Persons Participating in Maritime Commerce

1. Shipowners and Ship Agents

2. Captain and Masters of the vessel
3. Officers and Crew of the vessel
Sailing Mate / First Mate
Second Mate
Engineers
Members of the Crew
4. Supercargo
5. Pilot

1. Shipowners and Ship Agents

Shipowner (proprietario)
Person who has possession, control and management of the vessel and the consequent
right to direct her navigation and receive freight earned and paid, while his possession
continues.
Ship agent (naviero)
Person entrusted with provisioning and representing the vessel in the port in which it may
be found. (Art. 586)
His liability to passengers and cargo for loss or injury is the same as the shipowner.
SOLIDARILY liable with the owner for such loss or damage subject to his right to claim for
reimbursement from the shipowner.
Powers and functions:
1. Capacity to trade;
2. Discharge duties of the captain, subject to Art.609;
3. Contract in the name of the owners with respect to repairs, details of equipment,
armament, provisions of food and fuel, and freight of the vessel, and all that relate to the
requirements of navigation;
4. Order a new voyage, make a new charter or insure the vessel after obtaining authorization
from the shipowner or if granted in certificate of appointment.
Whether acting as agent of the owner of the vessel or as agent of the charterer, he will be
considered as the ship agent and may be held liable as such, as long as he is the one that
provisions or represents the vessel.
(Macondray & Co., Inc. v. Provident Insurance Corp, G.R. No. 154305, Dec. 9, 2004)
Civil Liabilities of the Shipowner and Ship Agent
(1) All contracts of the captain, whether authorized or not, to repair, equip and provision the
vessel (Art. 586, Code of Commerce);
(2) Loss and damage to the goods loaded on the vessel without prejudice to their right to free
themselves from liability by abandoning the vessel to the creditors (Art. 587, Code of
Commerce).
(3) not liable for the obligations contracted by the captain if he exceeds his authority, unless
the amounts claimed were invested for the benefit of the vessel (Article 588, Code of
Commerce).
(4) liable for the death of or injuries to passengers through the negligence or willful acts of the
formers employees, although such employees may have acted beyond the scope of their
authority or in violation of the orders of the shipowners. (Article 1759,NCC).

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Duty of Ship Agent to Discharge the Captain and Members of the Crew
If the seamen contract is not for a definite period or voyage, he may discharge them at his
discretion. (Art. 603)
If for a definite period, he may not discharge them until after the fulfillment of their
contracts, except on the following grounds:
Insubordination in serious matters;
Robbery;
Theft;
Habitual drunkenness;
Damage caused to the vessel or to its cargo through malice or manifest or proven
negligence. (Art. 605)

 It is universally recognized that the captain is primarily the representative of the owner;
and article 586 of the Code of Commerce expressly declares that both the owner of the
vessel and the naviero, or charterer, shall be civilly liable for the acts of the master.
In this connection, it may be noted that there is a discrepancy between the meaning
of naviero, in articles 586 of the Code of Commerce, where the word is used in
contradistinction to the term "owner of the vessel" ( propietario), and in article 587 where
it is used alone, and apparently in a sense broad enough to include the owner.
Fundamentally the word "naviero" must be understood to refer to the person undertaking
the voyage, who in one case may be the owner and in another the charterer.
The owner of the vessel is civilly liable for the acts of the captain; and he can only escape
from this civil liability by abandoning his property in the ship and any freight that he may
have earned on the voyage (arts. 587, 588, Code of Comm.).
Standard Oil Co. v. Castelo 42 Phil 256 October 18, 1921
2. Captains and Master of the Vessel
Captain - one who governs vessels that navigate the high seas or ships of large
dimensions and importance, although they may be engaged in coastwise trade
Master - one who commands smaller ships engaged exclusively in coastwise trade
captain and master have the same meaning
for maritime commerce
patron - bancas
Qualifications
Filipino citizen;
Legal capacity to contract;
Must have passed the required physical and mental examinations required for licensing
him as such. (Art. 609)
Triple Roles of the Captain
1. The general agent of the shipowner
2. The commander and technical director of the vessel
3. Government representative of the country under whose flag he navigates
a ship's captain must be accorded a reasonable measure of discretionary authority to
decide what the safety of the ship and of its crew and cargo specifically requires on a
stipulated ocean voyage.
is a basic principle of admiralty law that in navigating a merchantman, the master must
be left free to exercise his own best judgment. The requirements of safe navigation compel
us to reject any suggestion that the judgment and discretion of the captain of a vessel
may be confined within a straitjacket, even in this age of electronic communications.
(Inter-Orient Maritime Enterprises, Inc. v. NLRC, 235 SCRA 268,
August 11, 1994)
Duties of the Captain
1. To bring on board the proper certificate and documents and a copy of the Code of
Commerce;
2. To keep a Log Book, Accounting Book and Freight Book;
3. To examine the ship before the voyage;
4. To stay on board during the loading and unloading of the cargo;
5. To be on deck while leaving or entering the port;
6. To protest arrivals under stress and in case of shipwreck;
7. To follow instructions of and render an accounting to the ship agent;
8. To leave the vessel last in case of wreck;
9. To hold in custody properties left by deceased passengers and crew members;
10. To comply with the requirements of customs, health, etc. at the port of arrival;
11. To observe rules to avoid collision;
12. To demand a pilot while entering or leaving a port. (Art. 612)
No liability for the following:
Damages caused to the vessel or to the cargo by force majeure;
Obligations contracted for the repair, equipment, and provisioning of the vessel unless he
has expressly bound himself personally or has signed a bill of exchange or promissory note
in his name. (Art. 620)

