NOVEMBER 21, 2014

PRIMARY LAW: CIVIL CODE SECONDARY LAW/SUPPLEMENTARY: CODE OF COMMERCE & SPECIAL LAWS

CIVIL CODE 34 provisions 1732 Definition of common carriers

COMMON CARRIER Association of persons, corporations.. offering services to the PUBLIC for a COMPENSATION There is a CONTRACT If violated = file breach of contract of carriage PARTIES:1. Shipper/consignor 2. Common carrier itself person who obligates himself to transport 3. Consignee person who receives the gooods

GOVERNING LAWS 1766 In all matters not covered in this code, the:1. Code of Commerce2. Special Laws 1753 The law of the country to which the goods are delivered shall govern the liability of the common carrier in case of LDD

SEA SHIPMENT COASTWISE Governing law: 1. Civil Code2. Code of Commerce & SPL Governing if from Phil to another country law of the COUNTRY OF DESTINATION GR: Law of the country of destination E: If parties stipulate that COGSA governs = COGSA governs

LAND TRANSPORTATION NCC + CC + SPL

AIR TRANSPORATION DOMESTIC NCC + CC + SPL INTERNATIONAL Warsaw Convention Governs (primary law) Why? Philippines participated in the convention and agreed = bound HIGH CONTRACTING PARTIES countries that participated and adhered to the warsaw convention INTERNATIONAL FLIGHT Flight from one HCP to another HCP In case of breach of contract, where do you file?1. Place of principal domicile of the carrier 2. Place of principal business place of the carrier 3. Place where you purchased ticket 4. Place of destinationX residence of plaintiff

EXAMPLES OF COMMON CARRIER1. Bus2. Jeep3. Trains

COMMON CARRIERPRIVATE CARRIER

Offering public their serviceX public

Riding as a matter of right

ART. 1733 EXTRAORDINARY DILIGENCE Degree of diligence of common carrier = extraordinary diligence

ART. 1736 1738 DURATION OF EXTRAORDINARY RESPONSIBILITY OF CC

1736 Possession delivery (actual or constructive) Actual delivery Constructive Delivery 1. Notice was already given to the consignee regarding arrival of the cargoes and2. The consignee was given reasonable time to release it even though there is no actual release (1738)

1737 Continuing liability even when they are temporarily unloaded or stored in transit E: Right of stoppage in Transitu Diligence required: Diligence of a good father of a family Why is the diligence reduced? Because when the shopped availed of RSIT, the transpo contract no longer exists X acting as common carried Acting as bailee or warehouse manager

1734 DEFENSES OF A COMMON CARRIER (MEMORIZE!) instances when CC is NOT presumed to be at fault 1. Flood, storm, earthquake, lighting or other natural disaster or calamity 2. Act of the public enemy in war, whether international or civil3. Act or omission of the shipper or owner of the goods4. The character of the goods or defects in the packing or in the container 5. Order or act of competent public authority

1735 PRESUMPTION OF FAULT IN CASE OF LDD UNLESS PROVED THAT CC EXERCISED EO DILIGENCE Example: Plaintiffs hand goods damaged which were loaded in the common carrier only evidence is that he boarded CC + damage CC liable because of presumption of fault/negligence of CC

1734 CALAMITY (FLEC) REQUISITES1. Natural, must be the only and proximate cause 2. Before, during and after the calamity, the CC must prevent or minimize LDD

1741 CONTRIBUTORY NEGLIGENCE OF SHIPPER OR OWNER EQUITABLY REDUCES LIABILITY If there is CN by shipper CC is still liable but it will be equitably reduced Note: ONLY APPLIES TO CARGOES

PUBLIC ENEMY REQUISITES1. During War2. Country of common carrier should be involved in the war3. Pirates4. Local or International War

DEFECT OR CHARACTER OF GOODS1. Proximate cause2. CC is obliged to observe EO diligence to lessen or forestall further damage

OBLIGATIONS OF COMMON CARRIER IN TRANSPO OF PASSENGERS1. Accept the cargo or passengers w/o discrimination EXCEPTIONS:1.If the cargo is dangerous or hazardous 2. If the cargo arrives later than time stipulated 2. Obligation to deliver Where? place where stipulated in the bill of lading What time? Time is important because late delivery will cause monetary loss At the time stipulated If no time stipulated reasonable time How to determine reasonable time:1. Character of the goods (ex. perishable)2. Distance Any delay in the delivery will make the CC liable Basis: 1. 1740 if there is delay, CC will be liable despite natural disaster2. 1747 If the common carrier delays or deviates from route common carrier cannot avail of contract limiting carriers liability DEVIATION MARINA has already pre-determined route from one place to another TRANSSHIPMENT Cargo is transferred from one carrier to another GR: X allowed regardless of better durability or state (new) of other CC or even if the 2 vessels are owned by the same company E: Unless the transshipment is allowed under stipulation3. Observe extraordinary diligence When do you know that there is EO?1. It must prove that vessel is SEAWORTHY:1. If the vessel is FIT, engineering is well done, very good materials, vessel can meet the normal hazards of the sea2. CARGO WORTHY It has the ability to transport cargo Case: Shipper has no obligation to check the vessel if cargo worthy 3. Must have all the EQUIPMENT 4. Complete, capable, licensed, trained MANPOWER2. Person themselves must transport cargoes with utmost diligence observing the care that an ordinary prudent man would observe

OBLIGATIONS OF THE SHIPPER1. DUE DILIGENCE IN AVOIDING DAMAGE 1741 If the proximate cause of the LDE is because of the negligence of the CC, the CC will be liable but if there is CN of the passenger, it will be equitably reduced E: It will not be reduced the moment there is damage or injury to the passenger2. PAY THE FREIGHT CARRIERS LIEN the moment the shipper fails to pay the freight, the CC has a right or lien on the cargoes of the shipper CC has right to sell or auction the property That is why it cannot be released by the shipper because 3. PAY DEMORAGE DEMORAGE compensation or damages paid for detaining the CC or vessel for a certain beyond stipulated period shouldered by the shipper

OBLIGATIONS OF COMMON CARRIER IN TRANSPO OF PASSENGERS1. ACCEPT PASSENGER WITHOUT DISCRIMINATION2. TRANSPORT PASSENGER SAFELY 1755 Mandate of the law for CC to exercise ED in transporting passengers The exercise of ED would depend on the circumstances presented to you 3. EXERCISE EXTRAORDINARY DILIGENCE 1733 safety of the passengers 1755 specifically for passengers

DUTY OF PASSENGER/SHIPPER 1. To deliver2. To pay freight 3. To pay other costs

1744 Can you stipulate to bring down EO to less: GR: YES! But it should not be lower than DOGFOA provided that it is:1. In Writing and signed2. Valuable consideration other than the services rendered by common carrier3. Reasonable, just and not contrary to law

