4.

PERSONS WHO TAKE PART IN MARITIME

COMMERCE
PERSONS INVOLVED IN MARITIME COMMERCE
1. Shipowner or Ship agent;
2. The Captain or Master of the Vessel;
3. The officers of the vessel like the 1st mate, second mate and engineer;
4. The seamen or members of the crew; and
5. Other persons who make up the complements of the vessel

PERSONS LIABLE FOR DAMAGES IN MARITIME LAW

 Generally, the shipowner is the person who is primarily liable for damages
sustained in the operation of vessel. However, under the Code of Commerce,
the persons liable include the shipowner, ship agent and the charterer.

SHIP AGENT; HIS POWER

 Person entrusted with the provisioning of the vessel or who represent her in
the port in which she happens to be. Based on this definition, the code of
commerce makes the ship agent jointly and civilly liable with the owner.
 It can enter into a contract to provision the ship

LIMIT OF SHIP AGENT’S POWER

 ART. 596 (Code of Commerce). The ship agent may not order a new voyage,
or make contracts for a new charter, or insure the vessel, without the
authorization of its owner or resolution of the majority of the co-owners,
unless these powers were granted to him in the certificate of his
appointment.

PARTNERSHIP ESTABLISHED
ART 589. If two or more persons should be part owners of a merchant vessel, an
association shall be presumed as established by the part owners.

CO-OWNERS CIVILLY LIABLE

ART 590. The owners of a vessel shall be civilly liable in the proportion of their
contribution to the common fund, for the results of the acts of the captain, referred to in
Article 587.
Each part owner may exempt himself from this liability by the abandonment before a
notary of the part of the vessel belonging to him.
 Under the limited liability rule, owner may abandon to divest himself of liability.

JOINT LIABILITY
ART. 586 (Code of Commerce). The shipowner and the ship agent shall be
civilly liable for the acts of the captain and for the obligations contracted by the

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latter for the repair, equip, and provision the vessel, provided the creditor proves
the amount claimed was invested for the benefit of the same

DISCHARGE OR DISMISSAL OF THE CAPTAIN AND MEMBERS OF

THE CREW
 Before the vessel sets out to sea, the ship agent, may discharge the
captain and members of the crew whose contracts are not for a definite
period or voyage, paying them salaries earned according to their contracts
without any liability to pay indemnity.

 If the captain or any crew member should be discharge during voyage, he

shall receive his salary until his return to the port where the contract was
made, unless there should be just cause for discharge.

 If the contract is for definite period or voyage, they may not be discharged
until after the fulfillment of their contract, except by reason on
insubordination in serious matters, robbery, theft,

CAPTAIN AND MASTER OF THE VESSEL

A. CONCEPT
 For purposes of maritime commerce, the word “CAPTAIN” and
“MASTER” have the same meaning; both being the chiefs or commanders
of ship

CAPTAIN – is applied to those who govern vessels that navigate the high seas or
ship of large dimension and importance, although they engage in coastwise trade.

MASTER – are those who command smaller ships engaged exclusively in the
coastwise trade (i.e. island hopping)

SAILING MATE – act as the second chief of the vessel, and unless the agent order
otherwise, shall take place of the captain in cases of absence, sickness or death and
shall then assume all his powers, duties and responsibilities

FUNCTIONS or distinct roles of the Captain

1. He is the general agent;
2. He is the commander and technical director of the vessel;
3. He is a representative of the country under whose flag he navigates.

DISCRETION OF CAPTAIN OR MASTER

He is accorded a reasonable measure of discretionary authority to decide what
the safety of the ship and its crew and cargo specifically requires on a stipulated

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ocean voyage. The applicable principle is that “the captain has the control of all
departments of service in the vessel, and reasonable discretion as to its navigation.

CAPTAIN’S DUTY IN CASE OF PRIVATEERS (men of war against his flag)

 He shall obliged to make the nearest neutral port, inform his agent or shippers,
and await an occasion to sail under convoy, or until the danger is over or he
has received express orders from the ship agent or the shippers.

