CODE OF COMMERCE BOOK ONE MERCHANTS AND COMMERCE IN GENERAL TITLE ONE MERCHANTS AND

ACTS OF COMMERCE ARTICLE 1. For purposes of this Code, merchants are: 1. Those who,
having legal capacity to engage in commerce, habitually devote themselves to it;
cdasia 2. The commercial or industrial companies which may be created in accordance
with [this Code] existing legislation. ARTICLE 2. Acts of commerce, whether those
who execute them be merchants or not, and whether specified in this Code or not,
should be governed by the provisions contained in it, in their absence, by the
usages of commerce generally observed in each place; and in the absence of both
rules, by those of the civil law. Those acts contained in this Code and all others
of analogous character shall be deemed acts of commerce. ARTICLE 3. The legal
presumption of habitually engaging in commerce shall exist from the moment the
person who intends to engage therein announces through circulars, newspapers,
handbills, posters exhibited to the public, or in any other manner whatsoever, an
establishment which has for its object some commercial operation. ARTICLE 4.
Persons who possess the following qualifications shall have legal capacity to
habitually engage in commerce: 1. Having completed the age of twenty-one years. 2.
Not being subject to the authority of the father or of the mother nor to marital
authority. 3. Having the free disposition of their property. ARTICLE 5. Those under
twenty-one years of age and those incapacitated may continue, through their
guardians, the business engaged in by their parents or their predecessors. If the
guardians do not have legal capacity to trade or are under some disqualifications,
they shall be obliged to appoint one or more factors having the legal
qualifications who shall substitute them in conduct of the business. ARTICLE 6.
(Repealed) 1 ARTICLE 7. (Repealed) 2 ARTICLE 8. The husband may freely revoke the
authorization impliedly or expressly granted to his wife to trade, stating the
revocation in a public instrument which shall also be recorded in the commercial
registry, published in the official periodical of the town, if there be one, or
otherwise in that of the town, if there be one, or otherwise in that of the
province, and announced to her correspondents by means of circulars. The
publication may also be made, if the husband so demands, by proclamations and
common criers. This revocation may, in no case, prejudice rights acquired before
its publication in the official periodical. aisadc ARTICLE 9. (Repealed) 3 ARTICLE
10. (Repealed) 4 ARTICLE 11. (Repealed) 5 ARTICLE 12. (Repealed) 6 ARTICLE 13. The
following may not engage in commerce nor hold office or have any direct
administrative or financial intervention in commercial or industrial companies: 1.
Those sentenced to the penalty of civil interdiction, while they have not served
their sentence or have not been amnestied or pardoned. 2. Those declared bankrupt,
while they have not obtained their discharge [or have not been authorized, by
virtue of an agreement accepted at a general meeting of creditors and approved by
judicial authority, to continue at the head of the establishment, the authority
being understood in such case as limited to that expressed in the agreement.] 3.
Those who on account of special laws or provisions can not trade. ARTICLE 14. The
following cannot engage in the mercantile profession, in person or through another,
nor hold office or have any direct administrative or financial intervention in
commercial or industrial associations, within the limits of the districts,
provinces or towns in which they discharge their duties: 1. Justices, judges and
officials of the fiscals' office in active service. This provision shall not be
applicable to the municipal mayors, judges and prosecuting attorneys, nor to those
who may temporarily discharge judicial or prosecution duties. 2. Administrative,
economic or military heads of districts, provinces, or posts. 3. Those employed in
the collection and administration of funds of the State, appointed by the
Government. Those who administer and collect under contract and their
representative are excepted. 4. Stock and commercial brokers of whatever class they
may be. 5. Those who, under special laws and provisions, cannot trade in specified
territory. ARTICLE 15. Foreigners and companies created abroad may engage in
commerce in the Philippines, subject to the laws of their country with respect to
their capacity to contract, and to the provisions of this Code as regard the
creation of their establishments in Philippine territory, their mercantile
operations, and the jurisdiction of the courts of the nation. The provisions of the
article shall be understood to be without prejudice to what, in particular cases,
may be established by treaties or agreements with other powers. cdtai TITLE TWO
COMMERCIAL REGISTRIES ARTICLE 16. In all the capitals of provinces shall be opened
a mercantile registry composed of two independent books in which shall be
inscribed: 1. Individual merchants. 2. Associations. In the coastal provinces and
in the interior ones where it is considered convenient because of the presence of
navigation, the registry shall include a third book for the registration of
vessels. ARTICLE 17. Registration in the mercantile registry shall be optional for
individual merchants and compulsory for associations which are created in
accordance with this Code or with special laws, and for vessels. ARTICLE 18. The
unregistered merchant cannot request the inscription of any document in the
mercantile registry, nor take advantage of its legal effects. ARTICLE 19. The
register shall keep the books necessary for registration, stamped, folioed and with
a memorandum on the first page of the number of pages which each book contains,
signed by the justice of the peace. Where there are several justices of the peace,
any one of them may sign the memorandum. ARTICLE 20. The registrar shall enter in
chronological order in the registry and general index all the merchants and
companies which are registered, giving each sheet the correlative number which
corresponds to it. ARTICLE 21. On the record sheet of each merchant or company
shall be entered: 1. The name, firm name, or title. cd 2. The class of commerce or
transactions in which engaged. 3. The date on which the transactions shall commence
or have commenced. 4. The domicile, with a specification of the branches which may
have been established, without prejudice to the registration of the branches in the
registry of the province in which they may be domiciled. 5. Instruments for the
creation of commercial associations, whatever their object or denomination
may be, as well as those for the modification, rescission or dissolution of such
associations. 6. (Repealed) 7 7. (Repealed) 8 8. (Repealed) 9 9. [Dotal
instruments], marriage settlement and the title which prove the ownership of the
paraphernal property of the wives of merchants. 10. The issue of shares,
certificates, and bonds of railroads and of all classes of associations, be they
associations for public works, credit companies, or others, stating the series and
number of the certificates of each issue, their participation, interest, payment
and premium, should they have one or the other, the total amount of the issue, and
the property, works, rights or mortgages, should there be any, by which their
payment is secured. The issues which may be made by individuals shall also be
recorded in accordance with the provisions of the preceding paragraph. 11.
(Superseded) 10 12. (Superseded) 11 Foreign associations which desire to establish
themselves or create branches in the Philippines shall present and record in the
registry, besides their by-laws and the documents required of Filipinos, a
certificate issued by the Philippine consul that they are constituted and
authorized in accordance with the laws of their respective countries. ARTICLE 22.
(Superseded) 12 ARTICLE 23. As a general rule, the registration shall be made by
virtue of notarial copies of the documents which the interested party may present.
cdt The registration of notes, bonds, or order and bearer instruments which do not
carry mortgages of immovable property shall be made upon presentation of the
certified minutes where in appears the resolution of the person or persons who made
the issue, and the conditions, requisites and guaranties thereof. When these
guaranties consist of mortgage of immovables, the corresponding instrument shall be
presented for annotation in the mercantile registry. ARTICLE 24. Unregistered
articles of association shall produce effect among the members who execute them,
but they shall not prejudice third person who, however, may make use thereof in so
far as favorable. ARTICLE 25. All the resolutions or acts which effect an increase
or reduction in the capital of commercial associations, whatever their denomination
may be, and those which modify or alter the conditions of recorded instruments,
shall also be recorded in the mercantile registry. The omission of this requisite
shall produce the effects mentioned in the preceding article. ARTICLE 26.
Registered documents shall produce legal effect to the prejudice of third persons
only from the date of their registration, and cannot be invalidated by prior or
subsequent unregistered documents. ARTICLE 27. [Dotal] instruments [and those]
referring to paraphernal property of the merchant's wife, not registered in the
mercantile registry, shall have no right of preference over other credits.
Immovable property and real rights over them, acquired by the wife prior to the
creation of the concurrent credits, shall be excepted. ARTICLE 28. If a merchant
should fail to make in the registry the inscription of the [dotal or] paraphernal
property of his wife, the latter herself may request it or it may be done for her
by her parents, by others or uncles by consanguinity, as well as by those who
discharge or may have discharged the duties of guardians or curators of the wife,
[or who constitute or may have constituted the dowry.] ARTICLE 29. (Repealed) 13
ARTICLE 30. The mercantile registry shall be public. The registrar shall furnish
those who may
request it any data referring to what may appear on the registration sheet of each
merchant, association or vessel. Likewise, he shall issue true copies of the whole
or part of said sheet to anyone who may ask for it in a signed request. ARTICLES 31
and 32. (Repealed) 14 TITLE THREE BOOKS AND BOOKKEEPING OF COMMERCE ARTICLE 33.
Merchants shall necessarily keep: 1. A book of inventories and balances. 2. A
journal. 3. A ledger. 4. A book or books for copies of letters and telegrams. 5.
Other books which may be required by special laws. Associations and companies shall
also keep a book or books of minutes, in which shall be entered all resolutions
referring to the progress and operations of the entities, approved at general
meetings or at those of managing boards. cdtai ARTICLE 34. They may also keep other
books which they may deem convenient, according to the system of bookkeeping they
may adopt. These books shall not be subject to the provisions of Article 36; but
they may legalize those which they may consider proper. ARTICLE 35. Merchants may
keep their books personally or through persons whom they authorize for the purpose.
If a merchant does not keep his books personally, authorization shall be presumed
granted to him who keeps them unless there is proof to the contrary. ARTICLE 36.
Merchants shall present the books referred to in Article 33, bound, ruled, and
folioed, to the justice of the peace of the municipality in which they have their
commercial establishments in order that he may put on the first page of each one a
signed memorandum of the number of pages which the book contains. The seal of the
justice of the peace legalizing it shall, furthermore, be stamped on all the pages
of each book. ARTICLE 37. The book of inventories and balance shall begin with the
inventory which the merchant must prepare at the time he starts his operations, and
shall contain: 1. An exact statement of the money, securities, credits, notes
receivable, movable and immovable property, merchandise and goods of all kinds,
appraised at their true value, and which constitute his assets. 2. An exact
statement of the debts and all kinds of pending obligations, should there be any,
and which form his liabilities. 3. He shall determine, in proper cases, the exact
difference between the assets and the liabilities, which shall be the capital with
which he begins his operations. The merchant shall, furthermore, prepare annually
and enter in the same book the general balance of his business, with the details
mentioned in this article, and in accordance with the entries in the journal,
without any reservations or omissions, under his signature and responsibility.
ARTICLE 38. In the journal shall be entered as the first item the result of the
inventory mentioned in the preceding article, divided into one or various
consecutive accounts, according to the system of bookkeeping adopted. Thereafter,
all his operations shall follow day by day, each entry stating the credit and debit
of the respective accounts. aisadc When the operations are numerous, whatever their
importance may be, or when they have taken place outside the domicile, those
referring to each account and which have taken place in each day may be included in
a single entry, but observing in their statement, if itemized, the same order in
which they
took place. Likewise, the amounts which the merchant uses for his household
expenses shall be entered on the date on which they are withdrawn from the funds,
and they shall be carried into a special account to be opened for that purpose in
the ledger. ARTICLE 39. The accounts referring to each object or person in
particular shall, furthermore, be opened with Debit and Credit in the ledger, and
to each of these accounts shall be transferred, in strict order of dates, the
entries in the journal referring to them. ARTICLE 40. In the book of minutes which
each association shall carry shall be entered verbatim the resolutions agreed upon
at its meetings or at those of its managers, stating the date of each one, those
present in them, the votes cast, and other matters conducive to an exact knowledge
of what as agreed upon, authenticated with the signatures of the managers,
directors or administrators charged with the management of the association or
designated by the by-laws or regulations by which it is governed. ARTICLE 41. All
the letters which a merchant may write regarding his business and the telegraphic
dispatches which he may send shall be transferred, either by hand or by any
mechanical means, to the book for copies., fully and successively by order of
dates, including the subscribing clause and the signatures. ARTICLE 42. Merchants
shall carefully keep, in bundles and in proper order, the letters and telegraphic
dispatches which they may receive relative to their transactions. ARTICLE 43.
Besides complying with and fulfilling the conditions and formalities prescribed in
this title, merchants must keep their books with clearness, in the order of dates,
without blanks, interpolations, erasures or blots, and without showing signs of
having been altered by substituting or tearing out folios, or in any other manner
whatsoever. ARTICLE 44. Merchants shall correct the errors or omissions which they
may make in entering in their books, immediately upon noticing them, explaining
clearly in what they consisted, and writing the entry as it should have been
written. If some time should have elapsed since the error was committed or since
the omission was incurred, they shall make the proper entry of correction, adding
on the margin of the erroneous entry a memorandum indicating the correction.
ARTICLE 45. No judge or court or authority may, on his own initiative, make an
inquiry to ascertain if merchants keep their books in accordance with the
provisions of this Code, nor make a general investigation or examination of the
bookkeeping in the offices or counting-houses of merchants. ARTICLE 46. Neither may
the communication, delivery or general examination of the books, correspondence and
other documents of merchants, be decreed at the instance of a party, except in the
cases of liquidation, universal succession or bankruptcy. ARTICLE 47. Outside of
the cases mentioned in the preceding article, the exhibition of the books and
documents of merchants may be decreed at the instance of a party or at the
initiative of the court, only when the person to whom they belong has an interest
or responsibility in the case in which the exhibition is made. [The examination
shall be made in the counting-house of the merchant, in his presence or in that of
the person whom he commissions, and shall be limited to the points related to the
question at issue; these being the only ones that may be verified.] ARTICLE 48. In
order to measure the probative force of the books of merchants, the following rules
shall be observed: 1. The books of merchants shall be evidence against themselves,
no proof to the contrary being admissible; but the adverse party cannot accept the
entries which may be favorable to him and reject those which may prejudice him, but
having accepted this means of proof, he shall be bound by the result which it may
show in its entirety, taking into equal consideration all the entries relative to
the question in litigation. 2. If there should be a conflict in the entries of the
books kept by two merchant, and those of one
should have been kept with all the formalities mentioned in this title, and those
of the other should suffer from any defect or should lack the requisites prescribed
by this Code, the entries of the books properly kept shall be admitted against
those of the defective one. unless the contrary is shown by means of other evidence
admissible in law. cdt 3. If one of the merchants should not present his books or
should manifest that he does not have them, those of his adversary, kept with all
the legal formalities, shall be admitted against him, unless it is shown that the
absence of such books is due to force majeure, and always saving proof by other
means admissible in suits against the entries exhibited. 4. If the books of the
merchants should have all the legal requisites and should be contradictory, the
court shall decide by the other proofs, weighing them according to the general
rules of law. ARTICLE 49. Merchants and their heirs or successors shall keep the
books, telegrams, and correspondence of their business in general, during all the
time that this may last and for five years after the liquidation of all their
business and commercial affairs. Documents which specially concern specific acts or
transactions may be rendered useless or destroyed upon the laps of the prescriptive
period of the actions which may arise therefrom, unless some questions referring
directly or indirectly to them should be pending, in which case, they must be kept
until the conclusion thereof. TITLE FOUR GENERAL PROVISIONS RELATING TO COMMERCIAL
CONTRACTS ARTICLE 50. Commercial contracts, in everything relative to their
requisites, modifications, exceptions, interpretations and extinction and to the
capacity of the contracting parties, shall be governed in all matters not expressly
provided for in this Code or in special laws, by the general rules of the civil
law. ARTICLE 51. Commercial contracts shall be valid and shall give rise to
obligations and causes of action in suits, whatever the form and language in which
they may be executed, the class to which they may belong, and the amount they may
involve, provided their existence is shown by any means established by the civil
law. However, the testimony of witness alone shall not be sufficient to prove the
existence of a contract which involves an amount exceeding 1,500 pesetas unless
supported by some other evidence. ARTICLE 52. From the provisions of the preceding
article shall he excepted: 1. Contracts which, in accordance with this Code or with
special laws, must be reduced to writing or require forms or formalities necessary
for their efficacy. cdtai 2. Contracts executed in a foreign country in which the
law requires certain instruments, forms or formalities for their validity, although
Philippine law does not require them. In either case, contracts which do not
satisfy the circumstances respectively required shall not give rise to obligations
or causes of action. ARTICLE 53. Meaning of illicit agreements. — Illicit
agreements do not give rise to obligations or causes of action even should they
refer to commercial transaction. ARTICLE 54. Contracts entered into by
correspondence shall be perfected from the moment an answer is made accepting the
offer or the conditions by which the latter may be modified. ARTICLE 55. Contracts
in which an agent or broker intervenes shall be perfected when the contracting
parties shall have accepted his offer. ARTICLE 56. In a commercial contract in
which a penalty for indemnification against the party failing to comply therewith
is fixed, the injured party may demand through legal means the fulfillment of the
contract or the penalty stipulated; but the recourse to one of these actions shall
extinguish the other unless the contrary is stipulated. ARTICLE 57. Commercial
contracts shall be executed and complied with in good faith, according to the terms
in which they were made and drawn up, without evading through arbitrary
interpretations the plain, proper and usual meaning of the spoken or written words,
or limiting the effects which are
naturally derived from the manner in which the contracting parties may have
expressed their will and contracted their obligations. ARTICLE 58. If a discrepancy
should appear between the copies of a contract which the contracting parties
present, and, in its execution, an agent or broker should have intervened, that
which appears in the books of the latter shall prevail provided they are kept in
accordance with law. ARTICLE 59. If doubts which cannot be decided in accordance
with what is provided in Article 2 of this Code should arise, the question shall be
decided in favor of the debtor. ARTICLE 60. In all computations of days, months and
years, it shall be understood that a day has twenty four hours, the months as
designated in the Gregorian calendar, and the year has three hundred sixty-five
days. Bills of exchange, promissory notes, and loans, with respect to which that
specially provided for them by this Code shall govern, are excepted. ARTICLE 61.
Days of grace, courtesy or others which under any name whatsoever defer the
fulfillment of commercial obligations, shall not be recognized, except those which
the parties may have previously fixed in the contract or which are based on a
definite provision of law. ARTICLE 62. Obligations which do not have a period
previously fixed by the parties or by the provisions of this Code, shall be
demandable ten days after having been contracted if they give rise only to an
ordinary action, and on the next day if they involve immediate execution. cd
ARTICLE 63. The effect of default in the performance of commercial obligations
shall commence: 1. In contracts with a day for performance fixed by the will of the
parties or by the law, on the day following their maturity. 2. In those which do
not have such day fixed, from the day on which the creditor makes a judicial demand
on the debtor or notifies him of the protest for loss and damages made against him
before a judge, notary or other public official authorized to admit the same. TITLE
FIVE PLACES AND BUILDINGS FOR COMMERCIAL TRANSACTIONS ARTICLES 64 to 87. (These
articles have been repealed. by the Securities Act.) TITLE SIX COMMERCIAL AGENTS
AND THEIR RESPECTIVE OBLIGATIONS ARTICLES 88 to 115. (These articles of the Code of
Commerce have been repealed by the Securities Act.) BOOK TWO SPECIAL COMMERCIAL
CONTRACTS TITLE ONE COMMERCIAL ASSOCIATIONS ARTICLES 116 to 150, 151 to 159, 160 to
174. (Articles 116 to 150 and 160 to 174 have been repealed by Article 2270 [2] and
superseded by Title IX on Partnership of Book Four of the New Civil Code. Article
151 to 159, on sociedades anonimas, have been expressly repealed by Section 191 of
the Corporation Law.) ARTICLES 175 to 183. (These articles have been impliedly
repealed by the Corporation Law and superseded by the General Banking Act.)
ARTICLES 184 to 192. (These articles have been repealed and superseded by the
Corporation Law and by the New Corporation Code. ARTICLES 193 to 198. (These
articles have been repealed and superseded by the Warehouse Receipts Law.) ARTICLES
199 to 211. (These articles have been impliedly repealed by the Corporation Law and
superseded by the General Banking Act.) ARTICLES 212 to 217. (These articles have
been previously superseded by Act of Congress of March 4, 1907 and Act No. 1865.