1745 Stipulations that are contrary to law (memorize!) RLD GETD 1. That the goods are transported at the risk of the owner or shipper2. That the common carrier will not be liable for any loss, destruction or deterioration of the goods3. That the common carrier need not observe any diligence in the custody of goods4. That the common carrier shall exercise a degree of diligence less than that of a good father of a family or of a man of ordinary prudence in the vigilance over the movables transported 5. That the common carrier shall not be responsible for the acts or omissions of his or its employees6. That the common carriers liability for acts committed by thieves or of robbers, who do not act with grave or irresistible threat, violence or force, is dispensed with or diminished 7. That the common carrier is not responsible for the LDD of goods on account of defective condition of the car, vehicle, ship, airplane or other equipment used in the contract of carriage

December 5, 2014

PRESUMPTION IN CASE OF LED THAT CC WAS NEGLIGENT/AT FAULT 1735

PRESUMPTION IN CASE OF PASSENGERS DEATH OR INJURY THAT CC WAS NEGLIGENT/AT FAULT 1756

Legal Issues to Address:1. Is he a passenger? PASSENGER those who have entered into a contract, implied or express, to be transported from one place to another Instances:1. Without intention to pay X passenger 2. Entered surreptitiously X passenger 3. Enter who has not paid but with intention to pay Passenger4. If person boarded the bus in an unusual place of the bus (ex. roof) passenger 5. If person boarded the wrong bus passenger E: if he has already been informed that he entered the wrong bus and he has an opportunity to leave the bus X passenger6. If the person was asleep and was not able to get off destination and was informed and awaken that he has missed his destination + opportunity to get off + X get off X passenger 7. Newsboy, concessionaire on train abroad passenger 8. Driver/bus conductor X passenger But they should still exercise ED However there is no breach of contract of carriage between him and his employer since they are not passengers If something happens to them bus will be liable under workmens compensation law, X breach of contract of carriage 2. Did the CC exercise ED in transporting the passenger?3. When will this ED of CC start and end? Land Transportation A. BUSSTART: From the time the bus has stopped to take in passengers and the passenger attempted to board the bus If there was an offer and the offer was accepted there is already an implied contract The moment the bus stops and something has happened to the passenger, the common carrier is liable even if the passenger has not yet boarded the bus WHY? The law wants to protect the safety of the passenger and wants to impose an obligation to the bus company that when he offers, the passenger is in a safe place stop and offer your services at a safe place (ex. dont do it in the middle of the road cause you will be liable) END: From the time the passenger has alighted from the CC and has reasonably put himself in a safe place The mere fact that the passenger has already alighted the bus it does not cut the ED responsibility of the bus the passenger should be at a reasonably safe place only time when the CCs ED is over WHY? For the CC to stay in a place where the passenger can alight safely (x in the middle of the road)

B. TRAIN/LRTSTART: From the time the passenger has purchased a ticket Even if the passenger has not boarded the train yet 1763 injury caused by a stranger or fellow passenger END: From the time the person has alighted the LRT unit and has gone to a safe place AIR TRANSPORATIONSTART: From the time the passenger checks in and is in the pre-departure area (submitted yourself to the custody of the CC) Airplane ticket purchase only X make the CC liable at once END: From the time you alighted the plane and has gone in a safe place or outside the custody of the CC

LIABILITY OF COMMON CARRIER 1759 - Liable for acts of employee even if the employee has acted beyond its authority or violated the orders of the CC CC cannot use a defense that the CC exercised DGFOAF in selecting and supervising his employee in a case of breach of contract 1763 - Liable for the acts of a stranger and co-passenger Stranger - Somebody who just entered the bus and hurt somebody there IMPT: In order for the CC to be free from liability in cases of hold-ups and injuries cause by stranger, there must be IRRESISTABLE FORCE OR THREAT without this, CC will be liable Example: If hold up lang na walang kwenta CC liable because they could have prevented it If hold up na may arms, etc CC x liable Hypo: Security agent rode the bus to which he is an employee to go to his office in Cubao, saw his GF with another man and shot them liable under 1763 (co-passenger) and not under 1759 (employee)

CASES FILED:1. CULPA-CONTRACTUAL Filed against: the common carrier Breach of contract Preponderance of evidence 2. QUASI-DELICT Example: Vessel was moving to the wharf loaded with cargoes and when it was about to dock, it lost control and hit the tier and destroyed the cargoes owner of tier and cargoes filed case against the carrier Owner of the tier can file case for Quasi-delict Owner of the cargo can file case for Culpa-contractual Based on Torts3. CULPA-CRIMINAL Filed against the driver CC subsidiarily liable for civil liability of the driver

DAMAGES1. MORAL DAMAGES Anxiety, mental anguish, hurt feelings, sleepless nights GR: X awarded in culpa-contractual E: 1) Death 2) Gross negligence 2. EXEMPLARY DAMAGES Awarded to set an example to the public If there is one or more aggravating circumstance 3. NOMINAL DAMAGES To vindicate right of the person4. ACTUAL DAMAGES Life expectancy = (2/3 x 80 age) x (income expenses)

NEXT HW:1. CODE OF COMMERCE Real and hypothecary liability of CC Meaning of Vessel

JANUARY 9, 2015

CODE OF COMMERCE/MARITIME LAW

MARITIME LAW AND NCC Complementary (1766) X conflict with NCC

MARITIME LAW System of law which deals with affairs, business, vessels, crew of the sea and conveyance of property and persons Transportation by the sea Transpo by sea is usually used when it involves big shipments Transportation = life blood of the economy JURSDICTION: Metro Manila Amount is more than 400k = RTC Less than = MTC Provinces Amount involved is more than 300k = RTC Less than = City Court NATURE OF MARITIME LIABILITY REAL AND HYPOTHECARY IN NATURE (LIMITED LIABILITY RULE) Depends on the happening of something The owner/ ship agent of the vessel will not be liable for the value of the cargoes that are lost if the vessel is totally lost In sum: NO OR TOTAL LOSS OF VESSEL = NO LIABILITY PARTIAL LOSS = LIABLE Example 1: Shipment from HK to Philippines Value of vessel (150M); Cargo (200M) Vessel sank because of negligence of captain Although the TOTAL LOSS of the vessel is due to the negligence of the captain, the owner/ship agent will no longer be liable = x recover anything from the shipowner Reason behind law: To encourage the shipping business from freeing ship owners from liability because the sea transportation business is very risky Example 2: Ship cargo from HK to Philippines Cargo (200M); Cargoes totally lost, but vessel PARTIAL LOSS only CARGO OWNER CAN RECOVER because partial loss only Example 3: Partial loss of ship. Can you recover for your cargo that was lost? YES E: Is there a possibility that the ship owner will be free from liability? YES, IF HE ABANDONS THE SHIP because the ship will now go to the creditors and they can auction it In sum: GR: Yes, liability E: Abandoned ship Example 4: Vessel totally lost when it reached Hawaii; shipments are also totally lost Cargo owners filed case to recover value of their lost cargoes Can they recover? NO If partial loss of vessel, cargo totally lost + notice of abandonment? X recover If vessel totally lost + no abandonment? X recover PRINCIPLE: ABANDONMENT IS ONLY A CONDITION PRECEDENT WHEN THE VESSEL IS TOTALLY LOST EXCEPTIONS TO LIMITED LIABILITY: (CARGO OWNER CAN STILL RECOVER DESPITE TOTAL LOSS)1. Workmens Compensation 2. Injury or damage due to ship owner or to the concurring negligence of the ship owner or to the concurring negligence of the ship owner and the captain E: If negligence was only due to ship captain = limited liability applies3. The vessel is insured4. Expenses for repair on vessel completed before loss cost of repair has already been made and due but not yet paid by ship owner 5. In case there no total loss and the vessel is not abandonment 6. Collision between 2 negligent vessels