 If the privateers (or enemy) forcibly take the effects of the vessel or cargo
from the captain who resisted the same, the Captain should make an entry
thereof in the freight book and shall prove the fact before competent authority
at the first port he touches.

Q: The Captain is given the authority to enter into a contract. What is the effect
if the captain exceeded his authority?
A: As a general rule, the Shipowner and Ship agent are liable in certain cases even
if the captain has exceeded his authority. If the proceeds of an obligation redounded
to the benefit of the vessel. Example: If the vessel’s radar is broken, the captain is
authorized by the shipowner to purchase radar by borrowing money from a lending
institution. The shipowner is liable to pay the indebtedness for the purchase of the
radar. But if there is excess in the amount he borrowed and the ship captain uses it
in his own benefit, the shipowner is only liable as to the value which redounded to
the vessel. This is taken from Article 588:
ART. 588. Neither the owner of the vessel nor the agent shall be liable for the
obligations contracted by the captain if the latter exceeds his powers and privileges
which are his by reason of his position or have been conferred upon him by the
former.
However, if the amounts claimed were made use of for the benefit of the vessel, the
owner or agent shall be liable.

The captain may be discharged by the shipowner due to their EE relationship under
the labor laws. But most of the time, employment of captains are governed by
contract especially if overseas. Hence, they may not be discharged before the
expiration of the contract. But the captain may be discharged by shipowner provided
he pays the entire contract.

PILOTAGE
 A pilot is a person duly qualified, and licensed, to conduct a vessel into or out
of ports or in certain waters.

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  Not all ship captains are pilots but a pilot is a ship captain. A ship captain may
be a pilot by completing the required trainings. This certificate is issued by
the MARINA.
 In Cebu, the ports require compulsory pilotage. Hence, they should be manned
by pilots and not by a captain. But our ship captain now, most of them are
pilots.
 Generally, pilot is a person taken on board at a particular place for the purpose
of conducting a ship through a river, road or channel, or from a port.

The term pilot includes:

1. Those whose duty it is to guide vessels into or out of the ports, or in particular
waters;
2. Those entrusted with navigation of vessel on high seas.

LOSS OR DAMAGE DURING PILOTAGE

Q: What is the effect if a damage occurred at the time of pilotage, who is liable?
Pilot or common carrier?
A: Depends.

 Where Pilot is liable: If on compulsory pilotage grounds, it is the harbor

Pilot providing the services to a vessel shall be responsible for the damage
caused to a vessel or to life and property at ports due to his negligence or fault.
BUT he can only be absolved from liability if the accident is caused by force
majeure or natural calamities provided he has exercise prudence and extra
diligence to prevent or minimize damage

 Where Shipowner liable: The Captain or the Master, even during

compulsory pilotage ground, shall retain overall command of the vessel
whereby he can countermand or overrule the order or command of the Harbor
Pilot on board. In such event, any damage caused to a vessel or to life or
property at port by reason of the fault or negligence of the Captain or Master
shall be the responsibility and liability of the registered owner of the vessel
concerned without prejudice to recourse against the said Captain or Master

 If pilotage is not compulsory, the owner of the vessel is liable for the negligent
of the pilot.

Shipowner and Pilot

 In general, a pilot is personally liable for the damages caused by his own
negligence or default to the owner of the vessel, and to third parties for
damages sustain in collisions. Such negligence of the pilot in the performance
of duty constitutes a MARITIME TORT

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 5. CHARTER PARTIES
CHARTER PARTY – a contract (often referred to as a form of mercantile lease)
whereby an entire ship, or some principal part of the said ship is let by the owner
thereof to a merchant or other person for a specified time or use for the conveyance
of goods, in consideration of the payment of freight.

