Codal Prs

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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,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 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 through

the 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.

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:

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(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 willbe 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

(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)

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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 orderof 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 negotiatedacquires thereby:

(1) Such title to the goods as the person negotiating the document to him had or had ability

to 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

(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 upon

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the goods by a creditor of the transferor, or by a notification to such bailee by the transferoror 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 adocument 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 goodsrepresented 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 thereof

to 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 thenegotiation, 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 a

negotiable 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 in

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attaching such document or in satisfying the claim by means thereof as is allowed at law orin 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.

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 naturaldisaster 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.

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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

(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;

(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 the

shipper 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.

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

SUBSECTION 3. Safety of Passengers






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.



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

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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 debt

by the debtor. (1973a)

Code of commerce

PART 5 PASSENGERS ON SEA VOYAGES ARTICLE 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 apassenger should agree to await the repairs, he may not be required to pay any increased

price of passage, but his living expenses during the stay shall be for his own account. 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 them

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directly 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.

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 needs of navigation.

ARTICLE 702. In the absence of an agreement to the contrary, it shall be understood that

the subsistence of the passengers during the voyage is included in the price of the passage;but should it be for the account of the latter, the captain shall be under obligation, in case 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 ofsustenance, may retain the goods belonging to the passenger, and in case of the sale of the

same he shall be given preference over other creditors acting the same way as in 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 whether

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they 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 inwhich 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 herequests; 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 of

the 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 toreserve be reduced to writing, with the exception of that provided for in Article 366. In case

the 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 or

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aircraft'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 othernecessity 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 bythe 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 tariff

laws 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 personarriving from abroad. chanrobles virtual law library (3) On the strength of a false declaration

or 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 may

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make 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.

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 whichusage has established among careful persons, unless the shipper has committed fraud in

the 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, therenot 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 receivethose 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 it

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in 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 noindemnity 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 thedelivery 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.

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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 thecollection 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 hisfailure 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 of

the circumstances required in Article 350 and others following for the respective bills oflading.

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.

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.

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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 thelaws 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.

"Domestic ownership, as used in this section means ownership vested in citizens of the

Philippines 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 hundred

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and 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 theMaritime 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 any

person 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


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

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

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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 the

possession or enjoyment of the thing. (1454-A-a)

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

b. Establish, prescribe and regulate routes, zones and/or areas of operation of particularoperators of public water services;

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

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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 proper

arbiter 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 and

seamen shall be subject to what the laws and regulations of the public administration onnavigation, customs, health, safety of vessels, and other similar matters.

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.

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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 thecontrary 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 Republic

of 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 largest

circulation 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 thecommon 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

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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 third

persons 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 amountsclaimed 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 the

majority, 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 withoutany 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 contract

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was 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 amisdemeanor 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 the

crew 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 byreason 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 tothe 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

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, and

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domicile 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 notacknowledged, 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 violation

of 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 inthe 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 captain

shall 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, theshippers, 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 the

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charter, 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 iscontained.

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 those

seized 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, transportsaid 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 pay

freightage in full and as stipulated in the charter party.

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 for

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the 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 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 ordeposit. 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 following

claims 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 whatmay 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 viewof 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, on

the 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 thecontract, 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.

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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 ischartered 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 thereby

liable 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, saidcharterer 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 itsowner. 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 the

latter 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 themeantime, 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 the

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account 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 andawaiting 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 any

instructions, 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 of

his shipment and furthermore with his property, for the full indemnity to all those injuredthrough his fault.

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.

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

ARTICLE 685. In charters for transportation of general freight, any of the shippers mayunload the merchandise before the beginning of the voyage, paying one-half of thefreightage, the expense of stowing and restowing the cargo, and any other damage whichfor his reason he may cause the other shippers.

ARTICLE 686. After the vessel has been unloaded and the cargo placed at the disposal ofthe consignee, the latter must immediately pay the captain the freightage due and the otherexpenses for which said cargo may be liable. The primage must be paid in the sameproportion and at the same time as the freightage, all the changes and modifications towhich the latter should be subject also governing the former.

ARTICLE 687. The charterers and shippers may not abandon merchandise damaged onaccount 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.

PART 4 TOTAL OR PARTIAL RESCISSION OF CHARTER PARTIES

ARTICLE 688. A charter party may be rescinded at the request of the charterer: 1. If beforeloading the vessel he should not agree with that stated in the certificate of tonnage, or ifthere should be an error in the statement of the flag under which she sails. 2. If the vesselshould not be placed at the disposal of the charterer within the period and in the manneragreed upon. 3. If after the vessel has put to sea, she should return to the port of departure,on account of risk from pirates, enemies, or bad weather, and the shippers should agree tounload her. In the second and third cases the person from whom the vessel was charteredshall indemnify the charterer for the voyage out. 4. If the charter should have been made by

the months, the charterers shall pay the full freightage for one month, if the voyage is for aport in the same waters, and for two months, if for a port in different waters. From one portto another of the Philippines and adjacent islands, the freightage for one month only shallbe paid. 5. If the vessel should make a port during the voyage in order to make urgentrepairs, and the charterers should prefer to dispose of the merchandise. When the delaydoes not exceed thirty days, the shippers shall pay the full freightage for the voyage out.Should the delay exceed thirty days, they shall only pay the freightage in proportion to thedistance covered by the vessel.

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ARTICLE 689. At the request of the person from whom the vessel is chartered the charterparty may be rescinded: 1. If the charterer, at the termination of the extra lay days, does notplace the cargo alongside the vessel. In such case the charterer must pay half the freightstipulated, besides the demurrage due for the lay days and extra lay days. 2. If the personfrom whom the vessel was chartered should sell it before the charterer has begun to load it,and the purchaser should load it for his own account. In such case the vendor shallindemnify the charterer for the losses he may suffer. If the new owner of the vessel shouldnot load it for his own account, the charter party shall be respected, and the vendor shallindemnify the purchaser if the former did not inform him of the charter pending at the time ofmaking the sale.

ARTICLE 690. The charter party shall be rescinded and all actions arising therefrom shallbe extinguished, if, before the vessel puts to sea from the port of departure, any of thefollowing cases should occur: 1. A declaration of war or interdiction of commerce with thepower to whose ports the vessel was to make its voyage. 2. A condition of blockade of theport of destination of said vessel, or the breaking out of an epidemic after the contract wasexecuted. 3. The prohibition to receive at the said port the merchandise constituting the

cargo of the vessel. 4. An indefinite detention, by reason of an embargo of the vessel byorder of the government, or for any other reason independent of the will of the ship agent. 5.The inability of the vessel to navigate, without fault of the captain or ship agent. Theunloading shall be made for the account of the charterer.

ARTICLE 691. If the vessel cannot put to sea on account of the closing of the port ofdeparture or any other temporary cause, the charter shall remain in force, with neither oneof the contracting parties having a right to claim damages. The subsistence and wages ofthe crew shall be considered as general average. During the interruption, the charterer mayat the proper time and for his own account, unload and load the merchandise, payingdemurrage if he delays the reloading after the cause for the detention has ceased.

ARTICLE 692. A charter party shall be partially rescinded, unless there is an agreement tothe contrary, and the captain shall only be entitled to the freightage for the voyage out, if, byreason of a declaration of war, closing of ports, or interdiction of commercial relations duringthe voyage, the vessel should make the port designated for such a case in the instructionsof the charterer.BILLS OF LADING ARTICLE

706. The captain of the vessel and the shipper shall have the obligation of drawing up thebill of lading in which shall be stated: 1. The name, registry, and tonnage of the vessel. 2.The name of the captain and his domicile. 3. The port of loading and that of unloading. 4.The name of the shipper. 5. The name of the consignee, if the bill of lading is issued in the

name of a specified person. 6. The quantity, quality, number of packages and marks of themerchandise. 7. The freightage and the primage stipulated. The bill of lading may be issuedto bearer, to order, or in the name of a specified person, and must be signed within twenty-four hours after the cargo has been received on board, the shipper being entitled to demandthe unloading at the expense of the captain should the latter not sign it, and, in every case,the losses and damages suffered thereby. cdasia

ARTICLE 707. Four true copies of the original bill of lading shall be made, and all of themshall be signed by the captain and the shipper. Of these, the shipper shall keep one and

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send another to the consignee; the captain shall take two, one for himself and another forthe ship agent. There may also be drawn up as many copies of the bill of lading as may beconsidered necessary by the person interested; but when they are issued to order or tobearer, they shall be stated in all the copies, be they the first four or the subsequent ones,the destination of each one, stating whether it is for the agent, for the captain, for theshipper, or for the consignee. If the copy sent to the latter should have a duplicate, thiscircumstance and the fact that it is not valid except in default of the first one must be statedtherein.

ARTICLE 708. Bills of lading issued to bearer and sent to the consignee shall betransferable by actual delivery of the instrument; and those issued to order, by virtue of anindorsement. In either case, the person to whom the bill of lading is transferred shall acquireall the rights and actions of the transferor or indorser with regard to the merchandisementioned in the same.

ARTICLE 709. A bill of lading drawn up in accordance with the provisions of this title shallbe proof as between all those interested in the cargo and between the latter and the

insurers, proof to the contrary being reserved for the latter.

ARTICLE 710. If the bills of lading do not agree, and no change or erasure can be observedin any of them, those possessed by the shipper or consignee signed by the captain shall beproof against the captain or ship agent in favor of the consignee or shipper; and thosepossessed by the captain or ship agent signed by the shipper shall be proof against theshipper or consignee in favor of the captain or ship agent.

ARTICLE 711. The legitimate holder of a bill of lading who fails to present it to the captain ofthe vessel before the unloading obliging the latter thereby to unload it and place it indeposit, shall be responsible for the expenses of warehousing and other expenses arisingtherefrom.

ARTICLE 712. The captain may not by himself change the destination of the merchandise.In admitting this change at the instance of the shipper, he must first take up the bill of ladingwhich he may have issued, under pain of being liable for the cargo to the legitimate holderof the same.

ARTICLE 713. If before the delivery of the cargo a new bill of lading should be demanded ofthe captain, on the allegation that the failure to present the previous ones is due to their lossor to any other just cause, he shall be obliged to issue it, provided that security for the valueof the cargo is given to his satisfaction, but without changing the consignment, and statingtherein the circumstances prescribed in the last paragraph of Article 707, under penalty,

should he not so state, of being held liable for said cargo if improperly delivered through hisfault.

ARTICLE 714. If before the vessel puts to sea the captain should die or should cease tohold his position through any cause, the shippers shall have the right to demand of the newcaptain the ratification of the first bills of lading, and the latter must do so, provided that allthe copies previously issued be presented or returned to him, and it should appear from allexamination of the cargo that they are correct. The expenses arising from the examinationof the cargo shall be defrayed by the ship agent, without prejudice to the right of action of

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the latter against the first captain if he ceased to be such through his own fault. Should saidexamination not be made, it shall be understood that the new captain accepts the cargo asit appears from the bills of lading issued.

ARTICLE 715. Bills of lading will give rise to a most summary action or to judicial,compulsion ("accion sumarisima o de apremios"), according to the case, for the delivery ofthe cargo and the payment of the freightage and the expenses thereby incurred.

ARTICLE 716. If several persons should present bills of lading issued to bearer or to order,indorsed in their favor, demanding the same merchandise, the captain shall prefer, inmaking delivery the person who presents the copy first issued, except when the latter onewas issued on proof of the loss of the first, and both are presented by different persons. Insuch case, as well as when only second subsequent copies, issued without this proof, arepresented, the captain shall apply to the judge or court, so that he may order the deposit ofthe merchandise and their delivery, through him, to the proper person.

ARTICLE 717. The delivery of the bill of lading shall effect the cancellation of all the

provisional receipts of prior date given by the captain or his subordinates for partialdeliveries of the cargo which may have been made.

ARTICLE 718. After the cargo has been delivered the bill of lading which the captainsigned, or at least the copy by reason of which the delivery is made, shall be returned tohim, with the receipt for the merchandise mentioned therein. The delay on the part of theconsignee shall make him liable for the damages which such delay may cause the captain.

ARTICLE 580. In all judicial sales of any vessel for the payment of creditors, the followingshall have preference in the order stated 2 1. The credit in favor of the public treasuryproven by means of an official certificate of competent authority. 2. The judicial costs of theproceedings, according to an appraisement approved by the judge or court. 3. The pilotagecharges, tonnage dues, and the other sea or port charges, proven by means of proper

certificates of the officers intrusted with the collection thereof. 4. The salaries of thedepositaries and keepers of the vessel and any other expenses for its preservation from thetime of arrival at the port until the sale, which appear to have been paid or be due by virtueof an account verified and approved by the judge or court. cdtai 5. The rent of thewarehouse where the rigging and stores of the vessel have been taken care of, according tocontract. 6. The salaries due the captain and crew during its last voyage, which shall beverified by means of the liquidation to be made in view of the lists and of the books ofaccount of the vessel, approved by the chief of the Bureau of Merchant Marine, where thereis one, and in his absence by the consul or judge or court. 7. The reimbursement for thegoods of the freight which the captain may have sold in order to repair the vessel, providedthat the sale has been ordered through a judicial proceedings held with the formalities

required in such cases, and recorded in the certificate of registry of the vessel. 8. The partof the price which has not been paid to the said vendor, the unpaid credits for materials andlabor in the construction of the vessel, when it has not navigated, and those arising from therepair and equipment of the vessels and from its provisioning with victuals and fuel duringthe last voyage. In order that the credits provided for in this subdivision may enjoy thispreference, they must appear by contracts recorded in the registry of vessels, or if theywere contracted for the vessel while on a voyage and said vessel has not returned to theport where it is registered, they must be made with the authorization required for such casesand annotated in the certificate of registration of the vessel. cdtai 9. The amount borrowed

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on bottomry on the hull, keel, tackle, and stores of the vessel before its departure, provenby means of the contract executed according to law and recorded in the registry of vessels;those borrowed during the voyage with the authorization mentioned in the precedingsubdivision, satisfying the same requisites; and the insurance premium, proven by theinsurance policy or a certificate taken from the books of the broker. 10. The indemnity duethe shipper for the value of the goods shipped which were not delivered to the consignees,or for averages suffered for which the vessel is liable, provided that either appear in a

judicial or arbitration decision.

ARTICLE 581. If the proceeds of the sale should not be sufficient to pay all the creditorsincluded in one number or grade, the residue shall be divided among them pro rata.

ARTICLE 582. After the bill of the judicial sale at public auction has been executed andinscribed in the registry of vessels, all the other liabilities of the vessel in favor of thecreditors shall be considered extinguished. But if the sale should have been voluntary andshould have been made while the vessel was on a voyage, the creditors shall preserve theirrights against the vessel until it returns to the port of her registry, and three months after the

inscription of the sale in the registry of vessel or the arrival.

ARTICLE 583. If while on a voyage the captain should find it necessary to contract one ormore of the obligations mentioned in subdivisions 8 and 9 of Article 580, he shall apply tothe judge or court if he is in Philippine territory, and otherwise to the consul of the Republicof the Philippines, should there be one, and, in his absence, to the judge or court or properlocal authority, presenting the certificate of the registration sheet treated of in Article 612and the instruments proving the obligation contracted. The judge or court, the consul, or thelocal authority, as the case may be, in view of the result of the proceedings instituted, shallmake a temporary memorandum of their result in the certificate, in order that it may berecorded in the registry when the vessel returns to the port of its registry, or so that it can beadmitted as a legal and preferred obligation in case of sale before its return, by reason of

the sale of the vessel on account of a declaration of unseaworthiness. The omission of thisformality shall make the captain personally liable for the credits prejudiced on his account.

ARTICLE 584. The vessels subject to liability for the credits mentioned in Article 580 maybe attached and judicially sold in the manner prescribed in Article 579, in the port in whichthey may be found, at the instance of any of the creditors; but if they should be loaded andready to sail, the attachment may not be effected except for debts contracted to prepareand provision the vessel for the same voyage, and even then the attachment shall bedissolved if any person interested in its sailing should give a bond for the return of thevessel within the period fixed in the certificate of navigation binding himself to pay theindebtedness insofar as it may be legal, should it fail to do so, even if this failure be due to

fortuitous event. For debts of any other kind whatsoever not comprised within the said Article 580, the vessel may be attached only in the port of her registry.

ARTICLE 621. A captain who borrows money on the hull, engine, rigging or tackle of thevessel, or pledges or sells merchandise or provisions outside of the cases and without theformalities prescribed in this Code, shall be liable for the principal, interests, and costs, andshall indemnify for the damages he may cause. He who commits fraud in his accounts shallpay the amount defrauded and shall be subject to the provisions of the Penal Code.

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SECTION TWO LOANS ON BOTTOMRY AND RESPONDENTIA ARTICLE 719. A loan in which under any condition whatever, the repayment of the sumloaned and of the premium stipulated depends upon the safe arrival in port of the goods onwhich it is made, or of the price they may receive in case of accident, shall be considered aloan on bottomry or respondentia.

ARTICLE 720. Loans on bottomry or respondentia may be executed: 1. By means of apublic instrument. 2. By means of a policy signed by the contracting parties and the brokertaking part therein. cdt 3. By means of a private instrument. Under whichever of these formsthe contract is executed, it shall be entered in the certificate of the registry of the vessel andshall be recorded in the registry of vessels, without which requisites the credits of this kindshall not have, with regard to other credits, the preference which, according to their nature,they should have, although the obligation shall be valid between the contracting parties. Thecontracts made during a voyage shall be governed by the provisions of Articles 583 and611, and shall be effective with regard to third persons from the date of their execution, ifthey should be recorded in the registry of vessels of the port of registry of the vessel beforethe lapse of eight days following its arrival. If said eight days should elapse without the

record having been made in the corresponding registry, the contracts made during thevoyage of a vessel shall produce no effect with regard to third persons, except from the dayand date of their inscription. In order that the policy of the contracts executed in accordancewith No. 2 may have binding force, they must conform to the registry of the broker who tookpart therein. With respect to those executed in accordance with No. 3 the acknowledgmentof the signature shall be required. Contracts which are not reduced to writing shall not giverise to judicial action.

ARTICLE 721. In a contract on bottomry or respondentia the following must be stated: 1.The kind, name, and registry of the vessel. 2. The name, surname, and domicile of thecaptain. 3. The names, surnames, and domiciles of the person giving and the personreceiving the loan. 4. The amount of the loan and the premium stipulated. 5. The time for

repayment. 6. The goods pledged to secure repayment. 7. The voyage during which the riskis run.

ARTICLE 722. The contract may be made to order, in which case they shall be transferableby indorsement, and the indorsee shall acquire all the rights and shall incur all the riskscorresponding to the indorser.

ARTICLE 723. Loans may be made in goods and in merchandise, fixing their value in orderto determine the principal of the loan.

ARTICLE 724. The loans may be constituted jointly or separately: 1. On the hull of the

vessel. 2. On the rigging. 3. On the equipment, provisions, and fuel. 4. On the engine, if thevessel is a steamer. 5. On the merchandise loaded. If the loan in constituted on the hull ofthe vessel, the rigging, equipment and other goods, provisions, fuel, steam engines, and thefreightage earned during the voyage on which the loan is made shall also be considered asincluded in the liability for the loan. cdtai If the loan is made on the cargo, all that whichconstitutes the same shall be subject to the repayment; and if on a particular object of thevessel or of the cargo, only the object concretely and specifically mentioned shall be liable.

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Note: [ARTICLE 617. The captain may not contract loans on respondentia secured by thecargo; and should he do so, the contracts shall be void. Neither may he borrow money onbottomry for his own transactions, except on the portion of the vessel he owns, provided nomoney has been previously borrowed on the whole vessel, and there does not exist anyother kind of lien or obligation chargeable against the vessel. If he may do so, he must statewhat interest he has in the vessel. In case of violation of this article, the principal, interest,and costs shall be for the personal account of the captain, and the ship agent mayfurthermore discharge him. ARTICLE 621. A captain who borrows money on the hull,engine, rigging or tackle of the vessel, or pledges or sells merchandise or provisions outsideof the cases and without the formalities prescribed in this Code, shall be liable for theprincipal, interests, and costs, and shall indemnify for the damages he may cause. He whocommits fraud in his accounts shall pay the amount defrauded and shall be subject to theprovisions of the Penal Code.]

ARTICLE 725. No loans on bottomry may be made on the salaries of the crew or on theprofits expected.

ARTICLE 726. If the lender should prove that he loaned an amount larger than the value ofthe object liable for the bottomry loan, on account of fraudulent measures employed by theborrower, the loan shall be valid only for the amount at which said object is appraised byexperts. The surplus principal shall be returned with legal interests for the entire timerequired for repayment.

ARTICLE 727. If the full amount of the loan contracted in order to load the vessel should notbe used for the cargo, the balance shall be returned before clearing. The same procedureshall be observed with regard to the goods taken as loan, if they were not loaded.

ARTICLE 728. The loan which the captain takes at the point of residence of the owners of

the vessel shall only affect that part thereof which belongs to the captain, if the other ownersor their agents should not have given their express authorization therefor or should not havetaken part in the transaction. If one or more of the owners should be requested to furnishthe amount necessary to repair or provision the vessel, and they should not do so withintwenty-four hours, the interest which the parties in default may have in the vessel shall beliable for the loan in the proper proportion. Outside of the residence of the owners thecaptain may contract loans in accordance with the provisions of Articles 583 and 611.