Examples:1. Workmens Compensation 2. If the negligence is caused by ship agent/owner or concurrent negligence of ship agent and ship captaina. Vessel from Manila to Iloilo ship was overloaded ship was totally lost heirs filed breach of contract owner shall be liable b. Despite knowing that there was advice of typhoon, common carrier still travelled liable

*SHIP AGENT Acts as the owner in the port where the ship enters

VESSEL X cover small boats, hospital boats Why do we need to distinguish between maritime vessel and vessel? Because if we are referring to a maritime vessel, there must first be a protest filed Case: The small boat went near the big vessel and the small vessel was sucked by the big vessel and one of the passengers was hit by a propeller Contention of vessel: should be done within 24 hours therefore, cannot file claim SC: No need for protest because the small boat is not a maritime boat Also, the person who should make the protest could not do it because of his situation (injured brought to hospital) Summary: Maritime vessel: Protest is needed Not maritime vessel: No protest needed

MIDTERM EXAM: 1. Basic Concepts Explanation2. Multiple Choice 3. Problem solving (Discuss all the issues)

PRE-MIDTERM REVIEW1. What are the governing laws? If land Transportation If coast wise If Phil to somewhere If foreign to Philippines If Air Transportation If Domestic If International If Water Transportation2. Concepts Demurrage Extraordinary Diligence If air transpo (air worthy) Sea transpo (sea worthy) Land (road worthy) 1753 When will it start and end? 1738 Seaoworthy legal meaning When is inspection mandatory or not? Land transportation X mandatory E: If the danger is visible or obvious If X inspect = X exercise EOD = liable Air transportation mandatory 3. Memorize 1734 4. Can you reduce from EOD to Ordinary Diligence? Depends: CARGO YES Requirements:1. Writing2. Valuable consideration3. Should be reasonable and fair Passenger No PASSENGER = X reduced E: 1758 Fortuitous or non paying/ gratuitous passenger E to E: Willful act or gross negligence of the carrier If there is contributory negligence it may reduce only the liability of the common carrier, but it will not exempt CC from liability 5. What are the stipulations that are not valid?6. Will the common carrier be liable for acts of co-passenger or stranger? Yes In case of stranger irresistible force dapat so that the common carrier will not be liable 1763 In case of employees - Liable 17597. When will he become a passenger? End? Land transpo Air transpo Sea transpo

EXTRA NOTES

PASSENGER One who travels in a public conveyance by virtue of a contract, express or implied, with the carrier as to the payment of fare or that which is accepted as an equivalent thereof PARTIES TO CARRIAGE OF PASSENGERS1. Common Carrier2. Passenger PARTIES TO CARRIAGE OF GOODS1. Shipper2. Carrier 3. Consignee PERFECTION OF CONTRACT OF TRANSPORTATION1. Contract to Carry perfected by mere consent 2. Contract of Carriage or of Common Carrier real contract because facilities have to be used before contract is perfected PRIVATE CARRIER One which, without being engaged in the business of carrying as a public employment, undertakes to deliver goods or passenger for compensation (single transaction)

COMMON CARRIERPRIVATE CARRIER

GOVERNING LAWLaw on Common CarrierOblicon

STATE REGULATIONYesX

AVAILABILITYPeople indiscriminately Particular individuals or groups only

DILEGENCEEODOrdinary Diligence

PRESUMPTION OF NEGLIGENCEYesNo

EXEMPTING CIRCUMSTANCESProve EOD and Art 1734Caso Fortuito under 1174

STIPULATION LIMITING LIABILITYGR: X agree on limiting carriers liabilityE: Provided by law

X stipulate that it is exempt from liability for negligence of employees or agentsParties may limit carriers liability provided X contrary to public policy, law

Can stipulate that it is exempt from liability for negligence of employees or agents

CHARTER PARTY A contract by which an entire ship or some principal part thereof, is let by the owner to another person for a specified time or use transforms CC to PC REGISTERED OWNER RULE GR: Registered owner of the vehicle is liable for any damage caused by the negligent operation of the vehicle although the same was already sold or conveyed to another at the time of the incident E: Vehicle stolen from a garage without the owners knowledge and consent PRIMARY OBLIGATIONS OF A COMMON CARRIER IN THE CARRIAGE OF GOODS (PASTE)1. Duty to deliver the goods to the proper PERSON2. Duty to ACCEPT the goods3. Duty to SEASONABLY deliver the goods to the destination4. Duty to TRANSPORT the goods safely at the agreed destination5. Duty to exercise EXTRAORDINARY diligence EFFECTS OF INEXCUSABLE DELAY:1. Carrier still has duty to exercise EOD2. Natural disaster X free carrier from responsibility 3. Delay is without just cause = CC X limit its liability for LDD4. Liable for damages caused by delay5. Consignee may exercise his right to abandon DUTY TO ACCEPT GOODS: GR: CC duty bound to accept passengers and cargo without discrimination (DDUO-CITES) E:1. Goods are DANGEROUS2. Goods will be exposed to untoward DANGER such as flood, capture by enemies3. Goods are UNFIT for transportation 4. Acceptance would result to OVERLOADING5. Goods = CONTRABANDS or illegal6. INJURIOUS to health7. Failure to tender goods on TIME 8. Goods like livestock will be EXPOSED to diseases9. STRIKE DURATION OF LIABILITY 1736, 1738, 1737 REQUISITES OF FORCE MAJEURE: (PDD)1. Natural disaster must be the PROXIMATE AND ONLY CAUSE of the loss2. Common carrier excised DUE DILIGENCE to prevent or minimize the loss before, during or after occurrence of the disaster3. CC has not negligently incurred DELAY in transporting REQUISITES OF ACT OF PUBLIC ENEMY (PDW) 1. PROXIMATE AND ONLY CAUSE of the loss2. Common carrier excised DUE DILIGENCE to prevent or minimize the loss before, during or after occurrence of the disaster3. Existence of actual state of WAR** includes PIRACY NEGLIGENCE OF SHIP OWNER1. When it is the SOLE AND PROXIMAYTE cause = absolute defense2. When it is CONTRIBUTORY = partial defense BAGGAGE Hand carried = Ordinary diligence Checked in = EOD PRIMARY OBLIGATIONS OF A COMMON CARRIER IN THE CARRIAGE OF PASSENGERS (U-STAB)1. Duty to observe UTMOST diligence to passenger2. Duty to SEASONABLY bring the passenger to designation3. Duty to TRANSPORT the passenger safely to the agreed destination4. Duty to ACCEPT passengers without discrimination5. Duty to take care of the passengers BAGGAGE DILIGENCE IN THE SELECTION OF AND SUPERVISION OF EMPLOYEE GR: Based on contractual obligation = X exempt from liability E: Based on quasi-delict = available as defense

