Transportation and maritime law

Art. 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 is 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, it shall be appraised at its 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 constitutes 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.

6. The masts cut down, the sails, cables, and other equipment of the vessel rendered useless for the purpose of saving 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.

Art. 855. The merchandise loaded on the upper deck of the vessel shall contribute to the gross average should it be saved; but there shall be no right to indemnify if it should be lost by reason of having been jettisoned for common safety, except when the marine ordinances allow its 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.

The goods may be stowed on deck (1) with the consent of the shipper or (2) without his consent --> if stowed on deck with his consent, he takes the risk upon himself of the perils arising from the dangers of the sea and any damage will be borne by the owner [particular average]

--> if stowed on deck without his consent, the captain does so at his own risk; the captain cannot protect himself by showing that they are damaged or lost by dangers of the sea
The carriage of gasoline on deck by coastwise or interisland vessels is allowed by marine regulations --> the loss of petroleum for common safety and benefit will constitute a general average.


Art. 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 turned over to the liquidator appointed, in order that he may proceed with the distribution of the average.

(3) Liquidation of general average

Art. 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 persons interested or affect the liability of the captain, he shall call attention thereto 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 its actual condition, according to a 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.

Art. 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.

Art. 866. After the liquidation has been approved, it shall be the duty of the captain to collect the amount of the contribution, and he shall be liable to the owners of the goods averaged for the damages they may suffer through his delay or negligence.

Art. 867. If the persons 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, at the request of the captain, until payment has been made from their proceeds.

Art. 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.

Art. 869. The experts whom the court or the persons 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, in so far as they are applicable.

(4) Liquidation of particular average

Art. 869. The experts whom the court or the persons 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, in so far as they are applicable.

2. Arrivals Under Stress

(a) Causes
Art. 819. If during the voyage the captain should believe that the vessel cannot 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.


Art. 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 custom, 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 defector 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. Whenever malice, negligence, want of foresight, or lack of skill on the part of the captain exists in the act causing the damage.

Arrival under stress: Arrival of a vessel at the nearest and most convenient port, if during the voyage the vessel cannot continue the trip to the port of destination due to : (1) lack of provisions, (2) well-founded fear of seizure, privateers, or pirates, (3) by reason of any accident of the sea disabling it to navigate

(b) Formalities

Art. 819. If during the voyage the captain should believe that the vessel cannot 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.

Formalities : 1. assembly of the officers including all interested parties

2. drafting and entering in the log book the proper minutes, which shall be signed by all

3. entry in the log book of the objections and protests of the persons interested in the cargo

Art. 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 Filipino 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.

(c) Expenses

Art. 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.

Art. 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 Filipino 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.

Requisites for the captain to unload the cargo arriving under stress:

1. the unloading must be necessary to make repairs or there must be danger that the cargo may suffer damage

2. the captain must be authorized by either a competent court or the Phil. consul, depending on the port of arrival
(d) Responsibility of Captain
Art. 823. The custody and preservation of the cargo which has been unloaded shall be entrusted to the captain, who shall be responsible for the same, except in cases of force majeure.

Art. 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 it had arrived in good condition at the port of destination.

Art. 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 the 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.

The captain has the duty to continue the voyage without delay after the cause of the arrival under stress has ceased--> otherwise, he shall be liable for damages caused by the delay

3. Collisions
Collision: impact of two vessels both of which are moving

Allision: striking of a moving vessel against one that is stationary
Cases of collision :

1. due to the fault, negligence or lack of skill of the captain, sailing mate or the complement of the vessel --> under 826, the shipowner shall be liable for the losses and damages

2. due to the fault of both vessels --> under 827, each vessel shall suffer its own losses, but as regards the owners of the cargoes, both vessels shall be jointly and severally liable

3. where it cannot be determined which of the 2 vessels is at fault --> under 828, each vessel shall suffer its own losses, and both shall also be solidarily responsible for the losses and damages caused to their cargoes

4. collision due to fortuitous event or force majeure --> under 830, each vessel shall bear its own damages

5. where two vessels collide with each other without their fault but by reason of the fault of a third vessel --> under 831, the owner of the third vessel causing the collision shall be liable for the losses and damages 6. a vessel which is properly anchored and moored may collide with those nearby by reason of a storm or other cause of force majeure --> under 832, the vessel run into shall suffer its own damages and expenses

