FIRST DIVISION

[G.R. No. L-11407. October 30, 1917.]

FAUSTO FUBISO and BONIFACIO GELITO, plaintiffs-appellee, vs .

FLORENTINO E. RIVERA , defendant-appellant.

Francisco Sevilla for appellant.

Salvador Q. Araullo for appellees.

SYLLABUS

1. SHIPPING; REGISTRATION OF THE PURCHASE OF A VESSES. — The

requisite of registration in the registry of the purchase of a vessel is necessary and
indispensable in orderer that the purchaser's rights may be maintained against a claim
led by a third person; pursuant to article 573 of the Code of Commerce in connection
with section 2 of Act No. 1900, which Act, amending said article, provides that such
registration, instead of being made in the commercial registry, shall be entered in the
registry of the Insular Collector of Customs, who, since May 18 1909, has been
performing the duties of commercial register.
2. ID.; ID. — The legal rule set down in the Code of Commerce, subsist,
inasmuch as the amendment solely refers to the official who shall make the entry.
3. ID.; ID. — Ships or vessels, whether moved by steam or by sail, partake to a
certain extent, of the nature and conditions of real property, on account of their value
and importance in the world commerce; and for this reason the provisions of article
573 of the Code of Commerce are nearly identical with those of article 1473 of the Civil
Code.