LIABILITY OF COMMON CARRIER FOR DEATH OR INJURIES TO PASSENGERS CAUSED BY:ACTS OF EMPLOYEESACTS OF STRANGERS OR PASSENGER

DILEGENCE REQUIREDEODOrdinary Diligence

NATURE OF LIABILITYTORT (QUASI-DELICT)

However, employee must be on duty at the time of the actGR: X liableE: If common carriers employee could have prevented or stopped the act or omission through DGOAF

DOCTRINE OF LAST CLEAR CHANCE Where both parties are negligent but the negligent act of one is appreciably later than that of the other, or where it is impossible to determine whose fault or negligence caused the loss, the one who had the last clear opportunity to avoid the loss but failed to do so, is chargeable with the loss only available between 2 colliding vehicles because it is an action based on tort or quasi-delict OBLIGATIONS OF SHIPPER OR CONSIGNEE AND PASSENGER1. Due diligence to avoid damage or injury 2. Bound to pay the consideration in the form of freight or fare MEANING OF EXTRAORDINARY DILEGENCE IN CARRIAGE OF GOODS The EOD in the vigilance over the goods tendered for shipment requires the common carrier to know and to follow the required precaution for avoiding damage to or destruction of the goods entrusted to it for sale, carriage and delivery. It requires the common carrier to render service with the greatest skill and foresight and to use all reasonable means to ascertain the nature and characteristics of the goods tendered for shipment and to exercise due care in the handling and stowage, including such methods as their nature requires IN CARRIAGE OF PASSENGERS A CC is bound to carry passengers safely as far as human care and foresight can provide, using the utmost diligence of a very cautious person with due regard for all circumstances STIPULATION LIMITING/REDUCING CCS LIABILITY

GOODSPASSENGERS

Allowed less than EOD provided WSVRX lessened or dispensed with through stipulations or posting notices

GRATUTIOUS PASSENGERS - limit liability but not for willful acts or gross negligence ACCOMODATION PASSENGERS only Ordinary Diligence required STIPULATION LIMITING/REDUCING CCS LIABILITY SEAWORTHINESS: (RASEM)1. Fitness of the vessel itself to withstand the rigors of the voyage2. Fitness of the vessel to store the cargoes and accommodate passengers to be transported 3. Vessel is adequately equipped and properly manned with sufficient number of competent officers and crew CARGOWORTHINESS 1. The ship must be sufficiently strong and equipped to carry the particular kind of cargo which she has contracted to carry and 2. Her cargo must be so loaded that it is safe for her to proceed on voyage TRANSSHIPMENT The act taking cargo out of one ship and loading it in another or the transfer for further transportation from one ship or conveyance to another EOD IN CARRIAGE BY LAND- (CT)1. Condition of vehicle not defective, good order and condition2. X breach of traffic rules AIRWORTHINESS (REC)1. The aircraft must be in such condition that it must be able to withstand the rigors of flight2. The aircraft, its engines, propellers and other components and accessories are of proper design and construction and are safe for air navigation purposes, such design and construction being consistent with accepted engineering practice and in accordance with aerodynamics laws and aircraft science (EQUIPMENT)3. Vessel has a competent captain and crew who exercised EOD in operating the aircraft BILL OF LADING A written acknowledgement of the receipt of goods and an agreement to transport and to deliver them at a specified place to a person named or on his order MARITIME COMMERCE 573 869 of CODE OF COMMERCE That system of laws which particularly relates to the affairs and business of the sea, to ships, their crews and navigation and to maritime conveyance of persons and property CHARACTERISTICS OF MARITIME TRANSACTION1. REAL real contract, registration required 2. HYPOTHECARY the liability of the carrier in connection with losses related to maritime contracts is confined to the vessel, which stands as the guaranty for their settlement MERCHANT VESSEL engaged in maritime commerce, whether foreign or otherwise VESSEL Any barge, lighter, bulk, carrier, passenger ship, freighter, tanker, container, ship, fishing boats or other artificial contrivances utilizing any source of motive power, designed, used or capable of being used as a means of water transportation operating either as a common carrier, including fishing vessels covered under PD 43 E: 1. Those owned or operated by the AFP and by foreign government for military purpose2. Bancas, sailboats and other waterborne contrivances less than 3 gross tons capacity and not motorized MARITIME LIEN constitutes a present right of property in the ship, a jus in re, to be afterward enforced in admiralty by process in rem DOCTRINE OF LIMITED LIABILITY (HYPOTHECARY RULE) The exclusively real and hypothecary nature of maritime law operates to limit the liability of the shipowner to the value of the vessel, earned freightage and proceeds of the insurance, if any. GR: No vessel, no liability (Total loss) E: (WORK-AIIR)1. Workmens compensation2. X total loss and X abandoned3. Injury or damage due to ship owner or to the concurring negligence of shipowner and captain 4. Vessel is insured 5. Expenses for repair and provisioning of the ship Ship owner is the party who may invoke the limited liability rule Cases where applicable:1. Civil liability for indemnities to 3rd persons2. Indemnities for negligent act of the captain3. Collision4. Liability for unpaid wages of captain and crew and for advances made by the ship agent if the vessel is lost by shipwreck

January 30,2015 (From Mikee)

MT essay answers:1. A stipulation transferring the risk to the shipper is not valid. Would limited liability rule apply if the ship were lost due to the negligence of the ship captain? Yes. There are only 4 exceptions to the limited liability rule. One is the concurrent negligence of the ship captain together with the ship owner. So that if the loss was due to the fault of the ship captain only, then the limited liability rule will still apply.2. Robert is already a passenger since he was in the premises and under the control of the common carrier. Extraordinary diligence is now required of the common carrier. Art. 1762 provides for the liability of the common carrier for acts of passengers or strangers. There is a presumption that a common carrier is always liable unless proven otherwise under Art. 1735.3. Right of inspection is mandatory in airplanes because of the anti-hijacking law but it is not mandatory in busses or other land transportation unless there is something suspicious which is obvious to the naked eye4. Betty the accountant while on her way to work is a passenger and the common carrier is liable for her death because a common carrier is always presumed liable. On the other hand, the driver is not a passenger since there is no contract of carriage. However, he may claim compensation from other sources of law

Special Contracts under Maritime Commerce

What is a CHARTER PARTY? It is a document in itself and it does not refer to a party in a controversy. Simply put, it is in the nature of a contract of lease, having for its object the whole or part of a vessel.

