Bottomry – loan made by ship-owner or ship
agent guaranteed by the vessel itself and repayable upon arrival of vessel at destination
(Art. 719)
Respondentia – loan, taken on security of the
cargo laden on a vessel, and repayable upon safe arrival of cargo at destination (Art. 719)
Common Requisites: (BDPS²R)
Borrows money for use, equipment orrepair of vessel
For a definite term
With extraordinary interest calledpremium
Secured by pledge of vessel or portionthereof (in bottomry) or goods (respondentia)
Loan repayment depends or conditioned on the safe arrival of the vessel (bottomry) or goods (respondentia)
Obligation to repay extinguished ifvessel is lost due to specific marine perils in the course or voyage within a limited time, or if pledged goods are lost
Formal Requirements:
1. By means of public instrument
2. Policy signed by the contracting parties and the broker taking part therein
Who may contract:
Bottomry – ship owner or ship agent. Outside of the residence of the owners, the captain.
Respondentia – only the owner of the cargo, except: (i) on the portion of the vessel he owns, provided no money has been previously borrowed on the whole vessel, nor exists any other kind of lien or obligation chargeable against her; (ii) when he is permitted to do so, he must necessarily state what interest he has in the vessel
Exceptions to the Hypothecary Nature of Bottomry and Respondentia:
1. Loss due to inherent defect
2. Loss due to the barratry on the part of the captain
3. Loss due to the fault of malice of the borrower
4. Vessel was engaged in contraband 5. Cargo loaded on the vessel be different
in form that agreed upon
When Bottomry/Respondentia Regarded as Simple Loan
1.
Lender loaned an amount larger than the value of the object due to fraudulent means employed by borrower(Art. 726)
2.
Full amount of the loan is not used for the cargo or given on the goods if all of them could not have been loaded, the balance will be considered a simple loan (Art. 727)3.
If the effects on which the money is taken is not subjected to any risk (Art. 729)BOTTOMRY/
RESPONDENTIA ORDINARY LOAN
May or may not have a collateral
Must have collateral Collateral may be any
property Must be vessel or cargo subject to maritime risks
Absolutely repayable Depends upon the safe arrival of the collateral at the port
Need not be in writing but interest shall not be due unless
expressly stipulated in writing
Must be in writing
Need not be registered
to bind third persons Must be recorded in the registry of vessels of the port of registry of the vessel
Loss of collateral does Loss of collateral
not extinguish the loan extinguishes the same
VI. ACCIDENTS
1. Averages 2. Collision
3. Arrival Under Stress 4. Shipwreck
Protest– 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.
Required in the following instances:
1. Vessel makes an arrival under stress 2. Vessel is shipwrecked
3. Vessel has gone through hurricane or the captain has suffered damages or averages
4. Maritime collisions
Note: Should be made within 24 hours following
the arrival of the vessel at the first port. Upon arrival at the place of destination, the captain shall ratify the protest within 24 hours.
Averages
1. An extra-ordinary or accidental expense incurred during the voyage in order to preserve the cargo, vessel or both; and
2.
All damages ordeterioration suffered by the vessel from departure to the port of destination, and to the cargo from the port of loading to the port consignment (Art. 806)
Classes of Averages 1. Particular or Simple Average
(i) Damage or expenses caused to the vessel or cargo that did not inure to common benefit, and (ii) borne by respective owners
(Art. 809)
2. Gross or General Average
a.
Damage or expenses deliberately caused in order to save the vessel, its cargo or both from real and known risk(Art. 811)
b.
All the persons having an interest in the vessel and the cargo therein at the time of the occurrence of the average shall contribute to satisfy this average (Art.812) c. Requisites:
1. Common danger
2. Arising from accidents of sea, disposition of authority 3. Peril imminent and ascertained
4. Part of vessel or cargo deliberately sacrificed
5. Intended to save vessel or cargo or both
6. Successful saving of vessel or cargo
7. Proper legal steps and authority taken
d. Procedure for recovery:
1. There must be an assembly of the sailing mate and other officers with the captain including those with interests in the cargo
2. Resolution of the captain
3. The resolution must be entered in the logbook, with reasons and motives and the votes for and against the resolution
4. The minutes shall be signed by the parties
5.
The captain shall deliver a copy of the minutes to the maritime judicial authority of the first port he may make, within 24 hours after his arrival, and to ratify it immediately under oath (Art. 813-814)York-Antwerp Rules on determining liability for contribution on averages:
1. Deck cargo is permitted in coastwise shipping but prohibited in overseas shipping 2. Overseas trade – must always contribute to
general average, but should the same be jettisoned, it would not be entitled to reimbursement because there is violation of the Y-A Rules
3. Coastwise shipping – must always contribute to general average and if jettisoned would be entitled to reimbursement
Collision – Impact of two vessels both of which
are moving
Allision - Impact between a movingvessel and a stationary one
Zones of Time in the Collision of vessels:
1.
