7/26/2019 Codal Pr

1/329

Civil code

Article 1174.Except in cases expressly specified by the law, or when it is otherwisedeclared by stipulation, or when the nature of the obligation requires the assumption of risk,no person shall be responsible for those events which could not be foreseen, or which,

The reduction of fare does not justify any limitation of the common carrier's liability.

Article 1761.The passenger must observe the diligence of a good father of a family toavoid injury to himself.

Article 1762.The contributory negligence of the passenger does not bar recovery ofdamages for his death or injuries, if the proximate cause thereof is the negligence of thecommon carrier, but the amount of damages shall be equitably reduced.

Article 1766.In all matters not regulated by this Code, the rights and obligations ofcommon carriers shall be governed by the Code of Commerce and by special laws.

Article 2179.When the plaintiff's own negligence was the immediate and proximate cause of his injury,he cannot recover damages. But if his negligence was only contributory, the immediate and proximatecause of the injury being the defendant's lack of due care, the plaintiff may recover damages, but thecourts shall mitigate the damages to be awarded. (n)

Article 1755.A common carrier is bound to carry the passengers safely as far as humancare and foresight can provide, using the utmost diligence of very cautious persons, with adue regard for all the circumstances.

Article 1756.In case of death of or injuries to passengers, common carriers are presumed

to have been at fault or to have acted negligently, unless they prove that they observedextraordinary diligence as prescribed in articles 1733 and 1755.

Article 1757.The responsibility of a common carrier for the safety of passengers asrequired in articles 1733 and 1755 cannot be dispensed with or lessened by stipulation, bythe posting of notices, by statements on tickets, or otherwise.

Article 1758.When a passenger is carried gratuitously, a stipulation limiting the commoncarrier's liability for negligence is valid, but not for wilful acts or gross negligence.

The reduction of fare does not justify any limitation of the common carrier's liability.

Article 1759.Common carriers are liable for the death of or injuries to passengers throughthe negligence or wilful acts of the former's employees, although such employees may haveacted beyond the scope of their authority or in violation of the orders of the commoncarriers.

This liability of the common carriers does not cease upon proof that they exercised all thediligence of a good father of a family in the selection and supervision of their employees.

7/26/2019 Codal Pr

2/329

Article 1760.The common carrier's responsibility prescribed in the preceding article cannotbe eliminated or limited by stipulation, by the posting of notices, by statements on the ticketsor otherwise.

Article 1763.A common carrier is responsible for injuries suffered by a passenger onaccount of the wilful acts or negligence of other passengers or of strangers, if the commoncarrier's employees through the exercise of the diligence of a good father of a family couldhave prevented or stopped the act or omission.

Article 1636.In the preceding articles in this Title governing the sale of goods, unless the context orsubject matter otherwise requires:

(1) "Document of title to goods" includes any bill of lading, dock warrant, "quedan," or warehousereceipt or order for the delivery of goods, or any other document used in the ordinary course ofbusiness in the sale or transfer of goods, as proof of the possession or control of the goods, orauthorizing or purporting to authorize the possessor of the document to transfer or receive, either byindorsement or by delivery, goods represented by such document.

"Goods" includes all chattels personal but not things in action or money of legal tender in thePhilippines. The term includes growing fruits or crops.

"Order" relating to documents of title means an order by indorsement on the documents.

"Quality of goods" includes their state or condition.

"Specific goods" means goods identified and agreed upon at the time a contract of sale is made.

An antecedent or pre-existing claim, whether for money or not, constitutes "value" where goods ordocuments of title are taken either in satisfaction thereof or as security therefor.

Article 1503.When there is a contract of sale of specific goods, the seller may, by theterms of the contract, reserve the right of possession or ownership in the goods until certainconditions have been fulfilled. The right of possession or ownership may be thus reservednotwithstanding the delivery of the goods to the buyer or to a carrier or other bailee for thepurpose of transmission to the buyer.

Article 1507.A document of title in which it is stated that the goods referred to therein will

be delivered to the bearer, or to the order of any person named in such document is anegotiable document of title. (n)

Article 1508.A negotiable document of title may be negotiated by delivery:

(1) Where by the terms of the document the carrier, warehouseman or other bailee issuingthe same undertakes to deliver the goods to the bearer; or

7/26/2019 Codal Pr

3/329

(2) Where by the terms of the document the carrier, warehouseman or other bailee issuingthe same undertakes to deliver the goods to the order of a specified person, and suchperson or a subsequent indorsee of the document has indorsed it in blank or to the bearer.

Where by the terms of a negotiable document of title the goods are deliverable to bearer orwhere a negotiable document of title has been indorsed in blank or to bearer, any holdermay indorse the same to himself or to any specified person, and in such case the documentshall thereafter be negotiated only by the indorsement of such indorsee. (n)

Article 1509.A negotiable document of title may be negotiated by the indorsement of theperson to whose order the goods are by the terms of the document deliverable. Suchindorsement may be in blank, to bearer or to a specified person. If indorsed to a specifiedperson, it may be again negotiated by the indorsement of such person in blank, to bearer orto another specified person. Subsequent negotiations may be made in like manner. (n)

Article 1510.If a document of title which contains an undertaking by a carrier,warehouseman or other bailee to deliver the goods to bearer, to a specified person or order

of a specified person or which contains words of like import, has placed upon it the words"not negotiable," "non-negotiable" or the like, such document may nevertheless benegotiated by the holder and is a negotiable document of title within the meaning of thisTitle. But nothing in this Title contained shall be construed as limiting or defining the effectupon the obligations of the carrier, warehouseman, or other bailee issuing a document oftitle or placing thereon the words "not negotiable," "non-negotiable," or the like. (n)

Article 1511.A document of title which is not in such form that it can be negotiated bydelivery may be transferred by the holder by delivery to a purchaser or donee. A non-negotiable document cannot be negotiated and the indorsement of such a document givesthe transferee no additional right. (n)

Article 1512.A negotiable document of title may be negotiated:

(1) By the owner thereof; or

(2) By any person to whom the possession or custody of the document has been entrustedby the owner, if, by the terms of the document the bailee issuing the document undertakesto deliver the goods to the order of the person to whom the possession or custody of thedocument has been entrusted, or if at the time of such entrusting the document is in suchform that it may be negotiated by delivery. (n)

Article 1513.A person to whom a negotiable document of title has been duly negotiated

acquires thereby:

(1) Such title to the goods as the person negotiating the document to him had or had abilityto convey to a purchaser in good faith for value and also such title to the goods as theperson to whose order the goods were to be delivered by the terms of the document had orhad ability to convey to a purchaser in good faith for value; and

7/26/2019 Codal Pr

4/329

(2) The direct obligation of the bailee issuing the document to hold possession of the goodsfor him according to the terms of the document as fully as if such bailee had contracteddirectly with him. (n)

Article 1514.A person to whom a document of title has been transferred, but notnegotiated, acquires thereby, as against the transferor, the title to the goods, subject to theterms of any agreement with the transferor.

If the document is non-negotiable, such person also acquires the right to notify the baileewho issued the document of the transfer thereof, and thereby to acquire the direct obligationof such bailee to hold possession of the goods for him according to the terms of thedocument.

Prior to the notification to such bailee by the transferor or transferee of a non-negotiabledocument of title, the title of the transferee to the goods and the right to acquire theobligation of such bailee may be defeated by the levy of an attachment of execution uponthe goods by a creditor of the transferor, or by a notification to such bailee by the transferor

or a subsequent purchaser from the transferor of a subsequent sale of the goods by thetransferor. (n)

Article 1515.Where a negotiable document of title is transferred for value by delivery, andthe indorsement of the transferor is essential for negotiation, the transferee acquires a rightagainst the transferor to compel him to indorse the document unless a contrary intentionappears. The negotiation shall take effect as of the time when the indorsement is actuallymade. (n)

Article 1516.A person who for value negotiates or transfers a document of title byindorsement or delivery, including one who assigns for value a claim secured by a

document of title unless a contrary intention appears, warrants:

(1) That the document is genuine;

(2) That he has a legal right to negotiate or transfer it;

(3) That he has knowledge of no fact which would impair the validity or worth of thedocument; and

(4) That he has a right to transfer the title to the goods and that the goods are merchantableor fit for a particular purpose, whenever such warranties would have been implied if thecontract of the parties had been to transfer without a document of title the goods

represented thereby. (n)

Article 1517.The indorsement of a document of title shall not make the indorser liable forany failure on the part of the bailee who issued the document or previous indorsers thereofto fulfill their respective obligations. (n)