ARTICLE 729. Should the goods on which money is taken not be subjected to risk, thecontract shall be considered a simple loan, with the obligation on the part of the borrower toreturn the principal and interest at the legal rate, if that agreed upon should not be lower.

ARTICLE 730. Loans made during the voyage shall have preference over those madebefore the clearing of the vessel, and they shall be graduated in the inverse order of theirdates. The loans for the last voyage shall have preference over prior ones. Should severalloans have been made at the same port of arrival under stress and for the same purpose,all of them shall be paid pro rata.

ARTICLE 731. The actions pertaining to the lender shall be extinguished by the absoluteloss of the goods on which the loan was made, if it arose from an accident of the sea at the

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time and during the voyage designated in the contract, and it is proven that the cargo wason board; but this shall not take place if the loss was caused by the inherent defect of thething, or through the fault or malice, of the borrower, or barratry on the part of the captain, orif it was caused by damages suffered by the vessel as a consequence of being engaged incontraband, or if it arose from having loaded the merchandise on a vessel different from thatdesignated in the contract, unless this change should have been made by reason of forcemajeure. Proof of the loss as well as of the existence in the vessel of the goods declared tothe lender as the object of the loan is incumbent upon him who received the loan.

ARTICLE 732. Lenders on bottomry or respondentia shall suffer, in proportion to theirrespective interest, the general average which may take place in the goods on which theloan is made. In particular averages, in the absence of an express agreement between thecontracting parties, the lender on bottomry or respondentia shall also contribute inproportion to his respective interest, should it not belong to the kind of risks excepted in theforegoing article.

ARTICLE 733. Should the period during which the lender shall run the risk not have been

stated in the contract, it shall last, with regard to the vessel, engines, rigging, andequipment, from the moment said vessel puts to sea until she drops anchor in the port ofdestination; and with regard to the merchandise, from the time they are loaded at the shoreor wharf of the port of shipment until they are unloaded in the port of consignment. aisadc

ARTICLE 734. In case of shipwreck, the amount liable for the payment of the loan shall bereduced to the proceeds of the goods saved, after deducting the costs of the salvage. If theloan should be on the vessel or any of its parts, the freightage earned during the voyage forwhich said loan was contracted shall also be liable for its payment, as far as it may reach.

ARTICLE 735. If the same vessel or cargo should be the object of a loan on bottomry orrespondentia and marine insurance, the value of what may be saved in case of shipwreck

shall be divided between the lender and the insurer, in proportion to the legitimate interestof each one, taking into consideration, for this purpose only, the principal with respect to theloan, and without prejudice to the right of preference of other creditors in accordance with

Article 580.

Note: [Sec. 101. The insurable interest of the owner of the ship hypothecated by bottomry is onlythe excess of its value over the amount secured by bottomry.]

ARTICLE 736. If there should be delay in repayment of the principal and premiums of theloan, only the former shall bear of legal interest.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,though foreseen, were inevitable. (1105a)

Art 1680 par 2. Extraordinary fortuitous events are understood to be: fire, war, pestilence,unusual flood, locusts, earthquake, or others which are uncommon, and which thecontracting parties could not have reasonably foreseen. (1575)

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Article 1733. Common carriers, from the nature of their business and for reasons of public policy, arebound to observe extraordinary diligence in the vigilance over the goods and for the safety of thepassengers transported by them, according to all the circumstances of each case.

Such extraordinary diligence in the vigilance over the goods is further expressed in articles 1734, 1735,and 1745, Nos. 5, 6, and 7, while the extraordinary diligence for the safety of the passengers is further setforth in articles 1755 and 1756.

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 dueregard for all the circumstances.

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



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(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 such

person or a subsequent indorsee of the document has indorsed it in blank or to the bearer.


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 or

to another specified person. Subsequent negotiations may be made in like manner. (n)


Article 1511. A document of title which is not in such form that it can be negotiated by

delivery 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)



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(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 sd to him had or had ability to convey to a purchaser in good faithfor value and also such title to the goods as the person to whose order the goods were tobe delivered by the te stipulation, or when the nature of the obligation requires theassumption of risk, no person shall be responsible for those events which could not beforeseen, or which,


1755.



rms of the document had or had ability to convey to a purchaser in good faith for value; and


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 the

terms of any agreement with the transferor.

If the asd of an attachment of execution upon the goods by a creditor of the transferor, or bya notification to such bailee by the transferor or a subsequent purchaser from the transferorof a subsequent sale of the goods by the sd




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)

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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 be

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








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 extraordinary

diligence as required in article 1733.


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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 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, the

common 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 limiting

the liability of the former for the loss, destruction, or deterioration of the goods to a degreeless 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:



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Article 1746. An agreement limiting the common carrier's liability may be annulled by the

shipper or owner if the common carrier refused to carry the goods unless the former agreedto such stipulation.



Article 1749. A stipulation that the common carrier's liability is limited to the value of the

goods appearing in the bill of lading, unless the shipper or owner declares a greater value,is binding.





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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, by

the posting of notices, by statements on tickets, or otherwise.









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Article 1144. The following actions must be brought within ten years from the time the rightof action accrues:

(1) Upon a written contract;

(2) Upon an obligation created by law;

(3) Upon a judgment. (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



ARTICLE 695. The right to passage, if issued to a specified person, may not be transferred

without the consent of the captain or of the consignee.



ARTICLE 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

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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 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 distinction

whatsoever.


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.





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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 inwhich 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 regulation

rate 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 herequests; 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 toreserve 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 the

goods 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 support of their respective claims, according to thegeneral provisions established in this Code for commercial contracts. cd

ARTICLE 355. The responsibility of the carrier shall commence from the moment hereceives the merchandise, personally or through a person charged for the purpose, at theplace indicated for receiving them.

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ARTICLE 356. Carriers may refuse packages which appear unfit for transportation; and ifthe carriage is to be made by railway, and the shipment is insisted upon, the company shalltransport them, being exempt from all responsibility if its objections, is made to appear inthe bill of lading.

ARTICLE 357. If by reason of well-founded suspicion of falsity in the declaration as to thecontents of a package the carrier should decide to examine it, he shall proceed with hisinvestigation in the presence of witnesses, with the shipper or consignee in attendance. Ifthe shipper or consignee who has to be cited does not attend, the examination shall bemade before a notary, who shall prepare a memorandum of the result of the investigation,for such purposes as may be proper. If the declaration of the shipper should be true, theexpense occasioned by the examination and that of carefully repacking the packages shallbe for the account of the carrier and in a contrary case for the account of the shipper.

Note: [Sec. 2530.Property Subject to Forfeiture Under Tariff and Customs Laws.— Anyvessel or aircraft, cargo, articles and other objects shall, under the following conditions, be

subject 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 inthe 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 or

aircraft'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 othernecessity 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

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 its

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equipage 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 personarriving 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 exported

article 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 by

the delay should be for his account.


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 fortuitous

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event, 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 whichusage 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 mayhave 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 inthe 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 receivethose which are sound, this segregation to be made by distinct and separate pieces and

without dividing a single object, unless the consignee proves the impossibility ofconveniently making use of them in this form. cdt The same rule shall be applied tomerchandise in bales or packages, separating those parcels which appear sound.

ARTICLE 366. Within the twenty-four hours following the receipt of the merchandise, theclaim against the carrier for damage or average be found therein upon opening thepackages, may be made, provided that the indications of the damage or average whichgives rise to the claim cannot be ascertained from the outside part of such packages, inwhich case the claim shall be admitted only at the time of receipt. After the periods

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mentioned have elapsed, or the transportation charges have been paid, no claim shall beadmitted against the carrier with regard to the condition in which the goods transportedwere delivered.

ARTICLE 367. If doubts and disputes should arise between the consignee and the carrierwith respect to the condition of the goods transported at the time their delivery to the formeris made, the goods shall be examined by experts appointed by the parties, and, in case ofdisagreement, by a third one appointed by the judicial authority, the results to be reduced towriting; and if the interested parties should not agree with the expert opinion and they do notsettle their differences, the merchandise shall be deposited in a safe warehouse by order ofthe judicial authority, and they shall exercise their rights in the manner that may be proper.

ARTICLE 368. The carrier must deliver to the consignee, without any delay or obstruction,the goods which he may have received, by the mere fact of being named in the bill of ladingto receive them; and if he does not do so, he shall be liable for the damages which may becaused thereby.


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 made

within 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 noindemnity 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 would

have 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 valuenecessary to cover 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

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



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.



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.


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Note:

Section 3. Definition of Terms. The terms, as used, in this Decree, shall have the followingmeaning, unless the context of the particular usage of the term indicates otherwise;

a. "Maritime Industry", briefly referred to as "industry" in the broadest concept of the term.

All enterprises engaged in the business of designing, constructing, manufacturing,acquiring, operating, supplying, repairing and/or maintaining vessels, or component partsthereof; of managing and/or operating shipping lines, stevedoring arrastre and customsbrokerage services, shipyards, drydocks, marine railways, marine repair shops, shippingand freight forwarding agencies and similar enterprises.

b. "Vessels" or "Watercraft" Any barge, lighter, bulk carrier, passenger ship freighter, tanker,container ship, fishing boats or other artificial contrivance utilizing any source of motivepower, designed, used or capable of being used as a means of water transportationoperating either as common contract carrier, including fishing vessels covered underPresidential Decree No. 43, except (1) those owned and/or operated by the Armed Forcesof the Philippines and by foreign governments for military purposes, and (ii) bancas,sailboats and other waterborne contrivance of less than three gross tons capacity and notmotorized.

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 thelaws 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 both

corporations must be Philippine nationals.



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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, the

taking of the certificate of Philippine registry shall be optional with the owner.

"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 theMaritime 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 held

by 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 other means, the control of more thanforty percent of the capital or capital stock of the association or corporation is conferredupon or allowed to be exercised by any person not a citizen of the Philippines."

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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 entirelyowned 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.

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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 ghj


Article 1485. The preceding article shall be applied to contracts purporting to be leases ofpersonal dfg industry, the growth and effective regulation of shipping enterprises, andfor the national security objectives of the country;

m. Establish, prescribe and regulate routes, zones and/or areas of operation of particularoperators of public water services;

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

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

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

q. Enforce laws, prescribe and enforce rules and regulations, including penalties for violationsthereof, governing water transportation and the Philippine merchant marine, and deputize

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the Philippine Coast Guard and other law enforcement agencies to effectively discharge thesefunctions;

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

s. Determine, fix and/or prescribe charges and/or rates pertinent to the operation of public

water 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.

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

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


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



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.


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 to

the 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 at

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the 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 thecontrary 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 a

foreign 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


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 announcement

thereof 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 thecommon 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 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. If the part owners should not bemore than two, the disagreement of views, if any, shall be decided by the vote of themember having the largest interest. If the interests are equal, it should be decided by lot.The person having the smallest share in the ownership shall have one vote; andproportionately the other part owners as many votes as they have parts equal to thesmallest one. aisadc A vessel may not be detained, attached or levied upon in execution in

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its entirety, for the private debts of a part owner, but the proceedings shall be limited to theinterest which the debtor may have in the vessel, without interfering with the navigation

ARTICLE 592. The resolution of the majority with regard to the repair, equipment, andprovisioning of the vessel in the port of departure shall bind the minority, unless the minoritymembers renounce their interests, which must be acquired by the other co-owners, after a

judicial appraisement of the value of the portion or portions assigned. The resolutions of themajority relating to the dissolution of the partnership and sale of the vessel shall also bebinding on the minority. The sale of the vessel must be made at public auction, subject tothe provisions of the law of civil procedure, unless the co-owners unanimously agreeotherwise, saying always the right of repurchase and redemption provided for in Article 575.

ARTICLE 593. The owners of a vessel shall have preference in her charter over otherpersons, under the same conditions and price. If two or more of them should claim this right,the one having the greater interest shall be preferred; and should they have equal interests,the matter shall be decided by lot.

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.

ARTICLE 607. If the captain who is a co-owner should have obtained the command of thevessel by virtue of a special agreement contained in the articles of association, he may notbe deprived of his office except for the causes mentioned in Article 605. ARTICLE 608. Incase of the voluntary sale of the vessel, all contracts between the ship agent and thecaptain shall terminate, reserving to the latter his right to the indemnity which may pertain tohim, according to the agreements made with the ship agent. They vessel sold shall remainsubject to the security of the payment of said indemnity if, after the action against the

vendor has been instituted, the latter is found to be insolvent.

TITLE TWO PERSONS WHO TAKE PART IN MARITIME COMMERCE SECTION ONESHIPOWNERS AND SHIP AGENTS

ARTICLE 586. The shipowner and the ship agent shall be civilly liable for the acts of thecaptain and for the obligations contracted by the latter to repair, equip, and provision thevessel, provided the creditor proves that the amount claimed was invested for the benefit ofthe same. By ship agent is understood the person entrusted with provisioning orrepresenting 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

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

ARTICLE 590. The co-owners of a vessel shall be civilly liable in the proportion of theirinterests in the common fund, for the results of the acts of the captain, referred to in Article587. Each co-owner may exempt himself from this liability by the abandonment, before anotary, of the part of the vessel belonging to him.

ARTICLE 591. All the part owners shall be liable, in proportion to their respectiveownership, for the expenses for repairing the vessel, and for other expenses which areincurred by virtue of a resolution of the majority. They shall likewise be liable in the sameproportion for the expenses for the maintenance, equipment, and provisioning of the vessel,necessary for navigation.

ARTICLE 594. The co-owners shall elect the manager who is to represent them in thecapacity of ship agent. The appointment of director or ship agent shall be revocable at thewill of the members.

ARTICLE 595. The ship agent, whether he is at the same time the owner of the vessel, or amanager for an owner or for an association of co-owners, must have the capacity to tradeand must be recorded in the merchant's registry of the province. The ship agent shallrepresent the ownership of the vessel, and may, in his own name and in such capacity, take

judicial and extrajudicial steps in matters relating to commerce.

ARTICLE 596. The ship agent may discharge the duties of captain of the vessel, subject inevery case to the provision of Article 609. If two or more co-owners apply for the position ofcaptain, the disagreement shall be decided by a vote of the members; and if the vote shouldresult in a tie, it shall be decided in favor of the co-owner having the larger interest in thevessel. If the interests of the applicants should be equal, and there should be a tie, the

matter shall be decided by lot.

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 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.

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ARTICLE 601. Should there be any profits, the co-owners may demand of the managingagent the amount corresponding to their interests by means of an executory action ("accionejecutiva"), without any other requisite than the acknowledgment of the signatures on theinstrument approving the account.

ARTICLE 602. The ship agent shall indemnify the captain for all the expenses he may haveincurred with funds of his own or of others, for the benefit of the vessel.

ARTICLE 603. Before the vessel sets out to sea the ship agent may at his discretiondischarge 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 withoutany 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 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 amisdemeanor or crime has been committed, he shall be liable in accordance with the Penal

Code. 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.


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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.

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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, theshippers, 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 the


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 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.

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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.





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 ordeposit. 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 may

not 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


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 whatmay be necessary to pay the freightage and other expenses on the same. The sale shall

likewise 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.


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 the

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captain should contract to carry a greater amount of cargo than the vessel can carry in viewof 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 thecontract, 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 ischartered or the captain can not refuse to accept the rest of the cargo; and should he do so,the shipper shall have a right to demand that the vessel put to sea with the cargo which it

may have on board.

ARTICLE 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 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 vessel

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would be thrown out of trim, the captain must refuse it or unload it at the expense of itsowner. 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 themeantime, 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 the

round trip, should not be given any cargo on its return.


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 andawaiting 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 be

discharged 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.


ARTICLE 679. The charterer of an entire vessel may sub-charter the whole or part thereof

on 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 other

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freight 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.








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ARTICLE 688. A charter party may be rescinded at the request of the charterer: 1. If beforeloading the vessel he should not agree with that stated in the certificate of tonnage, or ifthere should be an error in the statement of the flag under which she sails. 2. If the vesselshould not be placed at the disposal of the charterer within the period and in the manneragreed upon. 3. If after the vessel has put to sea, she should return to the port of departure,on account of risk from pirates, enemies, or bad weather, and the shippers should agree tounload her. In the second and third cases the person from whom the vessel was charteredshall indemnify the charterer for the voyage out. 4. If the charter should have been made bythe months, the charterers shall pay the full freightage for one month, if the voyage is for aport in the same waters, and for two months, if for a port in different waters. From one portto another of the Philippines and adjacent islands, the freightage for one month only shallbe paid. 5. If the vessel should make a port during the voyage in order to make urgentrepairs, and the charterers should prefer to dispose of the merchandise. When the delaydoes not exceed thirty days, the shippers shall pay the full freightage for the voyage out.Should the delay exceed thirty days, they shall only pay the freightage in proportion to thedistance covered by the vessel.


ARTICLE 690. The charter party shall be rescinded and all actions arising therefrom shall

be extinguished, if, before the vessel puts to sea from the port of departure, any of thefollowing cases should occur: 1. A declaration of war or interdiction of commerce with thepower to whose ports the vessel was to make its voyage. 2. A condition of blockade of theport of destination of said vessel, or the breaking out of an epidemic after the contract wasexecuted. 3. The prohibition to receive at the said port the merchandise constituting thecargo of the vessel. 4. An indefinite detention, by reason of an embargo of the vessel byorder of the government, or for any other reason independent of the will of the ship agent. 5.The inability of the vessel to navigate, without fault of the captain or ship agent. Theunloading shall be made for the account of the charterer.

ARTICLE 691. If the vessel cannot put to sea on account of the closing of the port of

departure or any other temporary cause, the charter shall remain in force, with neither oneof the contracting parties having a right to claim damages. The subsistence and wages ofthe crew shall be considered as general average. During the interruption, the charterer mayat the proper time and for his own account, unload and load the merchandise, payingdemurrage if he delays the reloading after the cause for the detention has ceased.

ARTICLE 692. A charter party shall be partially rescinded, unless there is an agreement tothe contrary, and the captain shall only be entitled to the freightage for the voyage out, if, byreason of a declaration of war, closing of ports, or interdiction of commercial relations during

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the voyage, the vessel should make the port designated for such a case in the instructionsof the charterer.BILLS OF LADING ARTICLE

706. The captain of the vessel and the shipper shall have the obligation of drawing up thebill of lading in which shall be stated: 1. The name, registry, and tonnage of the vessel. 2.The name of the captain and his domicile. 3. The port of loading and that of unloading. 4.The name of the shipper. 5. The name of the consignee, if the bill of lading is issued in thename of a specified person. 6. The quantity, quality, number of packages and marks of themerchandise. 7. The freightage and the primage stipulated. The bill of lading may be issuedto bearer, to order, or in the name of a specified person, and must be signed within twenty-four hours after the cargo has been received on board, the shipper being entitled to demandthe unloading at the expense of the captain should the latter not sign it, and, in every case,the losses and damages suffered thereby. cdasia

ARTICLE 707. Four true copies of the original bill of lading shall be made, and all of themshall be signed by the captain and the shipper. Of these, the shipper shall keep one and

send another to the consignee; the captain shall take two, one for himself and another forthe ship agent. There may also be drawn up as many copies of the bill of lading as may beconsidered necessary by the person interested; but when they are issued to order or tobearer, they shall be stated in all the copies, be they the first four or the subsequent ones,the destination of each one, stating whether it is for the agent, for the captain, for theshipper, or for the consignee. If the copy sent to the latter should have a duplicate, thiscircumstance and the fact that it is not valid except in default of the first one must be statedtherein.

ARTICLE 708. Bills of lading issued to bearer and sent to the consignee shall betransferable by actual delivery of the instrument; and those issued to order, by virtue of anindorsement. In either case, the person to whom the bill of lading is transferred shall acquire

all the rights and actions of the transferor or indorser with regard to the merchandisementioned in the same.

ARTICLE 709. A bill of lading drawn up in accordance with the provisions of this title shallbe proof as between all those interested in the cargo and between the latter and theinsurers, proof to the contrary being reserved for the latter.

ARTICLE 710. If the bills of lading do not agree, and no change or erasure can be observedin any of them, those possessed by the shipper or consignee signed by the captain shall beproof against the captain or ship agent in favor of the consignee or shipper; and thosepossessed by the captain or ship agent signed by the shipper shall be proof against the

shipper or consignee in favor of the captain or ship agent.


ARTICLE 712. The captain may not by himself change the destination of the merchandise.In admitting this change at the instance of the shipper, he must first take up the bill of lading

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which he may have issued, under pain of being liable for the cargo to the legitimate holderof the same.

ARTICLE 713. If before the delivery of the cargo a new bill of lading should be demanded ofthe captain, on the allegation that the failure to present the previous ones is due to their lossor to any other just cause, he shall be obliged to issue it, provided that security for the valueof the cargo is given to his satisfaction, but without changing the consignment, and statingtherein the circumstances prescribed in the last paragraph of Article 707, under penalty,should he not so state, of being held liable for said cargo if improperly delivered through hisfault.

ARTICLE 714. If before the vessel puts to sea the captain should die or should cease tohold his position through any cause, the shippers shall have the right to demand of the newcaptain the ratification of the first bills of lading, and the latter must do so, provided that allthe copies previously issued be presented or returned to him, and it should appear from allexamination of the cargo that they are correct. The expenses arising from the examinationof the cargo shall be defrayed by the ship agent, without prejudice to the right of action of

the latter against the first captain if he ceased to be such through his own fault. Should saidexamination not be made, it shall be understood that the new captain accepts the cargo asit appears from the bills of lading issued.


