Laws on Transportation and Public Utilities

Search for more eCodals

Act No 2616 An Act on Salvage and Rendering of Assistance to Vessels and Cargoes

February 04, 1916

AN ACT ON SALVAGE AND RENDERING OF ASSISTANCE TO VESSELS AND CARGOES.

By authority of the United States, be it enacted by the Philippine Legislature, that:

SECTION 1. When, in case of shipwreck, the vessel or its cargo shall be beyond the control of the crew, or shall have been abandoned by them, and picked up and conveyed to a safe place by other persons, the latter shall be entitled to a reward for the salvage.

Those who, not being included in the above paragraph, assist in saving a vessel or its cargo from shipwreck, shall be entitled to a like reward.

SEC. 2. If the captain of the vessel, or the person acting in his stead, is present, no one shall take from the sea, or from the shores or coasts, merchandise or effects proceeding from a shipwreck, or proceed to the salvage of the vessel, without the consent of such captain or person acting in his stead.

SEC. 3. He who shall save or pick up a vessel or merchandise at sea, in the absence of the captain of the vessel, owner, or a representative of either of them, they being unknown, shall convey and deliver such vessel or merchandise, as soon as possible, to the collector of customs, if the port has a collector, and otherwise to the provincial treasurer or municipal president.

SEC. 4. After the salvage is accomplished, the owner or his representative shall have a right to the delivery of the vessel or things saved, provided that he pays, or gives a bond to secure, the expenses and the proper reward.

The amount and sufficiency of the bond, in the absence of agreement, shall be determined by the collector of customs or by the judge of Court of First Instance of the province in which the things saved may be found.

SEC. 5. The collector of customs, provincial treasurer, or municipal president, to whom a salvage is reported, shall order:

(a) That the things saved be safeguarded and inventoried.

(b) The sale at public auction of the things saved wmch may be in danger of immediate loss or of those whose conservation is evidently prejudicial to the interests of the owner, when no objection is made to such sale.

(c) The advertisement within thirty days subsequent to the salvage, in one of the local newspapers or in the nearest newspaper published, of all the details of the disaster, with a statement of the marks:and number of the effects, requesting all interested persons to make their claims.

SEC. 6. If, while the vessel or thing saved are at the disposition of the authorities, the owner or his representative shall claim them, such authorities shall order their delivery to such owner or his representative, provided that there is no controversy over their value, and a bond is given by the owner or his representative to secure the payment of the expenses and the proper reward. Otherwise, the delivery shall not be made until this matter is decided by the Court of First Instance of the province.

SEC. 7. No claim being presented in the three months subsequent to the publication of the advertisements prescribed in subsection (c) of section five, the things saved shall be sold at public auction, and their proceeds, after deducting the expenses and the proper reward, shall be deposited in the Insular Treasury. If three years shall pass without anyone claiming it, one-half of the deposit shall be adjudged to him who saved the things, and the other half to the Insular Government.

SEC. 8. The following shall have no right to a reward for salvage or assistance:

(a) The crew of the vessel shipwrecked or which was in danger of shipwreck;

(b) He who shall have commenced the salvage in spite of opposition of the captain or of his representative; and

SEC. 9. If, during the danger, an agreement is entered into concerning the amount of the reward for salvage or assistance, its validity may be impugned because it is excessive, and it may be required to be reduced to an amount proportionate to the circumstances.

SEC. 10. In a case coming under the last preceding section, as well as in the absence of an agreement, the i reward for salvage or assistance shall be fixed by the Court of First Instance of the province where the things salvaged are found, taking into account principally the expenditures made to recover or save the vessel or the cargo or both, the zeal demonstrated, trie time employed, the services rendered, the excessive expenses occasioned, the number of persons who aided, the danger to which they and their vessels were exposed, as well as that which menaced the things recovered or salvaged, and the value of such things after deducting the expenses.

SEC. 11. From the proceeds of the sale of the things saved shall be deducted, first, the expenses of their custody, conservation, advertisement, and auction, as well as whatever taxes or duties they should pay for their

entrance; then there shall be deducted the expenses of salvage; and from the net amount remaining there shall be taken the reward for the salvage or assistance, which shall not exceed fifty per cent of such amount remaining.

SEC. 12. If in the salvage or in the rendering of assistance different persons shall have intervened, the reward shall be divided between them in proportion to the services which each one may have rendered, and in case of doubt, in equal parts.

Those who, in order to save persons, shall have been exposed to the same dangers, shall also have a right to participation in the reward.

SEC. 13. If a vessel or its cargo shall have been assisted or saved, entirely or partially, by another vessel, the reward for salvage or for assistance shall be divided between the owner, the captain, and the remainder of the crew of the latter vessel, so as to give the owner a half, the captain a fourth, and all the remainder of the crew the other fourth of the reward, in proportion to their respective salaries, in the absence of an agreement to the contrary. The expenses of salvage, as well as the reward for salvage or assistance, shall be a charge on the things salvaged or their value.

SEC. 14. This Act shall take effect on its passage.

Enacted, February 4, 1916.