Article 1518.The validity of the negotiation of a negotiable document of title is not impairedby the fact that the negotiation was a breach of duty on the part of the person making the

7/26/2019 Codal Pr

5/329

negotiation, or by the fact that the owner of the document was deprived of the possession ofthe same by loss, theft, fraud, accident, mistake, duress, or conversion, if the person towhom the document was negotiated or a person to whom the document was subsequentlynegotiated paid value therefor in good faith without notice of the breach of duty, or loss,theft, fraud, accident, mistake, duress or conversion. (n)

Article 1519.If goods are delivered to a bailee by the owner or by a person whose act inconveying the title to them to a purchaser in good faith for value would bind the owner and anegotiable document of title is issued for them they cannot thereafter, while in possession ofsuch bailee, be attached by garnishment or otherwise or be levied under an executionunless the document be first surrendered to the bailee or its negotiation enjoined. Thebailee shall in no case be compelled to deliver up the actual possession of the goods untilthe document is surrendered to him or impounded by the court. (n)

Article 1520.A creditor whose debtor is the owner of a negotiable document of title shall beentitled to such aid from courts of appropriate jurisdiction by injunction and otherwise inattaching such document or in satisfying the claim by means thereof as is allowed at law or

in equity in regard to property which cannot readily be attached or levied upon by ordinarylegal process. (n)

SUBSECTION 2. Vigilance Over Goods

Article 1734.Common carriers are responsible for the loss, destruction, or deterioration of thegoods, 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.

Article 1735.In all cases other than those mentioned in Nos. 1, 2, 3, 4, and 5 of the precedingarticle, if the goods are lost, destroyed or deteriorated, common carriers are presumed to havebeen at fault or to have acted negligently, unless they prove that they observed extraordinarydiligence as required in article 1733.

Article 1736.The extraordinary responsibility of the common carrier lasts from the time thegoods are unconditionally placed in the possession of, and received by the carrier fortransportation until the same are delivered, actually or constructively, by the carrier to theconsignee, or to the person who has a right to receive them, without prejudice to the provisionsof article 1738.

Article 1737.The common carrier's duty to observe extraordinary diligence over the goodsremains in full force and effect even when they are temporarily unloaded or stored in transit,unless the shipper or owner has made use of the right of stoppage in transitu.

7/26/2019 Codal Pr

6/329

Article 1738.The extraordinary liability of the common carrier continues to be operative evenduring the time the goods are stored in a warehouse of the carrier at the place of destination,until the consignee has been advised of the arrival of the goods and has had reasonableopportunity thereafter to remove them or otherwise dispose of them.

Article 1739.In order that the common carrier may be exempted from responsibility, the natural

disaster must have been the proximate and only cause of the loss. However, the commoncarrier must exercise due diligence to prevent or minimize loss before, during and after theoccurrence of flood, storm or other natural disaster in order that the common carrier may beexempted from liability for the loss, destruction, or deterioration of the goods. The same duty isincumbent upon the common carrier in case of an act of the public enemy referred to in article1734, No. 2.

Article 1740.If the common carrier negligently incurs in delay in transporting the goods, anatural disaster shall not free such carrier from responsibility.

Article 1741.If the shipper or owner merely contributed to the loss, destruction or deteriorationof the goods, the proximate cause thereof being the negligence of the common carrier, the lattershall be liable in damages, which however, shall be equitably reduced.

Article 1742.Even if the loss, destruction, or deterioration of the goods should be caused bythe character of the goods, or the faulty nature of the packing or of the containers, the commoncarrier must exercise due diligence to forestall or lessen the loss.

Article 1743.If through the order of public authority the goods are seized or destroyed, thecommon carrier is not responsible, provided said public authority had power to issue the order.

Article 1744.A stipulation between the common carrier and the shipper or owner limitingthe 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 commoncarrier; and

(3) Reasonable, just and not contrary to public policy.

Article 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 thegoods;

(3) That the common carrier need not observe any diligence in the custody of the goods;

7/26/2019 Codal Pr

7/329

(4) That the common carrier shall exercise a degree of diligence less than that of a goodfather of a family, or of a man of ordinary prudence in the vigilance over the movablestransported;

(5) That the common carrier shall not be responsible for the acts or omission of his or itsemployees;

(6) That the common carrier's liability for acts committed by thieves, or of robbers who donot 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 ofgoods on account of the defective condition of the car, vehicle, ship, airplane or otherequipment used in the contract of carriage.

Article 1746.An agreement limiting the common carrier's liability may be annulled by theshipper or owner if the common carrier refused to carry the goods unless the former agreedto such stipulation.

Article 1747.If the common carrier, without just cause, delays the transportation of thegoods or changes the stipulated or usual route, the contract limiting the common carrier'sliability cannot be availed of in case of the loss, destruction, or deterioration of the goods.

Article 1748.An agreement limiting the common carrier's liability for delay on account ofstrikes or riots is valid.

Article 1749.A stipulation that the common carrier's liability is limited to the value of thegoods appearing in the bill of lading, unless the shipper or owner declares a greater value,is binding.

Article 1750.A contract fixing the sum that may be recovered. by the owner or shipper forthe loss, destruction, or deterioration of the goods is valid, if it is reasonable and just underthe circumstances, and has been fairly and freely agreed upon.

Article 1751.The fact that the common carrier has no competitor along the line or route, ora part thereof, to which the contract refers shall be taken into consideration on the questionof whether or not a stipulation limiting the common carrier's liability is reasonable, just andin consonance with public policy.

Article 1752.Even when there is an agreement limiting the liability of the common carrier inthe vigilance over the goods, the common carrier is disputably presumed to have beennegligent in case of their loss, destruction or deterioration.

Article 1753.The law of the country to which the goods are to be transported shall governthe liability of the common carrier for their loss, destruction or deterioration.

Article 1754.The provisions of articles 1733 to 1753 shall apply to the passenger'sbaggage which is not in his personal custody or in that of his employee. As to other

7/26/2019 Codal Pr

8/329

baggage, the rules in articles 1998 and 2000 to 2003 concerning the responsibility of hotel-keepers shall be applicable.

SUBSECTION 3. Safety of Passengers

Article 1755.A common carrier is bound to carry the passengers safely as far as humancare and foresight can provide, using the utmost diligence of very cautious persons, with adue regard for all the circumstances.

Article 1756.In case of death of or injuries to passengers, common carriers are presumedto have been at fault or to have acted negligently, unless they prove that they observedextraordinary diligence as prescribed in articles 1733 and 1755.

Article 1757.The responsibility of a common carrier for the safety of passengers asrequired in articles 1733 and 1755 cannot be dispensed with or lessened by stipulation, bythe posting of notices, by statements on tickets, or otherwise.

Article 1758.When a passenger is carried gratuitously, a stipulation limiting the commoncarrier's liability for negligence is valid, but not for wilful acts or gross negligence.

The reduction of fare does not justify any limitation of the common carrier's liability.

Article 1759.Common carriers are liable for the death of or injuries to passengers throughthe negligence or wilful acts of the former's employees, although such employees may haveacted beyond the scope of their authority or in violation of the orders of the commoncarriers.

This liability of the common carriers does not cease upon proof that they exercised all the

diligence of a good father of a family in the selection and supervision of their employees.

Article 1760.The common carrier's responsibility prescribed in the preceding article cannotbe eliminated or limited by stipulation, by the posting of notices, by statements on the ticketsor otherwise.

Article 1761.The passenger must observe the diligence of a good father of a family toavoid injury to himself.

Article 1148.The limitations of action mentioned in articles 1140 to 1142, and 1144 to 1147are without prejudice to those specified in other parts of this Code, in the Code ofCommerce, and in special laws. (n)

Article 1155.The prescription of actions is interrupted when they are filed before the court, when there isa written extrajudicial demand by the creditors, and when there is any written acknowledgment of the debtby the debtor. (1973a)

Code of commerce

7/26/2019 Codal Pr

9/329

PART 5 PASSENGERS ON SEA VOYAGESARTICLE 693. If the passage price has not been agreed upon, the judge or court shallsummarily fix it, after a declaration of experts.

ARTICLE 694. Should the passenger not arrive on board at the time fixed, or should leavethe vessel without permission from the captain when the latter is ready to leave the port, thecaptain may continue the voyage and demand the full passage price.

ARTICLE 695. The right to passage, if issued to a specified person, may not be transferredwithout the consent of the captain or of the consignee.