Solidary Liabilities of the Ship Agent/Shipowner for Acts Done by the Captain
towards Passengers and Cargoes
1. Damages to vessel and to cargo due to lack of skill and negligence;
2. Thefts and robberies of the crew;
3. Losses and fines for violation of laws;
4. Damages due to mutinies;
5. Damages due to misuse of power;
6. For deviations;
7. For arrivals under stress;
8. Damages due to non-observance of marine regulations. (Art. 618)
3. Officers and Crew of the vessel

Sailing Mate/First Mate

Second chief of the vessel who takes the place of the captain in case of absence,
sickness, or death and shall assume all of his duties, powers and responsibilities. (Art. 627)
Duties:
1. Provide himself with maps and charts with astronomical tables necessary for the
discharge of his duties;
2. Keep the Binnacle Book;
3. Change the course of the voyage on consultation with the captain and the officers of the
boat, following the decision of the captain in case of disagreement;
4. Responsible for all the damages caused to the vessel and the cargo by reason of his
negligence. (Arts. 628 - 631)
Second Mate
Takes 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 responsibilities.
Third in command
Duties:
1. Preserve the hull and rigging of the vessel;
2. Arrange well the cargo;
3. Discipline the crew;
4. Assign work to crew members;
5. Inventory the rigging and equipment of the vessel, if laid up. (Art. 632)
6. Take command in case of disability of the captain and the first mate.
Engineers
Officers of the vessel but have no authority except in matters referring to the motor
apparatus. When two or more are hired, one of them shall be the chief engineer.
Duties:
1. In charge of the motor apparatus, spare parts, and other instruments pertaining to the
engines;
2. Keep the engines and boilers in good condition;
3. Not to change or repair the engine without authority of the captain;
4. Inform the captain of any damage to the motor apparatus;
5. Keep an Engine Book;
6. Supervise all personnel maintaining the engine. (Art. 632)
Members of the crew
The aggregate of seamen who man a ship, or the ships company.
Who Hires Crew Members
Hired by the ship agent, where he is present and in his absence, the captain hires them,
preferring Filipinos, and in their absence, he may take in foreigners, but not exceeding 1/5
of the crew. (Art. 634)
Classes of Seamans Contracts
The most common classes are:
1. By the voyage;
2. By the month; and
3. By share of profits or freightage.

Just Causes for the Discharge of Seaman While Contract Subsists

1. Perpetration of a crime;
2. Repeated insubordination, want of discipline;

3. Repeated incapacity and negligence;

4. Habitual drunkenness;
5. Physical incapacity;
6. Desertion. (Art. 637)-an act by which a seaman deserts and abandons a ship or vessel
before the expiration of his term of duty and without leave and without intention to return.
Madrigal v. Oglivie 104 Phil 748, October 30, 1958
Rules in case of Death of a Seaman
The seamans heirs are entitled to payment as follows:
1. If death is natural:
a. compensation up to time of death if engaged on wage
b. if by voyage - half of amount if death occurs on voyage out; and full, if on voyage in
c. if by shares - none, if before departure; full, if after departure
2. if death is due to defense of vessel - full payment;
3. if captured in defense of vessel - full payment;
4. if captured due to carelessness - wages up to the date of the capture. (Art. 645)
Complement of the Vessel
All persons on board, from the captain to the cabin boy, necessary for the management,
maneuvers, and service, thus including the crew, the sailing mates, engineers, stokers and
other employees on board not having specific designations.
Does not include the passengers or the persons whom the vessel is transporting.
4. Supercargo
What is a supercargo?
He or she is an agent of the owner of goods shipped as cargo on a vessel, who has
charge of the cargo on board, sells the same to the best advantage in the foreign markets,
buys cargo to be brought back on the return voyage of the ship, and comes home with it.
Person who discharges administrative duties assigned to him by ship agent or shippers,
keeping an account and record of transaction as required in the accounting book of the
captain. (Art. 649)
5. Harbor Pilot

