Quickie Notes on Maritime Law

GENERAL CONCEPTS
A. Real and Hypothecary Nature

limitation of liability of agents (and owners) to the actual value of the

vessel and freight money - abandonment of the vessel is required
EXCEPT if the vessel is totally lost

right to retain the cargo and the embargo and detention of vessel

B. Acts and Conduct of Captain

- the common carrier and/or ship agent (solidary) are liable to third persons
EXCEPT when there is abandonment (no liability)
- co-owner also liable to third persons UNLESS he renounces, before a notary,
his interest in the vessel
C. Loss of Vessel
- all rights are extinguished
- if partial loss of vessel only, captain and crew on wages have a right to
salvage the ship and goods. HOWEVER, sailors on shares have a right to the
cargo only EXCEPT if they worked for salvage, in which case they are entitled
to compensation for their salvage service.
D. Collisions
- Liability of ship owner is limited to the value of the vessel and its
appurtenances and freight.
E. Exceptions to Limited Liability Rule
1. injury or death to passenger due to fault of shipowner or concurring
negligence of shipowner and captain
2. vessel is insured
3. workmen's compensation claims
4. expenses for repairs and provisioning of the ship prior to departure
VESSELS

A. Protest
- a condition precedent to make owner of the vessel liable in case of collision
B. Type of Property
- Vessels are personal property but they partake of the nature of real property
because of their value and importance to world commerce.
- The person registered as owner is presumed the owner of the vessel.
- The sale of vessels must be registered to the Maritime Industry Authority in
order to affect third persons.
C. Manifest
- a declaration of the entire cargo
- distinguish from a bill of lading, which is only a declaration of particular cargo
D. Ship Mortgage
(1) PURPOSE: construction, acquisition, purchase of vessels, initial operatio of
vessels
(2) PREFERRED MORTGAGE
Requisites:

mortgage recorded with the Coast Guard

affidavit of good faith

no stipulation that the mortgagee waives preferred status of the

mortgage

Exceptions
- not covered by preferred mortgage

court fees and taxes

crew's wages

general averages

maritime lien prior to the registration of mortgage

salvage

damages for tort

preferred mortages registered prior in time

(3) JUDICIAL FORECLOSURE

-

suit in rem in admiralty

vessel is arrested (replevin to recover possession) and made a party
applicant files a bond
filed with the Regional Trial Court

(4) MARITIME LIEN FOR NECESSARIES

- suit in rem
- allege credit and prove it
Requisites

for the benefit of the vessel

necessary for the continuation of the voyage

credit is extended to the vessel

necessity of such extension of credit

the extension of credit is ordered by authorized persons

Determine if Maritime Lien Exists

depends on the law of the country where the supplies were furnished
which must be pleaded and proved

Lauritzen-Romero-Rhobitis trilogy of cases

- multiple-contact test:
1. place of wrongful act
2. law of the flag
3. allegiance or domicile of the injured person
4. allegiance of the owner
5. place of contract

6. inaccessibility of foreign forum

7. law of the forum

factors provided in the Restatement of Conflict of Laws

- if no choice of law:
1. place of contracting
2. place of negotiation
3. place of performance
4. location
5. domicile or residence of parties
PERSONS WHO TAKE PART IN MARITIME COMMERCE
A. Ship Owner
- primarily liable
B. Ship Agent
- solidarily liable with ship owner

capacity to trade

recorded in the merchant's registry of the province

- POWERS: discharge duties of the captain

- LIMITATION ON POWERS: needs resolution of the majority of the co-owners
UNLESS previously this authority is included in the certificate of appointment
- If the ship agent enters into contract of insurance without authority, he shall
be held subsidiarily liable with the insurer.
- DUTY TO ACCOUNT
- REIMBURSEMENT AND LIABILITIES: accion ejectuva (expenses or profits) -resolution of majority and signatures of persons who voted
C. Part Owners
- if more than one, presumed partners
- vote of majority; if none, the owner with the largest interest; if equal, then
divided by lot
D. Sale