ARTICLE 696. If before beginning the voyage the passenger should die, his heirs shall onlybe obliged to pay half of the fare agreed upon. If the expenses of subsistence are includedin the price stipulated, the judge or court, after hearing experts if he considers it necessary,shall fix the amount which has to be left for the benefit of the vessel. Should anotherpassenger be received in the place of the deceased, no payment shall be made by saidheirs.

ARTICLE 697. If before the voyage is begun it is suspended through the exclusive fault ofthe captain or ship agent, the passengers shall have the right to a refund of their fares andto recover losses and damages; but if the suspension is due to fortuitous events, or to forcemajeure, or to any other cause independent of the captain or ship agent, the passengersshall only be entitled to the return of the fare. cd

ARTICLE 698. In case a voyage already begun should be interrupted, the passengers shallbe obliged to pay the fare in proportion to the distance covered, without right to recover forlosses and damages if the interruption is due to fortuitous event or to force majeure, butwith a right to indemnity if the interruption should have been caused by the captainexclusively. If the interruption should be caused by the disability of the vessel, and a

passenger should agree to await the repairs, he may not be required to pay any increasedprice of passage, but his living expenses during the stay shall be for his own account. Incase of delay in the departure of the vessel, the passengers have the right to remain onboard and to be furnished with food for the account of the vessel unless the delay is due tofortuitous events or to force majeure. If the delay should exceed ten days, passengersrequesting the same shall be entitled to the return of the fare; and if it is due exclusively tothe fault of the captain or ship agent, they may also demand indemnity for losses anddamages. A vessel exclusively devoted to the transportation of passengers must take themdirectly to the port or ports of destination, no matter what the number of passengers maybe, making all the stops indicated in its itinerary.

ARTICLE 699. If the contract is rescinded, before or after the commencement of thevoyage, the captain shall have a right to claim payment of what he may have furnished thepassengers.

ARTICLE 700. In all matters pertaining to the preservation of order and discipline on boardthe vessel passengers shall be subject to the orders of the captain, without any distinctionwhatsoever.

7/26/2019 Codal Pr

10/329

ARTICLE 701. The convenience or the interest of the passengers shall not obligate orempowers the captain to stand in shore or enter places which may take the vessel out ofher course, or to remain in the ports he must or in under necessity of touching for a periodlonger than that required by the needsof navigation.

ARTICLE 702. In the absence of an agreement to the contrary, it shall be understood thatthe subsistence of the passengers during the voyage is included in the price of the passage;but should it be for the account of the latter, the captain shall be under obligation, in case ofnecessity, to furnish the supply of food necessary for their sustenance at a reasonableprice.

ARTICLE 703. A passenger shall be considered a shipper insofar as the goods he carrieson board are concerned, and the captain shall not be responsible for what the former maykeep under his immediate and special custody, unless the damage arises from an act of thecaptain or of the crew.

ARTICLE 704. The captain, in order to collect the passage-money and expenses of

sustenance, may retain the goods belonging to the passenger, and in case of the sale of thesame he shall be given preference over other creditors acting the same way as in thecollection of freightage.

ARTICLE 705. In case of the death of a passenger during the voyage, the captain shall beauthorized, with regard to the body, to take the steps required by the circumstances, andshall carefully take care of the papers and goods which may be on board belonging to thepassenger, observing the provisions of case No. 10 of Article 612 with regard to membersof the crew.

COMMERCIAL CONTRACTS FOR TRANSPORTATION OVERLAND

ARTICLE 349. A contract of transportation by land or water ways of any kind shall beconsidered commercial: 1. When it has for its object merchandise or any article ofcommerce. 2. When, whatever its object may be, the carrier is a merchant or is habituallyengaged in transportation for the public.

ARTICLE 350. The shipper as well as the carrier of merchandise or goods may mutuallydemand that a bill of lading be made, stating: 1. The name, surname and residence of theshipper. 2. The name, surname and residence of the carrier. 3. The name, surname andresidence of the person to whom or to whose order the goods are to be sent or whetherthey are to be delivered to the bearer of said bill. 4. The description of the goods, with astatement of their kind, of their weight, and of the external marks or signs of the packages in

which they are contained. 5. The cost of transportation. 6. The date on which shipment ismade. 7. The place of delivery to the carrier. 8. The place and the time at which delivery tothe consignee shall be made. 9. The indemnity to be paid by the carrier in case of delay, ifthere should be any agreement on this matter.

ARTICLE 351. In transportation made by railroads or other enterprises subject to regulationrate and time schedules, it shall be sufficient for the bills of lading or the declaration ofshipment furnished by the shipper to refer, with respect to the cost, time and specialconditions of the carriage, to the schedules and regulations the application of which he

7/26/2019 Codal Pr

11/329

requests; and if the shipper does not determine the schedule, the carrier must apply the rateof those which appear to be the lowest, with the conditions inherent thereto, alwaysincluding a statement or reference to in the bill of lading which he delivers to the shipper.

ARTICLE 352. The bills of lading, or tickets in cases of transportation of passengers, maybe diverse, some for persons and others for baggage; but all of them shall bear the name ofthe carrier, the date of shipment, the points of departure and arrival, the cost, and, withrespect to the baggage, the number and weight of the packages, with such othermanifestations which may be considered necessary for their easy identification.

ARTICLE 353. The legal evidence of the contract between the shipper and the carrier shallbe the bills of lading, by the contents of which the disputes which may arise regarding theirexecution and performance shall be decided, no exceptions being admissible other thanthose of falsity and material error in the drafting. After the contract has been complied with,the bill of lading which the carrier has issued shall be returned to him, and by virtue of theexchange of this title with the thing transported, the respective obligations and actions shallbe considered cancelled, unless in the same act the claim which the parties may wish to

reserve be reduced to writing, with the exception of that provided for in Article 366. In casethe consignee, upon receiving the goods, cannot return the bill of lading subscribed by thecarrier, because of its loss or of any other cause, he must give the latter a receipt for thegoods delivered, this receipt producing the same effects as the return of the bill of lading.

ARTICLE 354. In the absence of a bill of lading, disputes shall be determined by the legalproofs which the parties may present in supportNote: [Sec. 2530.Property Subject to Forfeiture Under Tariff and Customs Laws.Anyvessel or aircraft, cargo, articles and other objects shall, under the following conditions, besubject to forfeiture: a. Any vessel or aircraft, including cargo, which shall be used lawfully inthe importation or exportation of articles into or from any Philippine port or place except aport of entry; and any vessel which, being of less than thirty tons capacity shall be used in

the importation of articles into any Philippine port or place except into a port of the Sulu seawhere importation in such vessel may be authorized by the Commissioner, with theapproval of the department head. chanrobles virtual law library b. Any vessel engaging inthe coastwise trade which shall have on board any article of foreign growth, product ormanufacture in excess of the amount necessary for sea stores, without such article havingbeen properly entered or legally imported. chanrobles virtual law library c. Any vessel oraircraft into which shall be transferred cargo unladen contrary to law prior to the arrival ofthe importing vessel or aircraft at her port of destination. d. Any part of the cargo of a vesselor aircraft arriving from a foreign port which is unladen before arrival at the vessel's oraircraft's port of destination and without authority from the proper customs official; but suchcargo shall not be forfeited if such unlading was due to accident, stress of weather or other

necessity and is subsequently approved by the Collector. e. Any article which is fraudulentlyconcealed in or removed from any public or private warehouse under customs supervision.f. Any article of prohibited importation or exportation, the importation or exportation of whichis effected or attempted contrary to law, and all other articles which, in the opinion of theCollector, have been used, are or were intended to be used as instrument in the importationor exportation of the former. g. Unmanifested article found on any vessel or aircraft, ifmanifest therefor is required. h. Sea stores or stores for aircraft adjudged by the Collector tobe excessive, when the duties assessed by the Collector thereon are not paid or securedforthwith upon assessment of the same. i. Any package of imported article which is found by

7/26/2019 Codal Pr

12/329

the examining official to contain any article not specified in the invoice or entry, including allother packages purportedly containing imported articles similar to those declared in theinvoice or entry to be the contents of the misdeclared package, provided the Collector is ofthe opinion that the misdeclaration was caused with fraudulent intent. j. Boxes, cases,trunks, envelopes and other containers of whatever character used as receptacles or asdevices to conceal article which is itself subject to forfeiture under the customs and tarifflaws or which is so designed as to conceal the character of such article. k. Any beastactually being used for the conveyance of article subject to forfeiture under the customs andtariff laws with its equipage or trappings, and any vehicles similarly used, together with itsequipage and appurtenances, including the beast, team or other motive power drawing orpropelling the same; but the forfeiture shall not be effected if it is established that the ownerof the means of conveyance used as aforesaid or his agent in charge thereof at the time,has no knowledge of the unlawful act. l. Any money or thing of value offered as a bribe orfor the purpose of exerting improper influence over a customs official or employee. m. Anyarticle sought to be imported or exported: (1) Without going through a customhouse,whether the act was consummated, frustrated or attempted; chanrobles virtual law library(2) By failure to mention to a customs official, articles found in the baggage of a person

arriving from abroad. chanrobles virtual law library (3) On the strength of a false declarationor affidavit executed by the owner, importer, exporter or consignee concerning theimportation or exportation of such article. (4) On the strength of a false invoice or otherdocument executed by the owner, importer, exporter or consignee concerning theimportation or exportation of such article. (5) Through any other fraudulent practice ordevice by means of which such articles was entered through a customhouse to theprejudice of the government.