Kinds of Charter Contract

1. Bareboat or Demise Charter – It is the entire vessel that was leased and
charterer mans the vessel with his own people and becomes, in effect, the
owner of the voyage or service stipulated. Thus, the charterer becomes the
owner “pro hac vice” of the vessels since he mans the vessel with his own set
of master and crew, becoming effectively the owner of the voyage or service
stipulated. The common carrier is now transformed into a private carrier.

2. Contract of Affreightment – it is a voyage or time charter. It could also be a

part or portion of the vessel that was being leased. The charterer only hires the
vessel, the crew still under the owner of the vessel and the owner is liable in
relations to expenses for the voyage. Thus, the owner of the vessel remain to
be the common carrier.

Kinds:
a) Time Charter – the vessel is leased for a fixed period of time
b) Voyage Charter – the vessel is leased for a single or particular voyage
In this type of charter, the charterer may sub-charter the entire vessel, unless
it is prohibited under the original charter contract.

Q: Is the original owner privy to the contract between the charterer and
sub-charterer?
A: No. If the charterer sub-charter the vessel, there is a separate contract
between the charterer and the sub-charter of which the owner of the vessel is
not a party thereto.

Requisites of a valid charter party

1. Consent of the contracting parties;
2. an existing vessel which should be placed at the disposition of the
shipper;
3. Freight; and
4. Compliance with the requirement of Art. 652 of the Code of Commerce,
which requires that
“A charter party must 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 his request.”

 The charterer may enter unto Sub-charter with another charter unless
prohibited under the original charter agreement.

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CAPTAIN OR MASTER MAY ENTER INTO CHARTER AGREEMENT
 It is one of the inherent power of the captain or master of the vessel to enter
into valid and binding charter parties, but only in the event of absence of the
ship agent or it is with the instruction of the ship agent or consignee and
protects the latter’s interest

FREIGHT – The compensation to be paid for the utilization of the vessel or the
payment for bringing of the goods from one port to another.

 The charterer freight would consist in a fixed sum of money, particularly if

the charterer involves a contract of affreightment in which case, the charter
price or money would be govern by the principles relative to freight would.

 When the goods were jettisoned for the common safety, freightage shall not
accrue thereon, although the same will be regarded as a general average.

Rules on Accrual of Freightage:

1. The freight shall begin to run from the day of loading on the vessel;
2. In charters with fixed period: the freight shall begin upon that very day; and
3. If the freight is charged according to weight, the payment shall be made
according to the gross weight, including the weight of the container.

Instances where charterer is not liable to pay the freight of shipowner

1. Jettisoned goods that are considered general average loss;
2. Merchandise that are lost because of ship wreck or stranding;
3. Goods that are lost due to seizure by pirates and enemies

Q: What if any of the three instances happened but freight has already been
paid?
A: Shipowner is liable to reimburse UNLESS in the charter contract it is so
specified that shipowner is not liable to reimburse.

Where the goods should be unloaded

The parties may stipulate as to where the shipowner allows the charterer to unload
the goods.

Captain may not accept cargo from another person.

If the vessel is chartered by Mr. A, the captain is not allowed to accept cargo from
Mr. B. This is the rule for charterer. In case of loss violating this rule, any loss
incurred by a shipper whose cargo is refused on account that it belongs to another,
the shipowner shall be indemnified if there are two or more charterers.

Fortunately, not all cargos can be loaded because it would amount to overloading.
Supposing the cargos of Mr. A and Mr. B are sufficient for the load limit of that
vessel so the cargo of Mr. C can no longer be loaded, the shipowner shall be liable
for the damages.

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Where load limit exceeded and several charterers cannot be accommodated
ART. 669. If, on the contrary, there should be several charter parties, and by reason of
the want of space all the cargo contracted for can not be received, and none of the
charterers desires to rescind the contract, preference shall be given to the person who
has already loaded and arranged the freight in the vessel, and the rest shall take the
place corresponding to them in the order of the dates of their contracts.
Should there be no priority, the charterers may load, if they wish, pro rata of the
amounts of weight or space they may have engaged, and the person from whom the
vessel was chartered shall be obliged to indemnify them for the loss and damage.