CA No 65 Carriage of Goods by Sea Act

October 22, 1936

AN ACT TO DECLARE THAT PUBLIC ACT NUMBERED FIVE HUNDRED AND TWENTY-ONE, KNOWN AS "CARRIAGE OF GOODS BY SEA ACT," ENACTED BY THE SEVENTY-FOURTH CONGRESS OF THE UNITED STATES, BE ACCEPTED, AS IT IS HEREBY ACCEPTED BY THE NATIONAL ASSEMBLY

WHEREAS, the Seventy-fourth Congress of the United States enacted Public Act Numbered Five hundred and twenty-one, entitled: "Carriage of Goods by Sea Act";

WHEREAS, the primordial purpose of the said Act is to bring about uniformity in ocean bills of lading and to give effect to the Brussels Treaty, signed by the United States with other powers;

WHEREAS, the Government of the United States has left it to the Philippine Government to decide whether or not the said Act shall apply to carriage of goods by sea in foreign trade to and from Philippine ports;

WHEREAS, the said Act of Congress contains advanced legislation, which is in consonance with modern maritime rules and the practices of the great shipping countries of the world;

WHEREAS, shipping companies, shippers, and marine insurance companies, and various chambers of commerce, which are directly affected by such legislation, have expressed their desire that said Congressional Act be made applicable and extended to the Philippines; therefore, be it enacted by the National Assembly of the Philippines:

SECTION 1. That the provisions of Public Act Numbered Five hundred and twenty-one of the Seventy-fourth Congress of the United States, approved on April sixteenth, nineteen hundred and thirty-six, be accepted, as it is hereby accepted to be made applicable to all contracts for the carriage of goods by sea to and from Philippine ports in foreign trade: Provided, That nothing in this Act shall be construed as repealing any existing provision of the Code of Commerce which is now in force, or as limiting its application.

SECTION 2. This Act shall take effect upon its approval.

Approved: October 22, 1936

AN ACT RELATING TO THE CARRIAGE OF GOODS BY SEA

Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled, That every bill of lading or similar document of title which is evidence of a contract for the carriage of goods by sea to or from ports of the United States, in foreign trade, shall have effect subject to the provisions of this Act.

TITLE I

SECTION 1. When used in this Act —

(a) The term "carrier" includes the owner or the charterer who enters into a contract of carriage with a shipper.

(b) The term "contract of carriage" applies only to contracts of carriage covered by a bill of lading or any similar document of title, insofar as such document relates to the carriage of goods by sea, including any bill of lading or any similar document as aforesaid issued under or pursuant to a charter party from the moment at which such bill of lading or similar document of title regulates the relations between a carrier and a holder of the same.

(c) The term "goods" includes goods, wares, merchandise, and articles of every kind whatsoever, except live animals and cargo which by the contract of carriage is stated as being carried on deck and is so carried.

(d) The term "ship" means any vessel used for the carriage of goods by sea.

(e) The term "carriage of goods" covers the period from the time when the goods are loaded on to the time when they are discharged from the ship.

Risks

SECTION 2. Subject to the provisions of section 6, under every contract of carriage of goods by sea, the carrier in relation to the loading, handling, stowage, carriage, custody, care, and discharge of such goods, shall be subject to the responsibilities and liabilities and entitled to the rights and immunities hereinafter set forth.

Responsibilities and Liabilities

SECTION 3. (1) The carrier shall be bound, before and at the beginning of the voyage, to exercise due diligence to —

(a) Make the ship seaworthy;

(b) Properly man, equip, and supply the ship;

(c) Make the holds, refrigerating and cooling chambers, and all other parts of the ship in which goods are carried, fit and safe for their reception, carriage and preservation.

(2) The carrier shall properly and carefully load, handle, stow, carry, keep, care for, and discharge the goods carried.

(3) After receiving the goods into his charge the carrier, or the master or agent of the carrier, shall, on demand of the shipper, issue to the shipper a bill of lading showing among other things —

(a) The leading marks necessary for identification of the goods as the same are furnished in writing by the shipper before the loading of such goods starts, provided such marks are stamped or otherwise shown clearly upon the goods if uncovered, or on the cases or coverings in which such goods are contained, in such a manner as should ordinarily remain legible until the end of the voyage.

(b) Either the number of packages or pieces, or the quantity or weight, as the case may be, as furnished in writing by the shipper.

(c) The apparent order and condition of the goods: Provided, That no carrier, master, or agent of the carrier, shall be bound to state or show in the bill of lading any marks, number, quantity, or weight which he has reasonable ground for suspecting not accurately to represent the goods actually received, or which he has had no reasonable means of checking.

(4) Such a bill of lading shall be prima facie evidence of the receipt by the carrier of the goods as therein described in accordance with paragraphs (3) (a),(b),and (c) of this section: Provided, That nothing in this Act shall be construed as repealing or limiting the application of any part of the Act, as amended, entitled "An Act relating to bills of lading in interstate and foreign commerce," approved August 29, 1916 (U.S.C., title 49, secs. 81-124),commonly known as the "Pomerene Bills of Lading Act."

(5) The shipper shall be deemed to have guaranteed to the carrier the accuracy at the time of shipment of the marks, number, quantity, and weight, as furnished by him; and the shipper shall indemnify the carrier against all loss, damages, and expenses arising or resulting from inaccuracies in such particulars. The right of the carrier to such indemnity shall in no way limit his responsibility and liability under the contract of carriage to any person other than the shipper.

(6) Unless notice of loss or damage and the general nature of such loss or damage be given in writing to the carrier or his agent at the port of discharge before or at the time of the removal of the goods into the custody of the person entitled to delivery thereof under the contract of carriage, such removal shall be prima facie evidence of the delivery by the carrier of the goods as described in the bill of lading. If the loss or damage is not apparent, the notice must be given within three days of the delivery.

Said notice of loss or damage may be endorsed upon the receipt for the goods given by the person taking delivery thereof.