Sec. 2531. Conditions Affecting Forfeiture of Article. As regards imported or exportedarticle or articles whereof the importation or exportation is merely attempted, the forfeitureshall be effected only when and while the article is in the custody or within the jurisdiction ofthe customs authorities or in the hands or subject to the control of the importer, exporter,

original owner, consignee, agent or other person effecting the importation, entry orexportation in question, or in the hands or subject to the control of some person who shallreceive, conceal, buy, sell or transport the same or aid in any such acts, with knowledgethat the article was imported, or was the subject of an attempt at importation or exportation,contrary to law.]

ARTICLE 358. If there is no period fixed for the delivery of the goods the carrier shall bebound to forward them in the first shipment of the same or similar goods which he maymake point where he must deliver them; and should he not do so, the damages caused bythe delay should be for his account.

ARTICLE 359. If there is an agreement between the shipper and the carrier as to the roadover which the conveyance is to be made, the carrier may not change the route, unless it beby reason of force majeure; and should he do so without this cause, he shall be liable for allthe losses which the goods he transports may suffer from any other cause, beside payingthe sum which may have been stipulated for such case. When on account of said cause offorce majeure, the carrier had to take another route which produced an increase intransportation charges, he shall be reimbursed for such increase upon formal proof thereof.

7/26/2019 Codal Pr

13/329

ARTICLE 360. The shipper, without changing the place where the delivery is to be made,may change the consignment of the goods which he delivered to the carrier, provided thatat the time of ordering the change of consignee the bill of lading signed by the carrier, if onehas been issued, be returned to him, in exchange for another wherein the novation of thecontract appears. The expenses which this change of consignment occasions shall be forthe account of the shipper.

ARTICLE 361. The merchandise shall be transported at the risk and venture of the shipper,if the contrary has not been expressly stipulated. As a consequence, all the losses anddeteriorations which the goods may suffer during the transportation by reason of fortuitousevent, force majeure, or the inherent nature and defect of the goods, shall be for theaccount and risk of the shipper. cdtai Proof of these accidents is incumbent upon thecarrier.

ARTICLE 362. Nevertheless, the carrier shall be liable for the losses and damages resultingfrom the causes mentioned in the preceding article if it is proved, as against him, that theyarose through his negligence or by reason of his having failed to take the precautions which

usage has established among careful persons, unless the shipper has committed fraud inthe bill of lading, representing the goods to be of a kind or quality different from what theyreally were. If, notwithstanding the precautions referred to in this article, the goodstransported run the risk of being lost, on account of their nature or by reason of unavoidableaccident, there being no time for their owners to dispose of them, the carrier may proceed tosell them, placing them for this purpose at the disposal of the judicial authority or of theofficials designated by special provisions.

ARTICLE 363. Outside of the cases mentioned in the second paragraph of Article 361, thecarrier shall be obliged to deliver the goods shipped in the same condition in which,according to the bill of lading, they were found at the time they were received, without anydamage or impairment, and failing to do so, to pay the value which those not delivered may

have at the point and at the time at which their delivery should have been made. If those notdelivered form part of the goods transported, the consignee may refuse to receive the latter,when he proves that he cannot make use of them independently of the others.

Note:[ARTICLE 687. The charterers and shippers may not abandon merchandise damagedon account of inherent defect or fortuitous event, for the payment of the freightage and otherexpenses. aisadc The abandonment shall be proper, however, if the cargo should consist ofliquids and they have leaked out, nothing remaining in the containers but one-fourth part oftheir contents.]

ARTICLE 364. If the effect of the damage referred to in Article 361 is merely a diminution in

the value of the goods, the obligation of the carrier shall be reduced to the payment of theamount which, in the judgment of experts, constitutes such difference in value.

ARTICLE 365. If, in consequence of the damage, the goods are rendered useless for saleand consumption for the purposes for which they are properly destined, the consignee shallnot be bound to receive them, and he may have them in the hands of the carrier,demanding of the latter their value at the current price on that day. If among the damagedgoods there should be some pieces in good condition and without any defect, the foregoingprovision shall be applicable with respect to those damaged and the consignee shall receive

7/26/2019 Codal Pr

14/329

those which are sound, this segregation to be made by distinct and separate pieces andwithout dividing a single object, unless the consignee proves the impossibility ofconveniently making use of them in this form

ARTICLE 369. If the consignee cannot be found at the residence indicated in the bill oflading, or if he refuses to pay the transportation charges and expenses, or if he refuses toreceive the goods, the municipal judge, where there is none of the first instance, shallprovide for their deposit at the disposal of the shipper, this deposit producing all the effectsof delivery without prejudice to third parties with a better right.

Note: [ARTICLE 711. The legitimate holder of a bill of lading who fails to present it to thecaptain of the vessel before the unloading obliging the latter thereby to unload it and place itin deposit, shall be responsible for the expenses of warehousing and other expenses arisingtherefrom.]

ARTICLE 370. If a period has been fixed for the delivery of the goods, it must be madewithin such time, and, for failure to do so, the carrier shall pay the indemnity stipulated in thebill of lading, neither the shipper nor the consignee being entitled to anything else. If no

indemnity has been stipulated and the delay exceeds the time fixed in the bill of lading, thecarrier shall be liable for the damages which the delay may have caused.

ARTICLE 371. In case of delay through the fault of the carrier, referred to in the precedingarticles, the consignee may leave the goods transported in the hands of the former, advisinghim thereof in writing before their arrival at the point of destination. When this abandonmenttakes place, the carrier shall pay the full value of the goods as if they had been lost ormislaid. aisadc If the abandonment is not made, the indemnification for losses and damagesby reason of the delay cannot exceed the current price which the goods transported wouldhave had on the day and at the place in which they should have been delivered; this samerule is to be observed in all other cases in which this indemnity may be due.

ARTICLE 372. The value of the goods which the carrier must pay in cases if loss ormisplacement shall he determined in accordance with that declared in the bill of lading, theshipper not being allowed to present proof that among the goods declared therein therewere articles of greater value and money. Horses, vehicles, vessels, equipment and allother principal and accessory means of transportation shall be especially bound in favor ofthe shipper, although with respect to railroads said liability shall be subordinated to theprovisions of the laws of concession with respect to the property, and to what this Codeestablished as to the manner and form of effecting seizures and attachments against saidcompanies

ARTICLE 374. The consignees to whom the shipment was made may not defer the

payment of the expenses and transportation charges of the goods they receive after thelapse of twenty-four hours following their delivery; and in case of delay in this payment, thecarrier may demand the judicial sale of the goods transported in an amount necessary tocover the cost of transportation and the expenses incurred.

ARTICLE 375. The goods transported shall be especially bound to answer for the cost oftransportation and for the expenses and fees incurred for them during their conveyance anduntil the moment of their delivery. This special right shall prescribe eight days after the

7/26/2019 Codal Pr

15/329

delivery has been made, and once prescribed, the carrier shall have no other action thanthat corresponding to him as an ordinary creditor.

Note: [ARTICLE 665. The cargo shall be specially liable for the payment of the freightage,expenses and duties arising therefrom, which must be reimbursed by the shippers, as wellas for the part of the general average which may correspond to it; but it shall not be legal forthe captain to delay unloading on account of suspicion that this obligation may not becomplied with. Should there be reasons for distrust, the judge or court, at the instance of thecaptain, may order the deposit of the merchandise until he has been paid in full.

ARTICLE 666. The captain may request the sale of the cargo to the amount necessary topay the freightage, expenses, and averages due him, reserving the right to demand thebalance due him therefor if the proceeds of the sale should not suffice to cover his credit.