- by public auction UNLESS owners unanimously agree otherwise

- owner of vessel is preferred
E. Discharge of Captain and Crew

Before Voyage: salary earned, no indemnity EXCEPT express and specific

agreement

During Voyage: salaries until return to port UNLESS cause of discharge

Contract for Definite Period: no discharge EXCEPT subordination in

serious matters, robbery, theft, habitual drunkenness, damage to ship
caused by malice or manifest/proven negligence

Captain is Owner: no discharge UNLESS return his interest

F. Captains and Masters

Qualifications:
1. Filipinos
2. legal capacity
3. skill, capacity, and qualifications necessary to perform their jobs
4. not disqualified
Roles:
1. general agent of shipowner
2. commander and technical director of the vessel
3. representative of the country under whose flag he navigates
G. Pilotage
- reponsible for damages/injuries due to his fault EXCEPT force majeure
- COLLISIONS: colliding vessel deemed prima facie responsible so burden of
proof is on it
CHARTER PARTIES
A. Bareboat
- whole vessel is chartered but the charterer provides the crew
- becomes a private carrier

- charterer is the owner pro hac vice and therefore liable to third persons
B. Contract of Affreightment
- the vessel, together with its crew, is leased
- common carrier
- liability to third persons rests with the shipowner
Kinds:

Time

Voyage

Requisites of a Valid Charter Party

1. consent
2. existing vessel which should be placed at the disposition of the shipper
3. freight
4. drawn in duplicate and signed by the parties
C. Demurrage
- charterer is responsible for sum of money in case vessel is detained in port
beyond the period allowed in the contract
D. Dead Freight
- charterer failed to occupy the leased portion of the vessel
LOANS ON BOTTOMRY AND RESPONDENTIA
Distinguish from Simple Loan

RATE OF INTEREST: Bottomry is not subject to Usury Law while Simple

Loan is subject to a fixed ceiling rate in the Usury Law.

EXISTENCE OF MARINE RISK: This is required in Bottomry but not in

Simple Loan.

REGISTRATION: Bottomry must be registered in the registry of vessels in

order to affect third persons while Simple Loan needs no registration.

REQUISITES: Bottomry is govered by the Code of Commerce while Simple

Loan by obligations and contracts.

PREFERENCE: In Bottomry, last lender is given preference while Simple

Loan, the first lender.
AVERAGE

A. Simple Average
- not inured to the common benefit of all persons interested
- shipowner bears loss
B. General Average
- all damages are deliberately caused to save the vessel or the cargo
Requisites:
1. common danger which must be imminent and real
2. for the common safety, part of the vessel or cargo is deliberately
sacrificed
3. successful saving of the vessel or cargo
4. taking of legal steps and authority
- those who benefited bears the loss
- owners of goods sacrificed are entitled to indemnity EXCEPT:

goods carried on deck

goods not recorded in the books

fuel for the vessel if there is more than enough for the voyage

COLLISIONS
- even owner of a third vessel liable if it forced a vessel to hit another
- no applicability of "last clear chance" rule: if both parties are negligent, both
must answer for the damage- no applicability of "contributory negligence" rule
A. Third Person at Fault
- indemnify others
- ship captain is civilly liable to the owner
- abandonment and limited liability rules apply
B. Doctrine of Inscrutable Fault
- if cannot determine who is at fault: both vessels bear the loss

- but shipper may go after the owner and captain if both have been negligent
C. Protest
- required of the captain only, not the passenger
ARRIVAL UNDER STRESS AND SHIPWRECK
Steps:
1. captain must determine if there is a well-founded fear of seizure, etc.
2. assemble the officers
3. summon all persons interested if present but they shall have no vote
4. officers determine danger and vote on it. The captain has the deciding
vote.
5. enter into agreement and all protests/objections entered into logbook