The notice in writing need not be given if the state of the goods has at the time of their receipt been the subject of joint survey or inspection.

In any event the carrier and the ship shall be discharged from all liability in respect of loss or damage unless suit is brought within one year after delivery of the goods or the date when the goods should have been delivered: Provided, That if a notice of loss or damage, either apparent or concealed, is not given as provided for in this section, that fact shall not affect or prejudice the right of the shipper to bring suit within one year after the delivery of the goods or the date when the goods should have been delivered.

In the case of any actual or apprehended loss or damage, the carrier and the receiver shall give all reasonable facilities to each other for inspecting and tallying the goods.

(7) After the goods are loaded the bill of lading to be issued by the carrier, master, or agent of the carrier to the shipper shall, if the shipper so demands, be a "shipped" bill of lading: Provided, That if the shipper shall have previously taken up any document of title to such goods, he shall surrender the same as against the issue of the "shipped" bill of lading, but at the option of the carrier such document of title may be noted at the port of shipment by the carrier, master, or agent with the name or names of the ship or ships upon which the goods have been shipped and the date or dates of shipment, and when so noted the same shall for the purpose of this section be deemed to constitute a "shipped" bill of lading.

(8) Any clause, covenant, or agreement in a contract of carriage relieving the carrier or the ship from liability for loss or damage to or in connection with the goods, arising from negligence, fault, or failure in the duties and obligations provided in this section, or lessening such liability otherwise than as provided in this Act, shall be null and void and of no effect. A benefit of insurance in favor of the carrier, or similar clause, shall be deemed to be a clause relieving the carrier from liability.

Rights and Immunities

SECTION 4. (1) Neither the carrier nor the ship shall be liable for loss or damage arising or resulting from unseaworthiness unless caused by want of due diligence on the part of the carrier to make the ship seaworthy, and to secure that the ship is properly manned, equipped, and supplied, and to make the holds, refrigerating and cool chambers, and all other parts of the ship in which goods are carried fit and safe for their reception, carriage, and preservation in accordance with the provisions of paragraph (1) of section 3. Whenever loss or damage has resulted from unseaworthiness, the burden of proving the exercise of due diligence shall be on the carrier or other persons claiming exemption under this section.

(2) Neither the carrier nor the ship shall be responsible for loss or damage arising or resulting from —

(a) Act, neglect, or default of the master, mariner, pilot, or the servants of the carrier in the navigation or in the management of the ship;

(b) Fire, unless caused by the actual fault or privity of the carrier;

(d) Act of God;

(e) Act of war,

(f) Act of public enemies;

(g) Arrest or restraint of princes, rulers, or people, or seizure under legal process;

(h) Quarantine restrictions;

(i) Act or omission of the shipper or owner of the goods, his agent or representative;

(j) Strikes or lockouts or stoppage or restraint of labor from whatever cause, whether partial or general; Provided, That nothing herein contained shall be construed to relieve a carrier from responsibility for the carrier's own acts;

(k) Riots and civil commotions;

(l) Saving or attempting to save life or property at sea;

(m) Wastage in bulk or weight or any other loss or damage arising from inherent defect, quality, or vice of the goods;

(n) Insufficiency of packing;

(o) Insufficiency or inadequacy of marks;

(p) Latent defects not discoverable by due diligence; and

(q) Any other cause arising without the actual fault and privity of the carrier and without the fault or neglect of the agents or servants of the carrier, but the burden of proof shall be on the person claiming the benefit of this exception to show that neither the actual fault or privity of the carrier nor the fault or neglect of the agents or servants of the carrier contributed to the loss or damage.

(3) The shipper shall not be responsible for loss or damage sustained by the carrier or the ship arising or resulting from any cause without the act, fault, or neglect of the shipper, his agents, or his servants.

(4) Any deviation in saving or attempting to save life or property at sea, or any reasonable deviation shall not be deemed to be an infringement or breach of this Act or of the contract of carriage, and the carrier shall not be liable for any loss or damage resulting therefrom: Provided, however, That if the deviation is for the purpose of loading or unloading cargo or passengers it shall, prima facie, be regarded as unreasonable.

(5) Neither the carrier nor the ship shall in any event be or become liable for any loss or damage to or in connection with the transportation of goods in an amount exceeding $500 per package lawful money of the United States, or in case of goods not shipped in packages, per customary freight unit, or the equivalent of that sum in other currency, unless the nature and value of such goods have been declared by the shipper before shipment and inserted in the bill of lading. This declaration, if embodied in the bill of lading, shall be prima facie evidence, but shall not be conclusive on the carrier.

By agreement between the carrier, master, or agent of the carrier, and the shipper another maximum amount than that mentioned in this paragraph may be fixed: Provided, That such maximum shall not be less than the figure above named. In no event shall the carrier be liable for more than the amount of damage actually sustained.

Neither the carrier nor the ship shall be responsible in any event for loss or damage to or in connection with the transportation of the goods if the nature or value thereof has been knowingly and fraudulently misstated by the shipper in the bill of lading.

(6) Goods of an inflammable, explosive, or dangerous nature to the shipment whereof the carrier, master or agent of the carrier, has not consented with knowledge of their nature and character, may at any time before discharge be landed at any place or destroyed or rendered innocuous by the carrier without compensation, and the shipper of such goods shall be liable for all damages and expenses directly or indirectly arising out of or resulting from such shipment. If any such goods shipped with such knowledge and consent shall become a danger to the ship or cargo, they may in like manner be landed at any place, or destroyed or rendered innocuous by the carrier without liability on the part of the carrier except to general average, if any.