ARTICLE 716. If several persons should present bills of lading issued to bearer or to order,indorsed in their favor, demanding the same merchandise, the captain shall prefer, inmaking delivery the person who presents the copy first issued, except when the latter onewas issued on proof of the loss of the first, and both are presented by different persons. In

such case, as well as when only second subsequent copies, issued without this proof, arepresented, the captain shall apply to the judge or court, so that he may order the deposit ofthe merchandise and their delivery, through him, to the proper person.

ARTICLE 717. The delivery of the bill of lading shall effect the cancellation of all theprovisional receipts of prior date given by the captain or his subordinates for partialdeliveries of the cargo which may have been made.

ARTICLE 718. After the cargo has been delivered the bill of lading which the captainsigned, or at least the copy by reason of which the delivery is made, shall be returned tohim, with the receipt for the merchandise mentioned therein. The delay on the part of the

consignee shall make him liable for the damages which such delay may cause the captain. ARTICLE 580. In all judicial sales of any vessel for the payment of creditors, the followingshall have preference in the order stated 2 1. The credit in favor of the public treasuryproven by means of an official certificate of competent authority. 2. The judicial costs of theproceedings, according to an appraisement approved by the judge or court. 3. The pilotagecharges, tonnage dues, and the other sea or port charges, proven by means of propercertificates of the officers intrusted with the collection thereof. 4. The salaries of thedepositaries and keepers of the vessel and any other expenses for its preservation from thetime of arrival at the port until the sale, which appear to have been paid or be due by virtue

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of an account verified and approved by the judge or court. cdtai 5. The rent of thewarehouse where the rigging and stores of the vessel have been taken care of, according tocontract. 6. The salaries due the captain and crew during its last voyage, which shall beverified by means of the liquidation to be made in view of the lists and of the books ofaccount of the vessel, approved by the chief of the Bureau of Merchant Marine, where thereis one, and in his absence by the consul or judge or court. 7. The reimbursement for thegoods of the freight which the captain may have sold in order to repair the vessel, providedthat the sale has been ordered through a judicial proceedings held with the formalitiesrequired in such cases, and recorded in the certificate of registry of the vessel. 8. The partof the price which has not been paid to the said vendor, the unpaid credits for materials andlabor in the construction of the vessel, when it has not navigated, and those arising from therepair and equipment of the vessels and from its provisioning with victuals and fuel duringthe last voyage. In order that the credits provided for in this subdivision may enjoy thispreference, they must appear by contracts recorded in the registry of vessels, or if theywere contracted for the vessel while on a voyage and said vessel has not returned to theport where it is registered, they must be made with the authorization required for such casesand annotated in the certificate of registration of the vessel. cdtai 9. The amount borrowed

on bottomry on the hull, keel, tackle, and stores of the vessel before its departure, provenby means of the contract executed according to law and recorded in the registry of vessels;those borrowed during the voyage with the authorization mentioned in the precedingsubdivision, satisfying the same requisites; and the insurance premium, proven by theinsurance policy or a certificate taken from the books of the broker. 10. The indemnity duethe shipper for the value of the goods shipped which were not delivered to the consignees,or for averages suffered for which the vessel is liable, provided that either appear in a



ARTICLE 582. After the bill of the judicial sale at public auction has been executed andinscribed in the registry of vessels, all the other liabilities of the vessel in favor of thecreditors shall be considered extinguished. But if the sale should have been voluntary andshould have been made while the vessel was on a voyage, the creditors shall preserve theirrights against the vessel until it returns to the port of her registry, and three months after theinscription of the sale in the registry of vessel or the arrival.

ARTICLE 583. If while on a voyage the captain should find it necessary to contract one ormore of the obligations mentioned in subdivisions 8 and 9 of Article 580, he shall apply tothe judge or court if he is in Philippine territory, and otherwise to the consul of the Republicof the Philippines, should there be one, and, in his absence, to the judge or court or proper

local authority, presenting the certificate of the registration sheet treated of in Article 612and the instruments proving the obligation contracted. The judge or court, the consul, or thelocal authority, as the case may be, in view of the result of the proceedings instituted, shallmake a temporary memorandum of their result in the certificate, in order that it may berecorded in the registry when the vessel returns to the port of its registry, or so that it can beadmitted as a legal and preferred obligation in case of sale before its return, by reason ofthe sale of the vessel on account of a declaration of unseaworthiness. The omission of thisformality shall make the captain personally liable for the credits prejudiced on his account.

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ARTICLE 584. The vessels subject to liability for the credits mentioned in Article 580 maybe attached and judicially sold in the manner prescribed in Article 579, in the port in whichthey may be found, at the instance of any of the creditors; but if they should be loaded andready to sail, the attachment may not be effected except for debts contracted to prepareand provision the vessel for the same voyage, and even then the attachment shall bedissolved if any person interested in its sailing should give a bond for the return of thevessel within the period fixed in the certificate of navigation binding himself to pay theindebtedness insofar as it may be legal, should it fail to do so, even if this failure be due tofortuitous event. For debts of any other kind whatsoever not comprised within the said

Article 580, the vessel may be attached only in the port of her registry.



ARTICLE 720. Loans on bottomry or respondentia may be executed: 1. By means of apublic instrument. 2. By means of a policy signed by the contracting parties and the brokertaking part therein. cdt 3. By means of a private instrument. Under whichever of these formsthe contract is executed, it shall be entered in the certificate of the registry of the vessel andshall be recorded in the registry of vessels, without which requisites the credits of this kindshall not have, with regard to other credits, the preference which, according to their nature,

they should have, although the obligation shall be valid between the contracting parties. Thecontracts made during a voyage shall be governed by the provisions of Articles 583 and611, and shall be effective with regard to third persons from the date of their execution, ifthey should be recorded in the registry of vessels of the port of registry of the vessel beforethe lapse of eight days following its arrival. If said eight days should elapse without therecord having been made in the corresponding registry, the contracts made during thevoyage of a vessel shall produce no effect with regard to third persons, except from the dayand date of their inscription. In order that the policy of the contracts executed in accordancewith No. 2 may have binding force, they must conform to the registry of the broker who tookpart therein. With respect to those executed in accordance with No. 3 the acknowledgmentof the signature shall be required. Contracts which are not reduced to writing shall not give

rise to judicial action.

ARTICLE 721. In a contract on bottomry or respondentia the following must be stated: 1.The kind, name, and registry of the vessel. 2. The name, surname, and domicile of thecaptain. 3. The names, surnames, and domiciles of the person giving and the personreceiving the loan. 4. The amount of the loan and the premium stipulated. 5. The time forrepayment. 6. The goods pledged to secure repayment. 7. The voyage during which the riskis run.

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ARTICLE 724. The loans may be constituted jointly or separately: 1. On the hull of thevessel. 2. On the rigging. 3. On the equipment, provisions, and fuel. 4. On the engine, if thevessel is a steamer. 5. On the merchandise loaded. If the loan in constituted on the hull ofthe vessel, the rigging, equipment and other goods, provisions, fuel, steam engines, and thefreightage earned during the voyage on which the loan is made shall also be considered asincluded in the liability for the loan. cdtai If the loan is made on the cargo, all that whichconstitutes the same shall be subject to the repayment; and if on a particular object of thevessel or of the cargo, only the object concretely and specifically mentioned shall be liable.

Note: [ARTICLE 617. The captain may not contract loans on respondentia secured by the

cargo; and should he do so, the contracts shall be void. Neither may he borrow money onbottomry for his own transactions, except on the portion of the vessel he owns, provided nomoney has been previously borrowed on the whole vessel, and there does not exist anyother kind of lien or obligation chargeable against the vessel. If he may do so, he must statewhat interest he has in the vessel. In case of violation of this article, the principal, interest,and costs shall be for the personal account of the captain, and the ship agent mayfurthermore discharge him. ARTICLE 621. A captain who borrows money on the hull,engine, rigging or tackle of the vessel, or pledges or sells merchandise or provisions outsideof the cases and without the formalities prescribed in this Code, shall be liable for theprincipal, interests, and costs, and shall indemnify for the damages he may cause. He whocommits fraud in his accounts shall pay the amount defrauded and shall be subject to theprovisions of the Penal Code.]




ARTICLE 728. The loan which the captain takes at the point of residence of the owners ofthe vessel shall only affect that part thereof which belongs to the captain, if the other ownersor their agents should not have given their express authorization therefor or should not havetaken part in the transaction. If one or more of the owners should be requested to furnishthe amount necessary to repair or provision the vessel, and they should not do so within

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twenty-four hours, the interest which the parties in default may have in the vessel shall beliable for the loan in the proper proportion. Outside of the residence of the owners thecaptain may contract loans in accordance with the provisions of Articles 583 and 611.



ARTICLE 731. The actions pertaining to the lender shall be extinguished by the absoluteloss of the goods on which the loan was made, if it arose from an accident of the sea at thetime and during the voyage designated in the contract, and it is proven that the cargo was

on board; but this shall not take place if the loss was caused by the inherent defect of thething, or through the fault or malice, of the borrower, or barratry on the part of the captain, orif it was caused by damages suffered by the vessel as a consequence of being engaged incontraband, or if it arose from having loaded the merchandise on a vessel different from thatdesignated in the contract, unless this change should have been made by reason of forcemajeure. Proof of the loss as well as of the existence in the vessel of the goods declared tothe lender as the object of the loan is incumbent upon him who received the loan.

ARTICLE 732. Lenders on bottomry or respondentia shall suffer, in proportion to theirrespective interest, the general average which may take place in the goods on which theloan is made. In particular averages, in the absence of an express agreement between thecontracting parties, the lender on bottomry or respondentia shall also contribute in

proportion to his respective interest, should it not belong to the kind of risks excepted in theforegoing article.

ARTICLE 733. Should the period during which the lender shall run the risk not have beenstated in the contract, it shall last, with regard to the vessel, engines, rigging, andequipment, from the moment said vessel puts to sea until she drops anchor in the port ofdestination; and with regard to the merchandise, from the time they are loaded at the shoreor wharf of the port of shipment until they are unloaded in the port of consignment. aisadc

ARTICLE 734. In case of shipwreck, the amount liable for the payment of the loan shall bereduced to the proceeds of the goods saved, after deducting the costs of the salvage. If the

loan should be on the vessel or any of its parts, the freightage earned during the voyage forwhich said loan was contracted shall also be liable for its payment, as far as it may reach.

ARTICLE 735. If the same vessel or cargo should be the object of a loan on bottomry orrespondentia and marine insurance, the value of what may be saved in case of shipwreckshall be divided between the lender and the insurer, in proportion to the legitimate interestof each one, taking into consideration, for this purpose only, the principal with respect to theloan, and without prejudice to the right of preference of other creditors in accordance with

Article 580.

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ARTICLE 736. If there should be delay in repayment of the principal and premiums of theloan, only the former shall bear of legal interest.

Civil code












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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 the

courts shall mitigate the damages to be awarded. (n)






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 common

carriers.



Article 1763. A common carrier is responsible for injuries suffered by a passenger on

account 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.


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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 upon

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the goods by a creditor of the transferor, or by a notification to such bailee by the transferoror a subsequent purchaser from the transferor of a subsequent sale of the goods by thetransferor. (n)













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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 common

carrier 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 degreeless than extraordinary diligence shall be valid, provided it be:










(6) That the common carrier's liability for acts committed by thieves, or of robbers who do

not act with grave or irresistible threat, violence or force, is dispensed with or diminished;


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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 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 under

the circumstances, and has been fairly and freely agreed upon.








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Code of commerce





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 passengers

shall 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 apassenger 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, passengers

requesting 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.

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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 reasonable

price.





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 habitually

engaged 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 inwhich they are contained. 5. The cost of transportation. 6. The date on which shipment is

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made. 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 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 toreserve 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 356. Carriers may refuse packages which appear unfit for transportation; and ifthe carriage is to be made by railway, and the shipment is insisted upon, the company shall

transport them, being exempt from all responsibility if its objections, is made to appear inthe bill of lading.

ARTICLE 357. If by reason of well-founded suspicion of falsity in the declaration as to thecontents of a package the carrier should decide to examine it, he shall proceed with hisinvestigation in the presence of witnesses, with the shipper or consignee in attendance. Ifthe shipper or consignee who has to be cited does not attend, the examination shall bemade before a notary, who shall prepare a memorandum of the result of the investigation,for such purposes as may be proper. If the declaration of the shipper should be true, the

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expense occasioned by the examination and that of carefully repacking the packages shallbe for the account of the carrier and in a contrary case for the account of the shipper.

Note: [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 inthe 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 or

aircraft'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 othernecessity 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 bythe examining official to contain any article not specified in the invoice or entry, including all

other 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 personarriving 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 the

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importation 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 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 that

at 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 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 whichusage 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 to

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sell 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 mayhave 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.



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 receivethose which are sound, this segregation to be made by distinct and separate pieces andwithout dividing a single object, unless the consignee proves the impossibility of

conveniently making use of them in this form. cdt The same rule shall be applied tomerchandise in bales or packages, separating those parcels which appear sound.

ARTICLE 366. Within the twenty-four hours following the receipt of the merchandise, theclaim against the carrier for damage or average be found therein upon opening thepackages, may be made, provided that the indications of the damage or average whichgives rise to the claim cannot be ascertained from the outside part of such packages, inwhich case the claim shall be admitted only at the time of receipt. After the periodsmentioned have elapsed, or the transportation charges have been paid, no claim shall beadmitted against the carrier with regard to the condition in which the goods transportedwere delivered.

ARTICLE 367. If doubts and disputes should arise between the consignee and the carrierwith respect to the condition of the goods transported at the time their delivery to the formeris made, the goods shall be examined by experts appointed by the parties, and, in case ofdisagreement, by a third one appointed by the judicial authority, the results to be reduced towriting; and if the interested parties should not agree with the expert opinion and they do notsettle their differences, the merchandise shall be deposited in a safe warehouse by order ofthe judicial authority, and they shall exercise their rights in the manner that may be proper.

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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 same

rule is to be observed in all other cases in which this indemnity may be due.


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

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until the moment of their delivery. This special right shall prescribe eight days after thedelivery has been made, and once prescribed, the carrier shall have no other action thanthat corresponding to him as an ordinary creditor.











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Note:


a. "Maritime Industry", briefly referred to as "industry" in the broadest concept of the term. All enterprises engaged in the business of designing, constructing, manufacturing,acquiring, operating, supplying, repairing and/or maintaining vessels, or component partsthereof; of managing and/or operating shipping lines, stevedoring arrastre and customsbrokerage services, shipyards, drydocks, marine railways, marine repair shops, shippingand freight forwarding agencies and similar enterprises.


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 thelaws 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 in

an enterprise, at least sixty percent of the members of the governing board of bothcorporations must be Philippine nationals.



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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, the

taking of the certificate of Philippine registry shall be optional with the owner.

"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 theMaritime 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 held

by 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 other means, the control of more thanforty percent of the capital or capital stock of the association or corporation is conferredupon or allowed to be exercised by any person not a citizen of the Philippines."

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CA 65











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)



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x. 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;

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

operators of public water services;

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

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

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

cc. 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;

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

ee. 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.

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

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


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



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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 the

purchaser, 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 thecontrary 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 purchase

and 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 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 cited

in order that they may take part in the proceedings on behalf of whoever may be concerned.


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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. If the part owners should not bemore than two, the disagreement of views, if any, shall be decided by the vote of themember having the largest interest. If the interests are equal, it should be decided by lot.The person having the smallest share in the ownership shall have one vote; andproportionately the other part owners as many votes as they have parts equal to the

smallest one. aisadc A vessel may not be detained, attached or levied upon in execution inits entirety, for the private debts of a part owner, but the proceedings shall be limited to theinterest which the debtor may have in the vessel, without interfering with the navigation





ARTICLE 607. If the captain who is a co-owner should have obtained the command of thevessel by virtue of a special agreement contained in the articles of association, he may notbe deprived of his office except for the causes mentioned in Article 605. ARTICLE 608. Incase of the voluntary sale of the vessel, all contracts between the ship agent and thecaptain shall terminate, reserving to the latter his right to the indemnity which may pertain tohim, according to the agreements made with the ship agent. They vessel sold shall remainsubject to the security of the payment of said indemnity if, after the action against thevendor has been instituted, the latter is found to be insolvent.

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ARTICLE 591. All the part owners shall be liable, in proportion to their respectiveownership, for the expenses for repairing the vessel, and for other expenses which areincurred by virtue of a resolution of the majority. They shall likewise be liable in the sameproportion for the expenses for the maintenance, equipment, and provisioning of the vessel,

necessary for navigation.




ARTICLE 596. The ship agent may discharge the duties of captain of the vessel, subject inevery case to the provision of Article 609. If two or more co-owners apply for the position ofcaptain, the disagreement shall be decided by a vote of the members; and if the vote shouldresult in a tie, it shall be decided in favor of the co-owner having the larger interest in thevessel. If the interests of the applicants should be equal, and there should be a tie, thematter shall be decided by lot.

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ARTICLE 603. Before the vessel sets out to sea the ship agent may at his discretiondischarge 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 withoutany indemnity whatsoever, unless there is an express and specific agreement in respect

thereto.



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 malice

or 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 amisdemeanor 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 and

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damages 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 byreason 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 652. A charter party must be drawn in duplicate and signed by the contracting

parties, and when either does not know how or is not able to do so, by two witnesses at 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 goods

of 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.


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ARTICLE 656. If in the charter party the time in which the loading and unloading are to take

place is not stated, the usages of the port where these acts take place shall be observed. After the stipulated or the customary period has passed, and there is no express proviso inthe 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, theshippers, after requiring the captain to charter a vessel within an inextendible period, may

charter one and petition the judicial authority to summarily approve the charter party 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 following

rules 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 iscontained.

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. cdt

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The 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 662. If the vessel or the merchandise should be redeemed, or the effects of the

shipwreck be salvaged, the freightage corresponding to the distance covered by the vesseltransporting the cargo shall be paid; and should the vessel, after being repaired, transportsaid merchandise to the port of destination, the full freightage shall be paid, withoutprejudice to what may be due by reason of the average.



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.



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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 whatmay 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.


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 thecontract, 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 they

wish, in proportion to the amounts of weight or space for which each may have contracted,and the person from whom the vessel was chartered shall 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 the

loading 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 ischartered 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 vessel

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designated 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 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 themeantime, 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 shall

make 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 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 any

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instructions, 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.





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 be

liable 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.




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ARTICLE 688. A charter party may be rescinded at the request of the charterer: 1. If beforeloading the vessel he should not agree with that stated in the certificate of tonnage, or if

there should be an error in the statement of the flag under which she sails. 2. If the vesselshould not be placed at the disposal of the charterer within the period and in the manneragreed upon. 3. If after the vessel has put to sea, she should return to the port of departure,on account of risk from pirates, enemies, or bad weather, and the shippers should agree tounload her. In the second and third cases the person from whom the vessel was charteredshall indemnify the charterer for the voyage out. 4. If the charter should have been made bythe months, the charterers shall pay the full freightage for one month, if the voyage is for aport in the same waters, and for two months, if for a port in different waters. From one portto another of the Philippines and adjacent islands, the freightage for one month only shallbe paid. 5. If the vessel should make a port during the voyage in order to make urgentrepairs, and the charterers should prefer to dispose of the merchandise. When the delaydoes not exceed thirty days, the shippers shall pay the full freightage for the voyage out.

Should the delay exceed thirty days, they shall only pay the freightage in proportion to thedistance covered by the vessel.

ARTICLE 689. At the request of the person from whom the vessel is chartered the charterparty may be rescinded: 1. If the charterer, at the termination of the extra lay days, does notplace the cargo alongside the vessel. In such case the charterer must pay half the freightstipulated, besides the demurrage due for the lay days and extra lay days. 2. If the personfrom whom the vessel was chartered should sell it before the charterer has begun to load it,and the purchaser should load it for his own account. In such case the vendor shallindemnify the charterer for the losses he may suffer. If the new owner of the vessel shouldnot load it for his own account, the charter party shall be respected, and the vendor shall

indemnify the purchaser if the former did not inform him of the charter pending at the time ofmaking the sale.

ARTICLE 690. The charter party shall be rescinded and all actions arising therefrom shallbe extinguished, if, before the vessel puts to sea from the port of departure, any of thefollowing cases should occur: 1. A declaration of war or interdiction of commerce with thepower to whose ports the vessel was to make its voyage. 2. A condition of blockade of theport of destination of said vessel, or the breaking out of an epidemic after the contract wasexecuted. 3. The prohibition to receive at the said port the merchandise constituting the

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cargo of the vessel. 4. An indefinite detention, by reason of an embargo of the vessel byorder of the government, or for any other reason independent of the will of the ship agent. 5.The inability of the vessel to navigate, without fault of the captain or ship agent. Theunloading shall be made for the account of the charterer.

ARTICLE 691. If the vessel cannot put to sea on account of the closing of the port ofdeparture or any other temporary cause, the charter shall remain in force, with neither oneof the contracting parties having a right to claim damages. The subsistence and wages ofthe crew shall be considered as general average. During the interruption, the charterer mayat the proper time and for his own account, unload and load the merchandise, payingdemurrage if he delays the reloading after the cause for the detention has ceased.