Quickie Notes on Maritime Law

GENERAL CONCEPTS
A. Real and Hypothecary Nature

limitation of liability of agents (and owners) to the actual value of the

vessel and freight money - abandonment of the vessel is required
EXCEPT if the vessel is totally lost

right to retain the cargo and the embargo and detention of vessel

B. Acts and Conduct of Captain

- the common carrier and/or ship agent (solidary) are liable to third persons
EXCEPT when there is abandonment (no liability)
- co-owner also liable to third persons UNLESS he renounces, before a notary,
his interest in the vessel
C. Loss of Vessel
- all rights are extinguished
- if partial loss of vessel only, captain and crew on wages have a right to
salvage the ship and goods. HOWEVER, sailors on shares have a right to the

cargo only EXCEPT if they worked for salvage, in which case they are entitled
to compensation for their salvage service.
D. Collisions
- Liability of ship owner is limited to the value of the vessel and its
appurtenances and freight.
E. Exceptions to Limited Liability Rule
5. injury or death to passenger due to fault of shipowner or concurring
negligence of shipowner and captain
6. vessel is insured
7. workmen's compensation claims
8. expenses for repairs and provisioning of the ship prior to departure
VESSELS
A. Protest
- a condition precedent to make owner of the vessel liable in case of collision
B. Type of Property
- Vessels are personal property but they partake of the nature of real property
because of their value and importance to world commerce.
- The person registered as owner is presumed the owner of the vessel.
- The sale of vessels must be registered to the Maritime Industry Authority in
order to affect third persons.
C. Manifest
- a declaration of the entire cargo
- distinguish from a bill of lading, which is only a declaration of particular cargo
D. Ship Mortgage
(1) PURPOSE: construction, acquisition, purchase of vessels, initial operatio of
vessels
(2) PREFERRED MORTGAGE
Requisites:

mortgage recorded with the Coast Guard

affidavit of good faith

no stipulation that the mortgagee waives preferred status of the

mortgage

Exceptions
- not covered by preferred mortgage

court fees and taxes

crew's wages

general averages

maritime lien prior to the registration of mortgage

salvage

damages for tort

preferred mortages registered prior in time

(3) JUDICIAL FORECLOSURE

-

suit in rem in admiralty

vessel is arrested (replevin to recover possession) and made a party
applicant files a bond
filed with the Regional Trial Court

(4) MARITIME LIEN FOR NECESSARIES

- suit in rem
- allege credit and prove it
Requisites

for the benefit of the vessel

necessary for the continuation of the voyage

credit is extended to the vessel

necessity of such extension of credit

the extension of credit is ordered by authorized persons

Determine if Maritime Lien Exists

depends on the law of the country where the supplies were furnished
which must be pleaded and proved

Lauritzen-Romero-Rhobitis trilogy of cases

- multiple-contact test:
8. place of wrongful act
9. law of the flag
10.allegiance or domicile of the injured person
11.allegiance of the owner
12.place of contract
13.inaccessibility of foreign forum
14.law of the forum

factors provided in the Restatement of Conflict of Laws

- if no choice of law:
6. place of contracting
7. place of negotiation
8. place of performance
9. location
10.domicile or residence of parties
PERSONS WHO TAKE PART IN MARITIME COMMERCE
A. Ship Owner
- primarily liable

B. Ship Agent
- solidarily liable with ship owner

capacity to trade

recorded in the merchant's registry of the province

- POWERS: discharge duties of the captain

- LIMITATION ON POWERS: needs resolution of the majority of the co-owners
UNLESS previously this authority is included in the certificate of appointment
- If the ship agent enters into contract of insurance without authority, he shall
be held subsidiarily liable with the insurer.
- DUTY TO ACCOUNT
- REIMBURSEMENT AND LIABILITIES: accion ejectuva (expenses or profits) -resolution of majority and signatures of persons who voted
C. Part Owners
- if more than one, presumed partners
- vote of majority; if none, the owner with the largest interest; if equal, then
divided by lot
D. Sale
- by public auction UNLESS owners unanimously agree otherwise
- owner of vessel is preferred
E. Discharge of Captain and Crew