Surrender of Rights and Immunities and Increase of Responsibilities and Liabilities

SECTION 5. A carrier shall be at liberty to surrender in whole or in part all or any of his rights and immunities or to increase any of his responsibilities and liabilities under this Act, provided such surrender or increase shall be embodied in the bill of lading issued to the shipper.

The provisions of this Act shall not be applicable to charter parties; but if bills of lading are issued in the case of a ship under a charter party, they shall comply with the terms of this Act. Nothing in this Act shall be held to prevent the insertion in a bill of lading of any lawful provision regarding general average.

Special Conditions

SECTION 6. Notwithstanding the provisions of the preceding sections, a carrier, master or agent of the carrier, and a shipper shall, in regard to any particular goods be at liberty to enter into any agreement in any terms as to the responsibility and liability of the carrier for such goods, and as to the rights and immunities of the carrier in respect of such goods, or his obligation as to seaworthiness (so far as the stipulation regarding seaworthiness is not contrary to public policy),or the care or diligence of his servants or agents in regard to the loading, handling, stowage, carriage, custody, care, and discharge of the goods carried by sea: Provided, That in this case no bill of lading has been or shall be issued and that the terms agreed shall be embodied in a receipt which shall be a non-negotiable document and shall be marked as such.

Any agreement so entered into shall have full legal effect: Provided, That this section shall not apply to ordinary commercial shipments made in the ordinary course of trade but only to other shipments where the character or condition of the property to be carried or the circumstances, terms, and conditions under which the carriage is to be performed are such as reasonably to justify a special agreement.

SECTION 7. Nothing contained in this Act shall prevent a carrier or a shipper from entering into any agreement, stipulation, condition, reservation, or exemption as to the responsibility and liability of the carrier or the ship for the loss or damage to or in connection with the custody and care and handling of goods prior to the loading on and subsequent to the discharge from the ship on which the goods are carried by sea.

SECTION 8. The provisions of this Act shall not affect the rights and obligations of the carrier under the provisions of the Shipping Act, 1916, or under the provisions of sections 4281 to 4289, inclusive, of the Revised Statutes of the United States, or of any amendments thereto; or under the provisions of any other enactment for the time being in force relating to the limitation of the liability of the owners of seagoing vessels.

TITLE II

SECTION 9. Nothing contained in this Act shall be construed as permitting a common carrier by water to discriminate between competing shippers similarly placed in time and circumstances, either (a) with respect to their right to demand and receive bills of lading subject to the provisions of this Act; or (b) when issuing such bills of lading, either in the surrender of any of the carrier's rights and immunities or in the increase of any of the carrier's responsibilities and liabilities pursuant to section 5, title I, of this Act; or (c) in any other way prohibited by the Shipping Act, 1916, as amended.

SECTION 10. Section 25 of the Interstate Commerce Act is hereby amended by adding the following proviso at the end of paragraph 4 thereof: "Provided, however, That insofar as any bill of lading authorized hereunder relates to the carriage of goods by sea, such bill of lading shall be subject to the provisions of the Carriage of Goods by Sea Act."

SECTION 11. Where under the customs of any trade the weight of any bulk cargo inserted in the bill of lading is a weight ascertained or accepted by a third party other than the carrier or the shipper, and the fact that the weight is so ascertained or accepted is stated in the bill of lading, then, notwithstanding any thing in this Act, the bill of lading shall not be deemed to be prima facie evidence against the carrier of the receipt of goods of the weight so inserted in the bill of lading, and the accuracy thereof at the time of shipment shall not be deemed to have been guaranteed by the shipper.

SECTION 12. Nothing in this Act shall be construed as superseding any part of the Act entitled "An act relating to navigation of vessels, bills of lading, and to certain obligations, duties, and rights in connection with the carriage of property," approved February 13, 1893, or of any other law which would be applicable in the absence of this Act, insofar as they relate to the duties, responsibilities, and liabilities of the ship or carrier prior to the time when the goods are loaded on or after the time they are discharged from the ship.

SECTION 13. This Act shall apply to all contracts for carriage of goods by sea to or from ports of the United States in foreign trade. As used in this Act the term "United States" includes its districts, territories, and possessions: Provided, however, That the Philippine Legislature may by law exclude its application to transportation to or from ports of the Philippine Islands. The term "foreign trade" means the transportation of goods between the ports of the United States and ports of foreign countries. Nothing in this Act shall be held to apply to contracts for carriage of goods by sea between any port of the United States or its possessions, and any other port of the United States or its possession: Provided, however, That any bill of lading or similar document of title which is evidence of a contract for the carriage of goods by sea between such ports, containing an express statement that it shall be subject to the provisions of this Act, shall be subjected hereto as fully as if subject hereto by the express provisions of this Act: Provided, further, That every bill of lading or similar document of title which is evidence of a contract for the carriage of goods by sea from ports of the United States, in foreign trade, shall contain a statement that it shall have effect subject to the provisions of this Act.

SECTION 14. Upon the certification of the Secretary of Commerce that the foreign commerce of the United States in its competition with that of foreign nations is prejudiced by the provisions, or any of them, of Title I of this Act, or by the laws of any foreign country or countries relating to the carriage of goods by sea, the President of the United States, may, from time to time, by proclamation, suspend any or all provisions of Title I of this Act for such periods of time or indefinitely as may be designated in the proclamation. The President may at any time rescind such suspension of Title I hereof, and any provisions thereof which may have been suspended shall thereby be reinstated and again apply to contracts thereafter made for the carriage of goods by sea. Any proclamation of suspension or rescission of any such suspension shall take effect on a date named therein, which date shall be not less than ten days from the issue of the proclamation.