DECISION

TORRES , J : p

This appeal by bill of exceptions was led by counsel for Florentino E. Rivera
against the judgment of September 6, 1915, in which the defendant and appellant was
ordered to place at the disposal of the plaintiff Fausto Rubiso the pilot boat in litigation.
No special finding was made for costs.
On April 10, 1915, counsel for plaintiffs brought suit in the Court of First Instance
of this city and alleged in the complaint that his clients were the owners of the pilot
boat named Valentina, which had been in bad condition since the year 1914 and, on the
date of the complaint, was stranded in the place called Tingloy, of the municipality of
Bauan, Batangas; that the defendant Florentino E. Rivera took charge or possession of
said vessel without the knowledge or consent of the plaintiffs and refused to deliver it
to them, under claim that he was the owner thereof; and that such procedure on the
defendant's part cause the plaintiffs to suffer damages, not only because they could
not proceed to repair the vessel, but also because they were unable to derive pro t
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 from the voyages for which said pilot boat was customarily used; and that the net
amount of such uncollected pro t was P1,750. The complaint terminated with a
petition that judgment be rendered by ordering the defendant to deliver said pilot boat
to the plaintiffs and indemnify them in the amount aforementioned or in such amount
as should be proven at trial, and to pay the costs.
Counsel for the defendant entered a general and speci c denial of all the facts
set forth in the complaint, with the exception of those admitted in the special defense
and consisting in that said pilot boat belonged to the concern named "Gelito & Co.,"
Bonifacio Gilito being a copartner thereof to the extent of two-thirds, and the Chinaman
Sy Qui, to that of one-third, of the value of said vessel; that subsequently Bonifacio
Gelito sold his share to his copartner Sy Qui, as attested by the instrument Exhibit A,
registered in the o ce of the Collector of Customs and made a part of his answer; that
later said Chinaman, the absolutely owner of the vessel, sold it in turn to the defendant
Rivera, according to the public instrument, also attached to his answer as Exhibit B; and
that, for this reason, Rivera took possession of the said pilot boat Valentina, as its sole
owner. He therefore petitioned that the defendant be absolve from the complaint, with
the costs against the plaintiffs.
After the hearing of the case and the introduction of documentary evidence, the
judgment of September 6, 1915, was rendered, from which counsel for the defendant
appealed and moved for a new trial. This motion was denied and appellant excepted.
The record shows it to have been fully proven that Bonifacio Gelito sold his share
in the pilot boat Valentina, consisting of a two-thirds interest therein, to the Chinaman
Sy Qui, the co-owner of the other one-third interest in said vessel; wherefore this vendor
is no longer entitled to exercise any action whatever in respect to the boat in question.
Gelito was one of the partnership owners of the Valentina, as in fact his name appears
in the certi cate of protection issued by the Bureau of Customs, and the rights he held
are evidenced by the articles of partnership; but, the whole ownership in the vessel
having been consolidated in behalf of the Chinaman Sy Qui, this latter, in the use of his
right as the sole owner of the Valentina, sold this boat to Florentino E. Rivera for P2d,
500, on January 4, 1915, which facts are set forth in a deed rati ed on the same date
before a notary. This document was registered in the Bureau of Customs on March
17th of the same year.
On the 23d of that year, that is, after the sale of the boat to the defendant Rivera,
suit having been brought in the justice of the peace court against the Chinaman Sy Qui
to enforce payment of a certain sum of money, the latter's creditor Fausto Rubiso, the
herein plaintiff, acquired said vessel at a public auction sale and for the sum of P55.45.
The certi cate of sale and adjudication of the boat in question was issued by the sheriff
on behalf of Fausto Rubiso, in the o ce of the Collector of Customs, on January 27 of
the same year and was also entered in the commercial registry on the 14th of March,
following:
So that the pilot boat Valentina was twice said: rst privately by its owner Sy Qui
to the defendant to the defendant Florentino E. Rivera, on January 4, 1915, and
afterwards by the sheriff at public auction in conformity with the order contained in the
judgment rendered by the justice of the peace court, on January 23 of the same year,
against the Chinaman Sy Qui and in behalf of the plaintiff, Fausto Rubiso.
It is undeniable that the defendant Rivera acquired by purchase the pilot boat
Valentina on behalf of the plaintiff Rubiso; but it is no less true that the sale of the
vessel by Sy Qui to Florentino E. Rivera, on January 4, 1915, was entered in the customs
registry only on March 17, 1915, while its sale is public auction to Fausto Rubiso on the
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 23d of January of the same year, 1915, was recorded in the o ce of the Collector of
Customs on the 27th of the same month, and in the commercial registry on the 4th of
March, following; that is, the sale on behalf of the defendant Rivera was prior to that
made at public auction to Rubiso, but the registration of this latter sale was prior by
may days to the sale made to the defendant.
Article 573 of the Code of Commerce provides, in its first paragraph:
"Merchant vessels constitute property which may be acquired an
transferred by any of the means recognized by law. The acquisition of a vessel
must be included in a written instrument, which shall not produce any effect with
regard to third persons if not recorded in the commercial registry."
So that, pursuant to the above-quoted article, inscription in the commercial
registry was indispensable , in order that said acquisition might affect, and produce
consequences with respect to third persons.
However, since the enactment of Act No. 1900, on May 18, 1909, said article of
the Code of Commerce was amended, as appears by section 2 of that Act, herebelow
transcribed.
"The documenting, registering, enrolling, and licensing of vessels in
accordance with the Customs Administrative Act and customs rules and
regulations shall be deemed to be a 900, on May 18, 1909, said article of the Code
of Commerce was amended, as appears by section 2 of that Act, herebelow
transcribed.
"The documenting, registering, enrolling, and licensing of vessels in
accordance with the Customs Administrative Act and customs rules and
regulations shall be deemed to be a registry of vessels within the meaning of title
two of the Code of Commerce, unless otherwise provided in said Customs
Administrative Act or in said customs rules and regulations, and the Insular
Collector of Customs shall perform the duties of commercial register concerning
the registering of vessels, as defined in title two of the Code of Commerce."
The requisite of registration on the registry, of the purchase of a vessel, is
necessary and indispensable in order that the purchaser's rights may be maintained
against a claim led by a third person. Such registration is required both by the Code of
Commerce and by Act No. 1900. The amendment solely consisted in charging the
Insular Collector of Customs, as at present, with the ful llment of the duties of the
commercial register concerning the registering of vessels; so that the registration of a
bill of sale of a vessel shall be made in the o ce of the Insular Collector of Customs,
who, since May 18, 1909, has been performing the duties of the commercial register in
place of this latter official.
In view of said legal provisions, it is undeniable that the defendant Florentino E.
Rivera's rights cannot prevail over those acquired by Fausto Rubiso in the ownership of
the pilot boat Valentina, inasmuch as, though the latter's acquisition of the vessel at
public auction, on January 23, 1915, was subsequent to its purchase by the defendant
Rivera, nevertheless said sale at public auction was antecedently record in the o ce of
the Collector of Customs, on January 27, and entered in the commercial registry. — An
unnecessary proceeding-on March 4th; while the private and voluntary purchase made
by Rivera on a prior date was not recorded in the o ce of the Collector of Customs
until many days afterwards, that is, not until March 17, 1915.
The legal rule set down in the Mercantile Code subsists, inasmuch as the
amendment solely refers to the o cial who shall make the entry; but, with respect to
the rights of the two purchases, whichever of them first registered his acquisition of the
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 vessel in the one entitled to enjoy the protection of the law, which considers him the
absolute owner of the purchased boat, an this latter to be free of all encumbrance and
all claims by strangers for, pursuant to article 582 of the said code, after the bill of the
judicial sale at auction has been executed and recorded in the commercial registry, all
the other liabilities of the vessel in favor of the creditors shall be considered canceled.
The purchaser at public auction, Fausto Rubiso, who was careful to record his
acquisition, opportunely and on prior date, has, according to the law, a better right than
the defendant Rivera who subsequently recorded his purchase. The latter is a third
person, who was directly affected by the registration which the plaintiff made of the
acquisition.
Ships or vessels, whether moved by steam or by sail, partake, to a certain extent,
of the nature and conditions of real property, on account of their value and importance
in the world commerce; and for this reason the provisions of article 573 of the Code of
Commerce are nearly identical with article 1473 of the Civil Code.
With respect to the indemnity for losses and damages, requested by the plaintiff,
aside from the fact, as shown by the evidence, that, subsequent to the date when the
judgment appealed from was rendered, the vessel in question emerged unharmed from
the place where it was stranded, and was, at the time of the trial, anchored in the port of
Maricaban, the record certainly does not furnish any positive evidence of the losses and
damages alleged to have been occasioned. On the other hand, it cannot be a rmed
that the defendant acted in bad faith speci cally because he acquired the vessel on a
date prior to that of its acquisition at public auction by the plaintiff Rubiso, who, for the
reasons aforestated, is true and sole owner of said pilot boat.
For the foregoing considerations, whereby the errors assigned to the judgment
appealed from are deemed to have been refuted, it is our opinion that said judgment
should be, as it is hereby, affirmed, with the costs against the appellant. So ordered.
Arrellano, C.J., Johnson, Carson, Street, and Malcolm, JJ., concur.
Araullo, J., did not take part.

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