See also Act No. 2612, as amended by Act No. 7247. Now, the
matters therein treated are governed by the General Banking Act.) ARTICLES 218 to
238. (Articles 218 to 237 have been expressly repealed by Articles 2270 [2] and
superseded by Title IX on Partnerships of Book Four of the New Civil Code. Article
238, being a provision on sociedades anonimas has been expressly repealed by the
Corporation Law.) cdasia TITLE TWO JOINT ACCOUNTS ARTICLE 239. Merchants may
interest themselves in the transaction of other merchants, contributing thereto the
amount of capital they may agree upon, and participating in the favorable or
unfavorable results thereof in the proportion they may determine. ARTICLE 240. With
regard to their formation, joint accounts shall not be subjected to any formality,
and may be privately contracted orally or in writing, and their existence may be
proved by any of the means accepted by law, in accordance with the provisions of
Article 51. ARTICLE 241. In the transactions treated of in the foregoing articles,
no commercial name common to all the participants can be adopted, nor can any
further direct credit be made use of except that of the merchant who transacts and
manages the business in his own name and under his individual liability. ARTICLE
242. Persons transacting business with the merchant carrying on the joint business
shall only have a right of action against the latter and not against the other
persons interested, and the latter, on the other hand, shall have no right of
action against the third person who made the transaction with the manager unless
said manager formally cedes his rights to them. ARTICLE 243. The liquidation shall
be effected by the manager, and after the transactions have been concluded, he
shall render a proper account of its results. TITLE THREE COMMERCIAL AGENCY
ARTICLES 244 to 302. (These articles have been expressly repealed by Article 2270
[2] of the New Civil Code and superseded by Title X, on Agency, of Book Four of the
same Code.) TITLE FOUR COMMERCIAL DEPOSITS ARTICLES 303 to 310. — (These articles
have been expressly repealed by Article 2270 [2] of the New Civil Code and
superseded by Title XI, on Deposits, of Book Four of the same Code.) TITLE FIVE
COMMERCIAL LOANS ARTICLES 311 to 324. (These articles have been expressly repealed
by Article 2270 [2] of the New Civil Code and superseded by Title XI, on Loans, of
Book Four of the same Code.) TITLE SIX COMMERCIAL PURCHASE AND SALE AND BARTER AND
TRANSFERS OF NONNEGOTIABLE CREDITS SECTION ONE PURCHASE AND SALE ARTICLES 325 to
345. (These articles have been expressly repealed by Article 2270 [2] of the New
Civil Code and superseded by Title VI, on Sales, of Book Four of the same Code.)
SECTION TWO BARTER ARTICLE 346. Commercial barter shall be governed by the same
rules prescribed in this title for purchase and sale in so far as they are
applicable to the circumstances and conditions of the former. SECTION THREE
TRANSFERS OF NON-NEGOTIABLE CREDITS ARTICLE 347. Commercial credits which are
neither negotiable nor payable to bearer may be transferred by the creditor without
requiring the consent of the debtor, it being sufficient that he be
inform of the transfer. The debtor shall be bound to the new creditor by virtue of
the notification, and, from the time it is made, no payment shall be considered
valid except that made to the latter. ARTICLE 348. The assignor shall answer for
the legality of the credit and the capacity in which he made the transfer; but he
shall not answer for the solvency of the debtor unless there is an express
agreement to the effect. cdtai TITLE SEVEN COMMERCIAL CONTRACTS FOR TRANSPORTATION
OVERLAND ARTICLE 349. A contract of transportation by land or water ways of any
kind shall be considered commercial: 1. When it has for its object merchandise or
any article of commerce. 2. When, whatever its object may be, the carrier is a
merchant or is habitually engaged in transportation for the public. ARTICLE 350.
The shipper as well as the carrier of merchandise or goods may mutually demand that
a bill of lading be made, stating: 1. The name, surname and residence of the
shipper. 2. The name, surname and residence of the carrier. 3. The name, surname
and residence of the person to whom or to whose order the goods are to be sent or
whether they are to be delivered to the bearer of said bill. 4. The description of
the goods, with a statement of their kind, of their weight, and of the external
marks or signs of the packages in which they are contained. 5. The cost of
transportation. 6. The date on which shipment is made. 7. The place of delivery to
the carrier. 8. The place and the time at which delivery to the consignee shall be
made. 9. The indemnity to be paid by the carrier in case of delay, if there should
be any agreement on this matter. ARTICLE 351. In transportation made by railroads
or other enterprises subject to regulation rate and time schedules, it shall be
sufficient for the bills of lading or the declaration of shipment furnished by the
shipper to refer, with respect to the cost, time and special conditions of the
carriage, to the schedules and regulations the application of which he requests;
and if the shipper does not determine the schedule, the carrier must apply the rate
of those which appear to be the lowest, with the conditions inherent thereto,
always including a statement or reference to in the bill of lading which he
delivers to the shipper. ARTICLE 352. The bills of lading, or tickets in cases of
transportation of passengers, may be diverse, some for persons and others for
baggage; but all of them shall bear the name of the carrier, the date of shipment,
the points of departure and arrival, the cost, and, with respect to the baggage,
the number and weight of the packages, with such other manifestations which may be
considered necessary for their easy identification. ARTICLE 353. The legal evidence
of the contract between the shipper and the carrier shall be the bills of lading,
by the contents of which the disputes which may arise regarding their execution and
performance shall be decided, no exceptions being admissible other than those of
falsity and material error in the drafting. After the contract has been complied
with, the bill of lading which the carrier has issued shall be returned to him, and
by virtue of the exchange of this title with the thing transported, the respective
obligations and actions shall be considered cancelled, unless in the same act the
claim which the parties may wish to reserve be reduced to writing, with the
exception of that provided for in Article 366. In case the consignee, upon
receiving the goods, cannot return the bill of lading subscribed by the carrier,
because of its loss or of any other cause, he must give the latter a receipt for
the goods
delivered, this receipt producing the same effects as the return of the bill of
lading. ARTICLE 354. In the absence of a bill of lading, disputes shall be
determined by the legal proofs which the parties may present in support of their
respective claims, according to the general provisions established in this Code for
commercial contracts. cd ARTICLE 355. The responsibility of the carrier shall
commence from the moment he receives the merchandise, personally or through a
person charged for the purpose, at the place indicated for receiving them. ARTICLE
356. Carriers may refuse packages which appear unfit for transportation; and if the
carriage is to be made by railway, and the shipment is insisted upon, the company
shall transport them, being exempt from all responsibility if its objections, is
made to appear in the bill of lading. ARTICLE 357. If by reason of well-founded
suspicion of falsity in the declaration as to the contents of a package the carrier
should decide to examine it, he shall proceed with his investigation in the
presence of witnesses, with the shipper or consignee in attendance. If the shipper
or consignee who has to be cited does not attend, the examination shall be made
before a notary, who shall prepare a memorandum of the result of the investigation,
for such purposes as may be proper. If the declaration of the shipper should be
true, the expense occasioned by the examination and that of carefully repacking the
packages shall be for the account of the carrier and in a contrary case for the
account of the shipper. ARTICLE 358. If there is no period fixed for the delivery
of the goods the carrier shall be bound to forward them in the first shipment of
the same or similar goods which he may make point where he must deliver them; and
should he not do so, the damages caused by the delay should be for his account.
ARTICLE 359. If there is an agreement between the shipper and the carrier as to the
road over which the conveyance is to be made, the carrier may not change the route,
unless it be by reason of force majeure; and should he do so without this cause, he
shall be liable for all the losses which the goods he transports may suffer from
any other cause, beside paying the sum which may have been stipulated for such
case. When on account of said cause of force majeure, the carrier had to take
another route which produced an increase in transportation charges, he shall be
reimbursed for such increase upon formal proof thereof. ARTICLE 360. The shipper,
without changing the place where the delivery is to be made, may change the
consignment of the goods which he delivered to the carrier, provided that at the
time of ordering the change of consignee the bill of lading signed by the carrier,
if one has been issued, be returned to him, in exchange for another wherein the
novation of the contract appears. The expenses which this change of consignment
occasions shall be for the account of the shipper. ARTICLE 361. The merchandise
shall be transported at the risk and venture of the shipper, if the contrary has
not been expressly stipulated. As a consequence, all the losses and deteriorations
which the goods may suffer during the transportation by reason of fortuitous event,
force majeure, or the inherent nature and defect of the goods, shall be for the
account and risk of the shipper. cdtai Proof of these accidents is incumbent upon
the carrier. ARTICLE 362. Nevertheless, the carrier shall be liable for the losses
and damages resulting from the causes mentioned in the preceding article if it is
proved, as against him, that they arose through his negligence or by reason of his
having failed to take the precautions which usage has established among careful
persons, unless the shipper has committed fraud in the bill of lading, representing
the goods to be of a kind or quality different from what they really were. If,
notwithstanding the precautions referred to in this article, the goods transported
run the risk of being lost, on account of their nature or by reason of unavoidable
accident, there being no time for their owners to dispose of them, the carrier may
proceed to sell them, placing them for this purpose at the
disposal of the judicial authority or of the officials designated by special
provisions. ARTICLE 363. Outside of the cases mentioned in the second paragraph of
Article 361, the carrier shall be obliged to deliver the goods shipped in the same
condition in which, according to the bill of lading, they were found at the time
they were received, without any damage or impairment, and failing to do so, to pay
the value which those not delivered may have at the point and at the time at which
their delivery should have been made. If those not delivered form part of the goods
transported, the consignee may refuse to receive the latter, when he proves that he
cannot make use of them independently of the others. ARTICLE 364. If the effect of
the damage referred to in Article 361 is merely a diminution in the value of the
goods, the obligation of the carrier shall be reduced to the payment of the amount
which, in the judgment of experts, constitutes such difference in value. ARTICLE
365. If, in consequence of the damage, the goods are rendered useless for sale and
consumption for the purposes for which they are properly destined, the consignee
shall not be bound to receive them, and he may have them in the hands of the
carrier, demanding of the latter their value at the current price on that day. If
among the damaged goods there should be some pieces in good condition and without
any defect, the foregoing provision shall be applicable with respect to those
damaged and the consignee shall receive those which are sound, this segregation to
be made by distinct and separate pieces and without dividing a single object,
unless the consignee proves the impossibility of conveniently making use of them in
this form. cdt The same rule shall be applied to merchandise in bales or packages,
separating those parcels which appear sound. ARTICLE 366. Within the twenty-four
hours following the receipt of the merchandise, the claim against the carrier for
damage or average be found therein upon opening the packages, may be made, provided
that the indications of the damage or average which gives rise to the claim cannot
be ascertained from the outside part of such packages, in which case the claim
shall be admitted only at the time of receipt. After the periods mentioned have
elapsed, or the transportation charges have been paid, no claim shall be admitted
against the carrier with regard to the condition in which the goods transported
were delivered. ARTICLE 367. If doubts and disputes should arise between the
consignee and the carrier with respect to the condition of the goods transported at
the time their delivery to the former is made, the goods shall be examined by
experts appointed by the parties, and, in case of disagreement, by a third one
appointed by the judicial authority, the results to be reduced to writing; and if
the interested parties should not agree with the expert opinion and they do not
settle their differences, the merchandise shall be deposited in a safe warehouse by
order of the judicial authority, and they shall exercise their rights in the manner
that may be proper. ARTICLE 368. The carrier must deliver to the consignee, without
any delay or obstruction, the goods which he may have received, by the mere fact of
being named in the bill of lading to receive them; and if he does not do so, he
shall be liable for the damages which may be caused thereby. ARTICLE 369. If the
consignee cannot be found at the residence indicated in the bill of lading, or if
he refuses to pay the transportation charges and expenses, or if he refuses to
receive the goods, the municipal judge, where there is none of the first instance,
shall provide for their deposit at the disposal of the shipper, this deposit
producing all the effects of delivery without prejudice to third parties with a
better right. ARTICLE 370. If a period has been fixed for the delivery of the
goods, it must be made within such time, and, for failure to do so, the carrier
shall pay the indemnity stipulated in the bill of lading, neither the shipper nor
the consignee being entitled to anything else. If no indemnity has been stipulated
and the delay exceeds the time fixed in the bill of lading, the carrier
shall be liable for the damages which the delay may have caused. ARTICLE 371. In
case of delay through the fault of the carrier, referred to in the preceding
articles, the consignee may leave the goods transported in the hands of the former,
advising him thereof in writing before their arrival at the point of destination.
When this abandonment takes place, the carrier shall pay the full value of the
goods as if they had been lost or mislaid. aisadc If the abandonment is not made,
the indemnification for losses and damages by reason of the delay cannot exceed the
current price which the goods transported would have had on the day and at the
place in which they should have been delivered; this same rule is to be observed in
all other cases in which this indemnity may be due. ARTICLE 372. The value of the
goods which the carrier must pay in cases if loss or misplacement shall he
determined in accordance with that declared in the bill of lading, the shipper not
being allowed to present proof that among the goods declared therein there were
articles of greater value and money. Horses, vehicles, vessels, equipment and all
other principal and accessory means of transportation shall be especially bound in
favor of the shipper, although with respect to railroads said liability shall be
subordinated to the provisions of the laws of concession with respect to the
property, and to what this Code established as to the manner and form of effecting
seizures and attachments against said companies. ARTICLE 373. The carrier who makes
the delivery of the merchandise to the consignee by virtue of combined agreements
or services with other carriers shall assume the obligations of those who preceded
him in the conveyance, reserving his right to proceed against the latter if he was
not the party directly responsible for the fault which gave rise to the claim of
the shipper or consignee. The carrier who makes the delivery shall likewise acquire
all the actions and rights of those who preceded him in the conveyance. The shipper
and the consignee shall have an immediate right of action against the carrier who
executed the transportation contract, or against the other carriers who may have
received the goods transported without reservation. However, the reservation made
by the latter shall not relieve them from the responsibilities which they may have
incurred by their own acts. ARTICLE 374. The consignees to whom the shipment was
made may not defer the payment of the expenses and transportation charges of the
goods they receive after the lapse of twenty-four hours following their delivery;
and in case of delay in this payment, the carrier may demand the judicial sale of
the goods transported in an amount necessary to cover the cost of transportation
and the expenses incurred. ARTICLE 375. The goods transported shall be especially
bound to answer for the cost of transportation and for the expenses and fees
incurred for them during their conveyance and until the moment of their delivery.
This special right shall prescribe eight days after the delivery has been made, and
once prescribed, the carrier shall have no other action than that corresponding to
him as an ordinary creditor. ARTICLE 376. The preference of the carrier to the
payment of what is owed him for the transportation and expenses of the goods
delivered to the consignee shall not be cut off by the bankruptcy of the latter,
provided it is claimed within the eight days mentioned in the preceding article.
ARTICLE 377. The carrier shall be liable for all the consequences which may arise
from his failure to comply with the formalities prescribed by the laws and
regulations of the public administration, during the whole course of the trip and
upon arrival at the point of destination, except when his failure arises from
having been led into error by falsehood on the part of the shipper in the
declaration of the merchandise. If the carrier has acted by virtue of a formal
order of the shipper or consignee of the merchandise, both
shall become responsible. cd ARTICLE 378. Agents for transportation shall be
obliged to keep a special registry, with the formalities required by Article 36, in
which all the goods the transportation of which is undertaken shall be entered in
consecutive order of number and dates, with a statement of the circumstances
required in Article 350 and others following for the respective bills of lading.
ARTICLE 379. The provisions contained in Articles 349 and following shall be
understood as equally applicable to those who, although they do not personally
effect the transportation of the merchandise, contract to do so through others,
either as contractors for a particular and definite operation, or as agents for
transportations and conveyances. In either case they shall be subrogated in the
place of the carriers themselves, with respect to the obligations and
responsibility of the latter, as well as with regard to their rights. TITLE EIGHT
INSURANCE CONTRACTS ARTICLES 380 to 438. (These articles have been expressly
repealed by Section 204 of the Insurance Act and are superseded by said Act.) TITLE
NINE COMMERCIAL GUARANTIES ARTICLES 439 to 442. (These articles have been expressly
repealed by Article 2270 [2] of the New Civil Code and are superseded by Articles
2047 to 2048 of the same Code.) TITLE TEN CONTRACTS FOR BILLS OF EXCHANGE SECTION
ONE BILL EXCHANGE ARTICLE 443. A bill of exchange shall be considered a commercial
instrument, [and all the rights and actions arising therefrom, without distinction
of persons, shall be governed by the provisions of this Code.] ARTICLE 444. (This
is repealed. See Secs. 1 and 126, Negotiable Instruments Law.) ARTICLE 445. The
clauses of "value on account" and "value understood" shall make the purchaser of
the draft liable for the amount of the same in favor of the drawer, in order to
demand it or compensate him in the manner and at the time which both may have
agreed on in making the exchange contract. ARTICLES 446 to 447. (These are
repealed. See Secs. 19-21, Negotiable Instruments Law.) ARTICLE 448. The drawers
cannot refuse to issue to holders of the bills of exchange second and third bills,
and as many as they may require on the same bill, provided the request is made
before the bills fall due, excepting the provision of Article 500, there being
stated in all of them that they shall not be considered valid except in case
payment was not made on the first bill of exchange issued, or other prior ones.
ARTICLE 449. In the absence of duplicate copies of the draft issued by the drawer,
any holder may give the purchaser a copy, stating that he issues it in the absence
of the original, which it is desired to substitute. In this copy, there must be
inserted literally all the indorsements which the original contains. ARTICLE 450.
(This is repealed. See Secs. 17[e] and 130, Negotiable Instruments Law.) ARTICLE
451. (This is repealed. See Secs. 4 and 7, Negotiable Instruments Law.) ARTICLES
452 to 453. (These are repealed. See Secs. 85, 86 and 194, Negotiable Instruments
Law.) cdasia ARTICLE 454. The months for the periods of drafts shall be computed
from date to date. If in the months the drafts falls due, there is no equivalent to
that of the date on which the bill was drawn, it shall be understood that if falls
due the last day of the month. ARTICLE 455. (Repealed).
SECTION THREE OBLIGATIONS OF DRAWERS ARTICLES 456 to 457. (These are repealed. See
Sec. 127, Negotiable Instruments Law). ARTICLE 458. The expenses arising from the
non-acceptance or non-payment of the draft shall be paid by drawer or by the third
person for whose account it was made, [unless he proves that he supplied the funds
at the proper time, or that he was a creditor in accordance with the foregoing
article, or that he was specially authorized to draw for the amount in question. In
any of the three cases, the drawer may require of the person obligated to accept
and to pay the indemnity nor the expenses which he may have paid the holder of the
draft.] ARTICLES 459 to 460. (These are repealed. See Secs. 61, 89, 124, 151, 102,
104, and 152, Negotiable Instruments Law.) SECTION FOUR INDORSEMENTS OF BILLS OF
EXCHANGE ARTICLES 461 to 464. (These are repealed. See Secs. 30, 31-46, 31 and 45
and 12, Negotiable Instruments Law.) ARTICLE 465. Indorsements signed in blank and
those in which the value is not stated shall transfer the ownership of the draft
and shall produce the same effect as if "value received" were written therein.
ARTICLES 466 to 468. (These are repealed. See Secs. 40 and 67; 63, 64, 66 and 69,
Negotiable Instruments Law.) SECTION FIVE PRESENTATION OF DRAFTS AND THEIR
ACCEPTANCE ARTICLE 469. Drafts which are not presented for acceptance or payment
within the period fixed shall be affected thereby, as well as when they are not
protested at the proper time. ARTICLES 470 to 477. (These are repealed. See Secs.
143 and 144 132, 13 and 17[c], Negotiable Instruments Law.) ARTICLE 478. [The
acceptance of the draft must take place or be refused on the same day on which the
holder presents it for this purpose, and the person of whom acceptance is demanded
cannot retain the draft in his possession under any pretext whatsoever.] If the
draft presented for acceptance is to be paid in a place other than that of the
residence of the person accepting the same, the domicile in which payment is to be
made must be stated in the draft. The person who receives a draft for acceptance,
if it is drawn on him, or to have it accepted if it is drawn on a third person, and
should retain possession thereof expecting another copy, and shall advise its
acceptance by means of a letter, telegram, or other means of writing, shall be
liable to the drawer and indorsers thereof in the same manner as if the acceptance
had been placed on the draft in question, even though such acceptance has not taken
place, or even when he refuses the delivery of the copy accepted to the person
legally requesting it.] ARTICLES 479 to 484. (These articles are repealed. See
Secs. 139-142, 162; 150, 151, 152 and 158; 70, 152, 81 and 82; and 131, Negotiable
Instruments Law.) ARTICLE 485. Persons who forward drafts from one place to another
too late to be presented or protested at the proper time shall be liable for the
consequences which may arise by reason thereof. SECTION SIX GUARANTIES AND THEIR
EFFECTS ARTICLE 486. The payment of a draft may be secured by a written obligation,
independent of that contracted by the acceptor and indorser, known by the name of
guarantee (aval). ARTICLE 487. If the guarantee (aval) is drawn up in general terms
and without restriction, the person giving it shall be liable for the payment of
the draft in the same cases and manner as the person for whom he appears as
guarantor; but if the guarantee (aval) is limited as to a determined time, case,
amount, or person, it shall not produce further liability than that arising from
the terms of the guarantee
(aval). SECTION SEVEN PAYMENTS ARTICLE 488. (This is repealed. See Secs. 70 and 71,
Negotiable Instruments Law.) aisadc ARTICLE 489. Bills of Exchange must be paid in
the money designated therein, and if that could not be procured, in its equivalent
according to the use and customs at the place of payment. ARTICLE 490. The person
paying a bill of exchange before it is due shall not be exempted from paying the
amount of the same if the first payment was not made to a legitimate person.