First zone - all time up to the moment whenrisk of collision begins
2.
Second zone - time between moment whenrisk of collision begins and moment it becomes a practical certainty;
3.
Third zone - time when collision is certainand time of impact
Error in Extremis – sudden movementmade by a faultless vessel during the third zone of collision with another vessel which is at fault during the second zone. Even if such sudden movement is wrong, no responsibility will fall on said faultless vessel
(Urrutia and Co. v. Baco River Plantation, 26 Phil. 632)
Cases Covered:
1.
One vessel at fault – such vessel is liable for damage caused to innocent vessel as well as damages suffered by the owners of cargo of both vessels2.
Both vessels at fault – each vessel must bear its own loss, but the shippers of both vessels may go against the ship owners who will be solidarily liable3. Vessel at fault not known
Doctrine of “Inscrutable Fault” (1997 Bar Exam)
In case of collision where it cannot be determined which between the two vessels was at fault, both vessels bear their respective damage, but both should be solidarily liable for damage to the cargo of both vessels.
4.
Third vessel at fault – same rule as (1)5.
Fortuitous event – each bears its own loss Procedure:
1.
Protest should be made within 24 hours before the competent authority at the point of collision or at the first port of arrival, if in the Philippines and to the Philippine consul, if the collision took place abroad (Art. 835)2.
Injuries to persons and damage to cargo of owners not on board on collision time need not be protested (Art.836)
Arrival under Stress
Arrival of a vessel at a port of destination on account of lack of provision, well-founded fear of seizure, pirates, or accidents of sea disabling navigation (Art. 819) When Not Lawful:
1. Lack of provisions due to negligence to carry according to usage and customs
2. Risk of enemy not well known or manifest 3. Defect of vessel due to improper repair; and
of captain (Art. 820)
Who Bears Expenses:
1.
The ship-owner or ship agent except for damages caused by the shippers by reason of a lawful arrival (Art. 821)2.
The captain shall be liable for damages caused by his delay, if after the cause of the arrival under stress has ceased, he continues the voyage (Art. 825) Procedure:
1. Captain determines during the voyage if there is well founded fear of seizure, privateers and other valid grounds
2. He shall then assemble the officers 3. He shall summon the persons interested in the cargo who may be present and who may attempt but without right to vote
4. The officers determine and agree if there is well founded reason after examining the circumstances. The captain shall have the deciding vote
5. The agreement shall be drafted and the proper minutes shall be signed and entered in the log book
6. Objections and protests shall likewise entered in the minutes
Shipwreck
Denotes all types of loss/ wreck of a vessel at sea either by being swallowed up by the waves, by running against another vessel or thing at sea or on coast where the vessel is rendered incapable of navigation
SALVAGE LAW (Act 2616)
Salvage - Compensation allowed topersons by whose voluntary assistance a ship at sea or her cargo or both have been saved in whole or in part from an impending or actual peril, shipwrecks, derelicts or recapture
- Services one person render 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 or secure
Derelict – Ship or her cargo which isabandoned and deserted at sea by those who were in charge of it, without any hope of recovering it, or without any intention of returning to it
Requisites for Salvage Award:
a. Valid object of salvage b. Exposed to marine peril c. Voluntary salvage services d. Success in
whole or in part, or that services contributed to success
Rules on Salvage Award
(1)
Fixed by RTC in the absence of agreement or where the latter is excessive(Sec. 9)
(2)
If sold (no claim being made within 3 months from publication)a. Proceeds, after deducting expenses and the salvage claim, shall go to the owner
b.
If he does not claim it within 3 years, 50% of the said proceeds shall go to the salvors, and the other half to the government (Secs. 11-12)3.
If a vessel is the salvor, the reward shall be distributed as follows:a. 50% to ship owner b. 25% to captain
c.
25% to officers and crew in proportion to their salaries (Sec. 13) Persons Without Right to a Salvage Reward:
1. Crew of the vessel saved
2. Persons who commenced salvage in spite of opposition of the captain or his representative
3.
Person who fails to deliver a salvaged vessel or cargo to the Collector of Customs (Sec. 3)
Towage - contract whereby one vessel, usually motorized, pulls another from one place to another, for compensation. It is a contract for services rather than a contract of carriage.SALVAGE TOWAGE
Governed by special
law (Act No. 2616) Governed by NCC on contract of lease Requires success,
otherwise no payment
Success not required Must be done with
the consent of the captain/crewmen
Only the consent of the tugboat owner is needed
Vessel must be involved in an accident
Vessel need not be involved in an accident Fees distributed
among crewmen Fees belong to the tugboat owner Salvor takes
possession and may retain possession
Tower has no possessory lien; only an action for sum of
until he is paid money Court can reduce
amount of renumeration if unconscionable
Court cannot change amount in towage even if
unconscionable
CARRIAGE OF GOODS BY SEA ACT (CA 65)