidential Decree No. 43, except (i) those owned and/or operated by the Armed Forces of the Philippines and by foreign governments for military purposes, and (ii) bancas, sailboats and other waterborne contrivance of less than three gross tons capacity and not motorized. (Section 3 (b) PD 474)
This definition is important for purposes of applying the laws and regulations that are being implemented by the Maritime Industry Authority. ALPHA PHI BETA
ALPHA PHI BETA FRATERNITY ALPHA PHI BETA FRATERNITY ALPHA PHI BETA FRATERNITY
ALPHA PHI BETA FRATERNITY – – – – SAN BEDA LAW SCHOOL SAN BEDA LAW SCHOOL SAN BEDA LAW SCHOOL SAN BEDA LAW SCHOOL
Contributed by: Ivin Ronald D.M. Alzona [2007] REV based on Atty. Villanueva-Castro’s Course Outline 48
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• Vessels are personal property under Article 416 of the Civil Code. The same rule can be found in Article 585 of the Code of Commerce which provides: “For all purposes of law not modified by the provisions of this Code, vessels shall continue to be considered as personal property. ALPHA PHI BETA
• Ships or vessels, whether moved by steam or by sail, partake, to a certain extent, of the nature and conditions of real property, on account of their value and importance in the world commerce (Rubiso and Calixto vs. Rivera). For instance, under Article 573 of the Code of Commerce, transfer of vessels should be in writing and must be recorded in the appropriate registry.
1. ACQUISITION
a. BY PRESCRIPTION
Art. 573, Code of Commerce. Merchant vessels constitute property which may be acquired and transferred by any of the means recognized by law. The acquisition of a vessel must appear in a written instrument, which shall not produce any effect with respect to third persons if not inscribed in the registry of vessels.
The ownership of a vessel shall likewise be acquired by possession in good faith, continued for three years, with a just title duly recorded.
In the absence of any of these requisites, continuous possession for ten years shall be necessary in order to acquire ownership.
A captain may not acquire by prescription the vessel of which he is in command.
Art. 575. Co-owners of vessels shall have the right of repurchase and redemption in sales made to strangers, but they may exercise the same only within the nine days following the inscription of the sale in the registry, and by depositing the price at the same time.
b. BY SALE
Art. 576. In the sale of a vessel it shall always be understood as included the rigging, masts, stores and engine of a streamer appurtenant thereto, which at the same time belongs to the vendor.
The arms, munitions of war, provisions and fuel shall not be considered as included in the sale. ALPHA PHI BETA
The vendor shall be under the obligation to deliver to the purchaser a certified copy of the record sheet of the vessel in the registry up to the date of the sale.
Art. 577. If the alienation of the vessel should be made while it is on voyage, the freightage which it earns from the time it receives its last cargo shall pertain entirely to the purchaser, and the payment of the crew and other persons who make up its complement for the same voyage shall be for his account.
If the sale is made after the vessel has arrived at the port of its destination, the freightage shall pertain to the vendor, and the payment of the crew and other
ALPHA PHI BETA FRATERNITY ALPHA PHI BETA FRATERNITY ALPHA PHI BETA FRATERNITY
ALPHA PHI BETA FRATERNITY – – – – SAN BEDA LAW SCHOOL SAN BEDA LAW SCHOOL SAN BEDA LAW SCHOOL SAN BEDA LAW SCHOOL
Contributed by: Ivin Ronald D.M. Alzona [2007] REV based on Atty. Villanueva-Castro’s Course Outline 49
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individuals who make up its complement shall be for his account, unless the contrary is stipulated in either case.
Art. 578. If the vessel being on a voyage or in a foreign port, its owner or owners should voluntarily alienate it, either to Filipinos or to foreigners domiciled in the capital or in a port of another country, the bill of sale shall be executed before the consul of the Republic of the Philippines at the port where it terminates its voyage and said instrument shall produce no effect with respect to third persons if it is not inscribed in the registry of the consulate. The consul shall immediately forward a true copy of the instrument of purchase and sale of the vessel to the registry of vessels of the port where said vessel is inscribed and registered.
In every case the alienation of the vessel must be made to appear with a statement of whether the vendor receives its price in whole or in part, or whether he preserves in whole or in part any claim on said vessel. In case the sale is made to a Filipino, this fact shall be stated in the certificate of navigation.
When a vessel, being on a voyage, shall be rendered useless for navigation, the captain shall apply to the competent judge on court of the port of arrival, should it be in the Philippines; and should it be in a foreign, to the consul of the Republic of the Philippines, should there be one, or, where there is none, to the judge or court or to the local authority; and the consul, or the judge or court, shall order an examination of the vessel to be made.
If the consignee or the insurer should reside at said port, or should representatives there, they must be cited in order that they may take part in the proceedings on behalf of whoever may be concerned.
c. REGISTRATION
Sec. 810, Tariff and Customs Code. Privileges Conferred by Certificate of Philippine Registry. – A certificate of Philippine registry confers upon the vessel the right to engage, consistently with law, in the Philippine coastwise trade and entities it to the protection of the authorities and the flag of the Philippines in all ports and on the high seas, and at the same time secures to it the same privileges and subjects it to the same disabilities as, under the laws of the Philippines, pertain to foreign-built vessels transferred abroad to citizens of the Philippines.
• Vessels are now registered through the Maritime Industry Authority. It is a long standing rule that the person who is the registered owner of the vessel is presumed to be the owner of the vessel. Moreover, it is likewise a settled rule that the sale or transfer of the vessel is not binding on third persons unless the same is registered.