ARTICLE 491. The payment of a bill of exchange payable to bearer which is due,
shall be considered valid unless a garnishment of the amount thereof by reason of a
judicial judgment was previously issued. ARTICLE 492. The holder of a draft who
requests its payment, is obliged to satisfy the person paying it as to his
identity, by means of instruments or though residents who are acquainted with him
or who will guarantee his identity. The absence of this proof shall not prevent the
deposit of the amount of the draft on the day of its presentation in an
establishment or with a person accepted by the holder and payor, in which case, the
establishment or person shall retain the sum deposited in his or its possession
until the legitimate payment is made. The expenses and risks arising from this
deposit shall be for the account of the holder of the draft. ARTICLE 493. The
holder of a draft shall not be obliged to collect its amount before it falls due;
but should he accept said payment, it shall be valid, [except in case of the
bankruptcy of the payor in the fifteen days following, in accordance with the
provisions of Article 879.)] ARTICLE 494. Neither shall the holder be obliged, even
after the draft has fallen due, to receive part and not the whole amount of the
same, and only with his consent may a portion of its value be paid and the balance
be left standing. In such case, the draft may be protested for the amount which has
been paid, and the holder shall retain possession thereof, making a memorandum on
the same of the amount collected and giving a separate receipt for said amount.
ARTICLE 495. Drafts accepted must necessarily be paid on the copy which contains
the acceptance. If the payment is made on any of the other ones, the person who
made the payment shall be liable for the value of the draft to the third person who
is the legitimate holder of the acceptance. ARTICLE 496. The acceptor cannot be
forced to pay even though the holder of the copy not containing the acceptance
binds himself to give security to the satisfaction of the former; but in the latter
case, the bearer may demand the deposit and formulate the protest in the terms
mentioned in Article 498. If the acceptor voluntarily admits the security and makes
the payment, the former shall be legally cancelled as soon as the acceptance has
prescribed which give rise to the execution of the security. ARTICLES 497 to 499.
(These are repealed.) ARTICLE 500. The request for a copy to take the place of the
draft lost must be made by the last holder from the person who transferred it to
him, and thus successively from one to another indorser until the drawer is
reached. No person can refuse to lend his name and interposition to the steps taken
to procure a new copy, the owner of the draft defraying the expenses which may
arise until it is obtained. ARTICLE 501. The payments made on account of the value
of a draft by the person on whom it is drawn shall reduce the liability of the
drawer and indorsers in like proportion. SECTION EIGHT PROTESTS ARTICLE 502. (This
is repealed. See Sec. 152, Negotiable Instruments Law.)
ARTICLE 503. All protests on account of non-acceptance or non-payment place the
person who gave rise thereto under the obligation to defray the expenses, losses,
and damages. ARTICLE 504 to 508. (These are repealed.) ARTICLE 509. No act or
instrument can supply the omission and absence of the protest for the preservation
of the action which may be instituted by the holder against the persons liable for
the legal effect of the draft. ARTICLE 510. (This is repealed. See Sec. 158,
Negotiable Instruments Law.) cdtai SECTION NINE INTERVENTION IN ACCEPTANCE AND
PAYMENT ARTICLE 511. (This is repealed. See Secs. 161-163, Negotiable Instruments
Law.) ARTICLE 512. [The person who intervenes in the protest of a bill of exchange,
if he accepts it, shall be liable for its payment in the same manner as if it were
drawn on him, being obliged to give notice of its acceptance by the first mail to
the person for whom he intervened]; and should he pay it, he shall be subrogated to
the rights of the holder, complying with the obligations prescribed for the latter,
with the following limitations: 1. If he pays said draft for the account of the
drawer, the latter only shall be liable for the amount disbursed, the indorsers
being free. 2. If he pays it for the account of one of the latter, he shall be
entitled to bring an action against the drawer, against the indorser for whose
account he intervened, and against the others who precede said indorser in the
order of their indorsements, but not against those who may be subsequent. ARTICLE
513. The intervention in the acceptance shall not deprive the holder of the draft
protested of the right to demand of the drawer or of the indorsers the security for
the results. ARTICLE 514. If the person who did not accept a draft, giving rise to
a protest thereby, should appear to pay it when it falls due, his payment shall be
accepted in preference to that of the person who intervened or wished to intervene
for the acceptance or payment; but the expenses caused by the nonacceptance of the
draft at the proper time shall be for his account. ARTICLE 515. (This is repealed.
See Sec. 177, Negotiable Instruments Law.) SECTION TEN ACTIONS WHICH MAY BE
INSTITUTED BY HOLDERS OF BILL OF EXCHANGE ARTICLE 516. In default of the payment of
a bill of exchange presented and protested at the proper time and in the proper
manner, the holder shall have a right to demand of the acceptor, of the drawer, or
of any of the indorsers, the reimbursement for the costs of protest and re-
exchange; [but after an action has been instituted against one of them, it cannot
be brought against the rest except in the case of the insolvency of the defendant.]
ARTICLE 517. (This is repealed). ARTICLE 518. If an execution has been had against
the property of the debtor for the payment or reimbursement of a draft and the
holder should have been able to realize only a part of his credit, he may bring an
action against the rest for the balance of his account until he is fully
reimbursed, in the manner established in Article 516. cdtai The same shall be done
in case the person proceeded against is declared in bankruptcy, and if all the
persons liable for the draft are in similar circumstances, the claimant shall be
entitled to recover from each set of assets the corresponding dividend until his
credit is totally cancelled. ARTICLE 519. [The indorser who pays a protested draft
shall subrogate himself to the rights of the holder thereof, viz.: 1. If the
protest were for non-acceptance, against the drawer and the other indorsers who
precede him in order, for the security of the value of the draft, or the deposit in
the absence of security. 2. If it were for non-payment, against the said drawer,
acceptor, and prior indorsers for the recovery of the amount of the draft and of
all the costs he may have paid.] If the drawer and the indorser both should appear
to make the payment, the drawer shall be preferred;
and if the indorsers only should appear, the one of a prior date. ARTICLE 520. The
drawer as well as any of the indorsers of a protested bill of exchange may demand,
as soon as they receive notice of the protest, that the holder receive the amount
with the legitimate expenses, and deliver to them the draft with the protest and
the account of the redraft. ARTICLES 521 to 523. (These are repealed.) ARTICLE 524.
The amount which a creditor remits or releases to a debtor against whom an action
has been brought from the payment or reimbursement of a bill of exchange, shall be
understood as extended also to the rest who may be liable for the effects of the
collection. ARTICLE 525. The prescription of a protested draft shall not have any
effect by reason of nonpresentation, protest, or its notification at the times
which have been stated, with regard to the drawer or indorser who, after said
periods have elapsed, has balanced the amount of the draft in his accounts with the
debtor or reimbursed him with bonds or securities belonging to him. ARTICLE 526.
Bills of exchange protested by reason of payment shall earn interest in favor of
the holders thereof. SECTION ELEVEN RE-EXCHANGE AND REDRAFT ARTICLE 527. The holder
of a protested bill of exchange may recover the amount thereof and the costs of
protests and re-exchange by drawing a new bill against the drawer or one of its
indorsers and attaching to this draft the original one, as well as the certified
copy of the protest and the account of the redraft, which shall only contain the
following clauses: 1. The amount of the bill of exchange protested. 2. Protest
costs. [3. Stamp tax for the redraft. 4. Exchange according to the customs of the
place. 5. Brokerage of the transaction.] 6. Expense of the correspondence. 7. Loss
by reason of the re-exchange. In this account, there shall be stated the name of
the person on whom the redraft is made. ARTICLE 528. All the items of the redraft
shall conform to the usages of the place, [and the reexchange to the current rate
of the day of the draft. This will be proven by the official quotation on exchange,
or by means of a certificate of an official agent or broker, should there be one,
and, in their absence, by that of two recorded merchants.] ARTICLE 529. Only one
account or redraft can be made for each bill of exchange, which account shall be
paid by the indorsers of one or the other until it is extinguished by means of the
reimbursement of the drawer. [More than one re-exchange shall not be charged, and
the amount thereof shall be graduated by increasing or reducing the amount due from
each person, according as to whether the paper on the place to which the redraft is
addressed is negotiated in that of its domicile with a premium or with discount
which circumstance shall be proven by means of certificate or an agent, broker, or
merchant.] cdasia ARTICLE 530. The holder of a redraft cannot demand legal interest
thereon until after the day he demands payment of the person who is to pay it, in
the manner prescribed in Article 63 of this Code. TITLE ELEVEN DRAFTS, BILLS, AND
PROMISSORY NOTES PAYABLE TO ORDER AND CHECKS ARTICLES 531 to 566. These are mainly
superseded by the Negotiable Instruments Law (Act 2031). TITLE TWELVE INSTRUMENTS
PAYABLE TO BEARER, AND FORGERY, ROBBERY, THEFT, OR LOSS OF THE SAME
ARTICLES 531 to 535. (These are repealed). ARTICLE 536. It may be drawn in the same
place it is to be paid or in a different place; but the maker shall be obliged to
previously have the funds on deposit with the person on whom it is drawn. ARTICLES
537 to 538. (These are repealed). ARTICLE 539. Payment of a check shall be demanded
of the depository on presentation. [The person to whom payment is made shall state
in his receipt his name and the date of payment.] ARTICLE 540. (This is repealed.)
ARTICLE 541. The maker or any legal holder of a check shall be entitled to indicate
therein that it be paid to a certain banker or institution, which he shall do by
writing across the face the name of said banker or institution, or only the words
"and company." The payment made to a person other than banker or institution shall
not exempt the person on whom it is drawn, if the payment was not correctly made.
ARTICLES 542 to 545. (These are repealed). ARTICLE 546. The holder of an instrument
payable to bearer shall have a right to compare it with the original whenever he
consider it advisable. ARTICLE 547. The following shall be instruments of credit
payable to bearer for the effects of this section, according to the following
cases: 1. Instruments of credit against the State, provinces or municipalities,
legally issued. 2. Those issued by foreign countries the quotation of which has
been authorized by the Government, on the recommendation of the board of directors
of the associations of agents. 3. Instruments of credit payable to bearer, of
foreign enterprises, established in accordance with the law of the State to which
they belong. 4. Instruments of credit payable to bearer issued in accordance with
the laws of their association by national establishments, associations, or
enterprises. 5. Those issued by private parties, provided they are mortgaged or are
sufficiently secured. cdt ARTICLE 548. The dispossessed owner, no matter for what
cause it may be, may apply to the judge or court of competent jurisdiction, asking
that the principal, interest or dividends due or about to become due, be not paid a
third person, as well as in order to prevent the ownership of the instrument from
being transferred to another person, or he may request that a duplicate he issued
him. The judge or court exercising jurisdiction in the district in which the debtor
establishment or person is situated shall be of competent jurisdiction. ARTICLE
549. In the complaint made to the judge or court by the dispossessed owner, he must
state the name, character, nominal value, number if it should have one, and the
series of the instrument; and furthermore, if it were possible, the time and place
he acquired ownership and the manner of acquisition thereof, the time and place
where he received the last interest or dividends, and the circumstances attending
the dispossession. The person dispossessed, in making the complaint, shall indicate
within the district in which the judge or court of competent jurisdiction exercises
the domicile where he is to be served with all notifications. ARTICLE 550. If the
complaint relates only to the payment of the principal or interest or dividends
which are due or about to become due, the judge or court, when the legality of the
acquisition of the instrument has been proved, must admit said complaint
immediately ordering: [1. That the complaint be immediately published in the
Gacetas of Madrid and Manila, in the Boletin oficial of the province, and in the
Diario oficial de Avisos of the place, should there be one fixing a short period
within which the holder of the instrument may appear.] 2. That it be communicated
to the managing office of the institution which issued the instrument, or to the
association or private person from whom it originates, in order that the payment of
the principal or interest may be suspended. ARTICLE 551. (This is repealed.)
ARTICLE 552. After one year has elapsed since the complaint without anybody
contradicting it,
and, if in the interval, two dividends have been distributed, the complainant may
request the judge or court for authority not only to recover the interest of
dividends due or about to become due, in the proportion and means of their
collectibility, but also the principal of the instruments, if it is demandable.
ARTICLE 553. After authorization has been granted by the judge or court, the person
dispossessed must, before receiving the interest or dividends, or the principal,
give sufficient security to cover the amount of the annuities recoverable, and,
furthermore, twice the amount of the last annuity due. After two years have elapsed
from the date of the authorization without the complainant being contradicted, the
guaranty shall be cancelled. If the complainant does not wish to or cannot give the
security, the debtor association or private person may request the deposit of the
interest or dividends past due or of the principal recoverable, and to receive
after the two years the amount deposited if there be no objection. ARTICLE 554. If
the principal should be recoverable after the authorization, it may be demanded
under security or the deposit may be required. After five years have elapsed,
without opposition, from the date of the authorization, or ten years from the date
it was demandable, the person dispossessed may receive the securities deposited.
ARTICLE 555. The solvency of the guaranty shall be passed upon by the judges and
courts. The complainant may give security in bonds of the State, recovering them at
the termination of the period fixed for the guaranty. ARTICLE 556. If the complaint
relates to coupons payable to bearer separated from the instrument, and the claim
should not be overruled, the claimant may recover the amount of the coupons after
three years have elapsed, counted from the date of the judicial declaration
admitting the complaint. ARTICLE 557. The payments made to the person dispossessed
in accordance with the rules above established exempt the debtor from all the
liability; and a third person who considers himself injured shall only retain the
right of personal action against the claimant who acted without just cause. ARTICLE
558. If, before the exemption of the debtor, a third holder should appear with the
instruments the subject of the complaint, the former must retain possession thereof
and inform the judge or court and the first claimant, at the same time stating the
name, residence, or manner in which the third holder may be found. cdasia The
appearance of a third person shall suspend the effects of the claim until it is
decided by the judge or court. ARTICLES 559 to 565. (These are repealed). ARTICLE
566. The foregoing provisions shall not be applicable to the bank notes of the
Spanish Philippine Bank (Banco Español-Filipino), nor to notes of the same kind
issued by institutions subject to the same rule, nor to the instruments payable to
bearer issued by the State, which are governed by special laws, decrees, or
regulations. TITLE THIRTEEN LETTERS OF CREDIT ARTICLE 567. Letters of credit are
those issued by one merchant to another or for the purpose of attending to a
commercial transaction. ARTICLE 568. The essential conditions of letters of credit
shall be: 1. To be issued in favor of a definite person and not to order. 2. To be
limited to a fixed and specified amount, or to one or more undetermined amounts,
but within a maximum the limits of which has to be stated exactly. Those which do
not have any of these last circumstances shall be considered as mere letters of
recommendation. ARTICLE 569. The drawer of a letter of credit shall be liable to
the person on whom it was
issued, for the amount paid by virtue thereof, within the maximum fixed therein.
Letters of credit may not be protested even should they not be paid, nor shall the
bearer thereof acquire any right of action by reason of such non-payment against
the person who issued it. The person paying shall have the right to demand the
proof of the identity of the person in whose favor the letter of credit was issued.
ARTICLE 570. The drawer of a letter of credit may annul it, informing the bearer
and the person to whom it is addressed of such revocation. ARTICLE 571. The bearer
of a letter of credit shall pay the amount received to the drawer without delay.
Should he not do so, an action involving execution may be brought to recover it,
with legal interest and the current exchange in the place where payment was made on
the place where it is repaid. ARTICLE 572. If the bearer of a letter of credit does
not make use thereof within the period agreed upon with the drawer, or, in default
of a period fixed, within six months, counted from its date in any point in the
Philippines, and with in twelve months anywhere outside thereof, it shall be void
in fact and in law. MARITIME COMMERCE TITLE ONE VESSELS ARTICLE 573. Merchant
vessels constitute property which may be acquired and transferred by any of the
means recognized by law. The acquisition of a vessel must appear in a written
instrument, which shall not produce any effect with respect to third persons if not
inscribed in the registry of vessels. cd The ownership of a vessel shall likewise
be acquired by possession in good faith, continued for three years, with a just
title duly recorded. In the absence of any of these requisites, continuous
possession for ten years shall be necessary in order to acquire ownership. A
captain may not acquire by prescription the vessel of which he is in command.
ARTICLE 574. Builders of vessels may employ the materials and follow, with respect
to their construction and rigging, the systems most suitable to their interests.
Ship owners and seamen shall be subject to what the laws and regulations of the
public administration on navigation, customs, health, safety of vessels, and other
similar matters. ARTICLE 575. Co-owners of vessels shall have the right of
repurchase and redemption in sales made to strangers, but they may exercise the
same only within the nine days following the inscription of the sale in the
registry, and by depositing the price at the same time. ARTICLE 576. In the sale of
a vessel it shall always be understood as included the rigging, masts, stores and
engine of a streamer appurtenant thereto, which at the time belongs to the vendor.
The arms, munitions of war, provisions and fuel shall not be considered as included
in the sale. The vendor shall be under the obligation to deliver to the purchaser a
certified copy of the record sheet of the vessel in the registry up to the date of
the sale. ARTICLE 577. If the alienation of the vessel should be made while it is
on a voyage, the freightage which it earns from the time it receives its last cargo
shall pertain entirely to the purchaser, and the payment of the crew and other
persons who make up its complement for the same voyage shall be for his account. If
the sale is made after the vessel has arrived at the port of its destination, the
freightage shall pertain to the vendor, and the payment of the crew and other
individuals who make up its complement shall be for his account, unless the
contrary is stipulated in either case. ARTICLE 578. If the vessel being on a voyage
or in a foreign port, its owner or owners should voluntarily alienate it, either to
Filipinos or to foreigners domiciled in the capital or in a port of another
country, the bill of sale shall be executed before the consul of the Republic of
the Philippines at the port
where it terminates its voyage and said instrument shall produce no effect with
respect to third persons if it is not inscribed in the registry of the consulate.
The consul shall immediately forward a true copy of the instrument of purchase and
sale of the vessel to the registry of vessels of the port where said vessel is
inscribed and registered. In every case the alienation of the vessel must be made
to appear with a statement of whether the vendor receives its price in whole or in
part, or whether he preserves in whole or in part any claim on said vessel. In case
the sale is made to a Filipino, this fact shall be stated in the certificate of
navigation. aisadc When a vessel, being on a voyage, shall be rendered useless for
navigation, the captain shall apply to the competent judge on court of the port of
arrival, should it be in the Philippines; and should it be in a foreign country, to
the consul of the Republic of the Philippines, should there be one, or, where there
is none, to the judge or court or to the local authority; and the consul, or the
judge or court, shall order an examination of the vessel to be made. If the
consignee or the insurer should reside at said port, or should have representatives
there, they must be cited in order that they may take part in the proceedings on
behalf of whoever may be concerned. ARTICLE 579. After the damage to the vessel and
the impossibility of her being repaired, in order to continue the voyage had been
shown, its sale at public auction shall be ordered, subject to the following rules:
1. The hull of the vessel, its rigging, engines, stores, and other articles shall
be appraised, after making an inventory, said proceedings to be brought to the
notice of the persons who may wish to take part in the auction. 2. The order or
decree ordering the auction to be held shall be posted in the usual places, an
announcement thereof to be inserted in the Official Gazette and in two of the
newspapers of the largest circulation of the port where the auction is to be held,
should there be any. The period which may be fixed for the auction shall not be
less than twenty days. 3. These announcements shall be repeated every ten days, and
their publication shall be made to appear in the records. 4. The auction shall be
held on the day fixed, with the formalities prescribed in the common law for
judicial sales. 5. If the sale should take place while the vessel is in a foreign
country, the special provisions governing such cases shall be observed. ARTICLE
580. In all judicial sales of any vessel for the payment of creditors, the
following shall have preference in the order stated 2 1. The credit in favor of the
public treasury proven by means of an official certificate of competent authority.
2. The judicial costs of the proceedings, according to an appraisement approved by
the judge or court. 3. The pilotage charges, tonnage dues, and the other sea or
port charges, proven by means of proper certificates of the officers intrusted with
the collection thereof. 4. The salaries of the depositaries and keepers of the
vessel and any other expenses for its preservation from the time of arrival at the
port until the sale, which appear to have been paid or be due by virtue of an
account verified and approved by the judge or court. cdtai 5. The rent of the
warehouse where the rigging and stores of the vessel have been taken care of,
according to contract. 6. The salaries due the captain and crew during its last
voyage, which shall be verified by means of the liquidation to be made in view of
the lists and of the books of account of the vessel, approved by the chief of the
Bureau of Merchant Marine, where there is one, and in his absence by the consul or
judge or court. 7. The reimbursement for the goods of the freight which the captain
may have sold in order to
repair the vessel, provided that the sale has been ordered through a judicial
proceedings held with the formalities required in such cases, and recorded in the
certificate of registry of the vessel. 8. The part of the price which has not been
paid to the said vendor, the unpaid credits for materials and labor in the
construction of the vessel, when it has not navigated, and those arising from the
repair and equipment of the vessels and from its provisioning with victuals and
fuel during the last voyage. In order that the credits provided for in this
subdivision may enjoy this preference, they must appear by contracts recorded in
the registry of vessels, or if they were contracted for the vessel while on a
voyage and said vessel has not returned to the port where it is registered, they
must be made with the authorization required for such cases and annotated in the
certificate of registration of the vessel. cdtai 9. The amount borrowed on bottomry
on the hull, keel, tackle, and stores of the vessel before its departure, proven by
means of the contract executed according to law and recorded in the registry of
vessels; those borrowed during the voyage with the authorization mentioned in the
preceding subdivision, satisfying the same requisites; and the insurance premium,
proven by the insurance policy or a certificate taken from the books of the broker.