Any contract for the carriage of goods by sea, subject to the provisions of this Act, effective during any period when title I hereof, or any part thereof, is suspended, shall be subject to all provisions of law now or hereafter applicable to that part of Title I which may have thus been suspended.

SECTION 15. This Act shall take effect ninety days after the date of its approval; but nothing in this Act shall apply during a period not to exceed one year following its approval to any contract for the carriage of goods by sea, made before the date on which this Act is approved, nor to any bill of lading or similar document of title issued, whether before or after such date of approval in pursuance of any such contract as aforesaid.

SECTION 16. This Act may be cited as the "Carriage of Goods by Sea Act."

Approved: April 16, 1936

Public Act No 521 Carriage of Goods by Sea Act

October 22, 1936

CARRIAGE OF GOODS BY SEA ACT

SECTION 1. That the provisions of Public Act No. 521 of the 7th Congress of the United States, approved on April 16, 1936, be accepted, as it is hereby accepted to be made applicable to all contracts for the carriage of goods by sea to and from Philippine ports in foreign trade: Provided, that nothing in this Act shall be construed as repealing any existing provision of the Code of Commerce which is now in force, or as limiting its application.

SECTION 2. This Act shall take effect upon its approval. (Approved October 22, 1936).

TITLE I

SECTION 1. When used in this Act —

(a) The term "carrier" includes the owner or the charterer who enters into a contract of carriage with a shipper.

(b) The term "contract of carriage" applies only to contracts of carriage by covered by a bill of lading or any similar document of title, insofar as such document relates to the carriage of goods by sea, including any bill of lading or any similar document as aforesaid issued under or pursuant to a character party from the moment at which such bill of lading or similar document of title regulates the relations between a carrier and a holder of the same.

(d) The term "ship" means any vessel used for the carriage of goods by sea.

(e) The term "carriage of goods" covers the period from the time when the goods are loaded to the time when they are discharged from the ship.

RISKS

SECTION 2. Subject to the provisions of Section 6, under every contract of carriage of goods by sea, the carrier in relation to the loading, handling, stowage,carriage, custody, care, and discharge of such goods shall be subject to the responsibilities and liabilities and entitled to the rights and immunities hereinafter set forth.

RESPONSIBILITIES AND LIABILITIES

SECTION 3. (1) The carrier shall be bound before and at the beginning of the voyage to exercise due diligence to —

(a) Make the ship seaworthy;

(b) Properly man, equip, and supply the ship;

(c) Make the holds, refrigerating and cooling chambers, and all other parts of the ship in which goods are carried, fit and safe for their reception, carriage, and preservation.

(2) The carrier shall properly and carefully load, handle, stow, carry, keep, care for, and discharge the goods carried.

(3) After receiving the goods into his carrier, or the master or agent of the carrier, shall, on demand of the shipper, issue to the shipper a bill of lading showing among other things —

(a) The loading marks necessary for identification of the goods as the same are furnished in writing by the shipper before the loading of such goods starts, provided such marks are stamped or otherwise shown clearly upon the goods if uncovered, in such a manner as should ordinarily remain legible until the end of the voyage.

(b) Either the number of packages or pieces, or the quantity or weight, as the case may be, as furnished in writing by the shipper.

(c) The apparent order and conditions of the goods: Provided, that no carrier, master, or agent of the carrier, shall be bound to state or show in the bill of lading any marks, number, quantity, or weight which he has reasonable ground for suspecting not accurately to represent the good actually received or which he has had no reasonable means of checking.

(4) Such a bill of lading shall be prima facie evidence of the receipt by the carrier of the goods as therein described in accordance with paragraphs (3) (a),(b),and (c),of this section: (The rest of the provision is not applicable to the Philippines).

(6) Unless notice or loss or damage and the general nature of such loss or damage by given in writing to the carrier or his agent at the port of discharge or at the time of the removal of the goods into the custody of the person entitled to delivery thereof under the contract of carriage, such removal shall be prima facie evidence of the delivery by the carrier of the goods as described in the bill of lading. If the loss or damage is not apparent, the notice must be given within three days ofthe delivery.

Said notice of loss or damage may be endorsed upon the receipt for the goods given by the person taking delivery thereof.

The notice in writing need not be given if the state of the goods has at the time of their receipt been the subject of joint survey or inspection.

In any event the carrier and the ship shall be discharged from all liability in respect of loss or damage unless suit is brought within one year after delivery of the goods or the date when the goods should have been delivered: Provided, that, if a notice of loss or damage, either apparent or concealed, is not given as provided for in this section, that fact shall not affect or prejudice the right of the shipper to bring suit within one year after the delivery of the goods or the date when the goods should have been delivered.

In the case of any actual or apprehended loss or damage, the carrier and the receiver shall give all reasonable facilities to each other for inspecting and tallying the goods.

(7) After the goods are loaded the bill of lading to be issued by the carrier, master, or agent of the carrier to the shipper shall if the shipper so demands, be a "shipped" bill of lading: Provided, that if the shipper shall have previously taken up any document of title to such goods, he shall surrender the same as against the issue of the "shipped" bill of lading, but at the option of the carrier such document of title may be noted at the port of shipment by the carrier, master, or agent with the name or names of the ship or ships upon which the goods have been shipped and the date or dates of shipment, and when so noted the same shall for the purpose of this section be deemed to constitute a "shipped" bill of lading.