LAY DAYS
 Lay days is the time allotted to the vessel to occupy portion of the port in order
to unload its cargo.

Q: What if there is no lay day in the contract?

A: It may be unloaded within reasonable time with reasonable diligence.

DEMURRAGE AND DEADFREIGHT

Q: Supposing the charterer was slow in unloading the vessel and exceeded
the time limit? Who will pay?
A: The charterer will pay for the excess called “demurrage.”

DEMMURAGE
 Means a sum of money due by the express contract for the detention of the
vessel in loading or unloading, beyond the time allowed for the purpose in the
charter party. In other words, if the vessel is detained beyond the number of
days agreed upon in the charter contract for the loading and unloading of
cargo, or for eventual sail, the charterer shall answer for the demurrage
incurred thereby, the sum of which is usually fixed by the parties in the charter
party.

Q: What if the cargo only occupies for a space lesser than what it reserved?
Shall it be liable for such portion?
A: The charterer will pay for the leased portion called “deadfreight.”

REPLACEMENT OF VESSEL
The shipowner is allowed to replace the vessel. Supposing during the loading, it
was discovered that the vessel is very big for the particular voyage. He may replace
the vessel provided it was inspected and was declared to be suitable for the
particular voyage.

Supposing the cargo was loaded to the replacement vessel, the expenses shall be
borne by the shipowner because it was him who caused the replacement.

DEADFREIGHT

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  means the sum of money to be paid by the charter due to the failure of the
vessel to occupy the leased portion of the vessel

RULES ON CHARTER

 ART. 672 – The captain, may not if the vessel has been chartered in whole,
accept cargo from any other person unless the consent of the charterer is
obtained. Otherwise, the captain may be compelled by the charterer to unload
the said cargo and pay the charterer any damage that he may suffer on account
thereof.

 ART. 679 – Any loss incurred by a shipper whose cargo is refused on account
of the receipt by the shipowner of a greater amount of cargo belonging to the
other persons shall be for the account of the shipowner in the form of
indemnity.

 ART. 649 – If there should be several charter parties, and due to lack of space,
not all could be accommodated although not one would want to rescind the
charter, the preference shall be given to the (1) person who is first in loading
his cargo, and (2) the others shall have preference in the order of the dates of
their charter. IN the absence of priority, the charterer may choose to load in
proportion to the amounts of weight or space that they may have contracted,
with a right to be indemnified for the loss.

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 6. LOANS ON BOTTOMRY AND RESPONTIA
1. DEFINITION and CONCEPT

LOAN ON BOTTOMRY – IN THE MARITIME LAW, is a contract whereby the

owner of a ship borrows for the use, equipment or repair the vessel, for a definite
term, and pledges the ship (or the keel or bottom of the ship pars proto) as security,
with the stipulation on account of the perils enumerated, the lender shall lose his
money.

This is different from an ordinary loan because there is danger or perils on sea. The
collateral in loan on bottomry is the ship. But if the collateral is goods, it is called
loan on respontia.

LOAN ON RESPONTIA – where the goods or some part thereof, are hypothecated
as security for loan, the repayment of which is dependent upon maritime risk, what
ensues is a loan on respontia.
 Who are the persons who can enter into loan on respontia? The shipowner.
 The lender in loan on respontia does not lose his capital should the ship perish
due to marine peril, so long as the goods subject of the loan survive or are
saved. Example: Where there’s a typhoon and ship is lost or capsized but
goods are saved, then the lender can still demand for payment of loan.
 Very peculiar loan because it arises from hazards of the trade whereby lender
had to bear and assume the numerous marine perils that lay in the path of the
voyage thus upon termination of voyage the lender is entitled to receive a
greater return on his principal loan that a lender would ordinarily receive in a
simple loan.
 But where a typhoon is coming but the vessel was allowed to sail, so that in
order to obtain the loan, container vans were needed to protect the goods but
shipowner cannot afford them, then he may get them by loan on respontia
using the goods as security. If the vessel and the goods survive and arrive
safely, the shipper shall be required to pay. But if the ship capsizes together
with the cargo, obligation of shipper is extinguished.
 But where the ship and the cargo on board should disappear due to perils of
the sea, the lender on respontia shall suffer loss of his capital.