10. The indemnity due the shipper for the value of the goods shipped which were not
delivered to the consignees, or for averages suffered for which the vessel is
liable, provided that either appear in a judicial or arbitration decision. ARTICLE
581. If the proceeds of the sale should not be sufficient to pay all the creditors
included in one number or grade, the residue shall be divided among them pro rata.
ARTICLE 582. After the bill of the judicial sale at public auction has been
executed and inscribed in the registry of vessels, all the other liabilities of the
vessel in favor of the creditors shall be considered extinguished. But if the sale
should have been voluntary and should have been made while the vessel was on a
voyage, the creditors shall preserve their rights against the vessel until it
returns to the port of her registry, and three months after the inscription of the
sale in the registry of vessel or the arrival. ARTICLE 583. If while on a voyage
the captain should find it necessary to contract one or more of the obligations
mentioned in subdivisions 8 and 9 of Article 580, he shall apply to the judge or
court if he is in Philippine territory, and otherwise to the consul of the Republic
of the Philippines, should there be one, and, in his absence, to the judge or court
or proper local authority, presenting the certificate of the registration sheet
treated of in Article 612 and the instruments proving the obligation contracted.
The judge or court, the consul, or the local authority, as the case may be, in view
of the result of the proceedings instituted, shall make a temporary memorandum of
their result in the certificate, in order that it may be recorded in the registry
when the vessel returns to the port of its registry, or so that it can be admitted
as a legal and preferred obligation in case of sale before its return, by reason of
the sale of the vessel on account of a declaration of unseaworthiness. The omission
of this formality shall make the captain personally liable for the credits
prejudiced on his account. ARTICLE 584. The vessels subject to liability for the
credits mentioned in Article 580 may be attached and judicially sold in the manner
prescribed in Article 579, in the port in which they may be found, at the instance
of any of the creditors; but if they should be loaded and ready to sail, the
attachment may not be effected except for debts contracted to prepare and provision
the vessel for the same voyage, and even then the attachment shall be dissolved if
any person interested in its sailing should give a bond for the return of the
vessel within the period fixed in the certificate of navigation binding himself to
pay the indebtedness insofar as it may be legal, should it fail to do so, even if
this failure be due to fortuitous event. For debts of any other kind whatsoever not
comprised within the said Article 580, the vessel may be attached only in the port
of her registry. ARTICLE 585. For all purposes of law not modified or restricted by
the provisions of this Code,
vessels shall continue to be considered as personal property. TITLE TWO PERSONS WHO
TAKE PART IN MARITIME COMMERCE SECTION ONE SHIPOWNERS AND SHIP AGENTS ARTICLE 586.
The shipowner and the ship agent shall be civilly liable for the acts of the
captain and for the obligations contracted by the latter to repair, equip, and
provision the vessel, provided the creditor proves that the amount claimed was
invested for the benefit of the same. By ship agent is understood the person
entrusted with provisioning or representing the vessel in the port in which it may
be found. ARTICLE 587. The ship agent shall also be civilly liable for the
indemnities in favor of third persons which may arise from the conduct of the
captain in the care of the goods which he loaded on the vessel; but he may exempt
himself therefrom by abandoning the vessel with all her equipments and the freight
it may have earned during the voyage. ARTICLE 588. Neither the shipowner nor the
ship agent shall be liable for the obligations contracted by the captain, if the
latter exceeds the powers and privileges pertaining to him by reason of his
position or conferred upon him by the former. Nevertheless, if the amounts claimed
were invested for the benefit of the vessel, the responsibility therefor shall
devolve upon its owner or agent. ARTICLE 589. If two or more persons should be part
owners of a merchant vessel, a partnership shall be presumed as established by the
co-owners. This partnership shall be governed by the resolutions of the majority of
the members. If the part owners should not be more than two, the disagreement of
views, if any, shall be decided by the vote of the member having the largest
interest. If the interests are equal, it should be decided by lot. The person
having the smallest share in the ownership shall have one vote; and proportionately
the other part owners as many votes as they have parts equal to the smallest one.
aisadc A vessel may not be detained, attached or levied upon in execution in its
entirety, for the private debts of a part owner, but the proceedings shall be
limited to the interest which the debtor may have in the vessel, without
interfering with the navigation. ARTICLE 590. The co-owners of a vessel shall be
civilly liable in the proportion of their interests in the common fund, for the
results of the acts of the captain, referred to in Article 587. Each co-owner may
exempt himself from this liability by the abandonment, before a notary, of the part
of the vessel belonging to him. ARTICLE 591. All the part owners shall be liable,
in proportion to their respective ownership, for the expenses for repairing the
vessel, and for other expenses which are incurred by virtue of a resolution of the
majority. They shall likewise be liable in the same proportion for the expenses for
the maintenance, equipment, and provisioning of the vessel, necessary for
navigation. ARTICLE 592. The resolution of the majority with regard to the repair,
equipment, and provisioning of the vessel in the port of departure shall bind the
minority, unless the minority members renounce their interests, which must be
acquired by the other co-owners, after a judicial appraisement of the value of the
portion or portions assigned. The resolutions of the majority relating to the
dissolution of the partnership and sale of the vessel shall also be binding on the
minority. The sale of the vessel must be made at public auction, subject to the
provisions of the law of civil procedure, unless the co-owners unanimously agree
otherwise, saying always the right of repurchase and redemption provided for in
Article 575. ARTICLE 593. The owners of a vessel shall have preference in her
charter over other persons, under the same conditions and price. If two or more of
them should claim this right, the one having the
greater interest shall be preferred; and should they have equal interests, the
matter shall be decided by lot. ARTICLE 594. The co-owners shall elect the manager
who is to represent them in the capacity of ship agent. The appointment of director
or ship agent shall be revocable at the will of the members. ARTICLE 595. The ship
agent, whether he is at the same time the owner of the vessel, or a manager for an
owner or for an association of co-owners, must have the capacity to trade and must
be recorded in the merchant's registry of the province. The ship agent shall
represent the ownership of the vessel, and may, in his own name and in such
capacity, take judicial and extrajudicial steps in matters relating to commerce.
ARTICLE 596. The ship agent may discharge the duties of captain of the vessel,
subject in every case to the provision of Article 609. If two or more co-owners
apply for the position of captain, the disagreement shall be decided by a vote of
the members; and if the vote should result in a tie, it shall be decided in favor
of the co-owner having the larger interest in the vessel. If the interests of the
applicants should be equal, and there should be a tie, the matter shall be decided
by lot. ARTICLE 597. The ship agent shall designate and come to terms with the
captain, and shall contract in the name of the owners, who shall be bound in all
that refer to repairs, details of equipment, armament, provisions of food and fuel,
and freight of the vessel, and, in general, in all that relate to the requirements
of navigation. ARTICLE 598. 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 coowners, unless these powers were
granted him in the certificate of his appointment. cdasia If he insures the vessel
without authorization therefore, he shall be subsidiarily liable for the solvency
of the insurer. ARTICLE 599. The ship agent managing for an association shall
render to his associates an account of the results of each voyage of the vessel,
without prejudice to always having the books and correspondence relating to the
vessel and to its voyages at their disposal. ARTICLE 600. After the account of the
managing agent has been approved by a relative majority, the co-owners shall pay
the expenses in proportion to their interest, without prejudice to the civil or
criminal actions which the minority may deem fit to institute afterwards. In order
to enforce the payment, the managing agent shall be entitled to an executory action
("accion ejecutiva"), which shall be instituted by virtue of a resolution of the
majority, and without further proceedings than the acknowledgment of the signatures
of the persons who voted for the resolution. ARTICLE 601. Should there be any
profits, the co-owners may demand of the managing agent the amount corresponding to
their interests by means of an executory action ("accion ejecutiva"), without any
other requisite than the acknowledgment of the signatures on the instrument
approving the account. ARTICLE 602. The ship agent shall indemnify the captain for
all the expenses he may have incurred with funds of his own or of others, for the
benefit of the vessel. ARTICLE 603. Before the vessel sets out to sea the ship
agent may at his discretion discharge the captain and members of the crew whose
contracts are not for a definite period or voyage, paying them the salaries earned
according to their contracts, and without any indemnity whatsoever, unless there is
an express and specific agreement in respect thereto. ARTICLE 604. If the captain
or any other member of the crew should be discharged during the voyage, they shall
receive their salary until they return to the port where the contract was made,
unless there should be just cause for the discharge, all in accordance with Article
636 and following of this Code.
ARTICLE 605. If the contracts of the captain and members of the crew with the ship
agent should be for a definite period or voyage, they may not be discharged until
after the fulfillment of their contracts, except by reason of insubordination in
serious matters, robbery, theft, habitual drunkenness, or damage caused to the
vessel or to its cargo through malice or manifest or proven negligence. ARTICLE
606. If the captain should be a co-owner of the vessel, he may not be discharged
unless the ship agent returns to him the amount of his interest therein, which, in
the absence of agreement between the parties, shall be appraised by experts
appointed in the manner established in the law of civil procedure. ARTICLE 607. If
the captain who is a co-owner should have obtained the command of the vessel by
virtue of a special agreement contained in the articles of association, he may not
be deprived of his office except for the causes mentioned in Article 605. ARTICLE
608. In case of the voluntary sale of the vessel, all contracts between the ship
agent and the captain shall terminate, reserving to the latter his right to the
indemnity which may pertain to him, according to the agreements made with the ship
agent. They vessel sold shall remain subject to the security of the payment of said
indemnity if, after the action against the vendor has been instituted, the latter
is found to be insolvent. SECTION TWO CAPTAINS AND MASTERS OF VESSELS ARTICLE 609.
Captains, masters or patrons of vessels must be Filipinos, have legal capacity to
contract in accordance with this code, and prove the skill, capacity, and
qualifications necessary to command and direct the vessel, as established by marine
or navigation laws, ordinances, or regulations, and must not be disqualified
according to the same for the discharge of the duties of the position. cdt If the
owner of a vessel desires to be the captain thereof, without having the legal
qualifications therefor, he shall limit himself to the financial administration of
the vessel, and shall intrust the navigation to a person possessing the
qualifications required by said ordinances and regulations. ARTICLE 610. The
following powers shall be inherent in the position of captain, master or patron of
a vessel: 1. To appoint or make contracts with the crew in the absence of the ship
agent, and to propose said crew, should said agent be present; but the ship agent
may not employ any member against the captain's express refusal. 2. To command the
crew and direct the vessel to the port of its destination, in accordance with the
instructions he may have received from the ship agent. 3. To impose, in accordance
with the contracts and with the laws and regulations of the merchant marine, and
when on board the vessel, correctional punishment upon those who fail to comply
with his orders or are wanting in discipline, holding a preliminary hearing on the
crimes committed on board the vessel on the seas, which crimes shall be turned over
to the authorities having jurisdiction over the same at the first port touched. 4.
To make contracts for the charter of the vessel in the absence of the ship agent or
of its consignee, acting in accordance with the instructions received and
protecting the interests of the owner with utmost care. 5. To adopt all proper
measures to keep the vessel well supplied and equipped, purchasing all that may be
necessary for the purpose, provided there is no time to request instruction from
the ship agent. 6. To order, in similar urgent cases while on a voyage, the repairs
on the hull and engines of the vessel and in its rigging and equipment, which are
absolutely necessary to enable it to continue and finish its voyage; but if he
should arrive at a point where there is a consignee of the vessel, he shall act in
concurrence with the latter. ARTICLE 611. In order to comply with the obligations
mentioned in the preceding article, the captain, when he has no funds and does not
expect to receive any from the ship agent, shall obtain the same in the successive
order stated below:
1. By requesting said funds from the consignee of the vessel or correspondents of
the ship agent. 2. By applying to the consignees of the cargo or to those
interested therein. 3. By drawing on the ship agent. 4. By borrowing the amount
required by means of a loan on bottomry. 5. By selling a sufficient amount of the
cargo to cover the sum absolutely indispensable for the repair of the vessel and to
enable it to continue its voyage. cd In these two last cases he must apply to the
judicial authority of the port, if in the Philippines, and to the consul of the
Republic of the Philippines if in a foreign country, and where there is none, to
the local authority, proceeding in accordance with the provisions of Article 583,
and with the provisions of the law of civil procedure. ARTICLE 612. The following
obligations shall be inherent in the office of captain: 1. To have on board before
starting on a voyage a detailed inventory of the hull, engines, rigging, spare-
masts, tackle, and other equipment of the vessel; the royal or the navigation
certificate; the roll of the persons who make up the crew of the vessel, and the
contracts entered into with them; the lists of passengers; the bill of health; the
certificate of the registry proving the ownership of the vessel and all the
obligations which encumber the same up to that date; the charter parties or
authenticated copies thereof; the invoices or manifests of the cargo, and the
memorandum of the visit or inspection by experts, should it have been made at the
port of departure. 2. To have a copy of this code on board. 3. To have three
folioed and stamped books, placing at the beginning of each one a memorandum of the
number of folios it contains, signed by the maritime authority, and in his absence
by the competent authority. In the first book, which shall be called "log book," he
shall enter day by day the condition of the atmosphere, the prevailing winds, the
courses taken, the rigging carried, the power of the engines used in navigation,
the distances covered, the maneuvers executed, and other incidents of navigation;
he shall also enter the damage suffered by the vessel in her hull, engines,
rigging, and tackle, no matter what its cause may be, as well as the impairment and
damage suffered by cargo, and the effect and importance of the jettison, should
there be any; and in cases of serious decisions which require the advice or a
meeting of the officers of the vessel, or even of the crew and passengers, he shall
record the decisions adopted. For the information indicated he shall make use of
the binnacle book and of the steam of engine book kept by the engineer. In the
second book called the "accounting book," he shall record all the amounts collected
and paid for the account of the vessel, entering specifically article by article,
the source of the collection and the amounts spent for provisions, repairs,
acquisitions of equipment or goods, fuel, food, outfits, wages, and other expenses
of whatever nature they may be. He shall furthermore enter therein a list of all
the members of the crew, stating their domiciles, their wages and salaries, and the
amounts they may have received on account, directly or by delivery to their
families. In the third book, called "freight book," he shall record the loading and
discharge of all the goods, stating their marks and packages, names of the shippers
and of the consignees, ports of loading and unloading, and the freightage they
give. In this same book he shall record the names and places of sailing of the
passengers, the number of packages in their baggage, and the price of passage. 4.
Before receiving cargo, to make with the officers of the crew and two experts, if
required by the shippers and passengers, an examination of the vessel, in order to
ascertain whether it is water-tight, with the rigging and engines in good
condition, and with the equipment required for good navigation, preserving under
his responsibility a certificate of the memorandum of his inspection, signed by all
those who may have taken part therein. The experts shall be appointed, one by the
captain of the vessel and another by those who request its examination, and in case
of disagreement a third shall be appointed by the marine authority of the port or
by the authority, exercising his functions.
5. To remain constantly on board the vessel with the crew while the cargo is being
taken on board and to carefully watch the stowage thereof; not to consent to the
loading of any merchandise or matter of a dangerous character, such as inflammable
or explosive substances, without the precautions which are recommended for their
packing, handling and isolation; not to permit the carriage on deck of any cargo
which by reason of its arrangement, volume, or weight makes the work of the sailors
difficult, and which might endanger the safety of the vessel; and if, on account of
the nature of the merchandise, the special character of the shipment, and
principally the favorable season in which it is undertaken, merchandise may be
carried on deck, he must hear the opinion of the officers of the vessel and have
the consent of the shippers and of the ship agent. 6. To demand a pilot at the
expense of the vessel whenever required by the navigation, and principally when he
has to enter a port, canal, or river, or has to take a roadstead or anchoring place
with which neither he nor the officers and crew are acquainted. 7. To be on deck on
reaching land and to take command on entering and leaving ports, canals,
roadsteads, and rivers, unless there is a pilot on board discharging his duties. He
shall not spend the night away from the vessel except for serious causes or by
reason of official business. cdtai 8. To present himself, when making a port in
distress, to the maritime authority if in the Philippines and to the consul of the
Republic of the Philippines if in a foreign country, before twentyfour hours have
elapsed, and to make a statement of the name registry, and port of departure of the
vessel, of its cargo, and the cause of arrival which declaration shall be visaed by
the authority or the consul, if after examining the same it is found to be
acceptable, giving the captain the proper certificate proving his arrival in
distress and the reasons therefor. In the absence of the maritime authority or of
the consul, the declaration must be made before the local authority. 9. To take the
necessary steps before the competent authority in order to record in the
certificate of the vessel in the registry of vessels the obligations which he may
contract in accordance with Article 583. 10. To place under good care and custody
all the papers and belongings of any members of the crew who might die on the
vessel, drawing up a detailed inventory, in the presence of passengers, or, in
their absence, of members of the crew as witnesses. 11. To conduct himself
according to the rules and precepts contained in the instructions of the ship
agent, being liable for all that which he may do in violation thereof. 12. To
inform the ship agent from the port at which the vessel arrives, of the reason of
his arrival, taking advantage of the semaphore, telegraph, mail, etc., as the case
may be; to notify him of the cargo he may have received, stating the names and
domiciles of the shippers, freightage earned, and amounts borrowed on bottomry
loan; to advise him of his departure, and of any operation and date which may be of
interest to him. 13. To observe the rules with respect to situation, lights and
maneuvers in order to avoid collisions. 14. To remain on board, in case the vessel
is in danger, until all hope to save it is lost, and before abandoning it, to hear
the officers of the crew, abiding by the decision of the majority; and if the boats
are to be taken to, he shall take with him, before anything else, the books and
papers, and then the articles of most value, being obliged to prove, in case of the
loss of the books and papers, that he did all he could to save them. 15. In case of
wreck, to make the proper protest in due form at the first port of arrival, before
the competent authority or the Philippine consul, within twenty-four hours,
specifying therein all the incidents of the wreck, in accordance with subdivision 8
of this article. 16. To comply with the obligations imposed by the laws and
regulations on navigation, customs, health, and others. ARTICLE 613. A captain who
navigates for freight in common or on shares may not make any separate transaction
for his own account; and should he do so, the profit which may accrue shall belong
to the other persons interested, and the losses shall be borne by him exclusively.
ARTICLE 614. A captain who, having made an agreement to make a voyage, fails to
perform his undertaking, without prevented by fortuitous accident or force majeure,
shall indemnify for all the losses which he may cause without prejudice to the
criminal penalties which may be proper. ARTICLE 615. Without the consent of the
agent, the captain cannot have himself substituted by another person; and should he
do so, besides being liable for all the acts of the substitute and bound to the
indemnities mentioned in the foregoing articles, the captain as well as the
substitute may be discharged by the ship agent. ARTICLE 616. If the provisions and
fuel of the vessel should be consumed before arriving at the port of destination,
the captain shall order, with the consent of the officers of the same, the arrival
at the nearest port to get a supply of either; but if there are persons on board
who have provisions of their own, he may force them to deliver said provision for
the common consumption of all those who may be on board, paying the price thereof
at the same time, or at the latest, at the first port reached. ARTICLE 617. The
captain may not contract loans on respondentia secured by the cargo; and should he
do so, the contracts shall be void. Neither may he borrow money on bottomry for his
own transactions, except on the portion of the vessel he owns, provided no money
has been previously borrowed on the whole vessel, and there does not exist any
other kind of lien or obligation chargeable against the vessel. If he may do so, he
must state what interest he has in the vessel. In case of violation of this
article, the principal, interest, and costs shall be for the personal account of
the captain, and the ship agent may furthermore discharge him. ARTICLE 618. The
captain shall be civilly liable to the ship agent, and the latter to the third
persons who may have made contracts with the former; 1. For all the damages
suffered by the vessel and its cargo by reason of want of skill or negligence on
his part. If a misdemeanor or crime has been committed, he shall be liable in
accordance with the Penal Code. cda 2. For all the thefts committed by the crew,
reserving his right of action against the guilty parties. 3. For the losses, fines,
and confiscations imposed an account of violation of customs, police, health, and
navigation laws and regulations. 4. For the losses and damages caused by mutinies
on board the vessel or by reason of faults committed by the crew in the service and
defense of the same, if he does not prove that he made timely use of all his
authority to prevent or avoid them. 5. For those caused by the misuse of the powers
and the non-fulfillment of the obligations pertaining to him in accordance with
Articles 610 and 612. 6. For those arising by reason of his going out of his course
or taking a course which he should not have taken without sufficient cause, in the
opinion of the officers of the vessel, at a meeting with the shippers or
supercargoes who may be on board. No exceptions whatsoever shall exempt him from
this obligation. 7. For those arising by reason of his voluntarily entering a port
other than that of his destination, outside of the cases or without the formalities
referred to in Article 612. 8. For those arising by reason of non-observance of the
provisions contained in the regulations on situation of lights and maneuvers for
the purpose of preventing collisions. ARTICLE 619. The captain shall be liable for
the cargo from the time it is delivered to him at the dock or afloat alongside the
at the port of loading, until he delivers it on the shore or on the discharging
wharf at the port of unloading, unless the contrary has been expressly agreed upon.