(8) Any clause, covenant, or agreement in a contract of carriage relieving the carrier of the ship from liability for loss or damage to or in connection with the goods, arising from negligence, fault, or failure in the duties and obligations provide in this section or lessening such liability otherwise than as provided in this Act, shall be null and void and of no effect. A benefit of insurance in favor of the carrier, or similar clause, shall be deemed to be a clause relieving the carrier from liability.

RIGHTS AND IMMUNITIES

SECTION 4. (1) Neither the carrier nor the ship shall be liable for loss or damage arising or resulting from unseaworthiness unless caused by want of due diligence on the part of the carrier to make the ship seaworthy and to secure that the ship is properly manned, equipped, and supplied, and to make the holds, refrigerating and cooling chambers, and all other parts of the ship in which goods are carried fit and safe for their reception, carriage, and preservation, in accordance with the provisions of paragraph (1) of Section (3).Whenever loss or damage has resulted from unseaworthiness, the burden of proving the exercise of due diligence shall be on the carrier or other person claiming exemption under this section.

(2) Neither the carrier nor the ship shall be responsible for loss or damage arising or resulting from —

(a) Act, neglect, or default of the master, mariner, pilot, or the servants of the carrier in the navigation or in the management of the ship;

(b) Fire, unless caused by the actual fault or privity of the carrier;

(d) Act of God;

(e) Act of war;

(f) Act of public enemies;

(g) Arrest or restraint of princes, rulers, or people, or seizure under legal process;

(h) Quarantine restrictions;

(i) Act or omission of the shipper or owner of the goods, his agent or representative;

(j) Strikes or lockouts or stoppage or restraint of labor from whatever cause, whether partial or general: Provided, that nothing herein contained shall be construed to relieve a carrier from responsibility for the carrier's own acts;

(k) Riots and civil commotions;

(l) Saving or attempting to save life or property at sea;

(m) Wastage in bulk or weight or any other loss or damage arising from inherent defect, quality, or vice of the goods;

(n) Insufficiency or packing;

(o) Insufficiency or inadequacy of marks;

(p) Latent defects not discoverable by due diligence; and

(3) The shipper shall not be responsible for loss or damage sustained by the carrier or the ship arising or resulting from any cause without the act, or neglect of the shipper, his agents, or his servants.

(4) Any deviation in saving or attempting to save life or property at sea, or any reasonable deviation shall not be deemed to be an infringement or breach or this Act or of the contract of carriage, and carrier shall not be liable for any loss or damage resulting therefrom: Provided, however, that if the deviation is for the purpose of loading or unloading cargo or passengers it shall, prima facie,be regarded as unreasonable.

(5) Neither the carrier nor the ship shall in any event be or become liable for any loss or damage to or in connection with the transportation of goods in an amount exceeding $500 per package of lawful money of the United States, or in case of goods not shipped in packages, per customary freight unit, or the equivalent of that sum in other currency, unless the nature and value of such goods have been declared by the shipper before shipment and inserted in the bill of lading. This declaration, if embodied in the bill of lading, shall be prima facie evidence, but shall not be conclusive on the carrier.

By agreement between the carrier, master or agent of the carrier, and the shipper another maximum amount than that mentioned in this paragraph may be fixed: Provided, that such maximum shall not be less than the figure above named. In no event shall the carrier be liable for more than the amount of damage actually sustained.

Neither the carrier nor the ship shall be responsible in any event for loss damage to or in connection with the transportation of the goods if the nature or value thereof has been knowingly and fraudulently mis-stated by the shipper in the bill of lading.

(6) Goods of an inflammable, explosive, or dangerous nature to the shipment whereof, the carrier, master or agent of the carrier, has not consented with knowledge of their nature and character, may at any time before discharge be landed at any place or destroyed or rendered innocuous by the carrier without compensation, and the shipper of such goods shall be liable for all damages and expenses directly or indirectly arising out of or resulting from such shipment. If any such goods shipped with such knowledge and consent shall become a danger to the ship or cargo, they may in like manner be landed at any place, or destroyed or rendered innocuous by the carrier without liability on the part of the carrier except to general average if any.

SURRENDER OF RIGHTS AND IMMUNITIES AND INCREASE OF RESPONSIBILITIES AND LIABILITIES

SPECIAL CONDITIONS

SECTION 6. Notwithstanding the provisions of the preceding section, a carrier, master or agent of the carrier, and a shipper shall, in regard to any particular goods be at liberty to enter into any agreement in any terms as to the responsibility and liability of the carrier for such goods, and as to the rights and immunities of the carrier in respect to such goods, or his obligation to seaworthiness, (so far as the stipulation regarding seaworthiness is contrary to public policy),or the care or diligence of his servants or agents in regard to the loading, handling, stowage, carriage, custody, care and discharge of the goods carried by sea; provided, that in this case no bill of lading has been or shall be issued and that the terms agreed shall be a non-negotiable document and shall be marked as such.

Any agreement so entered into shall have full legal effect: Provided, that this section shall not apply to ordinary commercial shipments made in the ordinary course of trade but only to other shipments where the character or condition of the property to be carried or the circumstances, terms and conditions under which the carriage is to be performed are such as reasonably to justify a special agreement.

SECTION 8. The provisions of this Act shall not affect the rights and obligations of the carrier under the provisions of the Shipping Act, 1916, or under the provisions of Section 4281 to 4292, inclusive, of the Revised Statutes of the United States, or of any amendments thereto, or under the provisions of any other enactment for the time being in force relating to the limitation of the liability of the owners of seagoing vessels.