Characteristics on loan on bottomry and respontia

1. The rate of interest is usually high and is not subject to usury law;
2. There must necessary be a marine risk the existence of which must duly
establish; (i.e. typhoon)
3. Must be executed in accordance with the form and manner required in the
Code of Commerce;
4. Must recorded in the Registry of Vessel in order to bind third person;
5. Preference is extended to the last lender if there be several lender

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Q: Who are the persons authorized to enter into a loan on bottomry?
A: It is the shipowner or ship agent.

Q: Who are the persons authorized to enter into a loan on respontia?

A: The shipowner or owner of the goods.

Parties to the loan

1. Shipowner, however, if he is just a part-owner, any bottomry that he may
contract shall be limited only to the extent of his interest in the vessel.
2. Ship captain who is a part-owner on up to the extent of his interest
3. Ship captain on account of extreme necessity in order to comply Art. 583 and
611 of the Code of Commerce
4. Cargo owner with respondent to the cargo.

 A ship captain may not contract a loan on respontia since he is a mere agent
of the ship owner not the cargo owner.

 No loan on bottomry may be made for the salaries of the crew, nor or the
profits which may be expected

Consequences of loss of effects of the loans

1. If the effects of the loans be lost to an accident of the sea during the time, and
on the occasion of the voyage which has been designated in the contract and
it is proven that the cargo was on board, then the lender loses the right to
institute the action that would pertained to him as such.

2. The lender retains the right to institute and action if the loss was caused by the
inherent defect of the thing, or through the fault or malice of the borrower, or
through the barratry on the part of the captain, or if it was caused by damages
suffered by the vessel as a consequence of being engaged in a contraband, or
if it arose from having loaded the goods on a vessel different from that
designated in the contract, unless the change due to force majeure.

 Supposing the goods were issued under the principle of abandonment of

cargo, the lender is entitled to recover the goods by himself or in the event the
ship and cargo was also insured, the lender and the insurance company can
demand pro-rata with respect to the goods of the vessels. In abandonment, the
shipowner’s liability is extinguished if he abandons. The same is true if the
goods are lost during the voyage.

3. If the vessel or cargo should be the object of loan on bottomry or respontia

and marine insurance, the value of what may be saved in case of
shipwreck(demolition or shaterring of a vessel caused by her driving ashore
or on rocks and shoals in the midseas, or by the violence of winds and waves
in tempests) shall be divided between the lender and the insurer in proportion
of their legitimate interest.

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 7. AVERAGES

AVERAGES IN GENERAL

ART. 806 Code of Commerce, the following are considered general

averages:
1. All extraordinary or accidental expenses which may be incurred during the
voyage in order to preserve the vessel. (Jettison)

2. Any damages or deterioration which the vessel may suffer from the time it
puts to sea from the port of departure until it casts anchor in the port of
destination, and those suffered by the merchandise from the time they are
loaded in the port of shipment until they are unloaded in the port of their
consignment.

GENERAL AVERAGE – shall include all the damages and expenses which are
deliberately caused in order to save the vessel, its cargo or both at the same time,
from real and known risk.

Example of General Average: The boat was sailing, unfortunately it encountered big
waves, in order to prevent it from capsized, there is a need to lighten the weight of
the vessel hence some goods were thrown away. Captain is allowed to castaway
cargo as general average but the requisites must be present.