ARTICLE 620. The captain shall not be liable for the damages caused to the vessel
or to the cargo by force majeure; but he shall always be so for those arising
through his own fault, no agreement to the contrary being valid. Neither shall he
be personally liable for the obligations he may have contracted for the repair,
equipment, and provisioning of the vessel, which shall devolve upon the ship agent,
unless the former
has expressly bound himself personally or has signed a bill of exchange or
promissory note in his name. ARTICLE 621. A captain who borrows money on the hull,
engine, rigging or tackle of the vessel, or pledges or sells merchandise or
provisions outside of the cases and without the formalities prescribed in this
Code, shall be liable for the principal, interests, and costs, and shall indemnify
for the damages he may cause. He who commits fraud in his accounts shall pay the
amount defrauded and shall be subject to the provisions of the Penal Code. ARTICLE
622. If while on a voyage the captain should learn of the appearance of privateers
or men of war against his flag, he shall be 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. ARTICLE 623. If he should be attacked by a privateer, and, after
having tried to avoid the encounter and having resisted the delivery of the effects
of the vessel or its cargo, they should be forcibly taken away from him, or he
should be obliged to deliver them, he shall make an entry thereof in his freight
book and shall prove the fact before the competent authority at the first port he
touches. cdasia After the force majeure has been proved, he shall be exempted from
liability. ARTICLE 624. A captain whose vessel has gone through a hurricane or who
believes that the cargo has suffered damages or averages, shall make a protest
thereon before the competent authority at the first port he touches, within twenty-
four hours following his arrival and shall ratify it within the same period when he
arrives at his destination, immediately proceeding with the proof of the facts, and
he may not open the hatches until after this has been done. The captain shall
proceed in the same manner, if, the vessel having been wrecked; he is saved alone
or with part of his crew, in which case he shall appear before the nearest
authority, and make a sworn statement of facts. The authority or the consul shall
verify the said facts receiving sworn statements of the members of the crew and
passengers who may have been saved; and taking such other steps as may assist in
arriving at the facts he shall make a statement of the result of the proceedings in
the log book and in that of the sailing mate, and shall deliver to the captain the
original record of the proceedings, stamped and folioed, with a memorandum of the
folios, which he must rubricate, in order that it may be presented to the judge or
court of the port of destination. The statement of the captain shall be accepted if
it is in accordance with those of the crew and passengers; if they disagree, the
latter shall be accepted, always saying proof to the contrary. ARTICLE 625. The
captain, under his personal responsibility as soon as he arrives at the port of
destination, should get the necessary permission from the health and customs
officers, and perform the other formalities required by the regulations of the
administration, delivering the cargo without any defalcation, to the consignee, and
in a proper case, the vessel, rigging, and freightage to the ship agent. If by
reason of the absence of the consignee or on account of the nonappearance of a
legal holder of the bills of lading, the captain should not know to whom he is to
legally make the delivery of the cargo, he shall place it at the disposal of the
proper judge or court or authority, in order that he may determine what is proper
with regard to its deposit, preservation and custody. SECTION THREE OFFICERS AND
CREW OF VESSELS ARTICLE 626. In order to be a sailing mate it shall be necessary:
1. To have the qualifications required by the marine or navigation laws or
regulations. 2. Not to be disqualified in accordance therewith for the discharge of
his duties. ARTICLE 627. The sailing mate, as the second chief of the vessel, and
unless the agent orders otherwise, shall take the place of the captain in cases of
absence, sickness, or death, and shall then
assume all his powers, duties, and responsibilities. ARTICLE 628. The sailing mate
must provide himself with charts of the seas in which he will navigate with the
astronomical tables and instruments for observation which are in use and which are
necessary for the discharge of his duties, being liable for the accidents which may
arise by reason of his omission in this regard. ARTICLE 629. The sailing mate shall
particularly and personally keep a book, folioed and stamped on all its pages,
denominated "Binnacle Book" with a memorandum at the beginning stating the number
of folios it contains, signed by the competent authority, and shall enter therein
daily the distance, the course travelled, the variations of the needle, the leeway,
the direction and force of the wind, the condition of the atmosphere and of the
sea, the rigging set, the latitude and longitude observed, the number of furnace
heated, the steam pressure, the number of revolutions, and under the title
"incidents," the maneuvers made, the meeting with other vessels, and all the
details and incidents which. may occur during the voyage. ARTICLE 630. In order to
change the course and to take the one most convenient for a good voyage of the
vessel, the sailing mate shall come to an agreement with the captain. If the latter
should object, the sailing mate shall state to him the proper observations in the
presence of the other officers of the sea. If the captain should still insist on
his negative decision, the sailing mate shall make the proper protest, signed by
him and by one other officer, in the log book, and shall obey the captain, who
alone shall be responsible for the consequences of his decision. ARTICLE 631. The
sailing mate shall be responsible for all the damages caused to the vessel and the
cargo by reason of his negligence or want of skill without prejudice to the
criminal liability which may arise, if a felony or misdemeanor has been committed.
aisadc ARTICLE 632. The following shall be the obligations of the second mate: 1.
To watch over the preservation of the hull and rigging of the vessel, and to take
charge of the preservation of the tackle and equipment which make up her outfit,
suggesting to the captain the repairs necessary and the replacement of the goods
and implements which are rendered useless and are lost. 2. To take care that the
cargo is well arranged, keeping the vessel always ready for maneuver. 3. To
preserve order, discipline, and good service among the crew, requesting the
necessary orders and Instructions of the captain, and giving him prompt information
of any occurrence in which the intervention of his authority may be necessary. 4.
To assign to each sailor the work he is to do on board, in accordance with the
instruction received and to see that it is promptly and accurately carried out. 5.
To take charge under inventory of the rigging and all the equipment of the vessel,
if it should be laid up, unless the ship agent has ordered otherwise. With regard
to engineers the following rules shall govern: 1. In order to be taken on board as
a marine engineer forming part of the complement of a merchant vessel, it shall be
necessary to have the qualifications which the laws and regulations require, and
not be disqualified in accordance therewith for the discharge of his duties.
Engineers shall be considered officers of the vessel but they shall have no
authority or intervention except in matters referring to the motor apparatus. 2.
When there are two or more engineers on board a vessel, one of them shall be the
chief, and the other engineers and all the personnel of the engines shall be under
his orders; he shall also have charge of the motor apparatus, the spare parts, the
instruments and tools pertaining thereto, the fuel, the lubricating material and,
finally, whatever is entrusted to an engineer on board a vessel. 3. He shall keep
the engines and boilers in good condition and state of cleanliness, and shall order
what may be proper in order that they may always be ready to work with regularity,
being liable for the accidents or damages which his negligence or want of skill may
cause to the motor apparatus, to the vessel and to the cargo, without prejudice to
the criminal liability which may be proper if there has been a felony or
misdemeanor.
4. He shall not make any change in the motor apparatus, or proceed to repair the
averages he may have noticed in the same, or change the normal speed of its
movement without the prior authorization of the captain., to whom, if he should
object to their being made, he shall state the proper observations in the presence
of the other engineers or officers; and if, notwithstanding this, the captain
should insist on his objection, the chief engineer shall make the proper protests,
entering the same in the engine book, and shall obey the captain, who, alone shall
be responsible for the consequences of his decision. 5. He shall inform the captain
of any average which may occur in the motor apparatus, and shall advise him
whenever it may be necessary to stop the engines for some time, or when any other
incident occurs in his department of which the captain should be immediately
informed, besides frequently advising him of the consumption of fuel and
lubricating material. 6. He shall keep a book or registry called the "engine book,"
in which shall be entered all the date referring to the work of the engines, such
as, for example, the number of furnaces heated, the vacuum in the condenser, the
temperature, the degree of saturation of the water in the boilers the consumption
of fuel and lubricating material, and under the heading of "noteworthy
occurrences," the averages and maladjustments which occur in the engines and
boilers, the causes thereof and the means employed to repair the same likewise, the
force and direction of the wind, the rigging set and the speed of the vessel shall
be stated, taking the information from the Binnacle Book. ARTICLE 633. The second
mate shall take command of the vessel in case of the inability or disqualification
of the captain and the sailing mate, assuming in such case their powers and
responsibility. ARTICLE 634. The captain may make up the crew of his vessel with
such number of men as he may consider proper, and in the absence of Filipino
sailors, he may take on foreigners residing in the country, the number thereof not
to exceed one-fifth of the crew. If in foreign ports the captain should not find a
sufficient number of Filipino sailors, he may complete the crew with foreigners,
with the consent of the consul or marine authorities. The agreement which the
captain may make with the members of the crew and others who go to make up the
complement of the vessel, to which reference is made in Article 612, must be
reduced to writing in the account book, without the intervention of a notary public
or clerk of court ("escribano"), signed by the parties thereto and visaed by the
marine authority if they be executed in Philippine territory or by the consuls or
consular agents of the Republic of the Philippines if executed abroad, stating
therein all the obligations which each one contracts and all the rights he acquires
said authorities taking care that these obligations and rights are recorded in a
clear and definite manner which give no room for doubts or claims. cd The captain
shall take care to read to them the articles of this Code which concern them,
stating in said document that they were read. If the book contains the requisites
prescribed in Article 612, and there should not appear any signs of alterations in
its entries, it shall be admitted as evidence in questions which may arise between
the captain and the crew with respect to the agreements contained therein and the
amounts paid on account of the same. Every member of the crew may demand of the
captain a copy, signed by the latter, of the agreement and of the liquidation of
his wages, as they appear in the book. ARTICLE 635. A seaman who has been
contracted to serve on a vessel may not rescind his contract or fail to comply
therewith except by reason of a legitimate impediment which may have happened to
him. Neither may he transfer from the service of one vessel to another without
obtaining the written permission of the captain of the vessel on which he may be.
If, without obtaining said permission, the seaman who has signed for one vessel
should sign for another one, the second contract shall be void, and the captain may
choose between forcing him to fulfill the service to which he first bound himself,
or at his expense to look for a person to substitute
him. Furthermore, he shall lose the wages earned on his first contract, to the
benefit of the vessel for which he had signed. A captain who, knowing that a seaman
is in the service of another vessel, should have made a new agreement with him
without having required of him the permission referred to in the preceding
paragraphs, shall be subsidiarily responsible to the captain of the vessel to which
the seaman first belonged, for that part of the indemnity, referred to in the third
paragraph of this article, which the seaman may not be able to pay. ARTICLE 636. If
there is no fixed period for which a seaman has been contracted he may not be
discharged until the end of the return voyage to the port where he enlisted.
ARTICLE 637. Neither may the captain discharge a seaman during the time of his
contract except for just cause, the following being considered as such: 1. The
perpetration of a crime which disturbs order on the vessel. 2. Repeated
insubordination, want of discipline, or non-fulfillment of the service. 3. Repeated
incapacity and negligence in the fulfillment of the service he should render. 4.
Habitual drunkenness. 5. Any occurrence which incapacitates the seaman to perform
the work entrusted to him, with the exception of that provided in Article 644. 6.
Desertion. The captain may, however, before getting out on a voyage and without
giving any reason, refuse to permit a seaman whom he may have engaged to go on
board, and leave him on land, in which case he will be obliged to pay him his wages
as if he had rendered services. This indemnity shall be paid from the funds of the
vessel if the captain should have acted for reasons of prudence and in the interest
of the safety and good services of the farmer. Should this not be the case, it
shall be paid by the captain personally. aisadc After the voyage has begun, during
the same, and until the conclusion thereof, the captain may not abandon any member
of his crew on land or on sea, unless, by reason of some crime, his imprisonment
and delivery to the competent authority in the first port touched should be proper,
a matter obligatory for the captain. ARTICLE 638. If, after the crew has been
engaged, the voyage is revoked by the will of the ship agent or of the charterers
before or after the vessel has put to sea, or if the vessel is for the same reason
given a destination different from that fixed in the agreement with the crew, the
latter shall be indemnified on account of the rescission of the contract, according
to the cases follows: 1. If the revocation of the voyage should be decided upon
before the departure of the vessel from the port, each sailor engaged shall be
given one month's salary, besides what may be due him, in accordance with his
contract, for the services rendered to the vessel up to the date of the revocation.
2. If the agreement should have been for a fixed amount for the whole voyage, that
which may be due for said month and days shall be determined in proportion to the
approximate number of days the voyage should have lasted, in the judgment of
experts, in the manner established in the law of Civil Procedure; and if the
proposed voyage should be of such short duration that it is calculated at
approximately one month, the indemnity shall be fixed for fifteen days, discounting
in all cases the sums advanced. 3. If the revocation should take place after the
vessel has put to sea, the seamen engaged for a fixed amount for the voyage shall
receive in full the salary which may have been offered them as if the voyage had
terminated; and those engaged by the month shall receive the amount corresponding
to the time they might have been on board and to the time they may require to
arrive at the port of destination, the captain being obliged, furthermore, to pay
the seamen in both cases, the passage to the said port or to the port of sailing of
the vessel, as may be convenient for them. 4. If the ship agent or the charterers
of the vessel should give it a destination different from that
fixed in the agreement, and the members of the crew should not agree thereto, they
shall be given by way of indemnity half the amount fixed in case No. 1, besides
what may be owed them for the part of the monthly wages corresponding to the days
which have elapsed from the date of their agreements. If they accept the change,
and the voyage, on account of the greater distance or of other reasons, should give
rise to an increase of wages, the latter shall be adjusted privately or through
amicable arbitrators in case of disagreement. Even though the voyage should be
shortened to a nearer point, this shall not give rise to a reduction in the wages
agreed upon. If the revocation or change of the voyage should come from the
shippers or charterers, the agent shall have a right to demand of them the
indemnity which may be justly due. ARTICLE 639. If the revocation of the voyage
should arise from a just cause independent of the will of the ship agent and
charterers, and the vessel should not have left the port, the members of the crew
shall have no other right than to collect the wages earned up to the day on which
the revocation took place. ARTICLE 640. The following shall be just causes for the
revocation of the voyage. 1. A declaration of war or interdiction of commerce with
the power to whose territory the vessel was bound. 2. The blockade of the port of
its destination, or the breaking out of an epidemic after the agreement. 3. The
prohibition to receive in said port the goods which make up the cargo of the
vessel. 4. The detention or embargo of the same by order of the government, or for
any other reason independent of the will of the ship agent. 5. The inability of the
vessel to navigate. cdasia ARTICLE 641. If, after a voyage has been begun, any of
the first three causes mentioned in the foregoing article should occur, the sailors
shall be paid at the port which the captain may deem advisable to make for the
benefit of the vessel and cargo, according to the time they may have served
thereon; but if the vessel is to continue its voyage, the captain and the crew may
mutually demand the enforcement of the contract. In case of the occurrence of the
fourth cause, the crew shall continue to be paid half wages, if the agreement is by
month; but if the detention should exceed three months, the contract shall be
rescinded and the crew shall be paid what they should have earned according to the
contract if the voyage had been concluded. And if the agreement should be for a
fixed sum for the voyage, the contract must be complied within the terms agreed
upon. In the fifth case, the crew shall have no other right than to collect the
wages earned; but if the disability of the vessel should have been caused by the
negligence or lack of skill of the captain, engineer, or sailing mate, they shall
indemnify the crew for the damages suffered, always without prejudice to the
criminal liability which may be proper. ARTICLE 642. If the crew have been engaged
on shares, they shall not be entitled, by reason of the revocation, delay, or
greater extension of the voyage, to anything but the proportionate part of the
indemnity which way be paid into the common funds of the vessel by the persons
liable for said occurrences. ARTICLE 643. If the vessel and her cargo should be
totally lost, by reason of capture or wreck, all rights shall be extinguished, both
as regards the crew to demand any wages whatsoever, and as regards the ship agent
to recover the advances made. If a portion of the vessel or of the cargo, or of
both, should be saved, the crew engaged on wages, including the captain, shall
retain their rights on the salvage, so far as they go, on the remainder of the
vessel as well as on the amount of the freightage of the cargo saved; but sailors
who are engaged on shares shall not have any right whatsoever on the salvage of the
hull, but only on the portion of the freightage saved. If they should have worked
to recover the remainder of the shipwrecked vessel they shall be given from the
amount of the salvage an award in proportion of the efforts made and to the
risks, encountered in order to accomplish the salvage. ARTICLE 644. A seaman who
falls sick shall not lose his right to wages during the voyage, unless the sickness
is the result of his own fault. At any rate, the costs of the attendance and cure
shall be defrayed from the common funds, in the form of a loan. If the sickness
should come from an injury received in the service or defense of the vessel, the
seaman shall be attended and cured at the expense of the common funds deducting,
before anything else, from the proceeds of the freightage the cost of the
attendance and cure. ARTICLE 645. If a seaman should die during the voyage, his
heirs will be given the wages earned and not received according to his contract and
the cause of his death, namely — If he died a natural death and was engaged on
wages, that which may have been earned up to the date of his death shall be paid.
If the contract was for a fixed sum for the whole voyage, half the amount earned
shall be paid if the seamen died on the voyage out, and the whole amount if he died
on the return voyage. And if the contract was on shares and death occurred after
the voyage was begun, the heirs shall be paid the entire portion due the seaman;
but if the latter died before the departure of the vessel from the port, the heirs
shall not be entitled to claim anything. If death occurred in the defense of the
vessel, the seaman shall be considered as living, and his heirs shall be paid, at
the end of the voyage, the full amount of wages or the integral part of the profits
which may be due him as to others of his class. In the same manner, the seaman
captured while defending the vessel shall be considered present so as to enjoy the
same benefits as the rest; but should he have been captured on account of
carelessness or other accident not related to the service, he shall only receive
the wages due up to the day of his capture. ARTICLE 646. The vessel with her
engines, rigging, equipment, and freightage shall he liable for the wages earned by
the crew engaged per month or for the trip, the liquidation and payment to take
place between one voyage and the other. After a new voyage has been undertaken,
credits of such kind pertaining to the preceding voyage shall lose their right of
preference. ARTICLE 647. The officers and the crew of the vessel shall be free from
all obligations if they deem it proper, in the following cases: 1. If, before
beginning the voyage, the captain attempts to change it, or a naval war with the
power to which the vessel was destined occurs. 2. If a disease should break out and
be officially declared an epidemic in the port of destination. 3. If the vessel
should change owner or captain. ARTICLE 648. By the complement of a vessel shall be
understood all the persons on board, from the captain to the cabin boy, necessary
for the management, maneuvers, and service, and therefore, the complement shall
include the crew, the sailing mates, engineers, stokers and other employees on
board not having specific designations; but it shall not include the passengers or
the persons whom the vessel is transporting. SECTION FOUR SUPERCARGOES ARTICLE 649.
Supercargoes shall discharge on board the vessel the administrative duties which
the ship agent or the shippers may have assigned to them; they shall keep an
account and record of their transactions in a book which shall have the same
conditions and requisites as required for the accounting book of the captain, and
they shall respect the latter in his capacity as chief of the vessel. cdtai The
powers and responsibilities of the captain shall cease, when there is a supercargo,
with regard to that part of the administration legitimately conferred upon the
latter, but shall continue in force for all acts which are inseparable from his
authority and office.
ARTICLE 650. All the provisions contained in the second section of Title III, Book
II, with regard to capacity, manner of making contracts, and liabilities of
factors, shall be applicable to supercargoes. ARTICLE 651. Supercargoes may not,
without special authorization or agreement, make any transaction for their own
account during the voyage, with the exception of the ventures which, in accordance
with the custom of the port of destination, they are permitted to do. Neither shall
they be permitted to invest in the return trip more than the profits from the
ventures, unless there is an express authorization from the principals. TITLE THREE
SPECIAL CONTRACTS OF MARITIME COMMERCE SECTION ONE CHARTER PARTIES PART I FORMS AND
EFFECTS OF CHARTER PARTIES ARTICLE 652. A charter party must be drawn in duplicate
and signed by the contracting parties, and when either does not know how or is not
able to do so, by two witnesses at his request. The charter party shall contain,
besides the conditions freely stipulated, the following circumstances: 1. The kind,
name, and tonnage of the vessel. 2. Its flag and port of registry. 3. The name,
surname, and domicile of the captain. 4. The name, surname, and domicile of the
ship agent, if the latter should make the charter party. 5. The name, surname, and
domicile of the charterer; and if he states that he is acting by commission, that
of the person for whose account he makes the contract. 6. The port of loading and
unloading. 7. The capacity, number of tons or the weight or measurement which they
respectively bind themselves to load and to transport, or whether the charter party
is total. 8. The freightage to be paid, stating whether it is to be a fixed amount
for the voyage or so much per month, or for the space to be occupied, or for the
weight or measure of the goods of which the cargo consists, or in any other manner
whatsoever agreed upon. 9. The amount of primage to be paid to the captain. 10. The
days agreed upon for loading and unloading. 11. The lay days and extra lay days to
be allowed and the demurrage to be paid for each of them. ARTICLE 653. If the cargo
should be received without the charter party having been signed, the contract shall
be understood as executed in accordance with what appears in the bill of lading,
the sole evidence of title with regard to the cargo for determining the rights and
obligations of the ship agent, of the captain, and of the charterer. cdt ARTICLE
654. The charter parties executed with the intervention of a broker, who certifies
to the authenticity of the signatures of the contracting parties because they were
signed in his presence, shall be full evidence in court; and if they should be
conflicting, that which accords with one which the broker must keep in his
registry, if kept in accordance with law, shall govern. The contracts shall also be
admitted as evidence, even though a broker has not taken part therein, if the
contracting parties acknowledge the signatures to be the same as their own. If no
broker has intervened in the charter party and the signatures are not acknowledged,
doubts shall be decided by what is provided for in the bill of lading and in the
absence thereof, by the proofs submitted by the parties. ARTICLE 655. Charter
parties executed by the captain in the absence of the ship agent shall be valid and
effective, even though in executing them he should have acted in violation of the
orders and instructions of the ship agent or shipowner; but the latter shall have a
right of action against the captain for indemnification of damages.