ARTICLE 704. The captain, in order to collect the passage-money and expenses ofsustenance, may retain the goods belonging to the passenger, and in case of the sale of thesame he shall be given preference over other creditors acting the same way as in the

collection of freightage.

Note: [Article 2241. With reference to specific movable property of the debtor, the followingclaims or liens shall be preferred: (9) Claims of donors or real property for pecuniarycharges or other conditions imposed upon the donee, upon the immovable donated;]

ARTICLE 376. The preference of the carrier to the payment of what is owed him for thetransportation and expenses of the goods delivered to the consignee shall not be cut off bythe bankruptcy of the latter, provided it is claimed within the eight days mentioned in thepreceding article.

ARTICLE 377. The carrier shall be liable for all the consequences which may arise from his

failure to comply with the formalities prescribed by the laws and regulations of the publicadministration, during the whole course of the trip and upon arrival at the point ofdestination, except when his failure arises from having been led into error by falsehood onthe part of the shipper in the declaration of the merchandise. If the carrier has acted byvirtue of a formal order of the shipper or consignee of the merchandise, both shall becomeresponsible. cd

ARTICLE 378. Agents for transportation shall be obliged to keep a special registry, with theformalities required by Article 36, in which all the goods the transportation of which isundertaken shall be entered in consecutive order of number and dates, with a statement ofthe circumstances required in Article 350 and others following for the respective bills of

lading.

ARTICLE 379. The provisions contained in Articles 349 and following shall be understoodas equally applicable to those who, although they do not personally effect the transportationof the merchandise, contract to do so through others, either as contractors for a particularand definite operation, or as agents for transportations and conveyances. In either casethey shall be subrogated in the place of the carriers themselves, with respect to theobligations and responsibility of the latter, as well as with regard to their rights.

7/26/2019 Codal Pr

16/329

MARITIME COMMERCE TITLE ONE VESSELS

ARTICLE 573. Merchant vessels constitute property which may be acquired and transferredby any of the means recognized by law. The acquisition of a vessel must appear in a writteninstrument, which shall not produce any effect with respect to third persons if not inscribedin the registry of vessels. cd The ownership of a vessel shall likewise be acquired bypossession in good faith, continued for three years, with a just title duly recorded. In theabsence of any of these requisites, continuous possession for ten years shall be necessaryin order to acquire ownership. A captain may not acquire by prescription the vessel of whichhe is in command.

Note:

motorized.

c. "Philippine national" A citizen of the Philippines; or a partnership or association whollyowned by and composed of citizens of the Philippines; or a corporation organized under the

laws of the Philippines of which at least sixty per cent of the capital stock outstanding andentitled to vote is owned and held by Philippine citizens; or a trustee of funds for pensionsor other employee retirement or separation benefits, where the trustee is a Philippinenational and at least sixty per cent of the funds will accrues to the benefit of the Philippinenationals: Provided, That where a corporation and its non-Filipino stockholders own stock inan enterprise, at least sixty percent of the members of the governing board of bothcorporations must be Philippine nationals.

d. "Philippine flag vessel" A vessel or watercraft registered under Philippine laws.

e. "Foreign flag vessel" A vessel or watercraft registered under the laws of a country otherthan the Philippines.

f. "Philippines shipping companies" Philippine nationals registered and licensed under thelaws of the Philippines to engage in the business of overseas and/or domestic watertransportation.

Section 12.Specific Powers and Functions of the Administrator.In addition to his generalpowers and functions, the Administrator shall;h. Approve the sale, lease or transfer of management of vessels owned by Philippine Nationals to foreignowned or controlled enterprises;

Section 1.Section 806 of the Tariff and Customs Code of the Philippines, as amended, ishereby amended to read as follows:

Sec. 806. Certificate of Philippine Registry. Upon registration of a vessel of domesticownership, and of more than fifteen tons gross, a certificate of Philippine registry shall beissued for it. If the vessel is of domestic ownership, and of fifteen tons gross or less, thetaking of the certificate of Philippine registry shall be optional with the owner.

7/26/2019 Codal Pr

17/329

"Domestic ownership, as used in this section means ownership vested in citizens of thePhilippines or corporations or associations organized under the laws of the Philippines atleast sixty per centum of the capital stock or capital of which is wholly owned by citizens ofthe Philippines, and, in the case of corporations or associations which will engage incoastwise trade the president or managing directors thereof shall be such citizens:Provided, That the members of the crew of the vessel, except specialized fishing vessels,shall all be citizens of the Philippines, Provided, That the certificate of Philippine registryissued to a vessel prior to the approval of this Code shall not be affected; Provided, further,That any vessel of more than fifteen gross tons which on February eight, nineteen hundredand eighteen, had a certificate of Philippine registry under existing law, shall likewise be,deemed a vessel of domestic ownership if there has been no change in its ownership or ifthe capital of the association or capital stock of the corporation owning such vessel has notbeen transferred to persons who are not citizens of the Philippines and if any such vesselsshould have been totally lost through shipwreck, collision or any other marine disaster whilebeing lawfully operated, it may be replaced with another vessel of the same or lessertonnage by the same person, association or corporation owning and operating same byvirtue of this section, under such terms and conditions as may be prescribed by the

Maritime Industry Authority consistent with public policy and with the view of its utility forgovernment service in case of war or any public emergency: Provided, further, That thecontrolling interest of the association or corporation shall not be considered as held by thecitizen of the Philippines; (a) if less than sixty percent of the capital or capital stock is heldby such citizens or such capital or capital stock is subject to any trust or fiduciary obligationin favor of any person not a citizen of the Philippines; (b) if less than sixty percent of thecapital or capital stock in said association or corporation entitled to vote is in the hands ofcitizens of the Philippines; (c) if by means of (a) any contract or agreement, more than fortypercent of the capital or capital stock can be voted directly or indirectly in favor of anyperson not a citizen of the Philippines: or (d) if by oth stipulation, or when the nature of theobligation requires the assumption of risk, no person shall be responsible for those eventswhich could not be foreseen, or which,

Article 1755.A common carrier is bound to carry the passengers safely as far as human careand foresight can provide, using the utmost diligence of very cautious persons, with a due

1755.

Article 1757.The responsibility of a common carrier for the safety of passengers as required inarticles 1733 and 1755 cannot be dispensed with or lessened by stipulation, by the posting ofnotices, by statements on tickets, or otherwise

Article 1757.The responsibility of a common carrier for the safety of passengers as required in

articles 1733 and 1755 cannot be dispensed with or lessened by stipulation, by the posting ofnotices, by statements on tickets, or otherwise

er means, the control of more than forty percent of the capital or capital stock of theassociation or corporation is conferred upon or allowed to be exercised by any person not acitizen of the Philippines."

Section 2.The above definition of "domestic ownership" notwithstanding, an enterprise dulyregistered with the Board of Investments, under R.A. 5186 or 6135, whether or not entirely

7/26/2019 Codal Pr

18/329

owned by foreign nationals, may register its own vessels under the provision of the sectionimmediately preceding if such vessels are to be used exclusively to transport its own rawmaterials and finished products in Philippine waters as an incident to its manufacturing,processing or business activity registered with the Board of Investments and certified to bysaid Board as an essential element in the operation of the registered project.

CA 65

(a) The term "carrier" includes the owner or the charterer who enters into a

contract of carriage with a shipper.

(d) The term "ship" means any vessel used for the carriage of goods by sea.

Article 1132.The ownership of movables prescribes through uninterrupted possession forfour years in good faith.

The ownership of personal property also prescribes through uninterrupted possession foreight years, without need of any other condition.

With regard to the right of the owner to recover personal property lost or of which he hasbeen illegally deprived, as well as with respect to movables acquired in a public sale, fair, ormarket, or from a merchant's store the provisions of articles 559 and 1505 of this Code shallbe observed.