DEFINITION OF TERMS:1. The lay days the number of days given to unload/load (this is free)2. The extra lay days an extension (it is not for free).3. Demurrage the penalty or fee for the excess time spent in unloading and loading.4. Primage compensation or fee given to the captain or crew which is due to the special care of captain and crew5. Embargo legal restriction of departure of vessels6. Contract of towage contract for a barge to be towed by a ship

What are the REQUISITES of a Charter party?1. The Charter Party must be in writing, signed, and with the consent of the parties2. Existence of the vessel at the disposal of the charterer3. Stipulation as to the freightage 4. It must comply with the appropriate formalities:a. Must specify the kind, name, tonnage, flag raised, port, registry, the names, surnames, & domiciles of the ship captain, ship agent, and ship owner, capacity, dates of loading and unloading, the lay days, extra lay days, demurrage, primage

Must the Charter Party always be in writing and signed to be valid? GR: Yes, according to Art. 652. E: Art. 653 provides that when cargo is already delivered or received without the Charter Party being signed, the stipulation should be interpreted to be that contained in a bill of lading.

Q: The parties agreed to deliver cargo from point A to point B. The Charter Party stipulated that there will be a demurrage. But when the cargo loaded and the vessel was in voyage, there was a deviation to point C, with a bill of lading to that effect. Shall there be a payment of demurrage? NO! The SC held: since the goods were received although the Charter Party was not signed it is still valid, but the provision in the bill of lading will apply. Since the bill of lading did not contain a stipulation as to demurrage, then there is no demurrage

What are the 2 KINDS of Charter Party?1. DEMISE or BAREBOAT the vessel is chartered in itself as a whole (hence, bare) and need not provide that the crew is included because of the principle that the control of the crew is given to charterer, along with the navigation etc. He is deemed the OWNER of the vessel and the EMPLOYER of the crew. Q: A was part of the crew of a vessel. After 3 months, the vessel was chartered. A was terminated by the charter. A is now claiming that he was terminated unlawfully. Against who do you file the case? The charterer. He has now the burden to prove that it is not a bareboat charter party. (SC Case) PRESUMPTION OF BAREBOAT:in case of doubt, the charter party is always presumed to be a BAREBOAT charter party, and not affreightment.

What is the difference between the 2?

BAREBOATAFFREIGHTMENT

Charter of whole vesselCharter of part of the vessel

Converted to private carrier X converted

What is the significance of the conversion? There could be a stipulation limiting liability in case of negligence of the ship owner and it will be valid in the case of bareboat but not in affreightment. Can a ship captain enter into a charter party over the vessel of the ship owner? Yes, a ship captain who entered into a charter party even against will of the owner who will be civilly liable for damages to the owner. Still, the contract is VALID.

If the vessel is no longer seaworthy, the captain shall:1. Look for another vessel within the parameter of 150KM for the purpose of transferring the cargo and continue with the voyage. If he is indolent in searching for another vessel then he is liable for whatever damages that may occur. The cargo owners will now have the right to look for another vessel at the expense of the captain or the ship owner2. If he cannot find another vessel, he may deposit the vessel which is not seaworthy

Can the captain sell cargo? Yes, if under special circumstances such as for necessity, provision, food, and repair of the vessel, the captain can sell but must pay the owner: If preserving the cargo is more expensive than the value cargo itself If the consignee cannot be found and there is refusal to sell or release the cargo.

Instances where the cargo made liable for freight, duties, taxes, duties, other expenses advanced and ought to be reimbursed by the shipper: Cargo is NOT liable to pay freight in the event of: A shipwreck or the stranding or the loss of the vessel E: unless the vessel is ultimately repaired and brought to its destination, in which case the cargo salvaged during shipwreck, will be liable in proportion to the distance travelled In case of confiscation because of piracy;

A charterer is deemed the owner of the vessel as a whole and should not accept cargo more than it can handle.

Owner must respect the capacity of the vessel. Owner once he notices that cargoes were clandestinely loaded, he may remove it. If not dangerous, he can still opt to deliver but at a higher freight.

In case of expiration of lay days, the cargo is not yet ready for loading, then the vessel can leave without them

2. AFFREIGHTMENT2 kinds:1. Time period2. Voyage

Grounds for rescission and at whose instance????___________________________________________________________

What are the loans on BOTTOMRY & RESPONDENTIA? These are SPECIAL kinds of loans involving vessel (bottomry) and cargo (respondentia). Because the vessel and consequently its cargo is left at the mercy of the sea these objects are made collaterals. That is why the parties can stipulate a higher interest since it is not covered by the usury law unlike in simple loan. There can never be oral but only written form in a public document (notarized).

LOAN ON BOTTOMRYLOAN ON RESPONDENTIA

DEFINITIONLoan made by the shipowner or ship agent guaranteed by vessel itself and repayable upon arrival of vessel at destination

Note: No LOB may be made in any case on the salaries of the crew, nor the profits which may be expected Loan taken on security of the cargo laden on vessel and repayable upon safe arrival of cargo at destination

WHO MAY CONTRACTShipowner or ship agent

Outside the residence of the owners the captainOnly the owner of the cargo

COMMON ELEMENTS1. Exposure of security to marine peril2. Obligation of the debtor conditions only upon safe arrival of the security at the point of destination

FORMS1. Public instrument2. Policy signed by contracting parties and the broker taking part therein3. Private instrument

What is the difference between simple loan and these loans?- In bottomry the collateral is the vessel and if it is lost the obligation to pay is extinguished. In respondentia the collateral is the cargo. If collateral is lost in a simple loan, the principal will still exist.