Before Voyage: salary earned, no indemnity EXCEPT express and specific

agreement

During Voyage: salaries until return to port UNLESS cause of discharge

Contract for Definite Period: no discharge EXCEPT subordination in

serious matters, robbery, theft, habitual drunkenness, damage to ship
caused by malice or manifest/proven negligence

Captain is Owner: no discharge UNLESS return his interest

F. Captains and Masters

Qualifications:
5. Filipinos
6. legal capacity

7. skill, capacity, and qualifications necessary to perform their jobs

8. not disqualified
Roles:
4. general agent of shipowner
5. commander and technical director of the vessel
6. representative of the country under whose flag he navigates
G. Pilotage
- reponsible for damages/injuries due to his fault EXCEPT force majeure
- COLLISIONS: colliding vessel deemed prima facie responsible so burden of
proof is on it
CHARTER PARTIES
A. Bareboat
- whole vessel is chartered but the charterer provides the crew
- becomes a private carrier
- charterer is the owner pro hac vice and therefore liable to third persons
B. Contract of Affreightment
- the vessel, together with its crew, is leased
- common carrier
- liability to third persons rests with the shipowner
Kinds:

Time

Voyage

Requisites of a Valid Charter Party

5. consent
6. existing vessel which should be placed at the disposition of the shipper
7. freight
8. drawn in duplicate and signed by the parties

C. Demurrage
- charterer is responsible for sum of money in case vessel is detained in port
beyond the period allowed in the contract
D. Dead Freight
- charterer failed to occupy the leased portion of the vessel
LOANS ON BOTTOMRY AND RESPONDENTIA
Distinguish from Simple Loan

RATE OF INTEREST: Bottomry is not subject to Usury Law while Simple

Loan is subject to a fixed ceiling rate in the Usury Law.

EXISTENCE OF MARINE RISK: This is required in Bottomry but not in

Simple Loan.

REGISTRATION: Bottomry must be registered in the registry of vessels in

order to affect third persons while Simple Loan needs no registration.

REQUISITES: Bottomry is govered by the Code of Commerce while Simple

Loan by obligations and contracts.

PREFERENCE: In Bottomry, last lender is given preference while Simple

Loan, the first lender.
AVERAGE

A. Simple Average
- not inured to the common benefit of all persons interested
- shipowner bears loss
B. General Average
- all damages are deliberately caused to save the vessel or the cargo
Requisites:
5. common danger which must be imminent and real
6. for the common safety, part of the vessel or cargo is deliberately
sacrificed
7. successful saving of the vessel or cargo
8. taking of legal steps and authority

- those who benefited bears the loss

- owners of goods sacrificed are entitled to indemnity EXCEPT:

goods carried on deck

goods not recorded in the books

fuel for the vessel if there is more than enough for the voyage

COLLISIONS
- even owner of a third vessel liable if it forced a vessel to hit another
- no applicability of "last clear chance" rule: if both parties are negligent, both
must answer for the damage- no applicability of "contributory negligence" rule
A. Third Person at Fault
- indemnify others
- ship captain is civilly liable to the owner
- abandonment and limited liability rules apply
B. Doctrine of Inscrutable Fault
- if cannot determine who is at fault: both vessels bear the loss
- but shipper may go after the owner and captain if both have been negligent
C. Protest
- required of the captain only, not the passenger
ARRIVAL UNDER STRESS AND SHIPWRECK
Steps:
6. captain must determine if there is a well-founded fear of seizure, etc.
7. assemble the officers
8. summon all persons interested if present but they shall have no vote
9. officers determine danger and vote on it. The captain has the deciding
vote.
10.enter into agreement and all protests/objections entered into logbook