Article 1484.In a contract of sale of personal property the price of which is payable ininstallments, the vendor may exercise any of the following remedies:

(1) Exact fulfillment of the obligation, should the vendee fail to pay;

(2) Cancel the sale, should the vendee's failure to pay cover two or more installments;

(3) Foreclose the chattel mortgage on the thing sold, if one has been constituted, should thevendee's failure to pay cover two or more installments. In this case, he shall have no furtheraction against the purchaser to recover any unpaid balance of the price. Any agreement tothe contrary shall be void. (1454-A-a)

Article 1485.The preceding article shall be applied to contracts purporting to be leases ofpersonal property with option to buy, when the lessor has deprived the lessee of thepossession or enjoyment of the thing. (1454-A-a)

Article 1486.In the case referred to in the two preceding articles, a stipulation that the

installments or rents paid shall not be returned to the vendee or lessee shall be valid insofaras the same may not be unconscionable under the circumstances. (n)

"Sec. 12. Maritime Industry Authority. The Maritime Industry Authority is hereby retained andshall have the following functions:

a. Develop and formulate plans, policies, programs, projects, standards, specifications andguidelines geared toward the promotion and development of the maritime industry, thegrowth and effective regulation of shipping enterprises, and for the national securityobjectives of the country;

7/26/2019 Codal Pr

19/329

b. Establish, prescribe and regulate routes, zones and/or areas of operation of particular

operators of public water services;

c. Issue Certificates of Public Convenience for the operation of domestic and overseas watercarriers;

d. Register vessels as well as issue certificates, licenses or documents necessary or incidentthereto;

e. Undertake the safety regulatory functions pertaining to vessel construction and operationincluding the determination of manning levels and issuance of certificates of competency toseamen;

f. Enforce laws, prescribe and enforce rules and regulations, including penalties for violationsthereof, governing water transportation and the Philippine merchant marine, and deputizethe Philippine Coast Guard and other law enforcement agencies to effectively discharge thesefunctions;

g. Undertake the issuance of licenses to qualified seamen and harbor, bay and river pilots;

h. Determine, fix and/or prescribe charges and/or rates pertinent to the operation of publicwater transport utilities, facilities and services except in cases where charges or rates areestablished by international bodies or associations of which the Philippines is a participatingmember or by bodies or associations recognized by the Philippine Government as the properarbiter of such charges or rates.

i. Accredit marine surveyors and maritime enterprises engaged in shipbuilding, shiprepair,shipbreaking, domestic and overseas shipping ship management and agency;

j. Issue and register the continuous discharge book of Filipino seamen;k. Establish and prescribe rules and regulations, standards and procedures for the efficient and

effective discharge of the above functions;

l. Perform such other functions as may now or hereafter be provided by law."

Article 1620.A co-owner of a thing may exercise the right of redemption in case the sharesof all the other co-owners or of any of them, are sold to a third person. If the price of thealienation is grossly excessive, the redemptioner shall pay only a reasonable one.

Should two or more co-owners desire to exercise the right of redemption, they may only doso in proportion to the share they may respectively have in the thing owned in common.(1522a) ] (end of note)

ARTICLE 574. Builders of vessels may employ the materials and follow, with respect totheir construction and rigging, the systems most suitable to their interests. Ship owners andseamen shall be subject to what the laws and regulations of the public administration onnavigation, customs, health, safety of vessels, and other similar matters.

7/26/2019 Codal Pr

20/329

ARTICLE 575. Co-owners of vessels shall have the right of repurchase and redemption insales made to strangers, but they may exercise the same only within the nine days followingthe inscription of the sale in the registry, and by depositing the price at the same time.

ARTICLE 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 time belongs tothe vendor. The arms, munitions of war, provisions and fuel shall not be considered asincluded in the sale. The vendor shall be under the obligation to deliver to the purchaser acertified copy of the record sheet of the vessel in the registry up to the date of the sale.

ARTICLE 577. If the alienation of the vessel should be made while it is on a voyage, thefreightage which it earns from the time it receives its last cargo shall pertain entirely to thepurchaser, and the payment of the crew and other persons who make up its complement forthe same voyage shall be for his account. If the sale is made after the vessel has arrived atthe port of its destination, the freightage shall pertain to the vendor, and the payment of thecrew and other individuals who make up its complement shall be for his account, unless the

contrary is stipulated in either case.

ARTICLE 578. If the vessel being on a voyage or in a foreign port, its owner or ownersshould voluntarily alienate it, either to Filipinos or to foreigners domiciled in the capital or ina port of another country, the bill of sale shall be executed before the consul of the Republicof the Philippines at the port where it terminates its voyage and said instrument shallproduce no effect with respect to third persons if it is not inscribed in the registry of theconsulate. The consul shall immediately forward a true copy of the instrument of purchaseand sale of the vessel to the registry of vessels of the port where said vessel is inscribedand registered. In every case the alienation of the vessel must be made to appear with astatement of whether the vendor receives its price in whole or in part, or whether hepreserves 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. aisadc When a vessel, being on avoyage, 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 aforeign country, 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 theinsurer should reside at said port, or should have representatives there, they must be citedin order that they may take part in the proceedings on behalf of whoever may be concerned.

ARTICLE 579. After the damage to the vessel and the impossibility of her being repaired, inorder to continue the voyage had been shown, its sale at public auction shall be ordered,

subject to the following rules: 1. The hull of the vessel, its rigging, engines, stores, and otherarticles shall be appraised, after making an inventory, said proceedings to be brought to thenotice of the persons who may wish to take part in the auction. 2. The order or decreeordering the auction to be held shall be posted in the usual places, an announcementthereof to be inserted in the Official Gazette and in two of the newspapers of the largestcirculation of the port where the auction is to be held, should there be any. The period whichmay be fixed for the auction shall not be less than twenty days. 3. These announcementsshall be repeated every ten days, and their publication shall be made to appear in therecords. 4. The auction shall be held on the day fixed, with the formalities prescribed in the

7/26/2019 Codal Pr

21/329

common law for judicial sales. 5. If the sale should take place while the vessel is in a foreigncountry, the special provisions governing such cases shall be observed.

ARTICLE 585. For all purposes of law not modified or restricted by the provisions of thisCode, vessels shall continue to be considered as personal property

ARTICLE 589. If two or more persons should be part owners of a merchant vessel, apartnership shall be presumed as established by the co-owners. This partnership shall begoverned by the resolutions of the majority of the members. as provisioning of the vessel inthe port of departure shall bind the minority, unless the minority members renounce theirinterests, which must be acquired by the other co-owners, after a judicial appraisement ofthe value of the portion or sd

ARTICLE 606. If the captain should be a co-owner of the vessel, he may not be dischargedunless the ship agent returns to him the amount of his interest therein, which, in theabsence of agreement between the parties, shall be appraised by experts appointed in themanner established in the law of civil procedure.asd liable for the acts of the captain and for the obligations contracted by the latter to repair,

equip, and provision the vessel, provided the creditor proves that the amount claimed wasinvested for the benefit of the same. By ship agent is understood the person entrusted withprovisioning or representing the vessel in the port in which it may be found.

ARTICLE 587. The ship agent shall also be civilly liable for the indemnities in favor of thirdpersons which may arise from the conduct of the captain in the care of the goods which heloaded on the vessel; but he may exempt himself therefrom by abandoning the vessel withall her equipments and the freight it may have earned during the voyage.

ARTICLE 588. Neither the shipowner nor the ship agent shall be liable for the obligationscontracted by the captain, if the latter exceeds the powers and privileges pertaining to himby reason of his position or conferred upon him by the former. Nevertheless, if the amounts

claimed were invested for the benefit of the vessel, the responsibility therefor shall devolveupon its owner or sd

ARTICLE 597. The ship agent shall designate and come to terms with the captain, and shallcontract in the name of the owners, who shall be bound in all that refer to repairs, details ofequipment, armament, provisions of food and fuel, and freight of the vessel, and, in general,in all that relate to the requirements of navigation.

ARTICLE 599. The ship agent managing for an association shall render to his associates anaccount of the results of each voyage of the vessel, without prejudice to always having thebooks and correspondence relating to the vessel and to its voyages at their disposal.

ARTICLE 600. After the account of the managing agent has been approved by a relativemajority, the co-owners shall pay the expenses in proportion to their interest, withoutprejudice to the civil or criminal actions which the minority may deem fit to instituteafterwards. In order to enforce the payment, the managing agent shall be entitled to anexecutory action ("accion ejecutiva"), which shall be instituted by virtue of a resolution of themajority, and without further proceedings than the acknowledgment of the signatures of thepersons who voted for the resolution.asd discharge the captain and members of the crew whose contracts are not for a definiteperiod or voyage, paying them the salaries earned according to their contracts, and without

7/26/2019 Codal Pr

22/329

any indemnity whatsoever, unless there is an express and specific agreement in respectthereto.

ARTICLE 604. If the captain or any other member of the crew should be discharged duringthe voyage, they shall receive their salary until they return to the port where the contractwas made, unless there should be just cause for the discharge, all in accordance with

Article 636 and following of this Code

ARTICLE 605. If the contracts of the captain and members of the crew with the ship agentshould be for a definite period or voyage, they may not be discharged until after thefulfillment of their contracts, except by reason of insubordination in serious matters, robbery,theft, habitual drunkenness, or damage caused to the vessel or to its cargo through maliceor manifest or proven negligence.