BOTTOMRY/ RESPONDENTIASIMPLE LOAN

Collateral = vessel (bottomry)

If lost = obligation to pay is extinguished If collateral is lost = principal will still exist

Collateral = cargo (respondentia)

If lost = obligation still exists

MARINE RISKMarine risk is necessaryX necessary

FORM AND MANNERForm and manner prescribed by the code of commerceFormal requisites of ordinary contract

REGISTRY OF VESSELSMust be recorded in the registry of vessels to be binding to third personsX need

PREFERENCELast lenderFirst lender

If it is not stated specifically that the voyage is from point A to point B or one way The presumption is that it is two way (round trip). In order to limit coverage, it must be specifically stated to be one way So that the borrower is not obligated to pay the loan if it is not stated

When is the obligation extinguished if the collateral is lost There must always be the existence of a maritime peril

GR: Presumed that LOR or LOB covers roundtrip E: When it is expressly stipulated that a particular trip is covered by loan

GR: When a vessel or cargo is lost, then the LOR or LOB is extinguished. The borrower will no longer pay the lender because the subject matter is lost E: 1. If the loss is caused by inherent defects of the cargo2. Fault of the borrower himself3. Barratry or malice on the part of the captain of the vessel4. If the damage was caused because the borrower was engaging in contraband goods5. If the goods loaded were different from that designated in the contract

Ex. Cargo worth 1M, loan on respondentia is 500k, the GA is 100k. How much should the lender pay? Pay 50k

Ex. In case of shipwreck and the vessel is stranded but some of the goods were salvaged or recovered, there is salvaging expenses in doing the same. What is the basis of determining the payment of the borrower? X original value of the loan Formula: Value of the goods expenses for salvaging

Ex. Cargo is worth 1M, salvaged cargo is worth 500k, salvaging expenses of 100k. 400k = basis of loan 500k 100k = 400k

WHERE THE GOODS OR VESSEL IS COVERED BY INSURANCE GR: If it is 100% covered by loan, it cannot be covered by insurance because there is no more insurable interest on the part of the owner E: Insurance and LOB/LOR may co-exist but there should be a determination of insurable interest Ex. How to determine? if the value of the goods or vessel is 1M and subject to LOB/LOR for 700k. insurable interest of insurance company is 1M 700k = 300k Is the insurance company also liable in case of damage? YES! Because it has interest in the subject matter Once insurance and loan co-exist, both shall be liable for damages in proportion to their interest INSURANCELOB/LOR

In case of loss, may be paid at any time in all events even without marine riskThere should be the presence of marine risk; in case of loss, loan is extinguished

INDEMNITYIndemnity is paid AFTER loss has occurredPaid in advance by way of a loan

EFFECTS OF LOSS OF VESSELIn case of loss of the vessel due to a risk insured against, the obligation of the insurer becomes absoluteIn case of loss of the vessel due to marine peril, the obligation to pay is extinguished

KIND OF CONTRACTConsensualReal

Q: Before the vessel reached its destination in Iloilo, the vessel sunk. There is no more obligation to pay if it is a loan on bottomry. If respondentia, obligation still exists. If the cargo was saved, then the borrower will pay lesser expenses. Vice-versa: If the cargo was lost and vessel was saved, the obligation of the borrower to pay in respondentia is extinguished (if bottomry, it still exists)

WHEN LOAN ON BOTTOMRY OR RESPONDENTIA IS REGARDED AS SIMPLE LOAN1. Lender loaned an amount larger than the value of the object due to fraudulent means employed by the borrower2. Full amount of the loan is not used for the cargo or given on the goods if all of them could not have been loaded, the balance will be considered a simple loan3. If the effects on which the money is taken is no subjected to any risk

Order of preference (if there are many creditors) Rule 1: Contracts or loans during voyage have preference over loans contracted before the clearing of the port for voyage Rule 2: The order of preference shall be in the inverted order based on the dates. Because if it were not for the latest loan, the vessel would have sunk and will be liable. There is presumption that the last loan saved the vessel. Last loan has preference over the earlier loans. Rule 3: If several loans were taken in the same port, then they have to be paid proportionately Example: For instance, in several loans on bottomry were contracted. Before the voyage, a loan in Manila for 20,000 was contracted. During the voyage, a loan in Iloilo was contracted. Due to the necessity of major repairs, a loan was contracted in Cebu for 100,000. Upon arrival in the place of destination in Cagayan de Oro, it was discovered that the vessel was no longer seaworthy. The vessel was then sold for 110,000. The creditors are now asking for them to be paid. Manila loan for 20,000 before voyage Iloilo loan for 10,000 during the voyage Cebu loan due to need of major repairs for 100,000 CDO discovered that vessel is no longer seaworthy, so it was sold for 110,000. What is the order of preference? The loan contracted in Iloilo has preference over loan in Manila because it was contracted during the voyage The loan contracted in Cebu was latest, them it has preference over the loan in Iloilo. So 100,000 will be paid to the creditor in Cebu. The remaining 10,000 will be paid to the creditor in IloiloAssuming that in the same port in Cebu, there were 3 loans were contracted with 3 different creditors, what is the order of preference? It must be paid proportionately to the amount of the loan.

The rule that when the collateral is lost, the obligation of the borrower to pay is extinguished only applies to risks due to MARINE PERILS not NATURAL DEFECT, MALICE, NEGLIGENCE, BARRATRY, then the obligation still subsists.

What is the effect if thru fraud the borrower was able to get a loan more than the value of the vessel is loan on bottomry considered valid? For instance, the vessel is worth 50M. but because of fraud, you were able to get a loan for 70M. how will we treat the loan?

The loan on bottomry will be valid up to the extent of 50. The remaining 20M will be treated as a simple loan

(Bar question) Does the ship captain have a right to enter into a loan on bottomry? Yes, provided that the ship captain is within the residence of the ship agent or the ship owner and that he is authorized to do so. Residence here does mean its literal sense (place of abode) but may be interpreted to mean the office of the ship owner.

What if ship captain is outside the residence of the ship owner or ship agent? Yes he can still can enter into a loan of bottomry:1. if it is connected to his inherent duty in a contract for voyage, such as in the case of the provision of the vessel, for repair of the vessel, OR 2. if the ship captain is a co-owner, in which case the loan will be valid up to the extent of his co-ownership.