TITLE II

SECTION 9. Nothing contained in this Act shall be construed as permitting a common carrier by water to discriminate between competing shippers similarly placed in time and circumstances, either (a) with respect to their right to demand and receive bills of lading subject to the provisions of this Act; or (b) when issuing such bills of lading either in the surrender of any of the carrier's rights and immunities or in the increase of any of the carrier's responsibilities and liabilities pursuant to Section 5, Title I, of this Act; (c) in any other way prohibited by the Shipping Act, 1916, as amended.

SECTION 10. (Not applicable to the Philippines.)

SECTION 11. When under the custom of any trade the weight of any bulk cargo inserted in the bill of lading is a weight ascertained or accepted by a third party other than the carrier or the shipper and the fact that the weight as ascertained or accepted is stated in the bill of lading, then notwithstanding anything in this Act, the bill of lading shall not be deemed to be prima facie evidence against the carrier of the receipt of goods of the weight so inserted in the bills of lading, and the accuracy thereof at the time of shipment shall not be deemed to have been guaranteed by the shipper.

SECTION 12. (Not applicable to the Philippines.)

SECTION 13. This Act shall apply to all contracts for carriage of goods by seas to or from ports of the United States in foreign trade. As used in this Act the term "United States" includes its districts, territories, and possessions: Provided, however, that the Philippine Legislature may by law exclude its application to transportation to or from ports of the Philippine Islands. The term "foreign trade" means the transportation of goods between the ports of the United States and ports of foreign countries. Nothing in this Act shall be held to apply to contracts for carriage of goods by sea between any port of the United States or its possessions and any other port of the United States or its possessions: Provided, however, that any bill of lading or similar document of the title which is evidence of a contract for the carriage of goods by sea between such ports, containing an express statement that it shall be subject to the provisions of this Act; shall be subjected hereto as fully as if subject hereto by the express provisions of this Act: Provided, further, that every bill of lading or similar document of title which is evidence of a contract for the carriage of goods by sea from ports of the United States in foreign trade, shall contain a statement that it shall have effect subject to the provisions of this Act.

SECTION 14. Upon the certification of the Secretary of Commerce that the foreign commerce of the United States in its competition with that of foreign nations is prejudiced by the provisions, or any of them, of the Title I of this Act, or by the laws of any foreign country or countries relating to the carriage of goods by sea, the President of the United States may, from time to time by proclamation, suspend any or all provisions of Title I of this Act for such periods of time or indefinitely as may be designated in the proclamation. The President may at any time rescind such suspension of Title I hereof, and any provisions thereof which may have been suspended shall thereby be reinstated and again apply to contracts thereafter made for carriage of goods by sea. Any proclamation of suspension or rescission of any such suspension shall take effect on the date named therein, which date shall be not less than ten days from the issue of the proclamation.

Any contract for the carriage of goods by sea, subject to the provisions of this Act, effective during any period when Title I hereof, or any part thereof, is suspended, shall be subject to all provisions of law now or hereafter applicable to that part of Title I which may have thus been suspended.

SECTION 15. This Act shall take effect ninety days after the date of its approval; but nothing in this Act shall apply during a period not to exceed one year following its approval to any contract for the carriage of goods by sea, made before the date on which this Act is approved nor to any bill of lading or similar document of title issued, whether before or after such date of approval in pursuance of any such contract as aforesaid.

SECTION 16. This Act may be cited as the "Carriage of Goods by Sea Act."

Approved: April 16, 1936

RA No 10668 Liberalization of Cabotage Law

July 21, 2015

AN ACT ALLOWING FOREIGN VESSELS TO TRANSPORT AND CO-LOAD FOREIGN CARGOES FOR DOMESTIC TRANSSHIPMENT AND FOR OTHER PURPOSES

Be it enacted by the Senate and House of Representatives of the Philippines in Congress assembled:

SECTION 1. Declaration of Policy. – It is the policy of the State:

(a) To assist importers and exporters in enhancing their competitiveness in light of intensifying international trade; and

(b) To lower the cost of shipping export cargoes from Philippine ports to international ports and import cargoes from international ports for the benefit of the consumers.

SEC. 2. Definition of Terms. – As used in this Act:

(a) Co-loading refers to agreements between two (2) or more international or domestic sea carriers whereby a sea carrier bound for a specified destination agrees to load, transport, and unload the container van or cargo of another carrier bound for the same destination;

(b) Container van refers to a standardized reusable steel box used for the safe, efficient and secure storage and movement of materials and products within an intermodal freight transport system where the cargo carried in the container van can be moved from one (1) mode of transport to another without having to unload or reload the contents of such container van;

(c) Domestic cargo refers to goods, articles, commodities or merchandise which are intended to be shipped from one (1) Philippine port to another Philippine port, even if, in the carriage of such cargo, there may be an intervening foreign port;

(d) Export cargo refers to goods, articles, commodities or merchandise carried in foreign vessels and duly declared before the Bureau of Customs at the port of origin as cargoes for shipment to a port outside the jurisdiction of the Philippines;

(e) Foreign cargo refers to import or export cargo carried by a foreign vessel;

(f) Foreign container van refers to a container van, whether empty or loaded with foreign cargo, which belongs to a foreign vessel;

(g) Foreign port refers to any seaport outside the jurisdiction of the Philippines;

(h) Foreign ship operator refers to a citizen, partnership, or corporation, whether foreign or local, owning or chartering a foreign vessel;