ARTICLE 618. The captain shall be civilly liable to the ship agent, and the latter to the thirdpersons who may have made contracts with the former; 1. For all the damages suffered bythe vessel and its cargo by reason of want of skill or negligence on his part. If a

misdemeanor or crime has been committed, he shall be liable in accordance with the PenalCode. 2. For all the thefts committed by the crew, reserving his right of action against theguilty parties. 3. For the losses, fines, and confiscations imposed an account of violation ofcustoms, police, health, and navigation laws and regulations. 4. For the losses anddamages caused by mutinies on board the vessel or by reason of faults committed by thecrew in the service and defense of the same, if he does not prove that he made timely useof all his authority to prevent or avoid them. 5. For those caused by the misuse of thepowers and the non-fulfillment of the obligations pertaining to him in accordance with

Articles 610 and 612. 6. For those arising by reason of his going out of his course or takinga course which he should not have taken without sufficient cause, in the opinion of theofficers of the vessel, at a meeting with the shippers or supercargoes who may be on board.No exceptions whatsoever shall exempt him from this obligation. 7. For those arising by

reason of his voluntarily entering a port other than that of his destination, outside of thecases or without the formalities referred to in Article 612. 8. For those arising by reason ofnon-observance of the provisions contained in the regulations on situation of lights andmaneuvers for the purpose of preventing collisions.

ARTICLE 619. The captain shall be liable for the cargo from the time it is delivered to him atthe dock or afloat alongside the at the port of loading, until he delivers it on the shore or onthe discharging wharf at the port of unloading, unless the contrary has been expresslyagreed upon.

ARTICLE 620. The captain shall not be liable for the damages caused to the vessel or to

the cargo by force majeure; but he shall always be so for those arising through his ownfault, no agreement to the contrary being valid. Neither shall he be personally liable for theobligations he may have contracted for the repair, equipment, and provisioning of thevessel, which shall devolve upon the ship agent, unless the former has expressly boundhimself personally or has signed a bill of exchange or promissory note in his name

TITLE THREE SPECIAL CONTRACTS OF MARITIME COMMERCE SECTION ONECHARTER PARTIES PART I FORMS AND EFFECTS OF CHARTER PARTIES

7/26/2019 Codal Pr

23/329

ARTICLE 652. A charter party must be drawn in duplicate and signed by the contractingparties, and when either does not know how or is not able to do so, by two witnesses at hisrequest. The charter party shall contain, besides the conditions freely stipulated, thefollowing circumstances: 1. The kind, name, and tonnage of the vessel. 2. Its flag and portof registry. 3. The name, surname, and domicile of the captain. 4. The name, surname, anddomicile of the ship agent, if the latter should make the charter party. 5. The name,surname, and domicile of the charterer; and if he states that he is acting by commission,that of the person for whose account he makes the contract. 6. The port of loading andunloading. 7. The capacity, number of tons or the weight or measurement which theyrespectively bind themselves to load and to transport, or whether the charter party is total.8. The freightage to be paid, stating whether it is to be a fixed amount for the voyage or somuch per month, or for the space to be occupied, or for the weight or measure of the goodsof which the cargo consists, or in any other manner whatsoever agreed upon. 9. Theamount of primage to be paid to the captain. 10. The days agreed upon for loading andunloading. 11. The lay days and extra lay days to be allowed and the demurrage to be paidfor each of them.

ARTICLE 653. If the cargo should be received without the charter party having been signed,the contract shall be understood as executed in accordance with what appears in the bill oflading, the sole evidence of title with regard to the cargo for determining the rights andobligations of the ship agent, of the captain, and of the charterer. cdt

ARTICLE 654. The charter parties executed with the intervention of a broker, who certifiesto the authenticity of the signatures of the contracting parties because they were signed inhis presence, shall be full evidence in court; and if they should be conflicting, that whichaccords with one which the broker must keep in his registry, if kept in accordance with law,shall govern. The contracts shall also be admitted as evidence, even though a broker hasnot taken part therein, if the contracting parties acknowledge the signatures to be the sameas their own. If no broker has intervened in the charter party and the signatures are not

acknowledged, doubts shall be decided by what is provided for in the bill of lading and in theabsence thereof, by the proofs submitted by the parties.

ARTICLE 655. Charter parties executed by the captain in the absence of the ship agentshall be valid and effective, even though in executing them he should have acted in violationof the orders and instructions of the ship agent or shipowner; but the latter shall have a rightof action against the captain for indemnification of damages.

ARTICLE 656. If in the charter party the time in which the loading and unloading are to takeplace is not stated, the usages of the port where these acts take place shall be observed.

After the stipulated or the customary period has passed, and there is no express proviso in

the charter party fixing the indemnity for the delay, the captain shall be entitled to demanddemurrage for the lay days and extra lay days which may have elapsed in loading andunloading.

ARTICLE 657. If during the voyage the vessel should be rendered unseaworthy, the captainshall be obliged to charter at his expense another one in good condition to receive the cargoand carry it to its destination, for which purpose he shall be obliged to look for a vessel notonly at the port of arrival but also in the neighborhood within distance of 150 kilometers. Ifthe captain, through indolence or malice, should not furnish a vessel to its destination, the

7/26/2019 Codal Pr

24/329

shippers, after requiring the captain to charter a vessel within an inextendible period, maycharter one and petition the judicial authority to summarily approve the charter party whichthey may have made. The same authority shall judicially ("por la via de appremio") compelthe captain, to carry out, for his account and under his responsibility, the charter made bythe shippers. If the captain, notwithstanding his diligence, should not find a vessel for thecharter, he shall deposit the cargo at the disposal of the shippers, to whom he shallcommunicate the facts on the first opportunity which presents itself, the freight beingadjusted in such cases by the distance covered by the vessel, with no right to anyindemnification whatsoever.

ARTICLE 658. The freightage shall accrue according to the conditions stipulated in thecontract, and should they not be expressed, or should they be ambiguous, the followingrules shall be observed: 1. If the vessel has been chartered by months or by days, thefreightage shall begin to run from the day the loading of the vessel is begun. 2. In chartersmade for a fixed period, the freightage shall begin to run from that very day. 3. If thefreightage is charged according to weight, the payment shall be made according to grossweight, including the containers, such as barrels or any other objects in which the cargo is

contained.

ARTICLE 659. The merchandise sold by the captain to pay for the necessary repairs to thehull, machinery or equipment, or for unavoidable and urgent needs, shall pay freightage. cdtThe price of this merchandise shall be fixed according to the result of the voyage, namely:1. If the vessel should arrive safely at the port of destination, the captain shall pay the pricewhich the sale of merchandise of the same kind brings at that port. 2. If the vessel shouldbe lost, the captain shall pay the price realized from said merchandise in the sale. Thesame rule shall be observed in the payment of the freightage, which shall be in full if thevessel arrives at her destination, and in proportion to the distance covered if she should belost before arrival.

ARTICLE 660. Merchandise jettisoned for the common safety shall not pay freightage; butthe amount of the latter shall be considered as general average computing the same inproportion to the distance covered when they were jettisoned.

ARTICLE 661. Neither merchandise lost by reason of shipwreck or stranding nor thoseseized by the pirates or enemies, shall pay freightage. If the freightage should have beenpaid in advance, it shall be returned, unless there is an agreement to the contrary.

ARTICLE 662. If the vessel or the merchandise should be redeemed, or the effects of theshipwreck be salvaged, the freightage corresponding to the distance covered by the vesseltransporting the cargo shall be paid; and should the vessel, after being repaired, transport

said merchandise to the port of destination, the full freightage shall be paid, withoutprejudice to what may be due by reason of the average.

ARTICLE 663. Merchandise which suffer deterioration or diminutions on account of inherentdefects or bad quality and condition of the packing, or because of fortuitous event, shall payfreightage in full and as stipulated in the charter party.

7/26/2019 Codal Pr

25/329

ARTICLE 664. The natural increase in weight or size of the merchandise loaded on thevessel shall accrue to the benefit of the owner, and shall pay the proper freightage fixed inthe contract for the same.

ARTICLE 665. The cargo shall be specially liable for the payment of the freightage,expenses and duties arising therefrom, which must be reimbursed by the shippers, as wellas for the part of the general average which may correspond to it; but it shall not be legal forthe captain to delay unloading on account of suspicion that this obligation may not becomplied with. Should there be reasons for distrust, the judge or court, at the instance of thecaptain, may order the deposit of the merchandise until he has been paid in full.