Requisites of general average

1. There must be a common danger (common to the vessel and to the cargo)
2. That for the common safety, part of the vessel or of the cargo or both is
sacrificed deliberately; (there is necessity to sacrifice to save)
3. That from the expenses or damages caused follows the successful saving of
the vessel and cargo; and
4. That the expenses or damages should have been incurred or inflicted after
taking proper legal steps and authority.
Legal step includes: (1) A resolution (must entered into the log book)
was adopted by the captain after consultation with other officers and
the person interested to the cargo; (2) The captain shall order the
jettison of the cargo

JETTISON – is the casting away of some portion of the associated interest for the
purpose of avoiding the common peril from the whole to a particular portion of those
interest. (In simple terms, casting away of goods to save other goods)

1. The sacrifice must be successful to be entitled for payment and to be liable for
general average contribution

Who is liable to the value of the goods jettison?

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 2. The persons who benefited the sacrificed or jettison shall contribute to the
general average. These includes the owner of the goods saved and the
shipowner

Who is entitled to indemnity after jettison?

3. The owner of the goods which were sacrificed is entitled to receive the general
average contribution.

Exceptions (where no indemnity despite jettison):

1. Goods carried on deck unless the rule, special law or customs of the
place allows the same;
2. Goods that are not recorded in the books or records of the vessel; and
3. Fuel for the vessel is there is more than sufficient fuel for the voyage

What if owner of goods reject the proposal to throw away, can captain insist in
the jettison?
Yes, the captain can insist but owner of goods must be compensated.

Who will pay the compensation for goods that are jettisoned?
It will be pro-rated by owner of goods saved and the shipowner.

What if goods were saved but still the cargo or vessel did not survive?
The owner of goods saved not entitled to be compensated. There must be
“successful” sacrifice.

KINDS OF AVERAGE:

SIMPLE or PARTICULAR AVERAGE – shall include all expenses and

damages caused to the vessel or to her cargo which have not inured to the
common benefit and profit of all the persons interested in the vessel and her
cargo. If a damage is not a general average, the same can be considered
particular average.

Who is liable?
The owner of the goods that suffered damage bears the loss.

Examples of simple or particular average:

1. Inherent to the cargo;
2. Damage through force majeure;
3. Loss of goods due to barratry

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 8. COLLISIONS
COLLISION – is an impact or sudden contact of a moving body with the
obstruction in its line of motion, whether both bodies are in motion or one stationary
and the other, no matter which, in motion

4. Under Maritime Law, refers to the contact of two moving vessels. If one
vessel is moving while the other is stationary, the same is more appropriately
called “ALLISION”

5. Two kinds of impact under maritime law:

1. COLLISION when both vessels are moving or in motion.

2. ALLISION only one vessel is moving.

6. If collision is imminent, each vessel must maneuver their respective vessel

to its port side (right side)

ZONES OF COLLISION:

1ST DIVISON / ZONE

1. It covers all the time up to the moment when the risk of collision may
be said to have begun. (Within this zone, no rule is applicable
because none is necessary. Each vessel is free to direct its course as
it deems best without reference to the movement of the other vessel)

2ND DIVISION / ZONE

2. It covers the time between the moment when the risk of collision begins
and the moment when it became a practical certainty. (The burden lies
on the vessel required to keep away to avoid the danger)

3RD DIVISION / ZONE

3. It covers the time between the moment of actual impact. (The rule is
that the vessel which has forced the privileged vessel into danger is
responsible even if the previledged vessel has committed an error
within that zone.

Basis of liability
 The liability is still based on negligence although the liability is not governed
by tort. Thus, the doctrine of last clear chance and contributory negligence are
not applicable

 If both vessels were operated negligently, it does not matter if the other has
the last clear chance in avoiding the injury because under Art. 827 Code of
Commerce) “each must suffer its own damage if both of them are
negligent.”