ARTICLE 656. If in the charter party the time in which the loading and unloading
are to take place is not stated, the usages of the port where these acts take place
shall be observed. After the stipulated or the customary period has passed, and
there is no express proviso in the charter party fixing the indemnity for the
delay, the captain shall be entitled to demand demurrage for the lay days and extra
lay days which may have elapsed in loading and unloading. ARTICLE 657. If during
the voyage the vessel should be rendered unseaworthy, the captain shall be obliged
to charter at his expense another one in good condition to receive the cargo and
carry it to its destination, for which purpose he shall be obliged to look for a
vessel not only at the port of arrival but also in the neighborhood within distance
of 150 kilometers. If the captain, through indolence or malice, should not furnish
a vessel to its destination, the shippers, after requiring the captain to charter a
vessel within an inextendible period, may charter one and petition the judicial
authority to summarily approve the charter party which they may have made. The same
authority shall judicially ("por la via de appremio") compel the captain, to carry
out, for his account and under his responsibility, the charter made by the
shippers. If the captain, notwithstanding his diligence, should not find a vessel
for the charter, he shall deposit the cargo at the disposal of the shippers, to
whom he shall communicate the facts on the first opportunity which presents itself,
the freight being adjusted in such cases by the distance covered by the vessel,
with no right to any indemnification whatsoever. ARTICLE 658. The freightage shall
accrue according to the conditions stipulated in the contract, and should they not
be expressed, or should they be ambiguous, the following rules shall be observed:
1. If the vessel has been chartered by months or by days, the freightage shall
begin to run from the day the loading of the vessel is begun. 2. In charters made
for a fixed period, the freightage shall begin to run from that very day. 3. If the
freightage is charged according to weight, the payment shall be made according to
gross weight, including the containers, such as barrels or any other objects in
which the cargo is contained. ARTICLE 659. The merchandise sold by the captain to
pay for the necessary repairs to the hull, machinery or equipment, or for
unavoidable and urgent needs, shall pay freightage. cdt The price of this
merchandise shall be fixed according to the result of the voyage, namely: 1. If the
vessel should arrive safely at the port of destination, the captain shall pay the
price which the sale of merchandise of the same kind brings at that port. 2. If the
vessel should be lost, the captain shall pay the price realized from said
merchandise in the sale. The same rule shall be observed in the payment of the
freightage, which shall be in full if the vessel arrives at her destination, and in
proportion to the distance covered if she should be lost before arrival. ARTICLE
660. Merchandise jettisoned for the common safety shall not pay freightage; but the
amount of the latter shall be considered as general average computing the same in
proportion to the distance covered when they were jettisoned. ARTICLE 661. Neither
merchandise lost by reason of shipwreck or stranding nor those seized by the
pirates or enemies, shall pay freightage. If the freightage should have been paid
in advance, it shall be returned, unless there is an agreement to the contrary.
ARTICLE 662. If the vessel or the merchandise should be redeemed, or the effects of
the shipwreck be salvaged, the freightage corresponding to the distance covered by
the vessel transporting the cargo shall be paid; and should the vessel, after being
repaired, transport said merchandise to the port of destination, the full
freightage shall be paid, without prejudice to what may be due by reason of the
average. ARTICLE 663. Merchandise which suffer deterioration or diminutions on
account of inherent defects or bad quality and condition of the packing, or because
of fortuitous event, shall pay freightage in full and as stipulated in the charter
party.
ARTICLE 664. The natural increase in weight or size of the merchandise loaded on
the vessel shall accrue to the benefit of the owner, and shall pay the proper
freightage fixed in the contract for the same. ARTICLE 665. The cargo shall be
specially liable for the payment of the freightage, expenses and duties arising
therefrom, which must be reimbursed by the shippers, as well as for the part of the
general average which may correspond to it; but it shall not be legal for the
captain to delay unloading on account of suspicion that this obligation may not be
complied with. Should there be reasons for distrust, the judge or court, at the
instance of the captain, may order the deposit of the merchandise until he has been
paid in full. ARTICLE 666. The captain may request the sale of the cargo to the
amount necessary to pay the freightage, expenses, and averages due him, reserving
the right to demand the balance due him therefor if the proceeds of the sale should
not suffice to cover his credit. ARTICLE 667. The goods loaded shall be liable in
the first place for the freight and expenses thereof during twenty days, to be
counted from the date of their delivery or deposit. During this period, the sale of
the same may be requested, even though there be other creditors and the bankruptcy
of the shipper or consignee should occur. This right may not he made use of,
however, on the goods which, after being delivered, were turned over to a third
person without malice on the part of the latter and for a valuable consideration.
cdasia ARTICLE 668. If the consignee should not be found or should refuse to
receive the cargo, the judge or court, at the instance of the captain, shall order
its deposit and the sale of what may be necessary to pay the freightage and other
expenses on the same. The sale shall likewise be allowed when the goods deposited
run the risk of deteriorating, or by reason of their condition or other
circumstances the expenses of preservation and custody should be disproportionate.
PART 2 RIGHTS AND OBLIGATIONS OF SHIPOWNERS ARTICLE 669. The shipowner or the
captain shall observe in charter parties the capacity of the vessel or that
expressly designated in its registry, a difference greater than 2 per cent between
that stated and her true capacity not being permissible. If the shipowner or the
captain should contract to carry a greater amount of cargo than the vessel can
carry in view of her tonnage, they shall indemnify the shippers whose contracts
they do not fulfill for the losses they may have caused when by reason of their
default, according to the following cases, viz: If the vessel has been chartered by
one shipper only, and there should appear to be an error or fraud in her capacity,
and the charterer should not wish to rescind the contract, when he has a right to
do so, the freightage shall he reduced in proportion to the cargo which the vessel
can not receive, the person from whom the vessel is chartered being furthermore
obliged to indemnify the charterer for the losses he may have caused him. If, on
the contrary there should be several charter parties, and by reason of want of
space all the cargo contracted for cannot be loaded, 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
places corresponding to them in the order of the dates of their contracts. Should
there be no priority, the charterers may load, if they wish, in proportion to the
amounts of weight or space for which each may have contracted, and the person from
whom the vessel was chartered shall he obliged to indemnify them for losses and
damages. ARTICLE 670. If the person from whom the vessel is chartered, after
receiving a part of the freight, should not find sufficient to make up at least
three-fifths of the amount which the vessel may hold, at the price he may have
fixed, he may substitute for the transportation another vessel inspected and
declared suitable for the same voyage, the expenses of transfer and the increase in
the price of the charter, should there be any, being for his account. Should he not
be able to make this change, he shall
undertake the voyage at the time agreed upon; and should no time have been fixed,
within fifteen days from the time the loading began, unless otherwise stipulated.
If the owner of the part of the freight already loaded should procure some more at
the same price and under similar or proportionate conditions to those accepted for
the freight received, the person from whom the vessel is chartered or the captain
can not refuse to accept the rest of the cargo; and should he do so, the shipper
shall have a right to demand that the vessel put to sea with the cargo which it may
have on board. ARTICLE 671. After three-fifths of the vessel has been loaded, the
person from whom she is chartered may not, without the consent of the charterers or
shippers, substitute the vessel designated in the charter party by another one,
under the penalty of making himself thereby liable for all the losses and damages
occurring during the voyage to the cargo of those who did not consent to the
change. ARTICLE 672. If the vessel has been chartered in whole, the captain may
not, without the consent of the charterer, accept cargo from any other person; and
should he do so, said charterer may oblige him to unload it and to indemnify him
for the losses suffered thereby. ARTICLE 673. The person from whom the vessel is
chartered shall he liable for all the losses caused to the charterer by reason of
the voluntary delay of the captain in putting to sea, according to the rules
prescribed, provided he has been requested, notarially or judicially, to put to sea
at the proper time. ARTICLE 674. If the charterer should carry to the vessel more
cargo than that contracted for, the excess may be admitted in accordance with the
price stipulated in the contract, if it can be well stowed without injuring the
other shippers; but if in order to load it, the vessel would be thrown out of trim,
the captain must refuse it or unload it at the expense of its owner. In the same
manner, the captain may, before leaving the port, unload merchandise clandestinely
placed on board, or transport them, if he can do so with the vessel in trim,
demanding by way of freightage the highest price which may have been stipulated for
said voyage. ARTICLE 675. If the vessel has been chartered to receive the cargo in
another port, the captain shall appear before the consignee designated in the
charter party; and, should the latter not deliver the cargo to him, he shall inform
the charterer and wait his instructions, the lay days agreed upon or those allowed
by custom in the port beginning to run in the meantime, unless there is an express,
agreement to the contrary. Should the captain not receive an answer within the time
necessary therefor, he shall make efforts to find freight; and should he not find
any after the lay days and extra lay days have elapsed, he shall make a protest and
return to the port where the charter was made. The charterer shall pay the
freightage in full, discounting that which may have been earned on the merchandise
which may have been carried on the voyage out or on the return trip, if carried for
the account of third persons. The same shall be done if a vessel, having been
chartered for the round trip, should not be given any cargo on its return. ARTICLE
676. The captain shall lose the freightage and shall indemnify the charterers if
the latter should prove, even against the certificate of inspection, if one has
been made at the port of departure, that the vessel was not in a condition to
navigate at the time of receiving the cargo. ARTICLE 677. The charter party shall
subsist if a declaration of war or a blockade should take place during the voyage,
the captain not having any instructions from the charterer. In such case the
captain must proceed to the nearest safe and neutral port, requesting and awaiting
orders from the shipper, and the expenses and salaries paid during the detention
shall be paid as general average. If, by orders of the shipper, the cargo should be
discharged at the port of arrival, the freightage for the voyage out shall be paid
in full. ARTICLE 678. If the time necessary, in the opinion of the judge or court,
to receive the orders of the shipper should have elapse, without the captain having
received any instructions, the cargo shall be
deposited, and it shall be liable for the payment of the freightage and expenses on
its account during the delay, which shall be paid from the proceeds of the part
first sold. PART 3 OBLIGATIONS OF CHARTERERS ARTICLE 679. The charterer of an
entire vessel may sub-charter the whole or part thereof on such terms as he may
consider most convenient, the captain not being allowed to refuse to receive on
board the freight delivered by the second charterers, provided that the conditions
of the first charter are not change, and that the price agreed upon is paid in full
to the person from whom the vessel is chartered, even though the full cargo is not
embarked, with the limitation established in the next article. cdtai ARTICLE 680. A
charterer who does not complete the full cargo he bound himself to ship shall pay
the freightage of the amount he fails to ship, if the captain does not take other
freight to complete the load of the vessel, in which case the first charterer shall
pay the difference, should there be any. ARTICLE 681. If the charterer should load
goods different from those stated at the time of executing the charter party,
without the knowledge of the person from whom the vessel was chartered or of the
captain, and should thereby give rise to losses, by reason of confiscation,
embargo, detention, or other causes, to the person from whom the vessel was
chartered or to the shippers, the person giving rise thereto shall be liable with
the value of his shipment and furthermore with his property, for the full indemnity
to all those injured through his fault. ARTICLE 682. If the merchandise should have
been shipped for the purpose of illicit commerce, and were taken on board with the
knowledge of the person from whom the vessel was chartered or of the captain, the
latter, jointly with the owner of the same, shall be liable for all the losses
which may be caused the other shippers; and even though it may have been
stipulated, they can not demand any indemnity whatsoever from the charterer for the
damaged caused to the vessel. ARTICLE 683. In case of making a port to repair the
hull, machinery, or equipment of the vessel, the shippers must await until the
vessel is repaired, being permitted to unload it at their own expense should they
deem it proper. If, for the benefit of the cargo subject to deterioration, the
shippers or the court, or the consul, or the competent authority in a foreign
country, should order the merchandise to be unloaded, the expenses of unloading and
reloading shall be for the account of the former. ARTICLE 684. If the charterer,
without the occurrence of any of the cases of force majeure mentioned in the
foregoing article, should wish to unload his merchandise before arriving at the
port of destination, he shall pay the full freightage, the expenses of the arrival
made at his request, and the losses and damages caused the other shippers, should
there be any. ARTICLE 685. In charters for transportation of general freight, any
of the shippers may unload the merchandise before the beginning of the voyage,
paying one-half of the freightage, the expense of stowing and restowing the cargo,
and any other damage which for his reason he may cause the other shippers. ARTICLE
686. After the vessel has been unloaded and the cargo placed at the disposal of the
consignee, the latter must immediately pay the captain the freightage due and the
other expenses for which said cargo may be liable. The primage must be paid in the
same proportion and at the same time as the freightage, all the changes and
modifications to which the latter should be subject also governing the former.
ARTICLE 687. The charterers and shippers may not abandon merchandise damaged on
account of inherent defect or fortuitous event, for the payment of the freightage
and other expenses. aisadc The abandonment shall be proper, however, if the cargo
should consist of liquids and they have leaked out, nothing remaining in the
containers but one-fourth part of their contents. PART 4 TOTAL OR PARTIAL
RESCISSION OF CHARTER PARTIES
ARTICLE 688. A charter party may be rescinded at the request of the charterer: 1.
If before loading the vessel he should not agree with that stated in the
certificate of tonnage, or if there should be an error in the statement of the flag
under which she sails. 2. If the vessel should not be placed at the disposal of the
charterer within the period and in the manner agreed upon. 3. If after the vessel
has put to sea, she should return to the port of departure, on account of risk from
pirates, enemies, or bad weather, and the shippers should agree to unload her. In
the second and third cases the person from whom the vessel was chartered shall
indemnify the charterer for the voyage out. 4. If the charter should have been made
by the months, the charterers shall pay the full freightage for one month, if the
voyage is for a port in the same waters, and for two months, if for a port in
different waters. From one port to another of the Philippines and adjacent islands,
the freightage for one month only shall be paid. 5. If the vessel should make a
port during the voyage in order to make urgent repairs, and the charterers should
prefer to dispose of the merchandise. When the delay does not exceed thirty days,
the shippers shall pay the full freightage for the voyage out. Should the delay
exceed thirty days, they shall only pay the freightage in proportion to the
distance covered by the vessel. ARTICLE 689. At the request of the person from whom
the vessel is chartered the charter party may be rescinded: 1. If the charterer, at
the termination of the extra lay days, does not place the cargo alongside the
vessel. In such case the charterer must pay half the freight stipulated, besides
the demurrage due for the lay days and extra lay days. 2. If the person from whom
the vessel was chartered should sell it before the charterer has begun to load it,
and the purchaser should load it for his own account. In such case the vendor shall
indemnify the charterer for the losses he may suffer. If the new owner of the
vessel should not load it for his own account, the charter party shall be
respected, and the vendor shall indemnify the purchaser if the former did not
inform him of the charter pending at the time of making the sale. ARTICLE 690. The
charter party shall be rescinded and all actions arising therefrom shall be
extinguished, if, before the vessel puts to sea from the port of departure, any of
the following cases should occur: 1. A declaration of war or interdiction of
commerce with the power to whose ports the vessel was to make its voyage. 2. A
condition of blockade of the port of destination of said vessel, or the breaking
out of an epidemic after the contract was executed. 3. The prohibition to receive
at the said port the merchandise constituting the cargo of the vessel. 4. An
indefinite detention, by reason of an embargo of the vessel by order of the
government, or for any other reason independent of the will of the ship agent. 5.
The inability of the vessel to navigate, without fault of the captain or ship
agent. The unloading shall be made for the account of the charterer. ARTICLE 691.
If the vessel cannot put to sea on account of the closing of the port of departure
or any other temporary cause, the charter shall remain in force, with neither one
of the contracting parties having a right to claim damages. The subsistence and
wages of the crew shall be considered as general average. During the interruption,
the charterer may at the proper time and for his own account, unload and load
the merchandise, paying demurrage if he delays the reloading after the cause for
the detention has ceased. ARTICLE 692. A charter party shall be partially
rescinded, unless there is an agreement to the contrary, and the captain shall only
be entitled to the freightage for the voyage out, if, by reason of a declaration of
war, closing of ports, or interdiction of commercial relations during the voyage,
the vessel should make the port designated for such a case in the instructions of
the charterer. PART 5 PASSENGERS ON SEA VOYAGES ARTICLE 693. If the passage price
has not been agreed upon, the judge or court shall summarily fix it, after a
declaration of experts. ARTICLE 694. Should the passenger not arrive on board at
the time fixed, or should leave the vessel without permission from the captain when
the latter is ready to leave the port, the captain may continue the voyage and
demand the full passage price. ARTICLE 695. The right to passage, if issued to a
specified person, may not be transferred without the consent of the captain or of
the consignee. ARTICLE 696. If before beginning the voyage the passenger should
die, his heirs shall only be obliged to pay half of the fare agreed upon. If the
expenses of subsistence are included in the price stipulated, the judge or court,
after hearing experts if he considers it necessary, shall fix the amount which has
to be left for the benefit of the vessel. Should another passenger be received in
the place of the deceased, no payment shall be made by said heirs. ARTICLE 697. If
before the voyage is begun it is suspended through the exclusive fault of the
captain or ship agent, the passengers shall have the right to a refund of their
fares and to recover losses and damages; but if the suspension is due to fortuitous
events, or to force majeure, or to any other cause independent of the captain or
ship agent, the passengers shall only be entitled to the return of the fare. cd
ARTICLE 698. In case a voyage already begun should be interrupted, the passengers
shall be obliged to pay the fare in proportion to the distance covered, without
right to recover for losses and damages if the interruption is due to fortuitous
event or to force majeure, but with a right to indemnity if the interruption should
have been caused by the captain exclusively. If the interruption should be caused
by the disability of the vessel, and a passenger should agree to await the repairs,
he may not be required to pay any increased price of passage, but his living
expenses during the stay shall be for his own account. In case of delay in the
departure of the vessel, the passengers have the right to remain on board and to be
furnished with food for the account of the vessel unless the delay is due to
fortuitous events or to force majeure. If the delay should exceed ten days,
passengers requesting the same shall be entitled to the return of the fare; and if
it is due exclusively to the fault of the captain or ship agent, they may also
demand indemnity for losses and damages. A vessel exclusively devoted to the
transportation of passengers must take them directly to the port or ports of
destination, no matter what the number of passengers may be, making all the stops
indicated in its itinerary. ARTICLE 699. If the contract is rescinded, before or
after the commencement of the voyage, the captain shall have a right to claim
payment of what he may have furnished the passengers. ARTICLE 700. In all matters
pertaining to the preservation of order and discipline on board the vessel
passengers shall be subject to the orders of the captain, without any distinction
whatsoever. ARTICLE 701. The convenience or the interest of the passengers shall
not obligate or empowers the captain to stand in shore or enter places which may
take the vessel out of her course, or to remain in the ports he must or in under
necessity of touching for a period longer than that required by the needs
of navigation. ARTICLE 702. In the absence of an agreement to the contrary, it
shall be understood that the subsistence of the passengers during the voyage is
included in the price of the passage; but should it be for the account of the
latter, the captain shall be under obligation, in case of necessity, to furnish the
supply of food necessary for their sustenance at a reasonable price. ARTICLE 703. A
passenger shall be considered a shipper insofar as the goods he carries on board
are concerned, and the captain shall not be responsible for what the former may
keep under his immediate and special custody, unless the damage arises from an act
of the captain or of the crew. ARTICLE 704. The captain, in order to collect the
passage-money and expenses of sustenance, may retain the goods belonging to the
passenger, and in case of the sale of the same he shall be given preference over
other creditors acting the same way as in the collection of freightage. ARTICLE
705. In case of the death of a passenger during the voyage, the captain shall be
authorized, with regard to the body, to take the steps required by the
circumstances, and shall carefully take care of the papers and goods which may be
on board belonging to the passenger, observing the provisions of case No. 10 of
Article 612 with regard to members of the crew. PART 6 BILLS OF LADING ARTICLE 706.