Nautical Rules to determine negligence :
1. When 2 vessels are about to enter a port, the farther one must allow the nearer to enter first; if they collide, the fault is presumed to be imputable to the one who arrived later, unless it can be proved that there was no fault on its part.
2. When 2 vessels meet, the smaller should give the right of way to the larger one.
3. A vessel leaving port should leave the way clear for another which may be entering the same port.
4. The vessel which leaves later is presumed to have collid­ed against one who has left earlier.
5. There is also a presumption against the vessel which sets sail at night.
6. The presumption also works against the vessel with spread sails which collides with another which is at anchor, and cannot move, even when the crew of the latter has received word to lift anchor, when there was not sufficient time to do so or there was fear of a greater damage or other legitimate reason.
7. The vessel which is not properly moored or does not observe the proper distances, has the presumption against itself.
8. The vessel which is moored at a place not used for the purpose, or which is improperly moored or does not have suffi­cient cables, or which has been left without watch, has also against itself the presumption.
9. The same rule applies to those vessels which do not have buoys to indicate the location of its anchors to prevent damage to these vessels which may approach it.

Zones in time of collisions (3 time zones):
1. all the time up to the moment when the risk of collision may have said to have begun

--> within this zone, no rule is applicable because none is necessary. Each vessel is free to direct its course as it deems best with reference to the movements of the other vessel.

2. the time between the moment when the risk of collission begins and the moment when it has become a practical necessity.
3. the time between the moment when collission has become a practical certainty and the moment of actual contact

Effect of fault of privileged vessel during third zone :
If a vessel having a right of way suddenly changes its course during the third zone, in an effort to avoid an imminent collision due to the fault of another vessel, such act may be said to be done in extremis, and even if wrong, cannot create responsibility on the part of said vessel with the right of way. Thus, it has been held that fault on the part of the sailing vessel at the moment preceding a collission, that is, during the third division of time, does not absolve the steamship which has suffered herself and a sailing vessel to get into such dangerous proximity as to cause inevitable harm and confusion, and a colli­sion results as a consequence. The steamer having a far greater fault in allowing such proximity to be brought about is charge­able with all the damages resulting from the collission; and the act of the sailing vessel having been done in extremis and even wrong, is not responsible for the result.
(a) Classes and Effects
(1) Fortuitous
Art. 830. If a vessel should collide with another through fortuitous event or force majeure, each vessel and its cargo shall bear its own damages.

Art. 832. If, by reasons 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.
Each to his own damage --> particular damage

(2) Culpable

Art. 826. If a vessel should collide with another, through 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.

Where the obligation arises from tortious act and not from contract, both the owner and the shipagent should be declared liable

Art. 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.

Defense of due diligence of a good father of a family in the selection and vigilance of the officers and crew cannot be used to render nugatory the solidary liability under 827

Under the express provisions of 827, the shipowners cannot successfully maintain an action against the other for the loss or injury to his vessel

Art.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.

(3) Inscrutable Fault

Art. 828. The provisions of the preceding article are applicable to the case in which it cannot be determined which of the two vessels has caused the collision.
Relation of Art. 827 to Art. 828

Art. 828 must be considered an extension of Art. 827

The rule of liability under Art. 827 is applicable not only to the case where both vessels may be shown to be actually blameworthy but also to the case where it is obvious that only one was at fault but the proof does not show which
Under Arts. 827 and 828, in case of collision between two vessels at sea, both are solidarily liable for the loss of cargo carried by either to the full extent of the value thereof, not only in the cse where both vessels may be shown to be actual­ly blameworthy but also in the case where it is shown that only one ws at fault but the proof does not show it --> it makes no difference that the negligence imputable to the two vessels may have differed somewhat in character and degree and that the negligence of the sunken ship was somewhat more marked than that of the ther
The doctrine of last clear chance cannot be raised --> under the express provisions of Art. 827, under which the evidence disclosing that both vessels are blameworthy, the owners of neither can successfully maintain an action against the other for the loss or injury to his vessel

(b) Presumption of loss by collision

Art.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.

(c) Liabilities

(1) Shipowner or agent
Art. 837. The civil liability incurred by the shipowners in the cases 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.
Art. 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.

Limited liability : limited to the value of the vessel and the freight earned during the voyage [provided for in Arts. 587, 590 and 837]

Damages may be recovered to the extent of what may be salvaged or of the freightage received or of the value of the insurance recoverable

(2) Captain, pilot, others

Art. 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.

Art. 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.

(3) conditions; protests