ARTICLE 692. A charter party shall be partially rescinded, unless there is an agreement tothe contrary, and the captain shall only be entitled to the freightage for the voyage out, if, byreason of a declaration of war, closing of ports, or interdiction of commercial relations duringthe voyage, the vessel should make the port designated for such a case in the instructionsof the charterer.

BILLS OF LADING ARTICLE

706. The captain of the vessel and the shipper shall have the obligation of drawing up thebill of lading in which shall be stated: 1. The name, registry, and tonnage of the vessel. 2.The name of the captain and his domicile. 3. The port of loading and that of unloading. 4.The name of the shipper. 5. The name of the consignee, if the bill of lading is issued in thename of a specified person. 6. The quantity, quality, number of packages and marks of themerchandise. 7. The freightage and the primage stipulated. The bill of lading may be issuedto bearer, to order, or in the name of a specified person, and must be signed within twenty-four hours after the cargo has been received on board, the shipper being entitled to demandthe unloading at the expense of the captain should the latter not sign it, and, in every case,the losses and damages suffered thereby. cdasia

ARTICLE 707. Four true copies of the original bill of lading shall be made, and all of themshall be signed by the captain and the shipper. Of these, the shipper shall keep one andsend another to the consignee; the captain shall take two, one for himself and another forthe ship agent. There may also be drawn up as many copies of the bill of lading as may beconsidered necessary by the person interested; but when they are issued to order or tobearer, they shall be stated in all the copies, be they the first four or the subsequent ones,the destination of each one, stating whether it is for the agent, for the captain, for theshipper, or for the consignee. If the copy sent to the latter should have a duplicate, thiscircumstance and the fact that it is not valid except in default of the first one must be statedtherein.


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ARTICLE 712. The captain may not by himself change the destination of the merchandise.In admitting this change at the instance of the shipper, he must first take up the bill of lading

which he may have issued, under pain of being liable for the cargo to the legitimate holderof the same.


ARTICLE 714. If before the vessel puts to sea the captain should die or should cease to

hold his position through any cause, the shippers shall have the right to demand of the newcaptain the ratification of the first bills of lading, and the latter must do so, provided that allthe copies previously issued be presented or returned to him, and it should appear from allexamination of the cargo that they are correct. The expenses arising from the examinationof the cargo shall be defrayed by the ship agent, without prejudice to the right of action ofthe latter against the first captain if he ceased to be such through his own fault. Should saidexamination not be made, it shall be understood that the new captain accepts the cargo asit appears from the bills of lading issued.

ARTICLE 715. Bills of lading will give rise to a most summary action or to judicial,compulsion ("accion sumarisima o de apremios"), according to the case, for the delivery of

the cargo and the payment of the freightage and the expenses thereby incurred.


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ARTICLE 580. In all judicial sales of any vessel for the payment of creditors, the followingshall have preference in the order stated 2 1. The credit in favor of the public treasuryproven by means of an official certificate of competent authority. 2. The judicial costs of theproceedings, according to an appraisement approved by the judge or court. 3. The pilotagecharges, tonnage dues, and the other sea or port charges, proven by means of propercertificates of the officers intrusted with the collection thereof. 4. The salaries of thedepositaries and keepers of the vessel and any other expenses for its preservation from thetime of arrival at the port until the sale, which appear to have been paid or be due by virtue

of an account verified and approved by the judge or court. cdtai 5. The rent of thewarehouse where the rigging and stores of the vessel have been taken care of, according tocontract. 6. The salaries due the captain and crew during its last voyage, which shall beverified by means of the liquidation to be made in view of the lists and of the books ofaccount of the vessel, approved by the chief of the Bureau of Merchant Marine, where thereis one, and in his absence by the consul or judge or court. 7. The reimbursement for thegoods of the freight which the captain may have sold in order to repair the vessel, providedthat the sale has been ordered through a judicial proceedings held with the formalitiesrequired in such cases, and recorded in the certificate of registry of the vessel. 8. The partof the price which has not been paid to the said vendor, the unpaid credits for materials andlabor in the construction of the vessel, when it has not navigated, and those arising from therepair and equipment of the vessels and from its provisioning with victuals and fuel during

the last voyage. In order that the credits provided for in this subdivision may enjoy thispreference, they must appear by contracts recorded in the registry of vessels, or if theywere contracted for the vessel while on a voyage and said vessel has not returned to theport where it is registered, they must be made with the authorization required for such casesand annotated in the certificate of registration of the vessel. cdtai 9. The amount borrowedon bottomry on the hull, keel, tackle, and stores of the vessel before its departure, provenby means of the contract executed according to law and recorded in the registry of vessels;those borrowed during the voyage with the authorization mentioned in the precedingsubdivision, satisfying the same requisites; and the insurance premium, proven by theinsurance policy or a certificate taken from the books of the broker. 10. The indemnity duethe shipper for the value of the goods shipped which were not delivered to the consignees,

or for averages suffered for which the vessel is liable, provided that either appear in a judicial or arbitration decision.


ARTICLE 582. After the bill of the judicial sale at public auction has been executed andinscribed in the registry of vessels, all the other liabilities of the vessel in favor of thecreditors shall be considered extinguished. But if the sale should have been voluntary and

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should have been made while the vessel was on a voyage, the creditors shall preserve theirrights against the vessel until it returns to the port of her registry, and three months after theinscription of the sale in the registry of vessel or the arrival.

ARTICLE 583. If while on a voyage the captain should find it necessary to contract one ormore of the obligations mentioned in subdivisions 8 and 9 of Article 580, he shall apply tothe judge or court if he is in Philippine territory, and otherwise to the consul of the Republicof the Philippines, should there be one, and, in his absence, to the judge or court or properlocal authority, presenting the certificate of the registration sheet treated of in Article 612and the instruments proving the obligation contracted. The judge or court, the consul, or thelocal authority, as the case may be, in view of the result of the proceedings instituted, shallmake a temporary memorandum of their result in the certificate, in order that it may berecorded in the registry when the vessel returns to the port of its registry, or so that it can beadmitted as a legal and preferred obligation in case of sale before its return, by reason ofthe sale of the vessel on account of a declaration of unseaworthiness. The omission of thisformality shall make the captain personally liable for the credits prejudiced on his account.



ARTICLE 621. A captain who borrows money on the hull, engine, rigging or tackle of the

vessel, or pledges or sells merchandise or provisions outside of the cases and without theformalities prescribed in this Code, shall be liable for the principal, interests, and costs, andshall indemnify for the damages he may cause. He who commits fraud in his accounts shallpay the amount defrauded and shall be subject to the provisions of the Penal Code.


ARTICLE 720. Loans on bottomry or respondentia may be executed: 1. By means of apublic instrument. 2. By means of a policy signed by the contracting parties and the brokertaking part therein. cdt 3. By means of a private instrument. Under whichever of these formsthe contract is executed, it shall be entered in the certificate of the registry of the vessel andshall be recorded in the registry of vessels, without which requisites the credits of this kindshall not have, with regard to other credits, the preference which, according to their nature,they should have, although the obligation shall be valid between the contracting parties. Thecontracts made during a voyage shall be governed by the provisions of Articles 583 and611, and shall be effective with regard to third persons from the date of their execution, if

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they should be recorded in the registry of vessels of the port of registry of the vessel beforethe lapse of eight days following its arrival. If said eight days should elapse without therecord having been made in the corresponding registry, the contracts made during thevoyage of a vessel shall produce no effect with regard to third persons, except from the dayand date of their inscription. In order that the policy of the contracts executed in accordancewith No. 2 may have binding force, they must conform to the registry of the broker who tookpart therein. With respect to those executed in accordance with No. 3 the acknowledgmentof the signature shall be required. Contracts which are not reduced to writing shall not giverise to judicial action.




ARTICLE 724. The loans may be constituted jointly or separately: 1. On the hull of thevessel. 2. On the rigging. 3. On the equipment, provisions, and fuel. 4. On the engine, if thevessel is a steamer. 5. On the merchandise loaded. If the loan in constituted on the hull ofthe vessel, the rigging, equipment and other goods, provisions, fuel, steam engines, and thefreightage earned during the voyage on which the loan is made shall also be considered as

included in the liability for the loan. cdtai If the loan is made on the cargo, all that whichconstitutes the same shall be subject to the repayment; and if on a particular object of thevessel or of the cargo, only the object concretely and specifically mentioned shall be liable.

Note: [ARTICLE 617. The captain may not contract loans on respondentia secured by thecargo; and should he do so, the contracts shall be void. Neither may he borrow money onbottomry for his own transactions, except on the portion of the vessel he owns, provided nomoney has been previously borrowed on the whole vessel, and there does not exist anyother kind of lien or obligation chargeable against the vessel. If he may do so, he must statewhat interest he has in the vessel. In case of violation of this article, the principal, interest,and costs shall be for the personal account of the captain, and the ship agent may

furthermore discharge him. ARTICLE 621. A captain who borrows money on the hull,engine, rigging or tackle of the vessel, or pledges or sells merchandise or provisions outsideof the cases and without the formalities prescribed in this Code, shall be liable for theprincipal, interests, and costs, and shall indemnify for the damages he may cause. He whocommits fraud in his accounts shall pay the amount defrauded and shall be subject to theprovisions of the Penal Code.]

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ARTICLE 728. The loan which the captain takes at the point of residence of the owners ofthe vessel shall only affect that part thereof which belongs to the captain, if the other ownersor their agents should not have given their express authorization therefor or should not havetaken part in the transaction. If one or more of the owners should be requested to furnish

the amount necessary to repair or provision the vessel, and they should not do so withintwenty-four hours, the interest which the parties in default may have in the vessel shall beliable for the loan in the proper proportion. Outside of the residence of the owners thecaptain may contract loans in accordance with the provisions of Articles 583 and 611.


ARTICLE 730. Loans made during the voyage shall have preference over those madebefore the clearing of the vessel, and they shall be graduated in the inverse order of theirdates. The loans for the last voyage shall have preference over prior ones. Should several

loans have been made at the same port of arrival under stress and for the same purpose,all of them shall be paid pro rata.

ARTICLE 731. The actions pertaining to the lender shall be extinguished by the absoluteloss of the goods on which the loan was made, if it arose from an accident of the sea at thetime and during the voyage designated in the contract, and it is proven that the cargo wason board; but this shall not take place if the loss was caused by the inherent defect of thething, or through the fault or malice, of the borrower, or barratry on the part of the captain, orif it was caused by damages suffered by the vessel as a consequence of being engaged incontraband, or if it arose from having loaded the merchandise on a vessel different from thatdesignated in the contract, unless this change should have been made by reason of force

majeure. Proof of the loss as well as of the existence in the vessel of the goods declared tothe lender as the object of the loan is incumbent upon him who received the loan.


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Article 580.



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,

though foreseen, were inevitable. (1105a)



Such extraordinary diligence in the vigilance over the goods is further expressed in articles 1734, 1735,

and 1745, Nos. 5, 6, and 7, while the extraordinary diligence for the safety of the passengers is further setforth in articles 1755 and 1756.


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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 of

notices, by statements on tickets, or otherwise.




Article 1762. The contributory negligence of the passenger does not bar recovery of

damages 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 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 have

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acted beyond the scope of their authority or in violation of the orders of the commoncarriers.











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 reserved

notwithstanding the delivery of the goods to the buyer or to a carrier or other bailee for thepurpose of transmission to the buyer.



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Article 1511. A document of title which is not in such form that it can be negotiated by

delivery 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)



(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 such

form that it may be negotiated by delivery. (n)


(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 the

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person 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


appears. The negotiation shall take effect as of the time when the indorsement is actuallymade. (n)











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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 common

carrier must exercise due diligence to forestall or lessen the loss.












(6) That the common carrier's liability for acts committed by thieves, or of robbers who do

not act with grave or irresistible threat, violence or force, is dispensed with or diminished;


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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 under

the circumstances, and has been fairly and freely agreed upon.








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Code of commerce





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 passengers

shall 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 apassenger 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, passengers

requesting 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,

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ARTICLE 350. The shipper as well as the carrier of merchandise or goods may mutually

demand 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 inwhich 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 of

shipment 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 herequests; 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.



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ARTICLE 357. If by reason of well-founded suspicion of falsity in the declaration as to thecontents of a package the carrier should decide to examine it, he shall proceed with hisinvestigation in the presence of witnesses, with the shipper or consignee in attendance. Ifthe shipper or consignee who has to be cited does not attend, the examination shall bemade before a notary, who shall prepare a memorandum of the result of the investigation,for such purposes as may be proper. If the declaration of the shipper should be true, theexpense occasioned by the examination and that of carefully repacking the packages shallbe for the account of the carrier and in a contrary case for the account of the shipper.

Note: [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 in

the 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 inthe 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 or

aircraft'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 othernecessity 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 to

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be 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 bythe 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 personarriving 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 forfeiture

shall 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.]




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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 they

arose through his negligence or by reason of his having failed to take the precautions whichusage 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 any

damage or impairment, and failing to do so, to pay the value which those not delivered mayhave 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.



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 foregoing

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provision shall be applicable with respect to those damaged and the consignee shall receivethose 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. cdt The same rule shall be applied tomerchandise in bales or packages, separating those parcels which appear sound.


ARTICLE 367. If doubts and disputes should arise between the consignee and the carrierwith respect to the condition of the goods transported at the time their delivery to the former

is made, the goods shall be examined by experts appointed by the parties, and, in case ofdisagreement, by a third one appointed by the judicial authority, the results to be reduced towriting; and if the interested parties should not agree with the expert opinion and they do notsettle their differences, the merchandise shall be deposited in a safe warehouse by order ofthe judicial authority, and they shall exercise their rights in the manner that may be proper.


ARTICLE 369. If the consignee cannot be found at the residence indicated in the bill of

lading, 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.




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 or

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mislaid. 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 374. The consignees to whom the shipment was made may not defer thepayment of the expenses and transportation charges of the goods they receive after the

lapse 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.


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 well

as 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 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 by

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the bankruptcy of the latter, provided it is claimed within the eight days mentioned in thepreceding article.


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 oflading.



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 inscribed

in 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:



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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 thelaws 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 both

corporations must be Philippine nationals.






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 be

issued 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.

"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:

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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 theMaritime 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 obligation

in 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 other means, the control of more thanforty percent of the capital or capital stock of the association or corporation is conferredupon or allowed to be exercised by any person not a citizen of the Philippines."


CA 65







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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)


jj. 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;

kk. Establish, prescribe and regulate routes, zones and/or areas of operation of particularoperators of public water services;

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

mm. Register vessels as well as issue certificates, licenses or documents necessary orincident thereto;

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

oo. 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;

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

qq. 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 are

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established 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.

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

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


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




ARTICLE 575. Co-owners of vessels shall have the right of repurchase and redemption in

sales made to strangers, but they may exercise the same only within the nine days followingthe inscription of the sale in the registry, and by depositing the price at the same time.




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ARTICLE 579. After the damage to the vessel and the impossibility of her being repaired, in

order 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 thecommon 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 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. If the part owners should not bemore than two, the disagreement of views, if any, shall be decided by the vote of themember having the largest interest. If the interests are equal, it should be decided by lot.The person having the smallest share in the ownership shall have one vote; andproportionately the other part owners as many votes as they have parts equal to the

smallest one. aisadc A vessel may not be detained, attached or levied upon in execution inits entirety, for the private debts of a part owner, but the proceedings shall be limited to theinterest which the debtor may have in the vessel, without interfering with the navigation


judicial appraisement of the value of the portion or portions assigned. The resolutions of themajority relating to the dissolution of the partnership and sale of the vessel shall also be

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binding on the minority. The sale of the vessel must be made at public auction, subject tothe provisions of the law of civil procedure, unless the co-owners unanimously agreeotherwise, saying always the right of repurchase and redemption provided for in Article 575.



ARTICLE 607. If the captain who is a co-owner should have obtained the command of thevessel by virtue of a special agreement contained in the articles of association, he may notbe deprived of his office except for the causes mentioned in Article 605. ARTICLE 608. In

case of the voluntary sale of the vessel, all contracts between the ship agent and thecaptain shall terminate, reserving to the latter his right to the indemnity which may pertain tohim, according to the agreements made with the ship agent. They vessel sold shall remainsubject to the security of the payment of said indemnity if, after the action against thevendor has been instituted, the latter is found to be insolvent.


ARTICLE 586. The shipowner and the ship agent shall be civilly liable for the acts of thecaptain and for the obligations contracted by the latter to repair, equip, and provision thevessel, provided the creditor proves that the amount claimed was invested for the benefit of

the same. By ship agent is understood the person entrusted with provisioning orrepresenting the vessel in the port in which it may be found.





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ARTICLE 596. The ship agent may discharge the duties of captain of the vessel, subject in

every case to the provision of Article 609. If two or more co-owners apply for the position ofcaptain, the disagreement shall be decided by a vote of the members; and if the vote shouldresult in a tie, it shall be decided in favor of the co-owner having the larger interest in thevessel. If the interests of the applicants should be equal, and there should be a tie, thematter shall be decided by lot.


ARTICLE 599. The ship agent managing for an association shall render to his associates an

account 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.




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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 amisdemeanor 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 taking

a 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 byreason 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 expressly

agreed upon.


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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 and

unloading. 11. The lay days and extra lay days to be allowed and the demurrage to be paidfor each of them.


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 notacknowledged, 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 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 inthe 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 cargo

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and 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, theshippers, 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 charters

made 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 iscontained.

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 the

vessel arrives at her destination, and in proportion to the distance covered if she should belost before arrival.





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ARTICLE 667. The goods loaded shall be liable in the first place for the freight and

expenses thereof during twenty days, to be counted from the date of their delivery ordeposit. 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


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 whatmay 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.


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 the

captain should contract to carry a greater amount of cargo than the vessel can carry in viewof 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 the

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cargo contracted for cannot be loaded, and none of the charterers desires to rescind thecontract, 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 proportionate

conditions to those accepted for the freight received, the person from whom the vessel ischartered 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 672. If the vessel has been chartered in whole, the captain may not, without the

consent of the charterer, accept cargo from any other person; and should he do so, saidcharterer may oblige him to unload it and to indemnify him for the losses suffered thereby.



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 vessel

would be thrown out of trim, the captain must refuse it or unload it at the expense of itsowner. 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, the

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lay days agreed upon or those allowed by custom in the port beginning to run in themeantime, 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 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. In

such case the captain must proceed to the nearest safe and neutral port, requesting andawaiting 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 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 the

difference, should there be any.


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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 at

the port of destination, he shall pay the full freightage, the expenses of the arrival made athis request, and the losses and damages caused the other shippers, should there be any.


ARTICLE 686. After the vessel has been unloaded and the cargo placed at the disposal ofthe consignee, the latter must immediately pay the captain the freightage due and the otherexpenses for which said cargo may be liable. The primage must be paid in the sameproportion and at the same time as the freightage, all the changes and modifications to

which the latter should be subject also governing the former.



ARTICLE 688. A charter party may be rescinded at the request of the charterer: 1. If before

loading the vessel he should not agree with that stated in the certificate of tonnage, or ifthere should be an error in the statement of the flag under which she sails. 2. If the vesselshould not be placed at the disposal of the charterer within the period and in the manneragreed upon. 3. If after the vessel has put to sea, she should return to the port of departure,on account of risk from pirates, enemies, or bad weather, and the shippers should agree tounload her. In the second and third cases the person from whom the vessel was charteredshall indemnify the charterer for the voyage out. 4. If the charter should have been made bythe months, the charterers shall pay the full freightage for one month, if the voyage is for aport in the same waters, and for two months, if for a port in different waters. From one port

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to another of the Philippines and adjacent islands, the freightage for one month only shallbe paid. 5. If the vessel should make a port during the voyage in order to make urgentrepairs, and the charterers should prefer to dispose of the merchandise. When the delaydoes not exceed thirty days, the shippers shall pay the full freightage for the voyage out.Should the delay exceed thirty days, they shall only pay the freightage in proportion to thedistance covered by the vessel.

ARTICLE 689. At the request of the person from whom the vessel is chartered the charterparty may be rescinded: 1. If the charterer, at the termination of the extra lay days, does notplace the cargo alongside the vessel. In such case the charterer must pay half the freightstipulated, besides the demurrage due for the lay days and extra lay days. 2. If the personshipper, or for the consignee. If the copy sent to the latter should have a duplicate, thiscircumstance and the fact that it is not valid except in default of the first one must be statedtherein.

ARTICLE 708. Bills of lading issued to bearer and sent to the consignee shall betransferable by actual delivery of the instrument; and those issued to order, by virtue of an

indorsement. In either case, the person to whom the bill of lading is transferred shall acquireall the rights and actions of the transferor or indorser with regard to the merchandisementioned in the same.







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ARTICLE 714. If before the vessel puts to sea the captain should die or should cease tohold his position through any cause, the shippers shall have the right to demand of the newcaptain the ratification of the first bills of lading, and the latter must do so, provided that allthe copies previously issued be presented or returned to him, and it should appear from allexamination of the cargo that they are correct. The expenses arising from the examinationof the cargo shall be defrayed by the ship agent, without prejudice to the right of action ofthe latter against the first captain if he ceased to be such through his own fault. Should saidexamination not be made, it shall be understood that the new captain accepts the cargo asit appears from the bills of lading issued.