Can the ship captain enter into a loan on respondentia? No, because he is NOT a representative or agent of the owner of the cargo, unlike in loan on bottomry wherein the ship the agent of the owner of the vessel

February 6, 2015AVERAGE AND COLLISION

AVERAGE Technical maritime term Simple meaning Extraordinary or accidental expense Damage or injury Should be distinguished from a simple damage and expense so that we will be able to know who will bear the damage/expense Art 806 It is an extraordinary or accidental expense incurred during the voyage for the preservation of the cargo, the vessel or both Any damage or deteriorations which the vessel may suffer from the time the vessel starts its voyage until the time it reaches its point of destination or damage/deterioration suffered by the cargo from the time it is loaded on the vessel until the time it is unloaded in the port of consignment

ORDINARY AND NECESSARY EXPENSEAVERAGE

Art 807Art 806

To determine who bears the loss

Loss/ injury is borne by the ship ownerDepends on what type of average is involved:1. General Average borne by all persons having interest in the vessel and the cargo should contribute to satisfy the average 2. Particular/ Simple Average borne by respective owners

Petty expense which must be shouldered by the ship owner

Examples:1. Pilotage (pilot fees)2. Anchorage terminal fee, etc. 3. Lighterage fee small barge where cargoes are unloaded and the lighterage brings the cargoes to the port4. Quarantine Fee 5. Health and Sanitation Fee6. Inspection Fee

Particular AverageGeneral Average

Expense or damage which does not inure to the common interest Particular only to the person who owns the thing

Expense or damage deliberately done to save the V/C/Both Inures to the common benefit of the ship owner and cargo owner

Only the particular person (ship owner/ cargo owner) who caused the expense or suffered the damage shall bear the expense X reimbursement

Borne by all persons having an interest in the vessel and the cargo therein at the time of occurrence of the average shall contribute to satisfy the average Reimbursement

Example (808): 1. Inherent defect of cargo Ex.: Guimaras mangoes exported to HK (owner knows that lifespan of mango 5 days) + voyage for 10 days = mangoes deteriorated 2. Force majeure 3. Damage to the haul, vessel, equipment 4. Wages, victuals of the crew of the vessel If fixed voyage = particular average If monthly basis = general average

Example: Ship owned by Germany agricultural machinery owned by America to be delivered to Russia War between Russia and Germany If vessel continues voyage to Germany, vessel will be captured vessel went to Philippines instead. Who will pay for the salary of the crew? Particular Average Ship owner will pay The reason for deviating is not because the machinery is a contraband, but to save the ship because of war between Russia and Germany

REQUISITES OF GENERAL AVERAGE (MEMORIZE) 1. Common danger or risk Clear, certain and imminent Ex.: Captain was sailing vessel and then the daughter told the captain that she dreamt that a storm was coming and that he should throw away some stuff in the vessel. Is this a valid general average? NO! Risk is based on speculation; not imminent or certain. 2. Deliberate Sacrifice Purpose is to save the vessel and cargo Ex.: Logs were moving from left to right on the vessel because of a storm. Because of the movement, the logs fell boat stabilized and the rest of the cargoes saved. Owner of the logs claimed that he should be paid by the ship captain because it is a general average. Correct? NO! Although it saved the rest of the cargoes, jettison was not deliberate. It was inevitable to happen because of the storm. 3. Sacrifice must be successful Supposing the cargo was jettisoned and it saved the rest of the cargo and vessel itself. Amount of cargo jettisoned (50M). Then vessel continued to its journey and vessel and cargoes were lost. Some of the cargoes were salvaged/saved. Are owners of the cargoes that were saved liable to pay the owner of the cargoes that were earlier sacrificed or jettisoned (50M)? Sacrifice was successful that is why the vessel was able to continue its voyage and the cause of the loss of the cargoes and sinking of the vessel was due to other reasons, not the original one. The cargoes that were subsequently lost were salvaged Owner of the salvaged cargo should pay to the owner of the cargoes jettisoned: Salvage value expenses for salvage 4. Proper Judicial Formalities (MEMORIZE) 1. Procedure for recovery2. Assembly and deliberation Captain will assemble the people who have interest and then deliberation3. Resolution of the captain 4. Entry of the resolution in the logbook Those who voted for and against it must be recorded Majority rule prevails BUT the captain has the last say even if it is against the decision of the majority and such decision should be recorded in the logbook5. Detailed minutes 6. Delivery of the minutes to the maritime judicial authority of the first port, within 24 hours from arrival7. Ratification by the captain under oath

JETTISON Act of throwing cargo overboard in order to lighten the vessel Under the control of the captain X res nullius; X object of occupation Cargoes must be covered by the bill of lading so that it can be proved Order of goods to be cast overboard:1. Those on deck first heaviest one with the least utility and value2. Those on the lower deck second - heaviest one with the least utility and value

Goods not covered by General Average even if sacrificed1. Goods carried on deck2. Goods not recorded in the books or records of the vessel3. Fuel for the vessel if there is more than sufficient fuel for the voyage

GR: Average should happen during the course of the voyage (?) E:1. In the course of a storm, the cargoes are transferred to barges to lighten the vessel 2. Vessels are already anchored in the pier and there was a fire on one of the vessels. They intentionally sinked the vessels beside the vessel on fire to save the other vessels anchored. = GENERAL AVERAGE even if X on voyage. The other vessels saved should contribute.

WHO ARE THE PEOPLE WHO ARE LIABLE TO CONTRIBUTE TO THE GENERAL AVERAGE? Ship owner Cargo owners in proportion to their interest Lenders on bottomry and respondentia Insurance company

COLLISION (Art 826 of Code of Commerce) Contract of 2 moving vessels or one moving, the other is stationary If one is moving and the other is stationary = allision

RULES IN CASE OF COLLISIONWho at faultWho is liable

If one vessel if at fault Vessel at fault is liable for damages

Both are at fault Vessel Each will bear their own loss Cargo solidary liability (one solidary debtor can pay for the whole obligation subject to reimbursement from the other solidary debtors) Example: Vessel A = 2M (damage) Vessel B = 2M Cargo:X 3M (damage)Y 2M W 15MZ 20M

If it cannot be determined who is liable DOCTRINE OF INSCRUTABLE FAULT Vessel Each will bear their own loss Cargo solidary liability

Proximate Cause and Contributory Cause X APPLY IN MARITIME LAW = both considered at fault Vessel Each will bear their own loss Cargo solidary liability Example: A = Proximate cause B = Contributory cause

Last Clear Chance X APPLY IN MARITIME LAW = both considered at fault Vessel Each will bear their own loss Cargo solidary liability

Force Majeure Vessel Each will bear their own loss Cargo Each will bear their own loss

If due to act of third person Third person will be liable

ZONES OF TIME IN THE COLLISION OF VESSELS1. Zone 1 All the time up to the moment when the risk of collision begins2. Zone 2 Risk of collision begins until risk is certain One who committed error is liable 3. Zone 3 Risk is certain until collision happens If there is collision in the 3rd zone, the one who caused the privileged vessel to cause the error or swerving is liable (ERROR IN EXTREMIS)

LIMITED LIABILITY RULE Also applies in collision Example: A collided with B. Fault of A. Who will be liable? Based on rule on collision: A is liable If limited liability rule is applied: B was partially damaged but A that is at fault sank and totally damaged A is not liable and need not pay because liability is extinguished because the vessel was totally lost

PROTEST There must be protest within 24 hours otherwise the action will not prosper The following instances need protest before the aggrieved may file a case:1. Collision 2. Arrival in distress3. Shipwreck 4. Hurricane Exceptions to protest:1. If the owner of the cargo is not on board the ship at the time of collision 2. If the person is not capable of expressing his wishes because of the injury that he sustained 3. If the other vessel is not a maritime vessel Feb 20, 2015