The captain of the vessel and the shipper shall have the obligation of drawing up
the bill of lading in which shall be stated: 1. The name, registry, and tonnage of
the vessel. 2. The name of the captain and his domicile. 3. The port of loading and
that of unloading. 4. The name of the shipper. 5. The name of the consignee, if the
bill of lading is issued in the name of a specified person. 6. The quantity,
quality, number of packages and marks of the merchandise. 7. The freightage and the
primage stipulated. The bill of lading may be issued to bearer, to order, or in the
name of a specified person, and must be signed within twenty-four hours after the
cargo has been received on board, the shipper being entitled to demand the
unloading at the expense of the captain should the latter not sign it, and, in
every case, the losses and damages suffered thereby. cdasia ARTICLE 707. Four true
copies of the original bill of lading shall be made, and all of them shall be
signed by the captain and the shipper. Of these, the shipper shall keep one and
send another to the consignee; the captain shall take two, one for himself and
another for the ship agent. There may also be drawn up as many copies of the bill
of lading as may be considered necessary by the person interested; but when they
are issued to order or to bearer, they shall be stated in all the copies, be they
the first four or the subsequent ones, the destination of each one, stating whether
it is for the agent, for the captain, for the shipper, or for the consignee. If the
copy sent to the latter should have a duplicate, this circumstance and the fact
that it is not valid except in default of the first one must be stated therein.
ARTICLE 708. Bills of lading issued to bearer and sent to the consignee shall be
transferable by actual delivery of the instrument; and those issued to order, by
virtue of an indorsement. In either case, the person to whom the bill of lading is
transferred shall acquire all the rights and actions of the transferor or indorser
with regard to the merchandise mentioned in the same. ARTICLE 709. A bill of lading
drawn up in accordance with the provisions of this title shall be proof as between
all those interested in the cargo and between the latter and the insurers, proof to
the contrary being reserved for the latter. ARTICLE 710. If the bills of lading do
not agree, and no change or erasure can be observed in any of them, those possessed
by the shipper or consignee signed by the captain shall be proof against the
captain or ship agent in favor of the consignee or shipper; and those possessed by
the captain or
ship agent signed by the shipper shall be proof against the shipper or consignee in
favor of the captain or ship agent. ARTICLE 711. The legitimate holder of a bill of
lading who fails to present it to the captain of the vessel before the unloading
obliging the latter thereby to unload it and place it in deposit, shall be
responsible for the expenses of warehousing and other expenses arising therefrom.
ARTICLE 712. The captain may not by himself change the destination of the
merchandise. In admitting this change at the instance of the shipper, he must first
take up the bill of lading which he may have issued, under pain of being liable for
the cargo to the legitimate holder of the same. ARTICLE 713. If before the delivery
of the cargo a new bill of lading should be demanded of the captain, on the
allegation that the failure to present the previous ones is due to their loss or to
any other just cause, he shall be obliged to issue it, provided that security for
the value of the cargo is given to his satisfaction, but without changing the
consignment, and stating therein the circumstances prescribed in the last paragraph
of Article 707, under penalty, should he not so state, of being held liable for
said cargo if improperly delivered through his fault. ARTICLE 714. If before the
vessel puts to sea the captain should die or should cease to hold his position
through any cause, the shippers shall have the right to demand of the new captain
the ratification of the first bills of lading, and the latter must do so, provided
that all the copies previously issued be presented or returned to him, and it
should appear from all examination of the cargo that they are correct. The expenses
arising from the examination of the cargo shall be defrayed by the ship agent,
without prejudice to the right of action of the latter against the first captain if
he ceased to be such through his own fault. Should said examination not be made, it
shall be understood that the new captain accepts the cargo as it appears from the
bills of lading issued. ARTICLE 715. Bills of lading will give rise to a most
summary action or to judicial, compulsion ("accion sumarisima o de apremios"),
according to the case, for the delivery of the cargo and the payment of the
freightage and the expenses thereby incurred. ARTICLE 716. If several persons
should present bills of lading issued to bearer or to order, indorsed in their
favor, demanding the same merchandise, the captain shall prefer, in making delivery
the person who presents the copy first issued, except when the latter one was
issued on proof of the loss of the first, and both are presented by different
persons. In such case, as well as when only second subsequent copies, issued
without this proof, are presented, the captain shall apply to the judge or court,
so that he may order the deposit of the merchandise and their delivery, through
him, to the proper person. ARTICLE 717. The delivery of the bill of lading shall
effect the cancellation of all the provisional receipts of prior date given by the
captain or his subordinates for partial deliveries of the cargo which may have been
made. ARTICLE 718. After the cargo has been delivered the bill of lading which the
captain signed, or at least the copy by reason of which the delivery is made, shall
be returned to him, with the receipt for the merchandise mentioned therein. The
delay on the part of the consignee shall make him liable for the damages which such
delay may cause the captain. SECTION TWO LOANS ON BOTTOMRY AND RESPONDENTIA ARTICLE
719. A loan in which under any condition whatever, the repayment of the sum loaned
and of the premium stipulated depends upon the safe arrival in port of the goods on
which it is made, or of the price they may receive in case of accident, shall be
considered a loan on bottomry or respondentia. ARTICLE 720. Loans on bottomry or
respondentia may be executed: 1. By means of a public instrument.
2. By means of a policy signed by the contracting parties and the broker taking
part therein. cdt 3. By means of a private instrument. Under whichever of these
forms the contract is executed, it shall be entered in the certificate of the
registry of the vessel and shall be recorded in the registry of vessels, without
which requisites the credits of this kind shall not have, with regard to other
credits, the preference which, according to their nature, they should have,
although the obligation shall be valid between the contracting parties. The
contracts made during a voyage shall be governed by the provisions of Articles 583
and 611, and shall be effective with regard to third persons from the date of their
execution, if they should be recorded in the registry of vessels of the port of
registry of the vessel before the lapse of eight days following its arrival. If
said eight days should elapse without the record having been made in the
corresponding registry, the contracts made during the voyage of a vessel shall
produce no effect with regard to third persons, except from the day and date of
their inscription. In order that the policy of the contracts executed in accordance
with No. 2 may have binding force, they must conform to the registry of the broker
who took part therein. With respect to those executed in accordance with No. 3 the
acknowledgment of the signature shall be required. Contracts which are not reduced
to writing shall not give rise to judicial action. ARTICLE 721. In a contract on
bottomry or respondentia the following must be stated: 1. The kind, name, and
registry of the vessel. 2. The name, surname, and domicile of the captain. 3. The
names, surnames, and domiciles of the person giving and the person receiving the
loan. 4. The amount of the loan and the premium stipulated. 5. The time for
repayment. 6. The goods pledged to secure repayment. 7. The voyage during which the
risk is run. ARTICLE 722. The contract may be made to order, in which case they
shall be transferable by indorsement, and the indorsee shall acquire all the rights
and shall incur all the risks corresponding to the indorser. ARTICLE 723. Loans may
be made in goods and in merchandise, fixing their value in order to determine the
principal of the loan. ARTICLE 724. The loans may be constituted jointly or
separately: 1. On the hull of the vessel. 2. On the rigging. 3. On the equipment,
provisions, and fuel. 4. On the engine, if the vessel is a steamer. 5. On the
merchandise loaded. If the loan in constituted on the hull of the vessel, the
rigging, equipment and other goods, provisions, fuel, steam engines, and the
freightage earned during the voyage on which the loan is made shall also be
considered as included in the liability for the loan. cdtai If the loan is made on
the cargo, all that which constitutes the same shall be subject to the repayment;
and if on a particular object of the vessel or of the cargo, only the object
concretely and specifically mentioned shall be liable. ARTICLE 725. No loans on
bottomry may be made on the salaries of the crew or on the profits expected.
ARTICLE 726. If the lender should prove that he loaned an amount larger than the
value of the object liable for the bottomry loan, on account of fraudulent measures
employed by the borrower, the loan shall be valid only for the amount at which said
object is appraised by experts. The surplus principal shall be returned with legal
interests for the entire time required for repayment. ARTICLE 727. If the full
amount of the loan contracted in order to load the vessel should not be used for
the cargo, the balance shall be returned before clearing.
The same procedure shall be observed with regard to the goods taken as loan, if
they were not loaded. ARTICLE 728. The loan which the captain takes at the point of
residence of the owners of the vessel shall only affect that part thereof which
belongs to the captain, if the other owners or their agents should not have given
their express authorization therefor or should not have taken part in the
transaction. If one or more of the owners should be requested to furnish the amount
necessary to repair or provision the vessel, and they should not do so within
twenty-four hours, the interest which the parties in default may have in the vessel
shall be liable for the loan in the proper proportion. Outside of the residence of
the owners the captain may contract loans in accordance with the provisions of
Articles 583 and 611. ARTICLE 729. Should the goods on which money is taken not be
subjected to risk, the contract shall be considered a simple loan, with the
obligation on the part of the borrower to return the principal and interest at the
legal rate, if that agreed upon should not be lower. ARTICLE 730. Loans made during
the voyage shall have preference over those made before the clearing of the vessel,
and they shall be graduated in the inverse order of their dates. The loans for the
last voyage shall have preference over prior ones. Should several loans have been
made at the same port of arrival under stress and for the same purpose, all of them
shall be paid pro rata. ARTICLE 731. The actions pertaining to the lender shall be
extinguished by the absolute loss of the goods on which the loan was made, if it
arose from an accident of the sea at the time and during the voyage designated in
the contract, and it is proven that the cargo was on board; but this shall not take
place if the loss was caused by the inherent defect of the thing, or through the
fault or malice, of the borrower, or 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
contraband, or if it arose from having loaded the merchandise on a vessel different
from that designated in the contract, unless this change should have been made by
reason of force majeure. Proof of the loss as well as of the existence in the
vessel of the goods declared to the lender as the object of the loan is incumbent
upon him who received the loan. ARTICLE 732. Lenders on bottomry or respondentia
shall suffer, in proportion to their respective interest, the general average which
may take place in the goods on which the loan is made. In particular averages, in
the absence of an express agreement between the contracting parties, the lender on
bottomry or respondentia shall also contribute in proportion to his respective
interest, should it not belong to the kind of risks excepted in the foregoing
article. ARTICLE 733. Should the period during which the lender shall run the risk
not have been stated in the contract, it shall last, with regard to the vessel,
engines, rigging, and equipment, from the moment said vessel puts to sea until she
drops anchor in the port of destination; and with regard to the merchandise, from
the time they are loaded at the shore or wharf of the port of shipment until they
are unloaded in the port of consignment. aisadc ARTICLE 734. In case of shipwreck,
the amount liable for the payment of the loan shall be reduced to the proceeds of
the goods saved, after deducting the costs of the salvage. If the loan should be on
the vessel or any of its parts, the freightage earned during the voyage for which
said loan was contracted shall also be liable for its payment, as far as it may
reach. ARTICLE 735. If the same vessel or cargo should be the object of a loan on
bottomry or respondentia and marine insurance, the value of what may be saved in
case of shipwreck shall be divided between the lender and the insurer, in
proportion to the legitimate interest of each one, taking into consideration, for
this purpose only, the principal with respect to the loan, and without prejudice to
the right of preference of other creditors in accordance with Article 580. ARTICLE
736. If there should be delay in repayment of the principal and premiums of the
loan, only the former shall bear of legal interest.
SECTION THREE MARINE INSURANCE ARTICLES 737 to 805. (These provisions are expressly
repealed by Section 204 of Act No. 2497, otherwise known as "The Insurance Act.")
The new law of governing insurance is PD No. 612, as amended, which took effect on
Dec. 18, 1974. TITLE FOUR RISKS, DAMAGES AND ACCIDENTS OF MARITIME COMMERCE SECTION
ONE AVERAGES ARTICLE 806. For the purposes of this code the following shall be
considered averages: 1. All extraordinary or accidental expenses which may be
incurred during the voyage in order to preserve the vessel, the cargo, or both. 2.
Any damages or deteriorations 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. ARTICLE 807. The
petty and ordinary expenses incident to navigation, such as those of pilotage of
coasts and ports, those of lighterage and towage, anchorage, inspection, health,
quarantine, lazaretto, and other so-called port expenses, costs of barges and
unloading until the merchandise is placed on the wharf, and any other usual
expenses of navigation, shall be considered ordinary expenses to be defrayed by the
shipowner, unless there is an express agreement to the contrary. ARTICLE 808.
Averages shall be: 1. Simple or particular. 2. General or gross. ARTICLE 809. As a
general rule, simple or particular averages shall include all the 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, and
especially the following: 1. The losses suffered by the cargo from the time of its
embarkation until it is unloaded, either on account of inherent defect of the goods
or by reason of an accident of the sea or force majeure, and the expenses incurred
to avoid and repair the same. 2. The losses and expenses suffered by the vessel in
its hull, rigging, arms, and equipment, for the same causes and reasons, from the
time it puts to sea from the port of departure until it anchors and lands in the
port of destination. 3. The losses suffered by the merchandise loaded on deck,
except in coastwise navigation, if the marine ordinances allow it. 4. The wages and
victuals of the crew when the vessel is detained or embargoed by legitimate order
or force majeure, if the charter has been contracted for a fixed sum for the
voyage. 5. The necessary expenses on arrival at a port, in order to make repairs or
secure provisions. 6. The lowest value of the goods sold by the captain in arrivals
under stress for the payment of provisions and in order to save the crew, or to
meet any other need of the vessel, against which the proper amount shall be
charged. 7. The victuals and wages of the crew while the vessel is in quarantine.
8. The loss inflicted upon the vessel or cargo by reason of an impact or collision
with another, if it is accidental and unavoidable. If the accident should occur
through the fault or negligence of the captain, the latter shall be liable for all
the losses caused. 9. Any loss suffered by the cargo through the fault, negligence,
or barratry of the captain or of the crew, without prejudice to the right of the
owner to recover the corresponding indemnity from the captain, the vessel, and the
freightage.
ARTICLE 810. The owner of the goods which gave rise to the expense or suffered the
damage shall bear the simple or particular averages. cd ARTICLE 811. As a general
rule, general or gross averages 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 a real and known risk, and particularly the following: 1. The goods or
cash invested in the redemption of the vessel or of the cargo captured by enemies,
privateers, or pirates, and the provisions, wages, and expenses of the vessel
detained during the time the settlement or redemption is being made. 2. The goods
jettisoned to lighten the vessel, whether they belong to the cargo, to the vessel,
or to the crew, and the damage suffered through said act by the goods which are
kept on board. 3. The cables and masts which are cut or rendered useless, the
anchors and the chains which are abandoned, in order to save the cargo, the vessel,
or both. 4. The expenses of removing or transferring a portion of the cargo in
order to lighten the vessel and place it in condition to enter a port or roadstead,
and the damage resulting therefrom to the goods removed or transferred. 5. The
damage suffered by the goods of the cargo by the opening made in the vessel in
order to drain it and prevent its sinking. 6. The expenses caused in order to float
a vessel intentionally stranded for the purpose of saying it. 7. The damage caused
to the vessel which had to be opened, scuttled or broken in order to save the
cargo. 8. The expenses for the treatment and subsistence of the members of the crew
who may have been wounded or crippled in defending or saying the vessel. 9. The
wages of any member of the crew held as hostage by enemies, privateers, or pirates,
and the necessary expenses which he may incur in his imprisonment, until he is
returned to the vessel or to his domicile, should he prefer it. 10. The wages and
victuals of the crew of a vessel chartered by the month, during the time that it is
embargoed or detained by force majeure or by order of the government, or in order
to repair the damage caused for the common benefit. 11. The depreciation resulting
in the value of the goods sold at arrival under stress in order to repair the
vessel by reason of gross average. 12. The expenses of the liquidation of the
average. ARTICLE 812. In order to satisfy the amount of the gross or general
averages, all the persons having an interest in the vessel and cargo therein at the
time of the occurrence of the average shall contribute. ARTICLE 813. In order to
incur the expenses and cause the damages corresponding to gross average, there must
be a resolution of the captain, adopted after deliberation with the sailing mate
and other officers of the vessel, and after hearing the persons interested in the
cargo who may be present. If the latter shall object, and the captain and officers
or a majority of them, or the captain, if opposed to the majority, should consider
certain measures necessary, they may be executed under his responsibility, without
prejudice to the right of the shippers to proceed against the captain before the
competent judge or court, if they can prove that he acted with malice, lack of
skill, or negligence. If the persons interested in the cargo, being on board the
vessel, have not been heard, they shall not contribute to the gross average, their
share being chargeable against the captain, unless the urgency of the case should
be such that the time necessary for previous deliberations was wanting. ARTICLE
814. The resolution adopted to cause the damages which constitute general average
must necessarily be entered in the log book, stating the motives and reasons for
the dissent, should there be any, and the irresistible and urgent causes which
impelled the captain if he acted of his own accord. In the first case the minutes
shall be signed by all the persons present who could do so before taking
action, if possible; and if not, at the first opportunity. In the second case, it
shall be signed by the captain and by the officers of the vessel. In the minutes,
and after the resolution, shall be stated in detail all the goods jettisoned, and
mention shall be made of the injuries caused to those kept on board. The captain
shall be obliged to deliver one copy of these minutes to the maritime judicial
authority of the first port he may make, within twentyfour hours after his arrival,
and to ratify it immediately under oath. ARTICLE 815. The captain shall direct the
jettison, and shall order the goods cast overboard in the following order: 1. Those
which are on deck, beginning with those which embarrass the maneuver or damage of
the vessel, preferring, if possible, the heaviest ones with the least utility and
value. cda 2. Those which are below the upper deck, always beginning with those of
the greatest weight and smallest value, to the amount and number absolutely
indispensable. ARTICLE 816. In order that the goods jettisoned may be included in
the gross average and the owners thereof be entitled to indemnity, it shall be
necessary insofar as the cargo is concerned that their existence on board be proven
by means of the bill of lading; and with regard to those belonging to the vessel,
by means of the inventory prepared before the departure in accordance with the
first paragraph of Article 812. ARTICLE 817. If in lightening a vessel on account
of a storm, in order to facilitate its entry into a port or roadstead, part of the
cargo should be transferred to lighters or barges and be lost, the owner of said
part shall be entitled to indemnity, as if the loss had originated from a gross
average, the amount thereof being distributed between the vessel and cargo from
which it came. If, on the contrary, the merchandise transferred should be saved and
the vessel should be lost, no liability may be demanded of the salvage. ARTICLE
818. If, as a necessary measure to extinguish a fire in a port, roadstead, creek,
or bay, it should be decided to sink any vessel, this loss shall be considered
gross average, to which the vessels saved shall contribute. SECTION TWO ARRIVALS
UNDER STRESS ARTICLE 819. If during the voyage the captain should believe that the
vessel can not continue the trip to the port of destination on account of the lack
of provisions, well-founded fear of seizure, privateers, or pirates, or by reason
of any accident of the sea disabling it to navigate, he shall assemble the officers
and shall summon the persons interested in the cargo who may be present, and who
may attend the meeting without the right to vote; and if, after examining the
circumstances of the case, the reason should be considered well-founded, the
arrival at the nearest and most convenient port shall be agreed upon, drafting and
entering the proper minutes, which shall be signed by all, in the log book. The
captain shall have the deciding vote, and the persons interested in the cargo, may
make the objections and protests they may deem proper, which shall be entered in
the minutes in order that they may make use thereof in the manner they may consider
advisable. ARTICLE 820. An arrival shall not be considered lawful in the following
cases: 1. If the lack of provisions should arise from the failure to take the
necessary provisions for the voyage according to usage and customs, or if they
should have been rendered useless or lost through bad stowage or negligence in
their care. 2. If the risk of enemies, privateers, or pirates should not have been
well known, manifest, and based on positive and provable facts. 3. If the defect of
the vessel should have arisen from the fact that it was not repaired, rigged,
equipped, and prepared in a manner suitable for the voyage, or from some erroneous
order of the captain. 4. When malice, negligence, want of foresight, or lack of
skill on the part of the captain exists in the act causing the damage.
ARTICLE 821. The expenses of an arrival under stress shall always be for the
account of the shipowner or agent, but they shall not be liable for the damages
which may be caused the shippers by reason of the arrival provided the latter is
legitimate. Otherwise, the ship agent and the captain shall be jointly liable.
ARTICLE 822. If in order to make repairs to the vessel or because there is danger
that the cargo may suffer damage, it should be necessary to unload, the captain
must request authorization from the competent judge or court for the removal, and
carry it out with the knowledge of the person interested in the cargo, or his
representative, should there be any. In a foreign port, it shall be the duty, of
the Philippine Consul, where there is one, to give the authorization. In the first
case, the expenses shall be for the account of the ship agent or owner, and in the
second, they shall be chargeable against the owners of the merchandise for whose
benefit the act was performed. If the unloading should take place for both reasons,
the expenses shall be divided proportionately between the value of the vessel and
that of the cargo. ARTICLE 823. The custody and preservation of the cargo which has
been unloaded shall be intrusted to the captain, who shall be responsible for the
same, except in cases of force majeure. ARTICLE 824. If the entire cargo or part
thereof should appear to be damaged, or there should be imminent danger of its
being damaged, the captain may request of the competent judge or court, or of the
consul in a proper case, the sale of all or of part of the former, and the person
taking cognizance of the matter shall authorize it, after an examination and
declaration of experts, advertisements, and other formalities required by the case,
and an entry in the book, in accordance with the provisions of Article 624. The
captain shall, in a proper case, justify the legality of his conduct, under the
penalty of answering to the shipper for the price the merchandise would have
brought if they had arrived in good condition at the port of destination. ARTICLE
825. The captain shall be responsible for the damages caused by his delay, if after
the cause of the arrival under stress has ceased, he should not continue the
voyage. If the cause of arrival should have been the fear of enemies, privateers,
or pirates, a deliberation and resolution in a meeting of the officers of the
vessel and persons interested in the cargo who may be present, in accordance with
the provisions contained in Article 819, shall precede the departure. SECTION THREE
COLLISIONS ARTICLE 826. If a vessel should collide with another, through or the
fault, negligence, or lack of skill of the captain, sailing mate, or any other
member of the complement, the owner of the vessel at fault shall indemnify the
losses and damages suffered, after an expert appraisal. aisadc ARTICLE 827. If the
collision is imputable to both vessels, each one shall suffer its own damages, and
both shall be solidarily responsible for the losses and damages occasioned to their
cargoes. ARTICLE 828. The provisions of the preceding article are applicable to the
use in which it cannot be determined which of the two vessels has caused the
collision. ARTICLE 829. In the cases above mentioned the civil action of the owner
against the person causing the injury as well as the criminal liabilities, which
may be proper, are reserved. ARTICLE 830. If a vessel should collide with another,
through fortuitous event or force majeure, each vessel and its cargo shall bear its
own damages. ARTICLE 831. If a vessel should be forced by a third vessel to collide
with another, the owner of the third vessel shall indemnify the losses and damages
caused, the captain thereof being civilly liable to said owner. ARTICLE 832. If by
reason of a storm or other cause of force majeure, a vessel which is properly
anchored and moored should collide with those nearby, causing them damages, the
injury occasioned shall be considered as particular average of the vessel run into.