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RULES ON WHO SHALL PAY

1. ONE VESSEL IS AT FAULT – the owner of the vessel at fault shall be

liable

2. BOTH VESSELS AT FAULT – Each one shall suffer its own damages, and
both shall be solidarily responsible for the losses and damages occasion on
their cargoes. Under the principle of “INSCRUTABLE FAULT”

3. PARTY AT FAULT CANNOT BE DERTERMINED – Each one shall

suffer its own damages, and both shall be solidarily responsible for the losses
and damages occasion on their cargoes. Under the principle of
“INSCRUTABLE FAULT”

4. CAUSE DUE TO FORTUITOUS EVENT – the shipowner and the owner

of the cargo shall bear its own damages

5. THIRD PERSON – The owner of the third vessel shall indemnify the losses
and damages caused, the captain thereof being civilly liable to said owner. It
is not necessary that the vessel own by a third person hit the vessel, it is enough
that it caused the other vessel to hit another

 PROTEST is necessary in order to claim damages and the limited liability

rule shall apply

Additional Notes
 Arrival and Distress
 Propriety of Arrival and Distress
 Shipwreck (Art 840)

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 10. SALVAGE
SALVAGE

SALVAGE LAW of February 4, 1916

SALVAGE
 IS a service which one person renders to the owner of a ship or goods, by his
own labor, preserving the goods or ship which the owner or those entrusted
with the care of them have either abandoned in distress at sea, or are unable
to protect and secure.

 It is a compensation for actual services rendered to the property charged with

it, and is allowed for meritorious conduct of the salvor, and in consideration
of a benefit conferred upon the person whose property ha has saved.

Kinds of salvage services:

1. Voluntary – the compensation is dependent upon success

2. Rendered under a contract for a per diem or per horam
3. Under a contract for a compensation payable only in cases of success

Requisites:
1. There must be a marine peril;
2. The service is voluntary rendered and is not required as an existing duty or
from a special contract;
3. There must be success in whole or in part or that the service rendered
contributed to such success
4. the vessel is shipwreck beyond the control of the crew or shall have abandoned
or (Derelict)

 The salvor has the right to retain possession unless paid for he has a lien on it

Persons not entitled to Salvage Compensation:

1. The crew of the vessel shipwreck or which was in danger of shipwreck;

2. He who shall have commenced the salvage in spite of the opposition of the
captain or his representatives; and
3. He who shall have failed to comply with the provision of section 3.

JETSAM – are goods that were thrown off a ship which was in danger

FLOTSAM – are goods that floated off the ship while the ship was in danger or
when it sank

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LIGAN – are goods left at sea on the wreck or tied to a bouy so that they can be
recovered later.

 These JETSAM, FLOTSAM and LIGAN are, unless abandoned, still the
property of their original owners.

LIMIT OF SALAVAGE FEE

 50% OF THE NET AMOUNT

IMPORTANT RULES:

1. The salvor has the right of possession of a derelict for purposes of a salvage
claim.
2. The owner of the vessel which is a derelict does not renounce his right to the
property. What the owner abandons temporarily is his right of possession,
which is thereby transferred to the salvor who becomes bound to preserve the
property with good faith and bring it to a place of safety for the owner’s use

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 11. CARRIAGE OF GOODS BY SEA ACT (COGSA)
CARRIAGE OF GOODS BY SEA ACT – COGSA
PUBLIC ACT NO. 521, 74th US Congress (April 16, 1936)

Philippine was given an option whether to adopt COGSA

COMMONWEALTH ACT NO. 65 (October 32, 1936)

Adopting COGSA

CARRIAGE BY SEA [ EXTRAORDINARY DELIGENCE]

COGSA is applicable in case of international carriage of goods

 COGSA applies immediately if damage is apparent

Notice of claim and prescriptive period:

1. The Notice of Claim must be made within three)3) days from delivery if the
damage is not apparent. This period is not mandatory
2. The prescriptive period of ONE(1) YEAR FROM DELIVERY for the filing
of the case is a condition precedent and mandatory. However, this one year
period is not applicable in case of misdelivery.

1 year period not applicable:

1. During negotiation
2. Misdelivery

Applicable laws of COGSA is based on destination

1. Article 1753 of the New Civil Code: Art. 1753. The law of the country to
which the goods are to be transported shall govern the liability of the
common carrier for their loss, destruction or deterioration.
2. Art 1766 of the NCC: Art. 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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