ARRIVAL UNDER STRESS The vessel will anchor in the nearest and most convenient port because of well founded fear of seizure, privateer, piracy, accident which will disable to common carrier to navigate Well founded fear should not be based on speculation; there must be a thorough deliberation and such should give you a reasonable conclusion that indeed there is a well founded fear

WHEN LAWFULWHEN UNLAWFUL

When the inability to continue is due to:1. Lack of provisions2. Well founded fear of seizure, privateers, pirates3. Accidents of the sea disabling it to navigateThe inability to continue voyage is due to:1. Lack of provisions due to negligence to carry according to usage and customs2. Risk of enemy not well known or manifest3. Defect of vessel due to improper repair4. Malice, negligence, lack of foresight or skill of captain

ADVANTAGE OF NOTICE THAT IT IS VALID AUS The CC will not be liable for damages But the cost and expenses caused by AUS will always be borne by the ship owner or CC

LEGAL STEPS1. Captain should determine during the voyage that there is a well founded fear of seizure, privateers and other valid grounds 2. Captain shall assemble the officers and summon the persons interested in the cargo who may attend the meeting but without right to vote3. The offices shall determine and agree if there is a well-founded reason after examining the circumstances

GR: CC X liable for damages E: X VALID ARRIVAL UNDER STRESS (OPENS CASE FOR DAMAGES AGAINST CC)1. If the AUS is unlawful Example: If the ship does not have enough food or was not properly kept Gutom members Went to Cebu to get more food X valid AUS2. Risk of enemy not well known or manifest Example: No well founded fear of pirates 3. Defect of vessel due to improper repair Because vessel must be seaworthy 4. Malice, negligence, lack of foresight or skill of captain

EXPENSES FOR UNLOADING CARGO If for repair of the vessel = shouldered by the shipowner If for saving the cargo = cargo owner If for both vessel and cargo = proportional

AFTER CARGO IS UNLOADED GR: ???? E: If caused by force majeure

If there is imminent danger of was already damaged, the captain has to apply in the proper judicial authority for the sale of the cargo. In order to effect the sale, captain must comply with certain formalities such as publishing, acquiring consent from persons who have interests over the cargoes

If the reasons/causes for arrival under stress are gone, he must assemble again his men and decide that the reason no longer exists and then proceed again with the voyage (Legal advice!)

SHIPWRECK Injuries or loss suffered by the vessel because of the swallowing by the waves, or grounding or stranding or running against an object in the sea rendering the vessel incapable to navigate

SHIPWRECKAUS

Vessel is completely incapable of moving Vessel can still move because it can still go to the nearest port

Swallowing by the waves, or grounding or stranding or running against an object in the sea rendering the vessel incapable to navigate

Grounds: well founded fear of seizure, privateer, piracy, accident which will disable to common carrier to navigate

Shouldered individually by the ship owner and cargo owner E: Malice, lack of foresight and skill by the captain CC will shoulder the expenses

WHY? Grounds is caused by FM Shouldered by the ship owner/CC

SALVAGE Saving a vessel Service one person renders to the owner of a goods or ship, by him own labor, preserving the goods or the ship which the owner or those entrusted with care of them have either abandoned in distress at sea or are unable to protect or secure Compensation allowed to persons by whose voluntary assistance a ship at sea or her cargo or both have been saved in whole or in part from impending sea peril or such property recovered from actual peril or loss, as in cases of shipwreck, derelict of recapture

BARRIOS VS GOTHONG CASE X salvage because no marine peril (weather was good) Act of towing only, not act of salvage QUASI-DERELICT -

CIRCUMSTANCES WHEN TOWING CAN BE AN ACT OF SALVAGE When the towing happens during very bad weather

TOWINGSALVAGE

Towing fee will go to the owner of the togboat owner Salvage reward distributed among owner of the vessel (50%), captain (25%) and crew (25% in proportion to their salaries

WHEN CAN A VESSEL OR CARGO BE CONSIDERED AS AN OBJECT OF SALVAGE? When the vessel or cargo is considered a DERELICT DERELICT when the vessel or cargo is already abandoned; a ship or her cargo which is abandoned and deserted at sea by those who are in charge of it without any hope of recovering it or without any intention of returning to it QUASI- DERELICT if the cargo or vessel is although not abandoned is left at the mercy of the waves and the persons who are entrusted to save the same cannot do anything anymore Example: Vessel during a very strong typhoon and at the mercy of the waves but the captain and everyone are still inside the ship X abandoned by still subject of salvage because of concept QD one who salvages the same is still entitled to salvage reward

WHAT IS THE RIGHT GAINED BY THE SALVAGOR OVER THE OBJECT SALVAGED? Right of possession the salvor cannot say that say that he owns it (abandonment of possession only by the abandoner, not ownership) Could the salvor refuse to surrender the vessel or cargo to the owner? Yes, if the owner does not want to pay the salvage reward SALVAGE LIEN

OBJECTS OF SALVAGE1. Ship2. Jetsam goods which were thrown off a ship which was in danger3. Floatsam goods which float upon the sea when cast overboard 4. Ligan/Lagan goods cast into the sea tied to a buoy, so that they may be found again by the owners

REQUISITES1. Valid object of salvage 2. Marine peril3. Service voluntary Example: Vessel was in danger crew saved the ship X voluntary because crew is under obligation to save ship 4. Successful, total or partial

WHEN SHOULD INTENTION SHOULD BE RECKONED Intention of abandonment starts from the time the captain and crew left the ship Salvaged by others Change of mind will not change the state of the vessel If no intention to abandon and goes back to the vessel after getting the necessary equipment X valid salvage by others

OBLIGATION OF COLLECTOR OF CUSTOM Safeguard and inventory of goods Subject the goods to public auction if the conservation is prejudicial to the owner and when no objection was made If no claim within 3 months: Sold Proceeds go to owner If 3 years no claimant: 50% - national government 50% - salvor If there are claimants: Owner of vessel 50% Captain 25% Crew 25% in proportion to their salaries Exclude expenses for advertising, taxes, duties, salvaging

NO SALVAGER REWARD WHEN If salvage was done by the crew of the vessel If the salvage was done despite opposition of the captain If the salvager did not comply with the requirement to report the matter to the collector of customs

BASIS OF SALVAGE AMOUNT TO BE GIVEN1. Labor2. Competence and skill3. Value of the materials being used to salvage4. Risk being assumed5. Value of the goods being salvaged ** Salvage reward must not exceed 50% of the value of the goods salvaged

THINGS THAT HAVE TO BE PAID BY THE OWNER1. Expenses for custody 2. Advertisement 3. Auction sale4. Taxes over the goods when it was brought to the country5. Expenses for salvage6. Salvage reward

1Michelle Duguil PALABRICA NOTES