ARTICLE 716. If several persons should present bills of lading issued to bearer or to order,indorsed in their favor, demanding the same merchandise, the captain shall prefer, inmaking delivery the person who presents the copy first issued, except when the latter one

was issued on proof of the loss of the first, and both are presented by different persons. Insuch case, as well as when only second subsequent copies, issued without this proof, arepresented, the captain shall apply to the judge or court, so that he may order the deposit ofthe merchandise and their delivery, through him, to the proper person.



consignee shall make him liable for the damages which such delay may cause the captain. ARTICLE 580. In all judicial sales of any vessel for the payment of creditors, the followingshall have preference in the order stated 2 1. The credit in favor of the public treasuryproven by means of an official certificate of competent authority. 2. The judicial costs of theproceedings, according to an appraisement approved by the judge or court. 3. The pilotagecharges, tonnage dues, and the other sea or port charges, proven by means of propercertificates of the officers intrusted with the collection thereof. 4. The salaries of thedepositaries and keepers of the vessel and any other expenses for its preservation from thetime of arrival at the port until the sale, which appear to have been paid or be due by virtueof an account verified and approved by the judge or court. cdtai 5. The rent of thewarehouse where the rigging and stores of the vessel have been taken care of, according to

contract. 6. The salaries due the captain and crew during its last voyage, which shall beverified by means of the liquidation to be made in view of the lists and of the books ofaccount of the vessel, approved by the chief of the Bureau of Merchant Marine, where thereis one, and in his absence by the consul or judge or court. 7. The reimbursement for thegoods of the freight which the captain may have sold in order to repair the vessel, providedthat the sale has been ordered through a judicial proceedings held with the formalitiesrequired in such cases, and recorded in the certificate of registry of the vessel. 8. The partof the price which has not been paid to the said vendor, the unpaid credits for materials andlabor in the construction of the vessel, when it has not navigated, and those arising from the

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repair and equipment of the vessels and from its provisioning with victuals and fuel duringthe last voyage. In order that the credits provided for in this subdivision may enjoy thispreference, they must appear by contracts recorded in the registry of vessels, or if theywere contracted for the vessel while on a voyage and said vessel has not returned to theport where it is registered, they must be made with the authorization required for such casesand annotated in the certificate of registration of the vessel. cdtai 9. The amount borrowedon bottomry on the hull, keel, tackle, and stores of the vessel before its departure, provenby means of the contract executed according to law and recorded in the registry of vessels;those borrowed during the voyage with the authorization mentioned in the precedingsubdivision, satisfying the same requisites; and the insurance premium, proven by theinsurance policy or a certificate taken from the books of the broker. 10. The indemnity duethe shipper for the value of the goods shipped which were not delivered to the consignees,or for averages suffered for which the vessel is liable, provided that either appear in a






ARTICLE 584. The vessels subject to liability for the credits mentioned in Article 580 maybe attached and judicially sold in the manner prescribed in Article 579, in the port in which

they may be found, at the instance of any of the creditors; but if they should be loaded andready to sail, the attachment may not be effected except for debts contracted to prepareand provision the vessel for the same voyage, and even then the attachment shall bedissolved if any person interested in its sailing should give a bond for the return of thevessel within the period fixed in the certificate of navigation binding himself to pay theindebtedness insofar as it may be legal, should it fail to do so, even if this failure be due tofortuitous event. For debts of any other kind whatsoever not comprised within the said


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ARTICLE 720. Loans on bottomry or respondentia may be executed: 1. By means of apublic instrument. 2. By means of a policy signed by the contracting parties and the brokertaking part therein. cdt 3. By means of a private instrument. Under whichever of these formsthe contract is executed, it shall be entered in the certificate of the registry of the vessel andshall be recorded in the registry of vessels, without which requisites the credits of this kind

shall not have, with regard to other credits, the preference which, according to their nature,they should have, although the obligation shall be valid between the contracting parties. Thecontracts made during a voyage shall be governed by the provisions of Articles 583 and611, and shall be effective with regard to third persons from the date of their execution, ifthey should be recorded in the registry of vessels of the port of registry of the vessel beforethe lapse of eight days following its arrival. If said eight days should elapse without therecord having been made in the corresponding registry, the contracts made during thevoyage of a vessel shall produce no effect with regard to third persons, except from the dayand date of their inscription. In order that the policy of the contracts executed in accordancewith No. 2 may have binding force, they must conform to the registry of the broker who tookpart therein. With respect to those executed in accordance with No. 3 the acknowledgmentof the signature shall be required. Contracts which are not reduced to writing shall not give



ARTICLE 722. The contract may be made to order, in which case they shall be transferableby indorsement, and the indorsee shall acquire all the rights and shall incur all the risks

corresponding to the indorser.


ARTICLE 724. The loans may be constituted jointly or separately: 1. On the hull of thevessel. 2. On the rigging. 3. On the equipment, provisions, and fuel. 4. On the engine, if thevessel is a steamer. 5. On the merchandise loaded. If the loan in constituted on the hull ofthe vessel, the rigging, equipment and other goods, provisions, fuel, steam engines, and the

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freightage earned during the voyage on which the loan is made shall also be considered asincluded in the liability for the loan. cdtai If the loan is made on the cargo, all that whichconstitutes the same shall be subject to the repayment; and if on a particular object of thevessel or of the cargo, only the object concretely and specifically mentioned shall be liable.

Note: [ARTICLE 617. The captain may not contract loans on respondentia secured by thecargo; and should he do so, the contracts shall be void. Neither may he borrow money onbottomry for his own transactions, except on the portion of the vessel he owns, provided nomoney has been previously borrowed on the whole vessel, and there does not exist anyother kind of lien or obligation chargeable against the vessel. If he may do so, he must statewhat interest he has in the vessel. In case of violation of this article, the principal, interest,and costs shall be for the personal account of the captain, and the ship agent mayfurthermore discharge him. ARTICLE 621. A captain who borrows money on the hull,engine, rigging or tackle of the vessel, or pledges or sells merchandise or provisions outsideof the cases and without the formalities prescribed in this Code, shall be liable for theprincipal, interests, and costs, and shall indemnify for the damages he may cause. He whocommits fraud in his accounts shall pay the amount defrauded and shall be subject to the

provisions of the Penal Code.]




ARTICLE 728. The loan which the captain takes at the point of residence of the owners ofthe vessel shall only affect that part thereof which belongs to the captain, if the other ownersor their agents should not have given their express authorization therefor or should not havetaken part in the transaction. If one or more of the owners should be requested to furnishthe amount necessary to repair or provision the vessel, and they should not do so withintwenty-four hours, the interest which the parties in default may have in the vessel shall beliable for the loan in the proper proportion. Outside of the residence of the owners the

captain may contract loans in accordance with the provisions of Articles 583 and 611.



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ARTICLE 731. The actions pertaining to the lender shall be extinguished by the absoluteloss of the goods on which the loan was made, if it arose from an accident of the sea at thetime and during the voyage designated in the contract, and it is proven that the cargo wason board; but this shall not take place if the loss was caused by the inherent defect of thething, or through the fault or malice, of the borrower, or barratry on the part of the captain, orif it was caused by damages suffered by the vessel as a consequence of being engaged incontraband, or if it arose from having loaded the merchandise on a vessel different from thatdesignated in the contract, unless this change should have been made by reason of forcemajeure. Proof of the loss as well as of the existence in the vessel of the goods declared tothe lender as the object of the loan is incumbent upon him who received the loan.

ARTICLE 732. Lenders on bottomry or respondentia shall suffer, in proportion to theirrespective interest, the general average which may take place in the goods on which theloan is made. In particular averages, in the absence of an express agreement between the

contracting parties, the lender on bottomry or respondentia shall also contribute inproportion to his respective interest, should it not belong to the kind of risks excepted in theforegoing article.





Article 580.



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,

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no person shall be responsible for those events which could not be foreseen, or which,though foreseen, were inevitable. (1105a)





regard for all the circumstances.







Article 1766. In all matters not regulated by this Code, the rights and obligations of

common carriers shall be governed by the Code of Commerce and by special laws.


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(1) "Document of title to goods" includes any bill of lading, dock warrant, "quedan," or warehouse

receipt 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.



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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 orderof 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-

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negotiable document cannot be negotiated and the indorsement of such a document givesthe transferee no additional right. (n)










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


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Article 1517. The indorsement of a document of title shall not make the indorser liable for

any failure on the part of the bailee who issued the document or previous indorsers thereofto fulfill their respective obligations. (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 orin equity in regard to property which cannot readily be attached or levied upon by ordinary

legal process. (n)




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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 provisions

of article 1738.



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 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 latter

shall be liable in damages, which however, shall be equitably reduced.



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(2) That the common carrier will not be liable for any loss, destruction, or deterioration of the

goods;









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Article 1755. A common carrier is bound to carry the passengers safely as far as human

care and foresight can provide, using the utmost diligence of very cautious persons, with adue regard for all the circumstances.



Article 1758. When a passenger is carried gratuitously, a stipulation limiting the common

carrier's liability for negligence is valid, but not for wilful acts or gross negligence.



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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 could

have prevented or stopped the act or omission.







Code of commerce

PART 5 PASSENGERS ON SEA VOYAGES

ARTICLE 693. If the passage price has not been agreed upon, the judge or court shallsummarily fix it, after a declaration of experts.


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ARTICLE 698. In case a voyage already begun should be interrupted, the passengers shall

be obliged to pay the fare in proportion to the distance covered, without right to recover 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 apassenger 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 them





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 of

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necessity, to furnish the supply of food necessary for their sustenance at a reasonableprice.



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 members

of the crew.



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 and

residence 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 inwhich 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 special

conditions of the carriage, to the schedules and regulations the application of which herequests; 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, with

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respect to the baggage, the number and weight of the packages, with such othermanifestations which may be considered necessary for their easy identification.


ARTICLE 354. In the absence of a bill of lading, disputes shall be determined by the legalproofs which the parties may present in support of their respective claims, according to the

general provisions established in this Code for commercial contracts. cd



ARTICLE 357. If by reason of well-founded suspicion of falsity in the declaration as to the

contents of a package the carrier should decide to examine it, he shall proceed with hisinvestigation in the presence of witnesses, with the shipper or consignee in attendance. Ifthe shipper or consignee who has to be cited does not attend, the examination shall bemade before a notary, who shall prepare a memorandum of the result of the investigation,for such purposes as may be proper. If the declaration of the shipper should be true, theexpense occasioned by the examination and that of carefully repacking the packages shallbe for the account of the carrier and in a contrary case for the account of the shipper.


the 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 inthe 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 of

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the 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 othernecessity 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 bythe 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 personarriving 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.



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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 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 the

contract appears. The expenses which this change of consignment occasions shall be forthe account of the shipper.






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 of

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liquids and they have leaked out, nothing remaining in the containers but one-fourth part oftheir contents.]


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 receivethose 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. cdt The same rule shall be applied tomerchandise in bales or packages, separating those parcels which appear sound.







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Note:



b. "Vessels" or "Watercraft" Any barge, lighter, bulk carrier, passenger ship freighter, tanker,container ship, fishing boats or other artificial contrivance utilizing any source of motivepower, designed, used or capable of being used as a means of water transportationoperating either as common contract carrier, including fishing vessels covered under

Presidential Decree No. 43, except (1) those owned and/or operated by the Armed Forcesof the Philippines and by foreign governments for military purposes, and (ii) bancas,sailboats and other waterborne contrivance of less than three gross tons capacity and notmotorized.

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 thelaws 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 Philippine

nationals: 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.





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"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 hundred

and 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 theMaritime 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 other means, the control of more thanforty percent of the capital or capital stock of the association or corporation is conferredupon or allowed to be exercised by any person not a citizen of the Philippines."



CA 65


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vv. 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;

ww. Establish, prescribe and regulate routes, zones and/or areas of operation of particularoperators of public water services;

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

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

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

aaa. Enforce laws, prescribe and enforce rules and regulations, including penalties forviolations thereof, governing water transportation and the Philippine merchant marine, anddeputize the Philippine Coast Guard and other law enforcement agencies to effectivelydischarge these functions;

bbb. Undertake the issuance of licenses to qualified seamen and harbor, bay and riverpilots;

ccc. Determine, fix and/or prescribe charges and/or rates pertinent to the operation ofpublic water transport utilities, facilities and services except in cases where charges or ratesare established by international bodies or associations of which the Philippines is a

participating member or by bodies or associations recognized by the Philippine Government asthe proper arbiter of such charges or rates.

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

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


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



ARTICLE 574. Builders of vessels may employ the materials and follow, with respect to

their 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.


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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. If the part owners should not bemore than two, the disagreement of views, if any, shall be decided by the vote of themember having the largest interest. If the interests are equal, it should be decided by lot.The person having the smallest share in the ownership shall have one vote; andproportionately the other part owners as many votes as they have parts equal to thesmallest one. aisadc A vessel may not be detained, attached or levied upon in execution inits entirety, for the private debts of a part owner, but the proceedings shall be limited to theinterest which the debtor may have in the vessel, without interfering with the navigation





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 the

manner established in the law of civil procedure.




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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 amountsclaimed were invested for the benefit of the vessel, the responsibility therefor shall devolveupon its owner or agent


ARTICLE 591. All the part owners shall be liable, in proportion to their respective

ownership, for the expenses for repairing the vessel, and for other expenses which areincurred by virtue of a resolution of the majority. They shall likewise be liable in the sameproportion for the expenses for the maintenance, equipment, and provisioning of the vessel,necessary for navigation.


ARTICLE 595. The ship agent, whether he is at the same time the owner of the vessel, or amanager for an owner or for an association of co-owners, must have the capacity to tradeand must be recorded in the merchant's registry of the province. The ship agent shall

represent the ownership of the vessel, and may, in his own name and in such capacity, take judicial and extrajudicial steps in matters relating to commerce.


ARTICLE 597. The ship agent shall designate and come to terms with the captain, and shall

contract in the name of the owners, who shall be bound in all that refer to repairs, details ofequipment, armament, provisions of food and fuel, and freight of the vessel, and, in general,in all that relate to the requirements of navigation.


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ARTICLE 603. Before the vessel sets out to sea the ship agent may at his discretion

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



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 the

fulfillment 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.



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 byreason of his voluntarily entering a port other than that of his destination, outside of the

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cases 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.



TITLE THREE SPECIAL CONTRACTS OF MARITIME COMMERCE SECTION ONE

CHARTER PARTIES PART I FORMS AND EFFECTS OF CHARTER PARTIES

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.



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ARTICLE 659. The merchandise sold by the captain to pay for the necessary repairs to the

hull, 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.

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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 whatmay 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 of

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their condition or other circumstances the expenses of preservation and custody should bedisproportionate.


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 viewof 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 the


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 of

transfer 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 ischartered 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 she

is 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.


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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 the

port of departure, that the vessel was not in a condition to navigate at the time of receivingthe cargo.


ARTICLE 678. If the time necessary, in the opinion of the judge or court, to receive the

orders of the shipper should have elapse, without the captain having received 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.


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 refuse

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to 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 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 foreign

country, should order the merchandise to be unloaded, the expenses of unloading andreloading shall be for the account of the former.


ARTICLE 685. In charters for transportation of general freight, any of the shippers mayunload the merchandise before the beginning of the voyage, paying one-half of thefreightage, the expense of stowing and restowing the cargo, and any other damage which

for his reason he may cause the other shippers.


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ARTICLE 688. A charter party may be rescinded at the request of the charterer: 1. If beforeloading the vessel he should not agree with that stated in the certificate of tonnage, or ifthere should be an error in the statement of the flag under which she sails. 2. If the vesselshould not be placed at the disposal of the charterer within the period and in the manneragreed upon. 3. If after the vessel has put to sea, she should return to the port of departure,on account of risk from pirates, enemies, or bad weather, and the shippers should agree tounload her. In the second and third cases the person from whom the vessel was charteredshall indemnify the charterer for the voyage out. 4. If the charter should have been made bythe months, the charterers shall pay the full freightage for one month, if the voyage is for a

port in the same waters, and for two months, if for a port in different waters. From one portto another of the Philippines and adjacent islands, the freightage for one month only shallbe paid. 5. If the vessel should make a port during the voyage in order to make urgentrepairs, and the charterers should prefer to dispose of the merchandise. When the delaydoes not exceed thirty days, the shippers shall pay the full freightage for the voyage out.Should the delay exceed thirty days, they shall only pay the freightage in proportion to thedistance covered by the vessel.

ARTICLE 689. At the request of the person from whom the vessel is chartered the charterparty may be rescinded: 1. If the charterer, at the termination of the extra lay days, does notplace the cargo alongside the vessel. In such case the charterer must pay half the freightstipulated, besides the demurrage due for the lay days and extra lay days. 2. If the person

from whom the vessel was chartered should sell it before the charterer has begun to load it,and the purchaser should load it for his own account. In such case the vendor shallindemnify the charterer for the losses he may suffer. If the new owner of the vessel shouldnot load it for his own account, the charter party shall be respected, and the vendor shallindemnify the purchaser if the former did not inform him of the charter pending at the time ofmaking the sale.

ARTICLE 690. The charter party shall be rescinded and all actions arising therefrom shallbe extinguished, if, before the vessel puts to sea from the port of departure, any of thefollowing cases should occur: 1. A declaration of war or interdiction of commerce with thepower to whose ports the vessel was to make its voyage. 2. A condition of blockade of the

port of destination of said vessel, or the breaking out of an epidemic after the contract wasexecuted. 3. The prohibition to receive at the said port the merchandise constituting thecargo of the vessel. 4. An indefinite detention, by reason of an embargo of the vessel byorder of the government, or for any other reason independent of the will of the ship agent. 5.The inability of the vessel to navigate, without fault of the captain or ship agent. Theunloading shall be made for the account of the charterer.

ARTICLE 691. If the vessel cannot put to sea on account of the closing of the port ofdeparture or any other temporary cause, the charter shall remain in force, with neither one

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of the contracting parties having a right to claim damages. The subsistence and wages ofthe crew shall be considered as general average. During the interruption, the charterer mayat the proper time and for his own account, unload and load the merchandise, payingdemurrage if he delays the reloading after the cause for the detention has ceased.


706. The captain of the vessel and the shipper shall have the obligation of drawing up thebill of lading in which shall be stated: 1. The name, registry, and tonnage of the vessel. 2.The name of the captain and his domicile. 3. The port of loading and that of unloading. 4.The name of the shipper. 5. The name of the consignee, if the bill of lading is issued in thename of a specified person. 6. The quantity, quality, number of packages and marks of the

merchandise. 7. The freightage and the primage stipulated. The bill of lading may be issuedto bearer, to order, or in the name of a specified person, and must be signed within twenty-four hours after the cargo has been received on board, the shipper being entitled to demandthe unloading at the expense of the captain should the latter not sign it, and, in every case,the losses and damages suffered thereby. cdasia

ARTICLE 707. Four true copies of the original bill of lading shall be made, and all of themshall be signed by the captain and the shipper. Of these, the shipper shall keep one andsend another to the consignee; the captain shall take two, one for himself and another forthe ship agent. There may also be drawn up as many copies of the bill of lading as may beconsidered necessary by the person interested; but when they are issued to order or tobearer, they shall be stated in all the copies, be they the first four or the subsequent ones,

the destination of each one, stating whether it is for the agent, for the captain, for theshipper, or for the consignee. If the copy sent to the latter should have a duplicate, thiscircumstance and the fact that it is not valid except in default of the first one must be statedtherein.




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ARTICLE 713. If before the delivery of the cargo a new bill of lading should be demanded ofthe captain, on the allegation that the failure to present the previous ones is due to their lossor to any other just cause, he shall be obliged to issue it, provided that security for the valueof the cargo is given to his satisfaction, but without changing the consignment, and statingtherein the circumstances prescribed in the last paragraph of Article 707, under penalty,should he not so state, of being held liable for said cargo if improperly delivered through his

fault.