ARTICLE 666. The captain may request the sale of the cargo to the amount necessary topay the freightage, expenses, and averages due him, reserving the right to demand thebalance due him therefor if the proceeds of the sale should not suffice to cover his credit.

ARTICLE 667. The goods loaded shall be liable in the first place for the freight andexpenses thereof during twenty days, to be counted from the date of their delivery or

deposit. During this period, the sale of the same may be requested, even though there beother creditors and the bankruptcy of the shipper or consignee should occur. This right maynot he made use of, however, on the goods which, after being delivered, were turned overto a third person without malice on the part of the latter and for a valuable consideration.cdasia

Note: [Article 2241. With reference to specific movable property of the debtor, the followingclaims or liens shall be preferred: (9) Claims of donors or real property for pecuniarycharges or other conditions imposed upon the donee, upon the immovable donated;]

ARTICLE 668. If the consignee should not be found or should refuse to receive the cargo,the judge or court, at the instance of the captain, shall order its deposit and the sale of what

may be necessary to pay the freightage and other expenses on the same. The sale shalllikewise be allowed when the goods deposited run the risk of deteriorating, or by reason oftheir condition or other circumstances the expenses of preservation and custody should bedisproportionate.

PART 2 RIGHTS AND OBLIGATIONS OF SHIPOWNERS

ARTICLE 669. The shipowner or the captain shall observe in charter parties the capacity ofthe vessel or that expressly designated in its registry, a difference greater than 2 per centbetween that stated and her true capacity not being permissible. If the shipowner or thecaptain should contract to carry a greater amount of cargo than the vessel can carry in view

of her tonnage, they shall indemnify the shippers whose contracts they do not fulfill for thelosses they may have caused when by reason of their default, according to the followingcases, viz: If the vessel has been chartered by one shipper only, and there should appear tobe an error or fraud in her capacity, and the charterer should not wish to rescind thecontract, when he has a right to do so, the freightage shall he reduced in proportion to thecargo which the vessel can not receive, the person from whom the vessel is chartered beingfurthermore obliged to indemnify the charterer for the losses he may have caused him. If, onthe contrary there should be several charter parties, and by reason of want of space all thecargo contracted for cannot be loaded, and none of the charterers desires to rescind the

7/26/2019 Codal Pr

26/329

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

ARTICLE 670. If the person from whom the vessel is chartered, after receiving a part of thefreight, should not find sufficient to make up at least three-fifths of the amount which thevessel may hold, at the price he may have fixed, he may substitute for the transportationanother vessel inspected and declared suitable for the same voyage, the expenses oftransfer and the increase in the price of the charter, should there be any, being for hisaccount. Should he not be able to make this change, he shall undertake the voyage at thetime agreed upon; and should no time have been fixed, within fifteen days from the time theloading began, unless otherwise stipulated. If the owner of the part of the freight alreadyloaded should procure some more at the same price and under similar or proportionateconditions to those accepted for the freight received, the person from whom the vessel is

chartered or the captain can not refuse to accept the rest of the cargo; and should he do so,the shipper shall have a right to demand that the vessel put to sea with the cargo which itmay have on board.

ARTICLE 671. After three-fifths of the vessel has been loaded, the person from whom sheis chartered may not, without the consent of the charterers or shippers, substitute the vesseldesignated in the charter party by another one, under the penalty of making himself therebyliable for all the losses and damages occurring during the voyage to the cargo of those whodid not consent to the change.

ARTICLE 672. If the vessel has been chartered in whole, the captain may not, without theconsent of the charterer, accept cargo from any other person; and should he do so, said

charterer may oblige him to unload it and to indemnify him for the losses suffered thereby.

ARTICLE 673. The person from whom the vessel is chartered shall he liable for all thelosses caused to the charterer by reason of the voluntary delay of the captain in putting tosea, according to the rules prescribed, provided he has been requested, notarially or

judicially, to put to sea at the proper time.

ARTICLE 674. If the charterer should carry to the vessel more cargo than that contractedfor, the excess may be admitted in accordance with the price stipulated in the contract, if itcan be well stowed without injuring the other shippers; but if in order to load it, the vesselwould be thrown out of trim, the captain must refuse it or unload it at the expense of its

owner. In the same manner, the captain may, before leaving the port, unload merchandiseclandestinely placed on board, or transport them, if he can do so with the vessel in trim,demanding by way of freightage the highest price which may have been stipulated for saidvoyage.

ARTICLE 675. If the vessel has been chartered to receive the cargo in another port, thecaptain shall appear before the consignee designated in the charter party; and, should thelatter not deliver the cargo to him, he shall inform the charterer and wait his instructions, thelay days agreed upon or those allowed by custom in the port beginning to run in the

7/26/2019 Codal Pr

27/329

meantime, unless there is an express, agreement to the contrary. Should the captain notreceive an answer within the time necessary therefor, he shall make efforts to find freight;and should he not find any after the lay days and extra lay days have elapsed, he shallmake a protest and return to the port where the charter was made. The charterer shall paythe freightage in full, discounting that which may have been earned on the merchandisewhich may have been carried on the voyage out or on the return trip, if carried for theaccount of third persons. The same shall be done if a vessel, having been chartered for theround trip, should not be given any cargo on its return.

ARTICLE 676. The captain shall lose the freightage and shall indemnify the charterers if thelatter should prove, even against the certificate of inspection, if one has been made at theport of departure, that the vessel was not in a condition to navigate at the time of receivingthe cargo.

ARTICLE 677. The charter party shall subsist if a declaration of war or a blockade shouldtake place during the voyage, the captain not having any instructions from the charterer. Insuch case the captain must proceed to the nearest safe and neutral port, requesting and

awaiting orders from the shipper, and the expenses and salaries paid during the detentionshall be paid as general average. If, by orders of the shipper, the cargo should bedischarged at the port of arrival, the freightage for the voyage out shall be paid in full.

ARTICLE 678. If the time necessary, in the opinion of the judge or court, to receive theorders of the shipper should have elapse, without the captain having received anyinstructions, the cargo shall be deposited, and it shall be liable for the payment of thefreightage and expenses on its account during the delay, which shall be paid from theproceeds of the part first sold.

PART 3 OBLIGATIONS OF CHARTERERS

ARTICLE 679. The charterer of an entire vessel may sub-charter the whole or part thereofon such terms as he may consider most convenient, the captain not being allowed to refuseto receive on board the freight delivered by the second charterers, provided that theconditions of the first charter are not change, and that the price agreed upon is paid in full tothe person from whom the vessel is chartered, even though the full cargo is not embarked,with the limitation established in the next article. cdtai

ARTICLE 680. A charterer who does not complete the full cargo he bound himself to shipshall pay the freightage of the amount he fails to ship, if the captain does not take otherfreight to complete the load of the vessel, in which case the first charterer shall pay thedifference, should there be any.

ARTICLE 681. If the charterer should load goods different from those stated at the time ofexecuting the charter party, without the knowledge of the person from whom the vessel waschartered or of the captain, and should thereby give rise to losses, by reason ofconfiscation, embargo, detention, or other causes, to the person from whom the vessel waschartered or to the shippers, the person giving rise thereto shall be liable with the value ofhis shipment and furthermore with his property, for the full indemnity to all those injuredthrough his fault.

7/26/2019 Codal Pr

28/329

ARTICLE 682. If the merchandise should have been shipped for the purpose of illicitcommerce, and were taken on board with the knowledge of the person from whom thevessel was chartered or of the captain, the latter, jointly with the owner of the same, shall beliable for all the losses which may be caused the other shippers; and even though it mayhave been stipulated, they can not demand any indemnity whatsoever from the charterer forthe damaged caused to the vessel.

ARTICLE 683. In case of making a port to repair the hull, machinery, or equipment of thevessel, the shippers must await until the vessel is repaired, being permitted to unload it attheir own expense should they deem it proper. If, for the benefit of the cargo subject todeterioration, the shippers or the court, or the consul, or the competent authority in a foreigncountry, should order the merchandise to be unloaded, the expenses of unloading andreloading shall be for the account of the former.

ARTICLE 684. If the charterer, without the occurrence of any of the cases of force majeurementioned in the foregoing article, should wish to unload his merchandise before arriving atthe port of destination, he shall pay the full freightage, the expenses of the arrival made at

his request, and the losses and damages caused the other shippers, should there be any.

ARTICLE 685. In charters for transporta