ARTICLE 833. A vessel which, upon being run into, sinks immediately, as well as
that which, having been obliged to make a port to repair the damages caused by the
collision, is lost during the voyage or is obliged to be stranded in order to be
saved, shall be presumed as lost by reason of collision. ARTICLE 834. If the
vessels colliding with each other should have pilots on board discharging their
duties at the time of the collision, their presence shall not exempt the captains
from the liabilities they incur, but the latter shall have the right to be
indemnified by the pilots, without prejudice to the criminal liability which the
latter may incur. ARTICLE 835. The action for the recovery of losses and damages
arising from collisions cannot be admitted if a protest or declaration is not
presented within twenty-four hours before the competent authority of the point
where the collision took place, or that of the first port of arrival of the vessel,
if in Philippine territory, and to the consul of the Republic of the Philippines if
it occurred in a foreign country. ARTICLE 836. With respect to damages caused to
persons or to the cargo, the absence of protest may not prejudice the persons
interested who were not on board or were not in a condition to make known their
wishes. ARTICLE 837. The civil liability incurred by the shipowners in the case
prescribed in this section, shall be understood as limited to the value of the
vessel with all its appurtenances and freightage earned during the voyage. ARTICLE
838. When the value of the vessel and her appurtenances should not be sufficient to
cover all the liabilities, the indemnity due by reason of the death or injury of
persons shall have preference. ARTICLE 839. If the collision should take place
between Philippine vessels in foreign waters, or if having taken place in the open
seas, and the vessels should make a foreign port, the Consul of the Republic of the
Philippines in said port shall hold a summary investigation of the accident,
forwarding the proceedings to the Secretary of the Department of Foreign Affairs
for continuation and conclusion. aisadc SECTION FOUR SHIPWRECKS ARTICLE 840. The
losses and deteriorations suffered by a vessel and her cargo by reason of shipwreck
or stranding shall be individually for the account of the owners, the part which
may be saved belonging to them in the same proportion. ARTICLE 841. If the wreck or
stranding should be caused by the malice, negligence, or lack of skill of the
captain, or because the vessel put to sea was insufficiently repaired and equipped,
the ship agent or the shippers may demand indemnity of the captain for the damages
caused to the vessel or to the cargo by the accident, in accordance with the
provisions contained in Articles 610, 612, 614, and 621. ARTICLE 842. The goods
saved from the wreck shall be specially bound for the payment of the expenses of
the respective salvage, and the amount thereof must be paid by the owners of the
former before they are delivered to them, and with preference over any other
obligation if the merchandise should be sold. ARTICLE 843. If several vessels sail
under convoy, and any of them should be wrecked, the cargo saved shall be
distributed among the rest in proportion to the amount which each one is able to
take. If any captain should refuse, without sufficient cause, to receive what may
correspond to him, the captain of the wrecked vessel shall enter a protest against
him, before two sea officials, of the losses and damages resulting therefrom,
ratifying the protest within twenty-four hours after arrival at the first
port, and including it in the proceedings he must institute in accordance with the
provisions contained in Article 612. If it is not possible to transfer to the other
vessels the entire cargo of the vessel wrecked, the goods of the highest value and
smallest volume shall be saved first, the designation thereof to be made by the
captain with the concurrence of the officers of his vessel. ARTICLE 844. A captain
who may have taken on board the goods saved from the wreck shall continue his
course to the port of destination, and on arrival shall deposit the same, with
judicial the intervention, at the disposal of their legitimate owners. In case he
changes his course, if he can unload them at the port of which they were consigned,
the captain may make said port if the shippers or supercargoes present and the
officers and passengers of the vessel consent thereto; but he may not do so, even
with said consent, in time of war or when the port is difficult and dangerous to
make. The owners of the cargo shall defray all the expenses of this arrival as well
as the payment of the freightage which, after taking into consideration the
circumstances of the case, may be fixed by agreement or by a judicial decision.
ARTICLE 845. If on the vessel there should be no person interested in the cargo who
can pay the expenses and freightage corresponding to the salvage, the competent
judge or court may order the sale of the part necessary to cover the same. This
shall also be done when its preservation is dangerous, or when in a period of one
year it should not have been possible to ascertain who are its legitimate owners.
In both cases the proceedings shall be with the publicity and formalities
prescribed in Article 579, and the net proceeds of the sale shall be safely
deposited, in the discretion of the judge or court, so that they may be delivered
to the legitimate owner thereof. TITLE FIVE PROOF AND LIQUIDATION OF AVERAGES
SECTION ONE PROVISIONS COMMON TO ALL KINDS OF AVERAGES ARTICLE 846. Those
interested in the proof and liquidation of averages may mutually agree and bind
themselves at any time with regard to the liability, liquidation, and payment
thereof. cdt In the absence of agreements, the following rules shall be observed:
1. The proof of the average shall take place in the port where the repairs are
made, should any be necessary, or in the port of unloading. 2. The liquidation
shall be made in the port of unloading, if it is a Philippine port. 3. If the
average occurred outside of the jurisdictional waters of the Philippines, or the
cargo has been sold in a foreign port by reason of an arrival under stress, the
liquidation shall be made in the port of arrival. 4. If the average has occurred
near the port of destination, so that said port can be made, the proceedings
mentioned in Rules 1 and 2 shall be held there. ARTICLE 847. In the case where the
liquidation of the averages is made privately by virtue of agreement, as well as
when a judicial authority intervened at the request of any of the parties
interested who do not agree thereto, all of them shall be cited, and heard, should
they not have renounced this right. Should they not be present or should the have
no legal representative, the liquidation shall be made by the Consul in a foreign
port, and where there is none, by the competent judge or court, according to the
laws of the country and for the account of the proper party. When the
representative is a person well known in the place where the liquidation is made,
his intervention shall be admitted and shall produce legal effects, even though he
be authorized only by a letter of the ship agent, the shipper, or the insurer.
ARTICLE 848. Claims for averages shall not be admitted if they do not exceed 5 per
cent of the
interest which the claimant may have in the vessel or in the cargo if it be gross
average and 1 per cent of the goods damaged if particular average, deducting in
both cases the expenses of appraisal, unless there is an agreement to the country.
ARTICLE 849. The damages, averages, loans on bottomry and respondentia and their
premiums and any other losses, shall not earn interest by reason of delay until
after the lapse of the period of three-days, to be counted from the day on which
the liquidation may have been concluded and communicated to the persons interested
in the vessel, in the cargo, or in both at the same time. ARTICLE 850. If by reason
of one or more accidents of the sea, particular and gross averages of the vessel,
of the cargo, or of both, should take place on the same voyage, the expenses and
damages corresponding to each average shall be determined separately in the port
where the repairs are made, or where the merchandise are discharged, sold, or
utilized. For this purpose the captains shall be obliged to demand of the expert
appraisers and of the contractors making the repairs, as well as of those
appraising and taking part in the unloading, repair, sale, or utilization of the
merchandise, that in their appraisements or estimates and accounts they set down
separately and accurately the expenses and damages pertaining to each average, and
in those of each average those corresponding to the vessel and to the cargo, also
stating separately whether or not there are damages proceeding from inherent defect
of the thing and not from accident of the sea; and in case there should be expenses
common to the different averages and to the vessel and its cargo, the amount
corresponding to each must be estimated and stated distinctly. SECTION TWO
LIQUIDATION OF GROSS AVERAGES ARTICLE 851. At the instance of the captain, the
adjustment, liquidation, and distribution of gross averages shall be held
privately, with the consent of all the parties in interest. For this purpose,
within forty-eight hours following the arrival of the vessel at the port, the
captain shall convene all the person interested in order that they may decide as to
whether the adjustment or liquidation of the gross average is to be made by experts
and liquidators appointed by themselves, in which case it shall so done if the
interested parties agree. If an agreement is not possible, the captain shall apply
to the competent judge or court, who shall be the one in the port where these
proceedings are to be held in accordance with the provisions of this code, or to
the consul of the Republic of the Philippines should there be one, and should there
be none, to the local authority when they are to be held in a foreign port. cdtai
ARTICLE 852. If the captain does not comply with the provisions of the preceding
article, the ship agent or the shippers shall demand the liquidation without
prejudice to the action they may bring to demand indemnity from him. ARTICLE 853.
After the experts have been appointed by the persons interested, or by the court,
and after the acceptance, they shall proceed to the examination of the vessel and
of the repairs required and to the appraisal of their cost, separating these losses
and damages from those arising from the inherent defect of the things. The experts
shall also declare whether the repairs may be made immediately, or whether it is
necessary to unload the vessel in order to examine and repair it. With regard to
the merchandise, if the average should be visible at a mere glance, the examination
thereof must be made before they are delivered. Should it not be visible at the
time of unloading, said examination may be made after the delivery, provided that
it is done within forty-eight hours from the unloading and without prejudice to the
other proofs which the experts may deem proper. ARTICLE 854. The valuation of the
objects which are to contribute to the gross average, and that of those which
constitute the average, shall be subject to the following rules: 1. The merchandise
saved which are to contribute to the payment of the gross average shall be valued
at the current price at the port of unloading, deducting the freightage, customs
duties, and expenses of unloading, as may appear from a material inspection of the
same, without taking the bills
of lading into consideration unless there is an agreement to the contrary. 2. If
the liquidation is to be made in the port of departure, the value of the
merchandise loaded shall be determined by the purchase price, including the
expenses until they are placed on board, the insurance premium excluded. 3. If the
merchandise should be damaged, they shall be appraised at their true value. 4. If
the voyage having been interrupted, the merchandise should have been sold in a
foreign port, and the average cannot be estimated, the value of the merchandise in
the port of arrival, or the net proceeds obtained at the sale thereof, shall be
taken as the contributing capital. 5. Merchandise lost, which constitute the gross
average, shall be appraised at the value which merchandise of its kind may have in
the port of unloading, provided that its kind and quality appear in the bill of
lading; and should they not appear, the value shall be that stated in the invoices
of the purchase issued in the port of shipment, adding thereto the expenses and
freightage subsequently arising. cd 6. The masts cut down, the sails, cables, and
other equipment of the vessel rendered useless for the purpose of saying it, shall
be appraised at the current value, deducting one-third by reason of the difference
between new and old. This deduction shall not be made with respect to anchors and
chains. 7. The vessel shall be appraised at its true value in the condition in
which it is found. 8. The freightage shall represent 50 per cent by way of
contributing capital. ARTICLE 855. The merchandise loaded on the upper deck of the
vessel shall contribute to the gross average should they be saved; but there shall
be no right to indemnity if they should be lost by reason of having been jettisoned
for common safety, except when the marine ordinances allow their shipment in this
manner in coastwise navigation. The same shall take place with that which is on
board and is not included in the bills of lading or inventories, according to the
cases. In any case the shipowner and the captain shall be liable to the shippers
for the damages from the jettison, if the storage on the upper deck was made
without the consent of the latter. ARTICLE 856. Provisions and munitions of war
which the vessel may have on board, and the clothing used by the captain, officers,
and crew, shall not contribute to the gross average. The clothing used by the
shipper, supercargoes, and passenger who may be on board at the time of the
jettison, shall also be accepted. Neither shall the goods jettisoned contribute to
the payment of the gross averages which may occur to the merchandise saved to a
different and subsequent risk. ARTICLE 857. After the appraisement of the goods
saved and of those lost which constitute the gross average, has been concluded by
the experts, the repairs, if any, made on the vessel, and in this case, the
accounts of the same approved by the persons interested or by the judge or court,
the entire record shall be turn over to the liquidator appointed, in order that he
may proceed with the distribution of the average. ARTICLE 858. In order to effect
the liquidation, the liquidator shall examine the protest of the captain, comparing
it, if necessary, with the log book, and all the contracts which may have been made
among the persons interested in the average, the appraisements, expert
examinations, and accounts of repairs made. If, as a result of this examination, he
should find any defect in the procedure which might injure the rights of the person
interested or affect the liability of the captain, he shall call attention thereof
in order that it may be corrected, if possible, and otherwise he shall include it
in the exordial of the liquidation. Immediately thereafter he shall proceed with
the distribution of the amount of the average, for which purpose he shall fix: 1.
The contributing capital, which he shall determine by the value of the cargo, in
accordance with the rules established in Article 854.
2. That of the vessel in her actual condition, according to the statement of
experts. 3. The 50 per cent of the amount of the freightage, deducting the
remaining 50 per cent for wages and maintenance of the crew. After the amount of
the gross average has been determined in accordance with the provisions of this
Code, it shall be distributed pro rata among the goods which are to cover the same.
cdasia ARTICLE 859. The insurers of the vessel of the freightage and of the cargo
shall be obliged to pay for the indemnification of the gross average, insofar as is
required of each one of the objects respectively. ARTICLE 860. If, notwithstanding
the jettison of merchandise, breakage of masts, ropes, and equipment, the vessel
shall be lost running the same risk, no contribution whatsoever by jettison of
gross average shall be proper. The owners of the goods saved shall not be liable
for the indemnification of those jettisoned, lost, or damaged. ARTICLE 861. If,
after the vessel has been saved from the risk which gave rise to the jettison, it
should be lost through another accident taking place during the voyage, the goods
saved and existing from the first risk shall continue liable to contribution by
reason of the gross average according to their value in the condition in which they
may be found, deducting the expenses incurred in saving them. ARTICLE 862. If, in
spite of having saved the vessel and the cargo in consequence of the cutting down
of masts or of any other damage deliberately done to the vessel for said purpose,
the merchandise should subsequently be lost or stolen, the captain can not demand
of the shippers or consignees that they contribute to the indemnity for the
average, unless the loss should occur by reason of an act of the owner or consignee
himself. ARTICLE 863. If the owner of the jettisoned goods should recover them
after having received the indemnity for gross average, he shall be obliged to
return to the captain and to the other persons interested in the cargo the amount
he may have received, deducting the amount of the damage caused by the jettison and
of the expenses incurred in their recovery. In this case, the amount returned shall
be distributed among the vessel and the persons interested in the cargo in the same
proportion in which they contributed to the payment of the average. ARTICLE 864. If
the owner of the goods jettisoned should recover them without having demanded any
indemnity, he shall not be obliged to contribute to the payment of the gross
average which may have been suffered by the rest of the cargo after the jettison.
ARTICLE 865. The distribution of the gross average shall not be final until it has
been agreed to, or in the absence thereof, until it has been approved by the judge
or court, after an examination of the liquidation and a hearing of the persons
interested who may be present or of their representatives. ARTICLE 866. After the
liquidation has been approved, it shall be the duty of the captain to collect the
amount of the contributions, and he shall be liable to the owners of the goods
averaged for the damages they may suffer through his delay or negligence. ARTICLE
867. If the person contributing should not pay the amount of the contribution at
the end of the third day after having been required to do so, the goods saved shall
be proceeded against, in the request of the captain, until payment has been made
from their proceeds. ARTICLE 868. If the person interested in receiving the goods
saved should not give security sufficient to answer for the amount corresponding to
the gross average, the captain may defer the delivery thereof until payment has
been made. aisadc SECTION THREE LIQUIDATION OF ORDINARY AVERAGES ARTICLE 869. The
experts whom the court or the person interested may appoint, as the case may be,
shall proceed with the examination and appraisement of the averages in the manner
prescribed in Articles 853 and 854, Rules 2 to 7, insofar as they are applicable.
Footnotes
1. "Art. 6. The married woman, over twenty-one years of age, can engage in commerce
with the authorization of her husband, stated in a public instrument which shall be
inscribed in the commercial registry." An opinion has been expressed that this
provision is still applicable where the husband objects to the wife's engaging in
commerce and the family council or the court sustains him. Furthermore, according
to this opinion, should the husband thereafter change his mind, his consent must be
given in accordance with this article. 2. "Art. 7. The married woman who, with the
knowledge of her husband, engages in commerce shall also be presumed authorized to
trade." (See fn. 35, supra.) 3. "Art. 9. The woman who, upon contracting marriage,
should be engaged in commerce, shall need the authorization of her husband to
continue the same. "This authorization shall be presumed granted so long as the
husband does not make known, in the form prescribed in the preceding article, the
discontinuance by his wife of the practice of commerce. (See fn. 25, under Art. 6,
supra.) 4. "Art. 10. Should the wife engaged in commerce in the cases mentioned in
Articles 6, 7, and 9 of this Code, all her dotal and paraphernal property, and all
the property rights which both spouses may have in the conjugal community or
partnership shall be solidarity liable for the results of her commercial activity,
the wife having the power to alienate and mortgage her own private property as well
as that owned in common. "The private property of the husband may also be alienated
and mortgaged by the wife, if the authority granted by him should have been or be
extended to such property." It is believed that this article is no longer in force.
Its provisions are based on the consent given by the husband as required under
Article 6 of this Code. At present, however, Article 117 of the New Civil Code
authorizes the wife to engage in commerce without the consent of the husband, as
that authority is given by the law itself. Said Code has thus practically equalized
the legal positions of the husband and the wife relative to their capacity to
engage in business. It would, therefore, be just and equitable to treat them
equally in respect to the effects of their commercial transactions. Accordingly, at
present, as to what property is liable for the acts of commerce done by the wife
shall be governed by the provisions of the New Civil Code on the subject. (See
Title VI of Book 1.) The conjugal partnership shall be liable for all debts and
obligations contracted by the husband for the benefit of the conjugal partnership,
and those contracted by the wife, also for the same purpose in the cases where she
may legally bind the partnership, (Par. 1, Art. 161, NCC). 5. "Art. 11. The married
woman, over twenty-one years of age, may likewise engage in commerce in any of the
following cases: "1. When she lives separate from her husband by reason of a final
decree of divorce. "2. When her husband is under guardianship. "3. When her husband
is absent, his whereabouts being unknown, and his return not expected. "4. When her
husband is serving the penalty of civil interdiction." (See fn. 31, under Art. 6,
supra). 6. "Art. 12. In the cases referred to in the preceding article, only the
private property of wife and that of the community of conjugal partnership acquired
through her commercial transactions shall be liable for the results thereof, the
wife having the power to alienate and mortgage one or the other. cd "When the
absence of the husband is legally declared, the wife shall furthermore have the
powers granted to her in such case by the civil law." (See fn. 31, under Art. 6,
supra). 7. Par. 6. "General powers of attorney, and the revocation of the same,
should there be any, given to managers, factors, employees and any other agents".
8. Par. 7 "The authorization of the husband for his wife to engage in commerce and
the legal or judicial authority of the wife to administer her property on account
of the absence or incapacity of the
husband." 9. Par. 8. "The revocation of the permission given to the wife to trade."
10. "Par. 11. "The issues of bank notes, stating the date, class, series, quantity
and value of each issue." 11. "Par. 12. "The titles of industrial property,
patents, and trademarks, in the form and manner established by law." 12. This
article has been superseded by Secs. 1170 and 1171 of the Revised Administrative
Code. 13. Art. 29. Unregistered powers of attorney shall give rise to actions
between the principal and the agent, but they cannot be used to the prejudice of
third persons, who, however, may rely thereon in so far as they may be favorable."
This article has been repealed by Article 2270 of the New Civil Code which has
repealed all provisions of the Code of Commerce on agency. 14. These articles have
been impliedly repealed by Commonwealth Acts No. 83 and 287, and by Sec. 66 of the
Revised Administrative Code. 1. See PD No. 1 and Integrated Reorganization Plan,
(Art. III, Chapter 1, Part X) appendix, infra. 2. But See Sec. 17 PD 1521, Ship
Mortgage Decree of 1978 which took effect June 11, 1978, infra and a different list
of preferred claims and Sec 2, PD 214, Appendix infra, repealing or modifying Arts
580 and 584. C o p y r i g h t 1 9 9 4 - 1 9 9 9 C D T e c h n o l o g i e s A s i
a, I n c.