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ARTICLE 580. In all judicial sales of any vessel for the payment of creditors, the followingshall have preference in the order stated 2 1. The credit in favor of the public treasuryproven by means of an official certificate of competent authority. 2. The judicial costs of theproceedings, according to an appraisement approved by the judge or court. 3. The pilotagecharges, tonnage dues, and the other sea or port charges, proven by means of propercertificates of the officers intrusted with the collection thereof. 4. The salaries of thedepositaries and keepers of the vessel and any other expenses for its preservation from thetime of arrival at the port until the sale, which appear to have been paid or be due by virtueof an account verified and approved by the judge or court. cdtai 5. The rent of thewarehouse where the rigging and stores of the vessel have been taken care of, according tocontract. 6. The salaries due the captain and crew during its last voyage, which shall beverified by means of the liquidation to be made in view of the lists and of the books ofaccount of the vessel, approved by the chief of the Bureau of Merchant Marine, where thereis one, and in his absence by the consul or judge or court. 7. The reimbursement for thegoods of the freight which the captain may have sold in order to repair the vessel, providedthat the sale has been ordered through a judicial proceedings held with the formalitiesrequired in such cases, and recorded in the certificate of registry of the vessel. 8. The part

of the price which has not been paid to the said vendor, the unpaid credits for materials andlabor in the construction of the vessel, when it has not navigated, and those arising from therepair and equipment of the vessels and from its provisioning with victuals and fuel duringthe last voyage. In order that the credits provided for in this subdivision may enjoy thispreference, they must appear by contracts recorded in the registry of vessels, or if theywere contracted for the vessel while on a voyage and said vessel has not returned to theport where it is registered, they must be made with the authorization required for such casesand annotated in the certificate of registration of the vessel. cdtai 9. The amount borrowedon bottomry on the hull, keel, tackle, and stores of the vessel before its departure, provenby means of the contract executed according to law and recorded in the registry of vessels;those borrowed during the voyage with the authorization mentioned in the precedingsubdivision, satisfying the same requisites; and the insurance premium, proven by the

insurance policy or a certificate taken from the books of the broker. 10. The indemnity duethe shipper for the value of the goods shipped which were not delivered to the consignees,or for averages suffered for which the vessel is liable, provided that either appear in a





ARTICLE 583. If while on a voyage the captain should find it necessary to contract one ormore of the obligations mentioned in subdivisions 8 and 9 of Article 580, he shall apply tothe judge or court if he is in Philippine territory, and otherwise to the consul of the Republicof the Philippines, should there be one, and, in his absence, to the judge or court or properlocal authority, presenting the certificate of the registration sheet treated of in Article 612

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and the instruments proving the obligation contracted. The judge or court, the consul, or thelocal authority, as the case may be, in view of the result of the proceedings instituted, shallmake a temporary memorandum of their result in the certificate, in order that it may berecorded in the registry when the vessel returns to the port of its registry, or so that it can beadmitted as a legal and preferred obligation in case of sale before its return, by reason ofthe sale of the vessel on account of a declaration of unseaworthiness. The omission of thisformality shall make the captain personally liable for the credits prejudiced on his account.




SECTION TWO LOANS ON BOTTOMRY AND RESPONDENTIA ARTICLE 719. A loan in which under any condition whatever, the repayment of the sumloaned and of the premium stipulated depends upon the safe arrival in port of the goods onwhich it is made, or of the price they may receive in case of accident, shall be considered a

loan on bottomry or respondentia.



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ARTICLE 724. The loans may be constituted jointly or separately: 1. On the hull of thevessel. 2. On the rigging. 3. On the equipment, provisions, and fuel. 4. On the engine, if the

vessel is a steamer. 5. On the merchandise loaded. If the loan in constituted on the hull ofthe vessel, the rigging, equipment and other goods, provisions, fuel, steam engines, and thefreightage earned during the voyage on which the loan is made shall also be considered asincluded in the liability for the loan. cdtai If the loan is made on the cargo, all that whichconstitutes the same shall be subject to the repayment; and if on a particular object of thevessel or of the cargo, only the object concretely and specifically mentioned shall be liable.

Note: [ARTICLE 617. The captain may not contract loans on respondentia secured by thecargo; and should he do so, the contracts shall be void. Neither may he borrow money onbottomry for his own transactions, except on the portion of the vessel he owns, provided nomoney has been previously borrowed on the whole vessel, and there does not exist anyother kind of lien or obligation chargeable against the vessel. If he may do so, he must state

what interest he has in the vessel. In case of violation of this article, the principal, interest,and costs shall be for the personal account of the captain, and the ship agent mayfurthermore discharge him. ARTICLE 621. A captain who borrows money on the hull,engine, rigging or tackle of the vessel, or pledges or sells merchandise or provisions outsideof the cases and without the formalities prescribed in this Code, shall be liable for theprincipal, interests, and costs, and shall indemnify for the damages he may cause. He whocommits fraud in his accounts shall pay the amount defrauded and shall be subject to theprovisions of the Penal Code.]

ARTICLE 725. No loans on bottomry may be made on the salaries of the crew or on the

profits expected.


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ARTICLE 728. The loan which the captain takes at the point of residence of the owners ofthe vessel shall only affect that part thereof which belongs to the captain, if the other ownersor their agents should not have given their express authorization therefor or should not havetaken part in the transaction. If one or more of the owners should be requested to furnishthe amount necessary to repair or provision the vessel, and they should not do so withintwenty-four hours, the interest which the parties in default may have in the vessel shall beliable for the loan in the proper proportion. Outside of the residence of the owners thecaptain may contract loans in accordance with the provisions of Articles 583 and 611.



ARTICLE 731. The actions pertaining to the lender shall be extinguished by the absoluteloss of the goods on which the loan was made, if it arose from an accident of the sea at thetime and during the voyage designated in the contract, and it is proven that the cargo wason board; but this shall not take place if the loss was caused by the inherent defect of thething, or through the fault or malice, of the borrower, or barratry on the part of the captain, orif it was caused by damages suffered by the vessel as a consequence of being engaged in

contraband, or if it arose from having loaded the merchandise on a vessel different from thatdesignated in the contract, unless this change should have been made by reason of forcemajeure. Proof of the loss as well as of the existence in the vessel of the goods declared tothe lender as the object of the loan is incumbent upon him who received the loan.




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Article 580.





Article 1733. Common carriers, from the nature of their business and for reasons of public policy, arebound to observe extraordinary diligence in the vigilance over the goods and for the safety of the

passengers transported by them, according to all the circumstances of each case.



Article 1756. In case of death of or injuries to passengers, common carriers are presumed tohave been at fault or to have acted negligently, unless they prove that they observed

extraordinary diligence as prescribed in articles 1733 and 1755.



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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 holder

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may 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)






(2) By any person to whom the possession or custody of the document has been entrusted

by 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)


(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



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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

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)


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












Article 1739. In order that the common carrier may be exempted from responsibility, the naturaldisaster must have been the proximate and only cause of the loss. However, the common

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carrier 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.















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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 question

of whether or not a stipulation limiting the common carrier's liability is reasonable, just andin consonance with public policy.






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Code of commerce








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ARTICLE 357. If by reason of well-founded suspicion of falsity in the declaration as to thecontents of a package the carrier should decide to examine it, he shall proceed with hisinvestigation in the presence of witnesses, with the shipper or consignee in attendance. If

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the shipper or consignee who has to be cited does not attend, the examination shall bemade before a notary, who shall prepare a memorandum of the result of the investigation,for such purposes as may be proper. If the declaration of the shipper should be true, theexpense occasioned by the examination and that of carefully repacking the packages shallbe for the account of the carrier and in a contrary case for the account of the shipper.

Note: [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 inthe 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 or

aircraft 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 othernecessity 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 to

be 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 bythe 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 its

equipage 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 personarriving from abroad. chanrobles virtual law library (3) On the strength of a false declaration

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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 whichusage 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 they

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really 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 367. If doubts and disputes should arise between the consignee and the carrierwith respect to the condition of the goods transported at the time their delivery to the formeris made, the goods shall be examined by experts appointed by the parties, and, in case ofdisagreement, by a third one appointed by the judicial authority, the results to be reduced towriting; and if the interested parties should not agree with the expert opinion and they do not

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settle their differences, the merchandise shall be deposited in a safe warehouse by order ofthe judicial authority, and they shall exercise their rights in the manner that may be proper.



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 arising

therefrom.]




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 the

provisions 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


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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 particular

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and 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.



Note:




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 thelaws 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 pensions

or 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.


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"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 registry

issued 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 theMaritime Industry Authority consistent with public policy and with the view of its utility for

government 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 other means, the control of more than

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forty percent of the capital or capital stock of the association or corporation is conferredupon or allowed to be exercised by any person not a citizen of the Philippines."


CA 65







Article 1484. In a contract of sale of personal property the price of which is payable in

installments, the vendor may exercise any of the following remedies:






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hhh. Develop and formulate plans, policies, programs, projects, standards, specificationsand guidelines 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;

iii. Establish, prescribe and regulate routes, zones and/or areas of operation of particularoperators of public water services;

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

kkk. Register vessels as well as issue certificates, licenses or documents necessary orincident thereto;

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

seamen;

mmm. Enforce laws, prescribe and enforce rules and regulations, including penalties forviolations thereof, governing water transportation and the Philippine merchant marine, anddeputize the Philippine Coast Guard and other law enforcement agencies to effectivelydischarge these functions;

nnn. Undertake the issuance of licenses to qualified seamen and harbor, bay and riverpilots;

ooo. Determine, fix and/or prescribe charges and/or rates pertinent to the operation ofpublic water transport utilities, facilities and services except in cases where charges or rates

are established by international bodies or associations of which the Philippines is aparticipating member or by bodies or associations recognized by the Philippine Government asthe proper arbiter of such charges or rates.

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

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


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


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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 as

included 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.





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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 thecommon 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 592. The resolution of the majority with regard to the repair, equipment, and

provisioning of the vessel in the port of departure shall bind the minority, unless the minoritymembers renounce their interests, which must be acquired by the other co-owners, after a


ARTICLE 593. The owners of a vessel shall have preference in her charter over otherpersons, under the same conditions and price. If two or more of them should claim this right,the one having the greater interest shall be preferred; and should they have equal interests,

the matter shall be decided by lot.


ARTICLE 607. If the captain who is a co-owner should have obtained the command of thevessel by virtue of a special agreement contained in the articles of association, he may not

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be deprived of his office except for the causes mentioned in Article 605. ARTICLE 608. Incase of the voluntary sale of the vessel, all contracts between the ship agent and thecaptain shall terminate, reserving to the latter his right to the indemnity which may pertain tohim, according to the agreements made with the ship agent. They vessel sold shall remainsubject to the security of the payment of said indemnity if, after the action against thevendor has been instituted, the latter is found to be insolvent.






ARTICLE 590. The co-owners of a vessel shall be civilly liable in the proportion of theirinterests in the common fund, for the results of the acts of the captain, referred to in Article

587. Each co-owner may exempt himself from this liability by the abandonment, before anotary, of the part of the vessel belonging to him.


ARTICLE 594. The co-owners shall elect the manager who is to represent them in thecapacity of ship agent. The appointment of director or ship agent shall be revocable at the

will of the members.



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ARTICLE 600. After the account of the managing agent has been approved by a relative

majority, 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.




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 contract

was made, unless there should be just cause for the discharge, all in accordance with Article 636 and following of this Code


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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 amisdemeanor 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 byreason 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 of

non-observance of the provisions contained in the regulations on situation of lights andmaneuvers for the purpose of preventing collisions.


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

vessel, 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


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, and

domicile 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 and

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unloading. 11. The lay days and extra lay days to be allowed and the demurrage to be paidfor each of them.






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, theshippers, 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 the


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 charters

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made 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 iscontained.


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 in

proportion to the distance covered when they were jettisoned.








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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 whatmay 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 be

disproportionate.


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 viewof 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 the

contract, 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 thecontract, 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 already

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loaded 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 ischartered 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 673. The person from whom the vessel is chartered shall he liable for all the

losses 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



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 themeantime, 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 the

account 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.


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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 was

chartered 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.

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 for

the damaged caused to the vessel.


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ARTICLE 687. The charterers and shippers may not abandon merchandise damaged on

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 688. A charter party may be rescinded at the request of the charterer: 1. If beforeloading the vessel he should not agree with that stated in the certificate of tonnage, or ifthere should be an error in the statement of the flag under which she sails. 2. If the vesselshould not be placed at the disposal of the charterer within the period and in the manneragreed upon. 3. If after the vessel has put to sea, she should return to the port of departure,

on account of risk from pirates, enemies, or bad weather, and the shippers should agree tounload her. In the second and third cases the person from whom the vessel was charteredshall indemnify the charterer for the voyage out. 4. If the charter should have been made bythe months, the charterers shall pay the full freightage for one month, if the voyage is for aport in the same waters, and for two months, if for a port in different waters. From one portto another of the Philippines and adjacent islands, the freightage for one month only shallbe paid. 5. If the vessel should make a port during the voyage in order to make urgentrepairs, and the charterers should prefer to dispose of the merchandise. When the delaydoes not exceed thirty days, the shippers shall pay the full freightage for the voyage out.Should the delay exceed thirty days, they shall only pay the freightage in proportion to thedistance covered by the vessel.

ARTICLE 689. At the request of the person from whom the vessel is chartered the charterparty may be rescinded: 1. If the charterer, at the termination of the extra lay days, does notplace the cargo alongside the vessel. In such case the charterer must pay half the freightstipulated, besides the demurrage due for the lay days and extra lay days. 2. If the personfrom whom the vessel was chartered should sell it before the charterer has begun to load it,and the purchaser should load it for his own account. In such case the vendor shallindemnify the charterer for the losses he may suffer. If the new owner of the vessel shouldnot load it for his own account, the charter party shall be respected, and the vendor shall

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indemnify the purchaser if the former did not inform him of the charter pending at the time ofmaking the sale.

ARTICLE 690. The charter party shall be rescinded and all actions arising therefrom shallbe extinguished, if, before the vessel puts to sea from the port of departure, any of thefollowing cases should occur: 1. A declaration of war or interdiction of commerce with thepower to whose ports the vessel was to make its voyage. 2. A condition of blockade of theport of destination of said vessel, or the breaking out of an epidemic after the contract wasexecuted. 3. The prohibition to receive at the said port the merchandise constituting thecargo of the vessel. 4. An indefinite detention, by reason of an embargo of the vessel byorder of the government, or for any other reason independent of the will of the ship agent. 5.The inability of the vessel to navigate, without fault of the captain or ship agent. Theunloading shall be made for the account of the charterer.

ARTICLE 691. If the vessel cannot put to sea on account of the closing of the port ofdeparture or any other temporary cause, the charter shall remain in force, with neither oneof the contracting parties having a right to claim damages. The subsistence and wages of

the crew shall be considered as general average. During the interruption, the charterer mayat the proper time and for his own account, unload and load the merchandise, payingdemurrage if he delays the reloading after the cause for the detention has ceased.


706. The captain of the vessel and the shipper shall have the obligation of drawing up the

bill of lading in which shall be stated: 1. The name, registry, and tonnage of the vessel. 2.The name of the captain and his domicile. 3. The port of loading and that of unloading. 4.The name of the shipper. 5. The name of the consignee, if the bill of lading is issued in thename of a specified person. 6. The quantity, quality, number of packages and marks of themerchandise. 7. The freightage and the primage stipulated. The bill of lading may be issuedto bearer, to order, or in the name of a specified person, and must be signed within twenty-four hours after the cargo has been received on board, the shipper being entitled to demandthe unloading at the expense of the captain should the latter not sign it, and, in every case,the losses and damages suffered thereby. cdasia

ARTICLE 707. Four true copies of the original bill of lading shall be made, and all of them

shall be signed by the captain and the shipper. Of these, the shipper shall keep one andsend another to the consignee; the captain shall take two, one for himself and another forthe ship agent. There may also be drawn up as many copies of the bill of lading as may beconsidered necessary by the person interested; but when they are issued to order or tobearer, they shall be stated in all the copies, be they the first four or the subsequent ones,the destination of each one, stating whether it is for the agent, for the captain, for theshipper, or for the consignee. If the copy sent to the latter should have a duplicate, thiscircumstance and the fact that it is not valid except in default of the first one must be statedtherein.

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ARTICLE 713. If before the delivery of the cargo a new bill of lading should be demanded ofthe captain, on the allegation that the failure to present the previous ones is due to their loss

or to any other just cause, he shall be obliged to issue it, provided that security for the valueof the cargo is given to his satisfaction, but without changing the consignment, and statingtherein the circumstances prescribed in the last paragraph of Article 707, under penalty,should he not so state, of being held liable for said cargo if improperly delivered through hisfault.

ARTICLE 714. If before the vessel puts to sea the captain should die or should cease tohold his position through any cause, the shippers shall have the right to demand of the newcaptain the ratification of the first bills of lading, and the latter must do so, provided that allthe copies previously issued be presented or returned to him, and it should appear from allexamination of the cargo that they are correct. The expenses arising from the examination

of the cargo shall be defrayed by the ship agent, without prejudice to the right of action ofthe latter against the first captain if he ceased to be such through his own fault. Should saidexamination not be made, it shall be understood that the new captain accepts the cargo asit appears from the bills of lading issued.


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ARTICLE 580. In all judicial sales of any vessel for the payment of creditors, the following

shall have preference in the order stated 2 1. The credit in favor of the public treasuryproven by means of an official certificate of competent authority. 2. The judicial costs of theproceedings, according to an appraisement approved by the judge or court. 3. The pilotagecharges, tonnage dues, and the other sea or port charges, proven by means of propercertificates of the officers intrusted with the collection thereof. 4. The salaries of thedepositaries and keepers of the vessel and any other expenses for its preservation from thetime of arrival at the port until the sale, which appear to have been paid or be due by virtueof an account verified and approved by the judge or court. cdtai 5. The rent of thewarehouse where the rigging and stores of the vessel have been taken care of, according tocontract. 6. The salaries due the captain and crew during its last voyage, which shall beverified by means of the liquidation to be made in view of the lists and of the books ofaccount of the vessel, approved by the chief of the Bureau of Merchant Marine, where there

is one, and in his absence by the consul or judge or court. 7. The reimbursement for thegoods of the freight which the captain may have sold in order to repair the vessel, providedthat the sale has been ordered through a judicial proceedings held with the formalitiesrequired in such cases, and recorded in the certificate of registry of the vessel. 8. The partof the price which has not been paid to the said vendor, the unpaid credits for materials andlabor in the construction of the vessel, when it has not navigated, and those arising from therepair and equipment of the vessels and from its provisioning with victuals and fuel duringthe last voyage. In order that the credits provided for in this subdivision may enjoy thispreference, they must appear by contracts recorded in the registry of vessels, or if theywere contracted for the vessel while on a voyage and said vessel has not returned to theport where it is registered, they must be made with the authorization required for such cases

and annotated in the certificate of registration of the vessel. cdtai 9. The amount borrowedon bottomry on the hull, keel, tackle, and stores of the vessel before its departure, provenby means of the contract executed according to law and recorded in the registry of vessels;those borrowed during the voyage with the authorization mentioned in the precedingsubdivision, satisfying the same requisites; and the insurance premium, proven by theinsurance policy or a certificate taken from the books of the broker. 10. The indemnity duethe shipper for the value of the goods shipped which were not delivered to the consignees,or for averages suffered for which the vessel is liable, provided that either appear in a


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ARTICLE 583. If while on a voyage the captain should find it necessary to contract one ormore of the obligations mentioned in subdivisions 8 and 9 of Article 580, he shall apply tothe judge or court if he is in Philippine territory, and otherwise to the consul of the Republicof the Philippines, should there be one, and, in his absence, to the judge or court or properlocal authority, presenting the certificate of the registration sheet treated of in Article 612and the instruments proving the obligation contracted. The judge or court, the consul, or the

local authority, as the case may be, in view of the result of the proceedings instituted, shallmake a temporary memorandum of their result in the certificate, in order that it may berecorded in the registry when the vessel returns to the port of its registry, or so that it can beadmitted as a legal and preferred obligation in case of sale before its return, by reason ofthe sale of the vessel on account of a declaration of unseaworthiness. The omission of thisformality shall make the captain personally liable for the credits prejudiced on his account.

ARTICLE 584. The vessels subject to liability for the credits mentioned in Article 580 maybe attached and judicially sold in the manner prescribed in Article 579, in the port in whichthey may be found, at the instance of any of the creditors; but if they should be loaded andready to sail, the attachment may not be effected except for debts contracted to prepareand provision the vessel for the same voyage, and even then the attachment shall be

dissolved if any person interested in its sailing should give a bond for the return of thevessel within the period fixed in the certificate of navigation binding himself to pay theindebtedness insofar as it may be legal, should it fail to do so, even if this failure be due tofortuitous event. For debts of any other kind whatsoever not comprised within the said




ARTICLE 720. Loans on bottomry or respondentia may be executed: 1. By means of apublic instrument. 2. By means of a policy signed by the contracting parties and the broker

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taking part therein. cdt 3. By means of a private instrument. Under whichever of these formsthe contract is executed, it shall be entered in the certificate of the registry of the vessel andshall be recorded in the registry of vessels, without which requisites the credits of this kindshall not have, with regard to other credits, the preference which, according to their nature,they should have, although the obligation shall be valid between the contracting parties. Thecontracts made during a voyage shall be governed by the provisions of Articles 583 and611, and shall be effective with regard to third persons from the date of their execution, ifthey should be recorded in the registry of vessels of the port of registry of the vessel beforethe lapse of eight days following its arrival. If said eight days should elapse without therecord having been made in the corresponding registry, the contracts made during thevoyage of a vessel shall produce no effect with regard to third persons, except from the dayand date of their inscription. In order that the policy of the contracts executed in accordancewith No. 2 may have binding force, they must conform to the registry of the broker who tookpart therein. With respect to those executed in accordance with No. 3 the acknowledgmentof the signature shall be required. Contracts which are not reduced to writing shall not giverise to judicial action.



ARTICLE 723. Loans may be made in goods and in merchandise, fixing their value in order

to determine the principal of the loan.

ARTICLE 724. The loans may be constituted jointly or separately: 1. On the hull of thevessel. 2. On the rigging. 3. On the equipment, provisions, and fuel. 4. On the engine, if thevessel is a steamer. 5. On the merchandise loaded. If the loan in constituted on the hull ofthe vessel, the rigging, equipment and other goods, provisions, fuel, steam engines, and thefreightage earned during the voyage on which the loan is made shall also be considered asincluded in the liability for the loan. cdtai If the loan is made on the cargo, all that whichconstitutes the same shall be subject to the repayment; and if on a particular object of thevessel or of the cargo, only the object concretely and specifically mentioned shall be liable.