A person duly qualified, and licensed, to conduct a vessel into or out of ports, or in certain
waters.
The term generally connotes a person taken on board at a particular place for the purpose
of conducting a ship through a river, road or channel, or from a port.
Master pro hac vice for the time being in the command and navigation of the ship.
GENERAL RULE: On compulsory pilotage grounds, the Harbor Pilot is responsible for
damage to a vessel or to life or property due to his negligence.
EXCEPT:
1. Accident caused by force majeure or natural calamity provided the pilot exercised
prudence and extra diligence to prevent or minimize damages.
2. Countermand or overrule by the master of the vessel in which case the registered
owner of the vessel is liable. (Sec.11, Art.III PPA Admin Order 03-85)

What is Limited Liability?

When applicable
Exceptions
Abandonment
Who can invoke the LLR
How claims are satisfied

Limited Liability Rule

What is Limited Liability?

The exclusively real and hypothecary nature of maritime law operates to limit the
liability of the shipowner to the value of the vessel, earned freightage, and proceeds of the
insurance , if any.
No vessel, no liability, expresses in the nutshell the limited liability rule. It means
that the shipowners or agents liability is merely co-extensive with his interest in the

vessel such that a total loss thereof results in its extinction. If the ship is totally lost, his
liability is extinguished. If the ship or part thereof still exists, he can escape liability by
abandoning the vessel, its appurtenances and its freight.
*hypothecary - An action by a creditor to whom property has been hypothecated
to have it sold to pay the debt.
*hypothecate (transitive verb) : to pledge as security without delivery of title or
possession.

The real and hypothecary nature of the liability of the shipowner or agent
Origin:
prevailing conditions of the maritime trade and sea voyages during medieval
ages
Purpose:
To offset against adverse conditions
To encourage shipbuilding and maritime commerce
When is LLR applicable?
The Code of Commerce sanctions (as in allows) the application of the doctrine in the
following cases:
1. Civil liability for indemnities in favor of 3d persons which arise from the conduct of the
captain in the care of the goods which the vessel carried (Art. 587, Code of Commerce);
2. Civil liability arising from collisions (Art. 837, Code of Commerce);
3. Unpaid wages of the captain and the crew if the vessel and its cargo are totally lost by
reason of capture or shipwreck. (Art. 643, Code of Commerce).

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When is LLR NOT applicable?

(Exceptions to LLR):
When the injury to or death of a passenger is due either to the fault of the shipowner, or to
the concurring negligence of the shipowner and the captain;
When the vessel is insured (to the extent of the insurance proceeds). If the vessel is
insured, the proceeds will go to the persons entitled to claim from the shipowner;
In Workmens Compensation claims;
Repairs and provisioning of the vessel before the loss of the vessel (Art. 586); and
When voyage is not maritime in character.
Who has the burden of proof in order to in voke limited liability doctrine?
The carrier or shipowner has the burden of showing that it exercised extraordinary
diligence in the transport of goods it had on board in order to invoke the limited liability
doctrine.
What is abandonment?
Under Article 587 of the Code of Commerce, the shipowner or ship agent may
exempt themselves from liability by abandoning the vessel with all her equipment and the
freight it may have earned during the voyage. If there is insurance over the vessel,
abandonment covers the insurance proceeds while the vessel itself shall be abandoned in
favor of the insurer.
It is an indispensable requirement before the shipowner or ship agent can enjoy the
benefits of the limited liability principle. If the carrier does not want to abandon the
vessel, then he is still liable even beyond the value of the vessel.

Who can invoke the LLR?

The shipowner. He is the person for whom the rule has been conceived.
The charterer cannot invoke the LLR as a defense especially against the shipowner.
How are claims satisfied?
All claims should be collated before they can be satisfied from what remains of the
insurance proceeds and freightage at the time of the loss.
No claimant should be given preference.
Execution of judgment must be stayed pending completion of all cases occasioned
by the subject sinking.
Then and only then can all such claims be simultaneously settled.

CASE:
Aboitiz Shipping Corporation V. General Accident Fire and Life Assurance
Corporation, Ltd.
217 SCRA 359, January 21, 1993
The real and hypothecary nature of maritime law simply means that the liability of the carrier in connection with
losses related to maritime contracts is confined to the vessel, which is hypothecated for such obligations or which
stands as guaranty for their settlement.

Issue: Whether or not the Limited Liability Rule arising out of the real and hypothecary nature of maritime law should
apply in this case