The persons participating in maritime

commerce are the following:

(1) Ship owners or ship agents
(2) Captains and masters
(3) Other officers and crew
(4) Supercargoes

The ship owner 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; he is the person
who is primarily liable for damages
sustained in the operation of the vessel,
based on the provisions of the Code of
Commerce.

A ship agent is the person entrusted with

the provisioning of a vessel, or who
represents her in the port in which she
happens to be [Art. 586].

The ship agent, even though he is not the

owner, is liable in every way to the creditor
for losses and damages, without prejudice
to his right against the owner, the vessel
and its equipment and freight [Aquino
(2011)].

Captains are those who govern vessels

that navigate the high seas or ships of large
dimensions and importance, although they
may be engaged in coastwise trade.
Masters are those who command smaller
ships engaged exclusively in coastwise
trade. In maritime commerce, masters and
captains are the same

crew is a person on board who is involved

in highly technical tasks and in manning of
the vessel (e.g. master, mate).
A complement is a person, not a crew,
who is not directly involved in the manning
of the vessel (e.g. cook).
Supercargo is a person on board the
vessel, who functions as an agent of the
owner of the 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.
The powers and liabilities 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 [Art. 649].

The ship owner or ship agent is

liable:
(1) For the acts of the captain, unless the
latter exceeds his authority [Art. 586].
(2) For contracts entered into by the
captain to repair, equip and provision
the vessel, provided that the amount
claimed was invested for the benefit of
the vessel [Art. 586].
(3) For the indemnities in favor of third
persons which may arise from the
conduct of the captain in the care of the
goods transported, as well as for the
safety of passengers transported [Art.
587].
(4) For damages to third persons for tort or
quasi-delict committed by the captain,
except collision with another vessel [Art.
1759, Civil Code].
(5) For damages in case of collision due to
the fault, negligence, or want of skill of
the captain, sailing mate, or any other
member of the complement [Art. 826].

B.1. LIABILIITY FOR ACTS OF CAPTAIN

Three (3) distinct roles of a captain:
(1) General agent of the ship owner;
(2) Commander and technical director of
the vessel;
(3) Representative of the country under
whose flag he navigates [Inter-Orient
Marine Enterprises v. NLRC (1994)].
The captain shall be liable to the
agent, and the latter to third
persons:
(1) For all the damages suffered by the
vessel and his cargo by reason of want
of skill or negligence on his part;
(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 on account of violation of the
laws and regulations of customs, police,
health, and navigation;
(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 full
use of his authority to prevent or avoid
them;
(5) For those arising by reason of an undue
use of powers and non-fulfillment of the
obligations which are his;
(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;
(7) For those arising by reason of his
voluntarily entering a port other than
that of his destination;
(8) For those arising by reason of nonobservance
of the provisions contained
in the regulations on situation of lights

and maneuvers for the purpose of

preventing collisions [Art. 618].
B.2. EXCEPTIONS TO LIMITED LIABILITY
The Doctrine of Limited Liability
(Hypothecary Rule)
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 the guaranty
for their settlement.
It has its origin by reason of the conditions
and risks attending maritime trade in its
earliest years when such trade was replete
with innumerable and unknown hazards
since vessels had to go through largely
uncharted waters to ply their trade. It was
designed to offset such adverse conditions
and to encourage people and entities to
venture into maritime commerce despite
the risks and the prohibitive cost of
shipbuilding.
Thus, the liability of the vessel owner and
agent arising from the operation of such
vessel were confined to the vessel itself, its
equipment, freight, and insurance, if any,
which limitation served to induce capitalists
into effectively wagering their resources
against the consideration of the large
profits attainable in the trade [Aboitiz
Shipping Corp. v. General Accident Fire and
Life Assurance Corp. (1993)].
Thus, under the doctrine of abandonment:
(1) The agent shall be civilly liable for the
indemnities in favor of third persons
which arise from the conduct of the
captain in the care of the goods which
the vessel carried, but he may exempt
himself therefrom by abandoning the
vessel with all her equipment and the
freight he may have earned during the
voyage [Art. 587];
(2) The owners of a vessel shall be civilly
liable in the proportion of their
contribution to the common fund, for
the results of the acts of the captain,
referred to in Art. 587. Each part owner
may exempt himself from this liability
by the abandonment before a notary of
the part of the vessel belonging to him
[Art. 590].
(3) In case of collision, the liability of the
ship owner shall be understood as
limited to the value of the vessel with all
her appurtenances and all the freight
earned during the voyage [Art. 837].
(4) If the vessel and her freight should be
totally lost, by reason of capture or
wreck, all rights of the crew to demand
any wages whatsoever shall be
extinguished, as well as the agent for
the recovery of the advances made [Art.
643].
If the ship owner or agent may in any way be
held civilly liable at all for injury to or death
of passengers arising from the negligence
of the captain in cases of collisions or
shipwrecks, his liability is merely coextensive
with his interest in the vessel such
that a total loss thereof results in its
extinction. This is based on the exclusively
“real and hypothecary nature” of maritime
law, which operates to limit such liability to
the value of the vessel, or to the insurance
thereon, if any. [Yangco v. Laserna (1941)]
Exceptions:
(1) Claims under the Workmen’s
Compensation Act [Abueg v. San Diego];
(2) Expenses for repairing, provisioning and
equipping the vessel;
(3) There is an actual finding of negligence
on the part of the vessel owner or agent
[Aboitiz Shipping v. General Accident Fire
and Life Assurance Corp. (1993)];
(4) Vessel is insured, to the extent of the
insurance proceeds [Vasquez v. CA
(1985)];
(5) There was no total loss;
(6) Collision between two negligent vessels.