Note: [ARTICLE 617. The captain may not contract loans on respondentia secured by thecargo; and should he do so, the contracts shall be void. Neither may he borrow money onbottomry for his own transactions, except on the portion of the vessel he owns, provided nomoney has been previously borrowed on the whole vessel, and there does not exist anyother kind of lien or obligation chargeable against the vessel. If he may do so, he must statewhat interest he has in the vessel. In case of violation of this article, the principal, interest,and costs shall be for the personal account of the captain, and the ship agent mayfurthermore discharge him. ARTICLE 621. A captain who borrows money on the hull,engine, rigging or tackle of the vessel, or pledges or sells merchandise or provisions outside

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of the cases and without the formalities prescribed in this Code, shall be liable for theprincipal, interests, and costs, and shall indemnify for the damages he may cause. He whocommits fraud in his accounts shall pay the amount defrauded and shall be subject to theprovisions of the Penal Code.]



ARTICLE 727. If the full amount of the loan contracted in order to load the vessel should notbe used for the cargo, the balance shall be returned before clearing. The same procedure

shall be observed with regard to the goods taken as loan, if they were not loaded.


ARTICLE 729. Should the goods on which money is taken not be subjected to risk, the

contract shall be considered a simple loan, with the obligation on the part of the borrower toreturn the principal and interest at the legal rate, if that agreed upon should not be lower.


ARTICLE 731. The actions pertaining to the lender shall be extinguished by the absoluteloss of the goods on which the loan was made, if it arose from an accident of the sea at the

time and during the voyage designated in the contract, and it is proven that the cargo wason board; but this shall not take place if the loss was caused by the inherent defect of thething, or through the fault or malice, of the borrower, or barratry on the part of the captain, orif it was caused by damages suffered by the vessel as a consequence of being engaged incontraband, or if it arose from having loaded the merchandise on a vessel different from thatdesignated in the contract, unless this change should have been made by reason of forcemajeure. Proof of the loss as well as of the existence in the vessel of the goods declared tothe lender as the object of the loan is incumbent upon him who received the loan.

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Article 580.


ARTICLE 736. If there should be delay in repayment of the principal and premiums of the

loan, only the former shall bear of legal interest.

Civil code


Art 1680 par 2. Extraordinary fortuitous events are understood to be: fire, war, pestilence,

unusual flood, locusts, earthquake, or others which are uncommon, and which thecontracting parties could not have reasonably foreseen. (1575)


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(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 of

business 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.






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 reserved

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notwithstanding the delivery of the goods to the buyer or to a carrier or other bailee for thepurpose of transmission to the buyer.





Where by the terms of a negotiable document of title the goods are deliverable to bearer or

where 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 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 orderof 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)




(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 the

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document 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 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 the

terms of any agreement with the transferor.


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)






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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)








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 have

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been 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 the

consignee, or to the person who has a right to receive them, without prejudice to the provisionsof article 1738.








Article 1744. A stipulation between the common carrier and the shipper or owner limiting

the liability of the former for the loss, destruction, or deterioration of the goods to a degreeless than extraordinary diligence shall be valid, provided it be:



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

employees;



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 agreed

to such stipulation.






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Code of commerce





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 and

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to 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 apassenger 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 them




ARTICLE 701. The convenience or the interest of the passengers shall not obligate or

empowers 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 needs of 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 carries

on 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.


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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 herequests; and if the shipper does not determine the schedule, the carrier must apply the rate

of 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 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 their

execution 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 toreserve 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.

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Note: [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 inthe importation of articles into any Philippine port or place except into a port of the Sulu sea

where 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 othernecessity and is subsequently approved by the Collector. e. Any article which is fraudulently

concealed 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 bythe examining official to contain any article not specified in the invoice or entry, including all

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other 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 personarriving from abroad. chanrobles virtual law library (3) On the strength of a false declaration


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 or

exportation 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 359. If there is an agreement between the shipper and the carrier as to the road

over 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.

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 that

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at 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 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 mayhave 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.



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 receivethose which are sound, this segregation to be made by distinct and separate pieces andwithout dividing a single object, unless the consignee proves the impossibility of

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conveniently making use of them in this form. cdt The same rule shall be applied tomerchandise in bales or packages, separating those parcels which appear sound.





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 effects

of delivery without prejudice to third parties with a better right.


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 noindemnity has been stipulated and the delay exceeds the time fixed in the bill of lading, the

carrier 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 would

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

cover the cost of transportation and the expenses incurred.


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 be

complied 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.





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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 transportation

of 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.


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 the

absence 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:


a. "Maritime Industry", briefly referred to as "industry" in the broadest concept of the term. All enterprises engaged in the business of designing, constructing, manufacturing,

acquiring, operating, supplying, repairing and/or maintaining vessels, or component partsthereof; of managing and/or operating shipping lines, stevedoring arrastre and customsbrokerage services, shipyards, drydocks, marine railways, marine repair shops, shippingand freight forwarding agencies and similar enterprises.

b. "Vessels" or "Watercraft" Any barge, lighter, bulk carrier, passenger ship freighter, tanker,container ship, fishing boats or other artificial contrivance utilizing any source of motivepower, designed, used or capable of being used as a means of water transportation

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operating either as common contract carrier, including fishing vessels covered underPresidential Decree No. 43, except (1) those owned and/or operated by the Armed Forcesof the Philippines and by foreign governments for military purposes, and (ii) bancas,sailboats and other waterborne contrivance of less than three gross tons capacity and notmotorized.

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 thelaws 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.







"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,

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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 theMaritime 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 forty

percent 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 other means, the control of more thanforty percent of the capital or capital stock of the association or corporation is conferredupon or allowed to be exercised by any person not a citizen of the Philippines."


CA 65








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ttt. 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;

uuu. Establish, prescribe and regulate routes, zones and/or areas of operation of particularoperators of public water services;

vvv. Issue Certificates of Public Convenience for the operation of domestic and overseaswater carriers;

www. Register vessels as well as issue certificates, licenses or documents necessary orincident thereto;

xxx. Undertake the safety regulatory functions pertaining to vessel construction andoperation including the determination of manning levels and issuance of certificates ofcompetency to seamen;

yyy. Enforce laws, prescribe and enforce rules and regulations, including penalties forviolations thereof, governing water transportation and the Philippine merchant marine, anddeputize the Philippine Coast Guard and other law enforcement agencies to effectivelydischarge these functions;

zzz. Undertake the issuance of licenses to qualified seamen and harbor, bay and riverpilots;

aaaa. Determine, fix and/or prescribe charges and/or rates pertinent to the operation ofpublic water transport utilities, facilities and services except in cases where charges or ratesare established by international bodies or associations of which the Philippines is a

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participating member or by bodies or associations recognized by the Philippine Government asthe proper arbiter of such charges or rates.

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

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

efficient and effective discharge of the above functions;

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




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 following

the inscription of the sale in the registry, and by depositing the price at the same time.


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 for

the 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 thecontrary 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 shall

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produce 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



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 thecommon 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 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. If the part owners should not bemore than two, the disagreement of views, if any, shall be decided by the vote of themember having the largest interest. If the interests are equal, it should be decided by lot.The person having the smallest share in the ownership shall have one vote; andproportionately the other part owners as many votes as they have parts equal to thesmallest one. aisadc A vessel may not be detained, attached or levied upon in execution in

its entirety, for the private debts of a part owner, but the proceedings shall be limited to theinterest which the debtor may have in the vessel, without interfering with the navigation


judicial appraisement of the value of the portion or portions assigned. The resolutions of themajority relating to the dissolution of the partnership and sale of the vessel shall also bebinding on the minority. The sale of the vessel must be made at public auction, subject to

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the provisions of the law of civil procedure, unless the co-owners unanimously agreeotherwise, saying always the right of repurchase and redemption provided for in Article 575.



ARTICLE 607. If the captain who is a co-owner should have obtained the command of thevessel by virtue of a special agreement contained in the articles of association, he may notbe deprived of his office except for the causes mentioned in Article 605. ARTICLE 608. Incase of the voluntary sale of the vessel, all contracts between the ship agent and the

captain shall terminate, reserving to the latter his right to the indemnity which may pertain tohim, according to the agreements made with the ship agent. They vessel sold shall remainsubject to the security of the payment of said indemnity if, after the action against thevendor has been instituted, the latter is found to be insolvent.


ARTICLE 586. The shipowner and the ship agent shall be civilly liable for the acts of thecaptain and for the obligations contracted by the latter to repair, equip, and provision thevessel, provided the creditor proves that the amount claimed was invested for the benefit ofthe same. By ship agent is understood the person entrusted with provisioning or

representing the vessel in the port in which it may be found.


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 amountsclaimed were invested for the benefit of the vessel, the responsibility therefor shall devolve

upon its owner or agent


ARTICLE 591. All the part owners shall be liable, in proportion to their respectiveownership, for the expenses for repairing the vessel, and for other expenses which are

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incurred by virtue of a resolution of the majority. They shall likewise be liable in the sameproportion for the expenses for the maintenance, equipment, and provisioning of the vessel,necessary for navigation.




ARTICLE 596. The ship agent may discharge the duties of captain of the vessel, subject inevery case to the provision of Article 609. If two or more co-owners apply for the position ofcaptain, the disagreement shall be decided by a vote of the members; and if the vote should

result in a tie, it shall be decided in favor of the co-owner having the larger interest in thevessel. If the interests of the applicants should be equal, and there should be a tie, thematter shall be decided by lot.




ARTICLE 601. Should there be any profits, the co-owners may demand of the managingagent the amount corresponding to their interests by means of an executory action ("accion

ejecutiva"), without any other requisite than the acknowledgment of the signatures on theinstrument approving the account.


ARTICLE 603. Before the vessel sets out to sea the ship agent may at his discretiondischarge 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

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




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 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


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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.






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

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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 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.


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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


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.


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

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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 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 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

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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 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.






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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 688. A charter party may be rescinded at the request of the charterer: 1. If beforeloading the vessel he should not agree with that stated in the certificate of tonnage, or if

there should be an error in the statement of the flag under which she sails. 2. If the vesselshould not be placed at the disposal of the charterer within the period and in the manneragreed upon. 3. If after the vessel has put to sea, she should return to the port of departure,on account of risk from pirates, enemies, or bad weather, and the shippers should agree tounload her. In the second and third cases the person from whom the vessel was charteredshall indemnify the charterer for the voyage out. 4. If the charter should have been made bythe months, the charterers shall pay the full freightage for one month, if the voyage is for aport in the same waters, and for two months, if for a port in different waters. From one portto another of the Philippines and adjacent islands, the freightage for one month only shall

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be paid. 5. If the vessel should make a port during the voyage in order to make urgentrepairs, and the charterers should prefer to dispose of the merchandise. When the delaydoes not exceed thirty days, the shippers shall pay the full freightage for the voyage out.Should the delay exceed thirty days, they shall only pay the freightage in proportion to thedistance covered by the vessel.


ARTICLE 690. The charter party shall be rescinded and all actions arising therefrom shallbe extinguished, if, before the vessel puts to sea from the port of departure, any of thefollowing cases should occur: 1. A declaration of war or interdiction of commerce with thepower to whose ports the vessel was to make its voyage. 2. A condition of blockade of theport of destination of said vessel, or the breaking out of an epidemic after the contract wasexecuted. 3. The prohibition to receive at the said port the merchandise constituting thecargo of the vessel. 4. An indefinite detention, by reason of an embargo of the vessel byorder of the government, or for any other reason independent of the will of the ship agent. 5.The inability of the vessel to navigate, without fault of the captain or ship agent. Theunloading shall be made for the account of the charterer.

ARTICLE 691. If the vessel cannot put to sea on account of the closing of the port of

departure or any other temporary cause, the charter shall remain in force, with neither oneof the contracting parties having a right to claim damages. The subsistence and wages ofthe crew shall be considered as general average. During the interruption, the charterer mayat the proper time and for his own account, unload and load the merchandise, payingdemurrage if he delays the reloading after the cause for the detention has ceased.

ARTICLE 692. A charter party shall be partially rescinded, unless there is an agreement tothe contrary, and the captain shall only be entitled to the freightage for the voyage out, if, byreason of a declaration of war, closing of ports, or interdiction of commercial relations duringthe voyage, the vessel should make the port designated for such a case in the instructionsof the charterer.

BILLS OF LADING ARTICLE

706. The captain of the vessel and the shipper shall have the obligation of drawing up thebill of lading in which shall be stated: 1. The name, registry, and tonnage of the vessel. 2.The name of the captain and his domicile. 3. The port of loading and that of unloading. 4.The name of the shipper. 5. The name of the consignee, if the bill of lading is issued in thename of a specified person. 6. The quantity, quality, number of packages and marks of themerchandise. 7. The freightage and the primage stipulated. The bill of lading may be issuedto bearer, to order, or in the name of a specified person, and must be signed within twenty-

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four hours after the cargo has been received on board, the shipper being entitled to demandthe unloading at the expense of the captain should the latter not sign it, and, in every case,the losses and damages suffered thereby. cdasia

ARTICLE 707. Four true copies of the original bill of lading shall be made, and all of themshall be signed by the captain and the shipper. Of these, the shipper shall keep one andsend another to the consignee; the captain shall take two, one for himself and another forthe ship agent. There may also be drawn up as many copies of the bill of lading as may beconsidered necessary by the person interested; but when they are issued to order or tobearer, they shall be stated in all the copies, be they the first four or the subsequent ones,the destination of each one, stating whether it is for the agent, for the captain, for theshipper, or for the consignee. If the copy sent to the latter should have a duplicate, thiscircumstance and the fact that it is not valid except in default of the first one must be statedtherein.

ARTICLE 708. Bills of lading issued to bearer and sent to the consignee shall betransferable by actual delivery of the instrument; and those issued to order, by virtue of an

indorsement. In either case, the person to whom the bill of lading is transferred shall acquireall the rights and actions of the transferor or indorser with regard to the merchandisementioned in the same.







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ARTICLE 716. If several persons should present bills of lading issued to bearer or to order,indorsed in their favor, demanding the same merchandise, the captain shall prefer, inmaking delivery the person who presents the copy first issued, except when the latter one

was issued on proof of the loss of the first, and both are presented by different persons. Insuch case, as well as when only second subsequent copies, issued without this proof, arepresented, the captain shall apply to the judge or court, so that he may order the deposit ofthe merchandise and their delivery, through him, to the proper person.



consignee shall make him liable for the damages which such delay may cause the captain. ARTICLE 580. In all judicial sales of any vessel for the payment of creditors, the followingshall have preference in the order stated 2 1. The credit in favor of the public treasuryproven by means of an official certificate of competent authority. 2. The judicial costs of theproceedings, according to an appraisement approved by the judge or court. 3. The pilotagecharges, tonnage dues, and the other sea or port charges, proven by means of propercertificates of the officers intrusted with the collection thereof. 4. The salaries of thedepositaries and keepers of the vessel and any other expenses for its preservation from thetime of arrival at the port until the sale, which appear to have been paid or be due by virtueof an account verified and approved by the judge or court. cdtai 5. The rent of thewarehouse where the rigging and stores of the vessel have been taken care of, according to

contract. 6. The salaries due the captain and crew during its last voyage, which shall beverified by means of the liquidation to be made in view of the lists and of the books ofaccount of the vessel, approved by the chief of the Bureau of Merchant Marine, where thereis one, and in his absence by the consul or judge or court. 7. The reimbursement for thegoods of the freight which the captain may have sold in order to repair the vessel, providedthat the sale has been ordered through a judicial proceedings held with the formalitiesrequired in such cases, and recorded in the certificate of registry of the vessel. 8. The partof the price which has not been paid to the said vendor, the unpaid credits for materials andlabor in the construction of the vessel, when it has not navigated, and those arising from the

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repair and equipment of the vessels and from its provisioning with victuals and fuel duringthe last voyage. In order that the credits provided for in this subdivision may enjoy thispreference, they must appear by contracts recorded in the registry of vessels, or if theywere contracted for the vessel while on a voyage and said vessel has not returned to theport where it is registered, they must be made with the authorization required for such casesand annotated in the certificate of registration of the vessel. cdtai 9. The amount borrowedon bottomry on the hull, keel, tackle, and stores of the vessel before its departure, provenby means of the contract executed according to law and recorded in the registry of vessels;those borrowed during the voyage with the authorization mentioned in the precedingsubdivision, satisfying the same requisites; and the insurance premium, proven by theinsurance policy or a certificate taken from the books of the broker. 10. The indemnity duethe shipper for the value of the goods shipped which were not delivered to the consignees,or for averages suffered for which the vessel is liable, provided that either appear in a






ARTICLE 584. The vessels subject to liability for the credits mentioned in Article 580 maybe attached and judicially sold in the manner prescribed in Article 579, in the port in which

they may be found, at the instance of any of the creditors; but if they should be loaded andready to sail, the attachment may not be effected except for debts contracted to prepareand provision the vessel for the same voyage, and even then the attachment shall bedissolved if any person interested in its sailing should give a bond for the return of thevessel within the period fixed in the certificate of navigation binding himself to pay theindebtedness insofar as it may be legal, should it fail to do so, even if this failure be due tofortuitous event. For debts of any other kind whatsoever not comprised within the said


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ARTICLE 720. Loans on bottomry or respondentia may be executed: 1. By means of apublic instrument. 2. By means of a policy signed by the contracting parties and the brokertaking part therein. cdt 3. By means of a private instrument. Under whichever of these formsthe contract is executed, it shall be entered in the certificate of the registry of the vessel andshall be recorded in the registry of vessels, without which requisites the credits of this kind

shall not have, with regard to other credits, the preference which, according to their nature,they should have, although the obligation shall be valid between the contracting parties. Thecontracts made during a voyage shall be governed by the provisions of Articles 583 and611, and shall be effective with regard to third persons from the date of their execution, ifthey should be recorded in the registry of vessels of the port of registry of the vessel beforethe lapse of eight days following its arrival. If said eight days should elapse without therecord having been made in the corresponding registry, the contracts made during thevoyage of a vessel shall produce no effect with regard to third persons, except from the dayand date of their inscription. In order that the policy of the contracts executed in accordancewith No. 2 may have binding force, they must conform to the registry of the broker who tookpart therein. With respect to those executed in accordance with No. 3 the acknowledgmentof the signature shall be required. Contracts which are not reduced to writing shall not give



ARTICLE 722. The contract may be made to order, in which case they shall be transferableby indorsement, and the indorsee shall acquire all the rights and shall incur all the risks

corresponding to the indorser.


ARTICLE 724. The loans may be constituted jointly or separately: 1. On the hull of thevessel. 2. On the rigging. 3. On the equipment, provisions, and fuel. 4. On the engine, if thevessel is a steamer. 5. On the merchandise loaded. If the loan in constituted on the hull ofthe vessel, the rigging, equipment and other goods, provisions, fuel, steam engines, and the

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freightage earned during the voyage on which the loan is made shall also be considered asincluded in the liability for the loan. cdtai If the loan is made on the cargo, all that whichconstitutes the same shall be subject to the repayment; and if on a particular object of thevessel or of the cargo, only the object concretely and specifically mentioned shall be liable.

Note: [ARTICLE 617. The captain may not contract loans on respondentia secured by thecargo; and should he do so, the contracts shall be void. Neither may he borrow money onbottomry for his own transactions, except on the portion of the vessel he owns, provided nomoney has been previously borrowed on the whole vessel, and there does not exist anyother kind of lien or obligation chargeable against the vessel. If he may do so, he must statewhat interest he has in the vessel. In case of violation of this article, the principal, interest,and costs shall be for the personal account of the captain, and the ship agent mayfurthermore discharge him. ARTICLE 621. A captain who borrows money on the hull,engine, rigging or tackle of the vessel, or pledges or sells merchandise or provisions outsideof the cases and without the formalities prescribed in this Code, shall be liable for theprincipal, interests, and costs, and shall indemnify for the damages he may cause. He whocommits fraud in his accounts shall pay the amount defrauded and shall be subject to the

provisions of the Penal Code.]




ARTICLE 728. The loan which the captain takes at the point of residence of the owners ofthe vessel shall only affect that part thereof which belongs to the captain, if the other ownersor their agents should not have given their express authorization therefor or should not havetaken part in the transaction. If one or more of the owners should be requested to furnishthe amount necessary to repair or provision the vessel, and they should not do so withintwenty-four hours, the interest which the parties in default may have in the vessel shall beliable for the loan in the proper proportion. Outside of the residence of the owners the

captain may contract loans in accordance with the provisions of Articles 583 and 611.



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ARTICLE 731. The actions pertaining to the lender shall be extinguished by the absoluteloss of the goods on which the loan was made, if it arose from an accident of the sea at thetime and during the voyage designated in the contract, and it is proven that the cargo wason board; but this shall not take place if the loss was caused by the inherent defect of thething, or through the fault or malice, of the borrower, or barratry on the part of the captain, orif it was caused by damages suffered by the vessel as a consequence of being engaged incontraband, or if it arose from having loaded the merchandise on a vessel different from thatdesignated in the contract, unless this change should have been made by reason of forcemajeure. Proof of the loss as well as of the existence in the vessel of the goods declared tothe lender as the object of the loan is incumbent upon him who received the loan.

