MARITIME COMMERCE TIONS | L. CHARACTERISTICS OF MARITIME TRANSAC’ merce, a vessel is essentially | 1. “Real” — Under Art, 585 of Code ele Supreme Court hag recause it is moval ee Sao ‘transactions as a real in es ie ‘i oi ce ee similar to transactions over real property with ee n. Rubiso v. Rivera, 37 third persons, which are effected through registration. 7 Phil. 72 (1918). Luzon Stevedoring Corp. v. Court of Appeals 156 SCRA 169 (1987) Evidence ofthe ‘real nature" of Maritime Law is shown by: (@) Limitation of lability of shipowner or ship agent ‘Value of vessel and freight money; and (b) Rightto retain cargo, embargo, and detention of vessel even in cases where ordinary civil law would not allow more than a personal action against debtor. to actual Grescent Petroleum v. MIV Lok Maheshwari 474 SCRA 623 (2005) Contracts involving Supplying Vessels Maritime in Nature — Local courts would have maritime jurisdiction over a contract for furnishing supplies to vessels, which is maritime in nature and within admiralty jurisciction, which may be filed before Philippine courts through an action Jn em or quasi in rem or an action in personarn. “Hypothecary” — Under Art. 587 of Code of Commerce, in case of maritime transactions, shipowner’s liability is limited to the vessel itself: If vessel sinks, generally the liailly of shipowner is extinguished, even if he may have other properties. Luzon Stevedoring Corp. v. Court of Appeals 156 SCRA 169 (1987) The real and hypothecary nature of the liability of shipowner or agent under in the Code of Commerce had ts origin from the prevailing conditions 92MARITIME COMMERCE any; if they abandor ipment and freight, or insurance, if Woe extinguished. Tene esse: equipment, and freight, thei ability Under At. 837 of Code of Corn Smut lst, the hypothecary nature agent abandons the vessel? it M2! BPply unless shipowner or Monarch Insurance v. Court of Appeals - 333 SCRA 1 (2000) aula N asst, lab” expresas natal "ned Lbity Rule Shipowners or agents fabliy is merely co-xtensive with his interest in the vessel, such tha afta loss ofthe vessel rests in the liabitys extinction The vests total destruction extinguishes martime liens because there is no longer any res to which they can attach. The Limited Liabilty Rule in Maritime Law has not been rendered obsolete by the advances in modem technologies which have considerably lessened the risks involved in maritime trade, and the courts shall continue to apply the said rule in appropriate cases. Dela Torre v. Court of Appeals 653 SCRA 714 (2011) ‘The “Limited Liabilty Rule” pertains to the real and hypothecary doctrine in Maritime Law where the shipowner or ship agent's liability is held as merely co-extensive with his interest in the vessel such that a total joss thereof results in the libilty’s extinction. The rule is provided in Arts. 587, 590, and 837 of Code of Commerce. ‘The only person who could avail ofthe Limited Liability Rule is the shipowner — he is the very person whom the Rule has been conceived to protect — the charterer cannot invoke this as a defense. Since the shipowner isthe one who Is supposed o be supported and encouraged to pursue maritime commerce, it would be absurd to apply the rule against firm who. in the first place, should be the one benefiting from it. EXCEPTIONS TO HYPOTHECARY NATURE Monarch Insurance v. Court of Appeals, 333 SCRA 71 (2000) “The “Limited Liabildy Rulo”is subject tothe folowing exceptions {e) Where passenger's inury or death is due either to: {) Ship owner's fait; or (i) Concurring negligence of ship ‘owner and captain (b) Where the vessel i insured: and 93COMMERCIAL LAW REVIEW (2) Inworkmen's compensation claims. Article 687 limits shipowner's liability if the vessel is abandoned; However, the limitation applies only to situations where the fault or ‘negligence is committed solely by the captain. In cases where the shipowner is also negligent, Art. 587 will not apply, and such a situation will be covered by Civil Code provisions on common carriers. Thus, when carrier fails to comply with its duty to maintain the vessel