ARTICLE 732. Lenders on bottomry or respondentia shall suffer, in proportion to theirrespective interest, the general average which may take place in the goods on which theloan is made. In particular averages, in the absence of an express agreement between the

contracting parties, the lender on bottomry or respondentia shall also contribute inproportion to his respective interest, should it not belong to the kind of risks excepted in theforegoing article.





Article 580.



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,

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no person shall be responsible for those events which could not be foreseen, or which,though foreseen, were inevitable. (1105a)















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(1) "Document of title to goods" includes any bill of lading, dock warrant, "quedan," or warehouse

receipt 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.



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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 orderof 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-

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negotiable document cannot be negotiated and the indorsement of such a document givesthe transferee no additional right. (n)












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Article 1517. The indorsement of a document of title shall not make the indorser liable for

any failure on the part of the bailee who issued the document or previous indorsers thereofto fulfill their respective obligations. (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 orin equity in regard to property which cannot readily be attached or levied upon by ordinary

legal process. (n)




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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 provisions

of article 1738.



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 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 latter

shall be liable in damages, which however, shall be equitably reduced.



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(2) That the common carrier will not be liable for any loss, destruction, or deterioration of the

goods;









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Article 1755. A common carrier is bound to carry the passengers safely as far as human

care and foresight can provide, using the utmost diligence of very cautious persons, with adue regard for all the circumstances.



Article 1758. When a passenger is carried gratuitously, a stipulation limiting the common

carrier's liability for negligence is valid, but not for wilful acts or gross negligence.



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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 could

have prevented or stopped the act or omission.







Code of commerce

PART 5 PASSENGERS ON SEA VOYAGES

ARTICLE 693. If the passage price has not been agreed upon, the judge or court shallsummarily fix it, after a declaration of experts.


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ARTICLE 698. In case a voyage already begun should be interrupted, the passengers shall

be obliged to pay the fare in proportion to the distance covered, without right to recover 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 apassenger 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 them





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 of

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necessity, to furnish the supply of food necessary for their sustenance at a reasonableprice.



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 members

of the crew.



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 and

residence 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 inwhich 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 special

conditions of the carriage, to the schedules and regulations the application of which herequests; 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, with

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respect to the baggage, the number and weight of the packages, with such othermanifestations which may be considered necessary for their easy identification.


ARTICLE 354. In the absence of a bill of lading, disputes shall be determined by the legalproofs which the parties may present in support of their respective claims, according to the

general provisions established in this Code for commercial contracts. cd



ARTICLE 357. If by reason of well-founded suspicion of falsity in the declaration as to the

contents of a package the carrier should decide to examine it, he shall proceed with hisinvestigation in the presence of witnesses, with the shipper or consignee in attendance. Ifthe shipper or consignee who has to be cited does not attend, the examination shall bemade before a notary, who shall prepare a memorandum of the result of the investigation,for such purposes as may be proper. If the declaration of the shipper should be true, theexpense occasioned by the examination and that of carefully repacking the packages shallbe for the account of the carrier and in a contrary case for the account of the shipper.


the 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 inthe 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 of

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the 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 othernecessity 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 bythe 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 personarriving 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.



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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 the

contract appears. The expenses which this change of consignment occasions shall be forthe account of the shipper.







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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 receivethose 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. cdt The same rule shall be applied tomerchandise in bales or packages, separating those parcels which appear sound.







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Note:



b. "Vessels" or "Watercraft" Any barge, lighter, bulk carrier, passenger ship freighter, tanker,container ship, fishing boats or other artificial contrivance utilizing any source of motivepower, designed, used or capable of being used as a means of water transportationoperating either as common contract carrier, including fishing vessels covered under

Presidential Decree No. 43, except (1) those owned and/or operated by the Armed Forcesof the Philippines and by foreign governments for military purposes, and (ii) bancas,sailboats and other waterborne contrivance of less than three gross tons capacity and notmotorized.

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 thelaws 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 Philippine

nationals: 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.





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"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 hundred

and 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 theMaritime 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 other means, the control of more thanforty percent of the capital or capital stock of the association or corporation is conferredupon or allowed to be exercised by any person not a citizen of the Philippines."



CA 65


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ffff. Develop and formulate plans, policies, programs, projects, standards, specificationsand guidelines 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;

gggg. Establish, prescribe and regulate routes, zones and/or areas of operation of particularoperators of public water services;

hhhh. Issue Certificates of Public Convenience for the operation of domestic and overseaswater carriers;

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

jjjj. Undertake the safety regulatory functions pertaining to vessel construction andoperation including the determination of manning levels and issuance of certificates ofcompetency to seamen;

kkkk. Enforce laws, prescribe and enforce rules and regulations, including penalties forviolations thereof, governing water transportation and the Philippine merchant marine, anddeputize the Philippine Coast Guard and other law enforcement agencies to effectivelydischarge these functions;

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

mmmm. Determine, fix and/or prescribe charges and/or rates pertinent to the operation ofpublic water transport utilities, facilities and services except in cases where charges or ratesare established by international bodies or associations of which the Philippines is aparticipating member or by bodies or associations recognized by the Philippine Government as

the proper arbiter of such charges or rates.

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

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


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



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 and

seamen shall be subject to what the laws and regulations of the public administration onnavigation, customs, health, safety of vessels, and other similar matters.


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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 the

manner established in the law of civil procedure.




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ARTICLE 591. All the part owners shall be liable, in proportion to their respective

ownership, for the expenses for repairing the vessel, and for other expenses which areincurred by virtue of a resolution of the majority. They shall likewise be liable in the sameproportion for the expenses for the maintenance, equipment, and provisioning of the vessel,necessary for navigation.


ARTICLE 595. The ship agent, whether he is at the same time the owner of the vessel, or amanager for an owner or for an association of co-owners, must have the capacity to tradeand must be recorded in the merchant's registry of the province. The ship agent shall

represent the ownership of the vessel, and may, in his own name and in such capacity, take judicial and extrajudicial steps in matters relating to commerce.


ARTICLE 597. The ship agent shall designate and come to terms with the captain, and shall

contract in the name of the owners, who shall be bound in all that refer to repairs, details ofequipment, armament, provisions of food and fuel, and freight of the vessel, and, in general,in all that relate to the requirements of navigation.


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ARTICLE 603. Before the vessel sets out to sea the ship agent may at his discretion

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



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 the

fulfillment 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.



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 byreason of his voluntarily entering a port other than that of his destination, outside of the

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cases 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.



TITLE THREE SPECIAL CONTRACTS OF MARITIME COMMERCE SECTION ONE

CHARTER PARTIES PART I FORMS AND EFFECTS OF CHARTER PARTIES

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.



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ARTICLE 659. The merchandise sold by the captain to pay for the necessary repairs to the

hull, 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.

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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 whatmay 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 of

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their condition or other circumstances the expenses of preservation and custody should bedisproportionate.


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 viewof 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 the


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 of

transfer 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 ischartered 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 she

is 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.


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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 the

port of departure, that the vessel was not in a condition to navigate at the time of receivingthe cargo.


ARTICLE 678. If the time necessary, in the opinion of the judge or court, to receive the

orders of the shipper should have elapse, without the captain having received 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.



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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 foreign

country, should order the merchandise to be unloaded, the expenses of unloading andreloading shall be for the account of the former.


ARTICLE 685. In charters for transportation of general freight, any of the shippers mayunload the merchandise before the beginning of the voyage, paying one-half of thefreightage, the expense of stowing and restowing the cargo, and any other damage which

for his reason he may cause the other shippers.


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ARTICLE 688. A charter party may be rescinded at the request of the charterer: 1. If beforeloading the vessel he should not agree with that stated in the certificate of tonnage, or ifthere should be an error in the statement of the flag under which she sails. 2. If the vesselshould not be placed at the disposal of the charterer within the period and in the manneragreed upon. 3. If after the vessel has put to sea, she should return to the port of departure,on account of risk from pirates, enemies, or bad weather, and the shippers should agree tounload her. In the second and third cases the person from whom the vessel was charteredshall indemnify the charterer for the voyage out. 4. If the charter should have been made bythe months, the charterers shall pay the full freightage for one month, if the voyage is for a

port in the same waters, and for two months, if for a port in different waters. From one portto another of the Philippines and adjacent islands, the freightage for one month only shallbe paid. 5. If the vessel should make a port during the voyage in order to make urgentrepairs, and the charterers should prefer to dispose of the merchandise. When the delaydoes not exceed thirty days, the shippers shall pay the full freightage for the voyage out.Should the delay exceed thirty days, they shall only pay the freightage in proportion to thedistance covered by the vessel.

ARTICLE 689. At the request of the person from whom the vessel is chartered the charterparty may be rescinded: 1. If the charterer, at the termination of the extra lay days, does notplace the cargo alongside the vessel. In such case the charterer must pay half the freightstipulated, besides the demurrage due for the lay days and extra lay days. 2. If the person

from whom the vessel was chartered should sell it before the charterer has begun to load it,and the purchaser should load it for his own account. In such case the vendor shallindemnify the charterer for the losses he may suffer. If the new owner of the vessel shouldnot load it for his own account, the charter party shall be respected, and the vendor shallindemnify the purchaser if the former did not inform him of the charter pending at the time ofmaking the sale.

ARTICLE 690. The charter party shall be rescinded and all actions arising therefrom shallbe extinguished, if, before the vessel puts to sea from the port of departure, any of thefollowing cases should occur: 1. A declaration of war or interdiction of commerce with thepower to whose ports the vessel was to make its voyage. 2. A condition of blockade of the

port of destination of said vessel, or the breaking out of an epidemic after the contract wasexecuted. 3. The prohibition to receive at the said port the merchandise constituting thecargo of the vessel. 4. An indefinite detention, by reason of an embargo of the vessel byorder of the government, or for any other reason independent of the will of the ship agent. 5.The inability of the vessel to navigate, without fault of the captain or ship agent. Theunloading shall be made for the account of the charterer.

ARTICLE 691. If the vessel cannot put to sea on account of the closing of the port ofdeparture or any other temporary cause, the charter shall remain in force, with neither one

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of the contracting parties having a right to claim damages. The subsistence and wages ofthe crew shall be considered as general average. During the interruption, the charterer mayat the proper time and for his own account, unload and load the merchandise, payingdemurrage if he delays the reloading after the cause for the detention has ceased.


706. The captain of the vessel and the shipper shall have the obligation of drawing up thebill of lading in which shall be stated: 1. The name, registry, and tonnage of the vessel. 2.The name of the captain and his domicile. 3. The port of loading and that of unloading. 4.The name of the shipper. 5. The name of the consignee, if the bill of lading is issued in thename of a specified person. 6. The quantity, quality, number of packages and marks of the

merchandise. 7. The freightage and the primage stipulated. The bill of lading may be issuedto bearer, to order, or in the name of a specified person, and must be signed within twenty-four hours after the cargo has been received on board, the shipper being entitled to demandthe unloading at the expense of the captain should the latter not sign it, and, in every case,the losses and damages suffered thereby. cdasia

ARTICLE 707. Four true copies of the original bill of lading shall be made, and all of themshall be signed by the captain and the shipper. Of these, the shipper shall keep one andsend another to the consignee; the captain shall take two, one for himself and another forthe ship agent. There may also be drawn up as many copies of the bill of lading as may beconsidered necessary by the person interested; but when they are issued to order or tobearer, they shall be stated in all the copies, be they the first four or the subsequent ones,

the destination of each one, stating whether it is for the agent, for the captain, for theshipper, or for the consignee. If the copy sent to the latter should have a duplicate, thiscircumstance and the fact that it is not valid except in default of the first one must be statedtherein.




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ARTICLE 713. If before the delivery of the cargo a new bill of lading should be demanded ofthe captain, on the allegation that the failure to present the previous ones is due to their lossor to any other just cause, he shall be obliged to issue it, provided that security for the valueof the cargo is given to his satisfaction, but without changing the consignment, and statingtherein the circumstances prescribed in the last paragraph of Article 707, under penalty,should he not so state, of being held liable for said cargo if improperly delivered through his

fault.






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ARTICLE 580. In all judicial sales of any vessel for the payment of creditors, the followingshall have preference in the order stated 2 1. The credit in favor of the public treasuryproven by means of an official certificate of competent authority. 2. The judicial costs of theproceedings, according to an appraisement approved by the judge or court. 3. The pilotagecharges, tonnage dues, and the other sea or port charges, proven by means of propercertificates of the officers intrusted with the collection thereof. 4. The salaries of thedepositaries and keepers of the vessel and any other expenses for its preservation from thetime of arrival at the port until the sale, which appear to have been paid or be due by virtueof an account verified and approved by the judge or court. cdtai 5. The rent of thewarehouse where the rigging and stores of the vessel have been taken care of, according tocontract. 6. The salaries due the captain and crew during its last voyage, which shall beverified by means of the liquidation to be made in view of the lists and of the books ofaccount of the vessel, approved by the chief of the Bureau of Merchant Marine, where thereis one, and in his absence by the consul or judge or court. 7. The reimbursement for thegoods of the freight which the captain may have sold in order to repair the vessel, providedthat the sale has been ordered through a judicial proceedings held with the formalitiesrequired in such cases, and recorded in the certificate of registry of the vessel. 8. The part

of the price which has not been paid to the said vendor, the unpaid credits for materials andlabor in the construction of the vessel, when it has not navigated, and those arising from therepair and equipment of the vessels and from its provisioning with victuals and fuel duringthe last voyage. In order that the credits provided for in this subdivision may enjoy thispreference, they must appear by contracts recorded in the registry of vessels, or if theywere contracted for the vessel while on a voyage and said vessel has not returned to theport where it is registered, they must be made with the authorization required for such casesand annotated in the certificate of registration of the vessel. cdtai 9. The amount borrowedon bottomry on the hull, keel, tackle, and stores of the vessel before its departure, provenby means of the contract executed according to law and recorded in the registry of vessels;those borrowed during the voyage with the authorization mentioned in the precedingsubdivision, satisfying the same requisites; and the insurance premium, proven by the

insurance policy or a certificate taken from the books of the broker. 10. The indemnity duethe shipper for the value of the goods shipped which were not delivered to the consignees,or for averages suffered for which the vessel is liable, provided that either appear in a





ARTICLE 583. If while on a voyage the captain should find it necessary to contract one ormore of the obligations mentioned in subdivisions 8 and 9 of Article 580, he shall apply tothe judge or court if he is in Philippine territory, and otherwise to the consul of the Republicof the Philippines, should there be one, and, in his absence, to the judge or court or properlocal authority, presenting the certificate of the registration sheet treated of in Article 612

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and the instruments proving the obligation contracted. The judge or court, the consul, or thelocal authority, as the case may be, in view of the result of the proceedings instituted, shallmake a temporary memorandum of their result in the certificate, in order that it may berecorded in the registry when the vessel returns to the port of its registry, or so that it can beadmitted as a legal and preferred obligation in case of sale before its return, by reason ofthe sale of the vessel on account of a declaration of unseaworthiness. The omission of thisformality shall make the captain personally liable for the credits prejudiced on his account.




SECTION TWO LOANS ON BOTTOMRY AND RESPONDENTIA ARTICLE 719. A loan in which under any condition whatever, the repayment of the sumloaned and of the premium stipulated depends upon the safe arrival in port of the goods onwhich it is made, or of the price they may receive in case of accident, shall be considered a

loan on bottomry or respondentia.



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ARTICLE 724. The loans may be constituted jointly or separately: 1. On the hull of thevessel. 2. On the rigging. 3. On the equipment, provisions, and fuel. 4. On the engine, if the

vessel is a steamer. 5. On the merchandise loaded. If the loan in constituted on the hull ofthe vessel, the rigging, equipment and other goods, provisions, fuel, steam engines, and thefreightage earned during the voyage on which the loan is made shall also be considered asincluded in the liability for the loan. cdtai If the loan is made on the cargo, all that whichconstitutes the same shall be subject to the repayment; and if on a particular object of thevessel or of the cargo, only the object concretely and specifically mentioned shall be liable.

Note: [ARTICLE 617. The captain may not contract loans on respondentia secured by thecargo; and should he do so, the contracts shall be void. Neither may he borrow money onbottomry for his own transactions, except on the portion of the vessel he owns, provided nomoney has been previously borrowed on the whole vessel, and there does not exist anyother kind of lien or obligation chargeable against the vessel. If he may do so, he must state

what interest he has in the vessel. In case of violation of this article, the principal, interest,and costs shall be for the personal account of the captain, and the ship agent mayfurthermore discharge him. ARTICLE 621. A captain who borrows money on the hull,engine, rigging or tackle of the vessel, or pledges or sells merchandise or provisions outsideof the cases and without the formalities prescribed in this Code, shall be liable for theprincipal, interests, and costs, and shall indemnify for the damages he may cause. He whocommits fraud in his accounts shall pay the amount defrauded and shall be subject to theprovisions of the Penal Code.]

ARTICLE 725. No loans on bottomry may be made on the salaries of the crew or on the

profits expected.


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ARTICLE 731. The actions pertaining to the lender shall be extinguished by the absoluteloss of the goods on which the loan was made, if it arose from an accident of the sea at thetime and during the voyage designated in the contract, and it is proven that the cargo wason board; but this shall not take place if the loss was caused by the inherent defect of thething, or through the fault or malice, of the borrower, or barratry on the part of the captain, orif it was caused by damages suffered by the vessel as a consequence of being engaged in

contraband, or if it arose from having loaded the merchandise on a vessel different from thatdesignated in the contract, unless this change should have been made by reason of forcemajeure. Proof of the loss as well as of the existence in the vessel of the goods declared tothe lender as the object of the loan is incumbent upon him who received the loan.




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Article 580.



Civil code



Article 1733. Common carriers, from the nature of their business and for reasons of public policy, are

bound to observe extraordinary diligence in the vigilance over the goods and for the safety of thepassengers transported by them, according to all the circumstances of each case.



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.



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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 holder

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may 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)






(2) By any person to whom the possession or custody of the document has been entrusted

by 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)





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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

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)


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












Article 1739. In order that the common carrier may be exempted from responsibility, the naturaldisaster must have been the proximate and only cause of the loss. However, the common

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carrier 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.















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Code of commerce








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Note: [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 inthe 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 or

aircraft 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 othernecessity 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 to

be 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 bythe 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 its

equipage 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 personarriving from abroad. chanrobles virtual law library (3) On the strength of a false declaration

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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 arising

therefrom.]




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 the

provisions 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


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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 particular

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and 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.



Note:




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 thelaws 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 pensions

or 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.


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"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 registry

issued 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 theMaritime Industry Authority consistent with public policy and with the view of its utility for

government 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 other means, the control of more than

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forty percent of the capital or capital stock of the association or corporation is conferredupon or allowed to be exercised by any person not a citizen of the Philippines."


CA 65







Article 1484. In a contract of sale of personal property the price of which is payable in

installments, the vendor may exercise any of the following remedies:






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rrrr. Develop and formulate plans, policies, programs, projects, standards, specificationsand guidelines 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;

ssss. Establish, prescribe and regulate routes, zones and/or areas of operation of particularoperators of public water services;

tttt. Issue Certificates of Public Convenience for the operation of domestic and overseaswater carriers;

uuuu. Register vessels as well as issue certificates, licenses or documents necessary orincident thereto;

vvvv. Undertake the safety regulatory functions pertaining to vessel construction andoperation including the determination of manning levels and issuance of certificates of

competency to seamen;

wwww. Enforce laws, prescribe and enforce rules and regulations, including penalties forviolations thereof, governing water transportation and the Philippine merchant marine, anddeputize the Philippine Coast Guard and other law enforcement agencies to effectivelydischarge these functions;

xxxx. Undertake the issuance of licenses to qualified seamen and harbor, bay and riverpilots;

yyyy. Determine, fix and/or prescribe charges and/or rates pertinent to the operation ofpublic water transport utilities, facilities and services except in cases where charges or rates

are established by international bodies or associations of which the Philippines is aparticipating member or by bodies or associations recognized by the Philippine Government asthe proper arbiter of such charges or rates.

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

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


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


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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 as

included 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.





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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 thecommon 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 592. The resolution of the majority with regard to the repair, equipment, and

provisioning of the vessel in the port of departure shall bind the minority, unless the minoritymembers renounce their interests, which must be acquired by the other co-owners, after a


ARTICLE 593. The owners of a vessel shall have preference in her charter over otherpersons, under the same conditions and price. If two or more of them should claim this right,the one having the greater interest shall be preferred; and should they have equal interests,

the matter shall be decided by lot.


ARTICLE 607. If the captain who is a co-owner should have obtained the command of thevessel by virtue of a special agreement contained in the articles of association, he may not

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be deprived of his office except for the causes mentioned in Article 605. ARTICLE 608. Incase of the voluntary sale of the vessel, all contracts between the ship agent and thecaptain shall terminate, reserving to the latter his right to the indemnity which may pertain tohim, according to the agreements made with the ship agent. They vessel sold shall remainsubject to the security of the payment of said indemnity if, after the action against thevendor has been instituted, the latter is found to be insolvent.






ARTICLE 590. The co-owners of a vessel shall be civilly liable in the proportion of theirinterests in the common fund, for the results of the acts of the captain, referred to in Article

587. Each co-owner may exempt himself from this liability by the abandonment, before anotary, of the part of the vessel belonging to him.


ARTICLE 594. The co-owners shall elect the manager who is to represent them in thecapacity of ship agent. The appointment of director or ship agent shall be revocable at the

will of the members.



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