in seaworthy condition, the doctrine cannot be made to apply to limit the carrier's liability {his pro rata shares in the insurance proceeds. |. When the Shipowner Is at Fault Manila Steamship v. Abdulhaman 100 Phil. 32 (1956) Abdulhaman bought a submarine chaser of World War II vintage, which he converted into a passenger vessel. The chaser, being at fault, collided with a new steel vessel of Manila Steamship Co. and sank. Manila ‘Steamship sued to recover damages as Abdulhaman had other properties. ‘Abdulhaman put up the defense that his liability was extinguished by the loss of the chaser. It was proven that the chaser, being of a certain tonnage, should have been commanded by one having the qualifications ‘of captain and not a mere patron. Held: Abdulhaman is stil liable, The hypothecary nature will not apply when the shipowneris personally at fault due to lack of proper equipment, OF of proper technica training ofthe oficers and crew. Philamgen v. Court of Appeals 273 SCRA 262 (1997) Although ship agent is liable for captain's negligent act in the care of loaded goods, this liability can be limited through abandonment of the vessel, is equipment and freightage as provided in Art. 587. However, the international rule is thatthe right of abandonment as legal limitations of a shipowners liability, does not apply to cases where the injury or average was occasioned by the shipowner’s own fault. Art. 587 speaks only of situations were the fault or negligence is committed solely by the captain; ‘where shipowner is likewise to be blamed, Art. 587 will not apply. ‘Negros Navigation v. Court of Appeals 281 SCRA 534 (1997) Well-entrenched rule is that a shipowner may be held liable for injuries to passengers notwithstanding the real and hypothecary nature of Maritime Law, iffautt can be attnbuted to the shipowner. "Chua Yok Hong «AC, 168 SCRA 109 (1988),TLoadstar Sipping v. Court of Appeals CA’ MARITIME COMMERCE Ce ‘Sntral Shipping Co. v, insurance Co. of NA. 437 SCRA 511 (2004) oat was lost at sea due to monsoon and the 98. Can shipowner be excused from lability for 80d on fortuitous event? Held: No. Monsoon seasonal The vessel ca improper securing of he the loss of the vessel ba: encountered was not unforeseeable as it is @ occurre captain and his enoy con not constitute fortuitous event — ship doctrine of lime tek anticipated the pers ofthe soa. The Sere na lal does nat apply to stations in wich the oss {o the concurrent negligence of the shipowner and the captain. “Closer supervis could supervision on the i prevented this fatal miscatuaton= SmPowner = APQ Shipmanagement Co., Ltd. v. Casefias i: 725 SCRA 108 (2014) faving incomplete documents for the vessel's operation renders it Unseaworthy. Wha seawortinoss fs commonly equated wth he physical aspect and condition of the vessel for voyage as its ability to withstand the rigors of the sea, it must not be forgotten that a vessel should be ‘armed with the necessary documents required by the maritime rules and regulations, both local and intemational. Seaworthiness extends to cover the documents required to ensure that vessel can enter and leave ports without problems. When the Vessel Is Not Seaworthy ‘Trans-Asia Shipping Lines v. Court of Appeals 254 SCRA 260 (1996) Before commencing a contracted voyage, carrier undertook some repairs on vessel's two engines. Even before it could finish these repairs, it allowed vessel to leave port of origin on only one functioning engine, instead of two. Even lone functioning engine was not in perfect condi a it eventually conked out. Plainly, vessel was unseaworthy even before Voyage began. To be seaworthy, vessel must be adequately equipped for voyage and manned with a sufficient number of competent officers and cron Failure of common carrier to maintain vessel in seaworthy condition ‘eeclear breach ofits duty under Art. 1755 of Cl Code, which binds carier to carry passengers safely as far as human care and foresight could provide, using the utmost diigence ofa very cautious person, wth due regard for al the circumstances 1,915 SORA 39 (1999), 95