(i) Foreign vessel refers to a ship registered or documented in a flag registry other than that of the Philippines;

(j) Import cargo refers to goods, articles, commodities or merchandise of foreign origin carried in a foreign vessel which are intended to be cleared before the Bureau of Customs for delivery to the port of final destination within the jurisdiction of the Philippines;

(k) Philippine port refers to any port within the Philippines authorized by a government contract to handle domestic import or export cargo;

(l) Port Authorities refer to entities engaged in the development and operation of seaports including, but not limited to, Philippine Ports Authority, Cebu Port Authority, PHIVIDEC Industrial Authority, Cagayan Special Economic Zone Authority, Aurora Special Economic Zone Authority, Bases Conversion and Development Authority, Authority of the Free Port Area of Bataan and Subic Bay Metropolitan Authority; and

(m) Transshipment refers to the transfer of cargo from one (1) vessel or conveyance to another vessel for further transit to complete the voyage and carry the cargo to its final destination.

SEC. 3. Scope. – This Act shall apply exclusively to foreign vessels carrying foreign container vans or foreign cargoes.

SEC. 4. Carriage of a Foreign Cargo by a Foreign Vessel. – A foreign vessel:

(a) Arriving from a foreign port, shall be allowed to carry a foreign cargo to its Philippine port of final destination, after being cleared at its port of entry;

(b) Arriving from a foreign port, shall be allowed to carry a foreign cargo by another foreign vessel calling at the same port of entry to the Philippine port of final destination of such foreign cargo;

(c) Departing from a Philippine port of origin through another Philippine port to its foreign port of final destination, shall be allowed to carry a foreign cargo intended for export; and

(d) Departing from a Philippine port of origin, shall be allowed to carry a foreign cargo by another foreign vessel through a domestic transshipment port and transferred at such domestic transshipment port to its foreign port of final destination.

For purposes of this Act, an empty foreign container van going to or coming from any Philippine port, or going to or coming from a foreign port, and being transshipped between two (2) Philippine ports shall be allowed.

SEC. 5. Authority of the Commissioner of Customs. – The Commissioner of Customs, upon such reasonable conditions as may be imposed, may do the following acts:

(a) Authorize the conveyance of foreign cargo brought from abroad by a foreign vessel;

(b) Allow a foreign vessel to take cargo intended for export at any Philippine port and convey the same upon such foreign vessel to a foreign port; and

(c) Authorize the transshipment of such foreign cargo intended for import or export through another Philippine port 1 by another foreign vessel to the cargo’s port of final destination.

Provided, That such acts shall not diminish or impair any existing and valid government contract covering the handling of import and export cargo: Provided, further, That the Commissioner of Customs shall have the authority to impose penalties to foreign ship operators found to have violated any provision of this Act and to take measures to address illegal activities, including smuggling.

SEC. 6. Application of the Carriage of Goods by Sea Act. – Carriage conducted in accordance with this Act shall be governed by Commonwealth Act No. 65, otherwise known as the “Carriage of Goods by Sea Act” with respect to the liability of the carrier for the loss of, or damage to, goods carried.

SEC. 7. Carriage by Foreign Vessels Not a Public Service, Foreign Vessels Not Common Carriers. – Foreign vessels engaging in carriage conducted in accordance with this Act shall not be considered common carriers as provided in Republic Act No. 386, otherwise known as the “Civil Code of the Philippines”; neither shall such foreign vessels be considered as offering a public service and thus shall fall outside the coverage of Republic Act No. 9295, otherwise known as the “Domestic Shipping Development Act of 2004?.

SEC. 8. Prohibitions. – Foreign ship operators shall submit their cargo manifest to the Port Authorities to ensure that no domestic cargoes are carried by the foreign ship. No foreign vessel shall be allowed to carry any domestic cargo or domestic container van, whether loaded or empty, even if such domestic container van may contain foreign cargo.

SEC. 9. Fines and Penalties. – The Bureau of Customs, upon due notice, hearing and determination of the existence of any breach or violation of the provisions of this Act or any rule and regulation issued pursuant thereto, shall impose a penalty or fine on any erring foreign ship operator in accordance with applicable provisions of the Tariff and Customs Code of the Philippines and other related laws.

SEC. 10. Implementing Rules and Regulations. – Within sixty (60) days from the approval of this Act, the Department of Finance, the Bureau of Customs, the Department of Trade and Industry, the Bureau of Immigration, and all Port Authorities, shall promulgate such rules and regulations necessary for the effective implementation of this Act.

SEC. 11. Separability Clause. – If any provision of this Act is subsequently declared invalid or unconstitutional, other provisions hereof which are not affected thereby shall remain in full force and effect.

SEC. 12. Repealing Clause. – Section 1009 of Presidential Decree No. 1464, otherwise known as the “Tariff and Customs Code of 1978? and all laws, decrees, orders, rules and regulations, and other issuances, or parts thereof, inconsistent with the provisions of this Act are hereby repealed or modified accordingly.

SEC. 13. Effectivity. – This Act shall take effect fifteen (15) days after its publication in the Official Gazette or in a newspaper of general circulation.

Approved: JUL 21 2015

A.M. No. 19-08-14-SC The Rules of Procedure for Admiralty Cases

September 17, 2019

RESOLUTION

WHEREAS, Section 19 (3) of the Judiciary Reorganization Act of 1980 (Batas Pambansa Bilang [BP Blg.] 129, as amended) provides that Regional Trial Courts shall have exclusive original jurisdiction over "all actions in admiralty and maritime jurisdiction where the demand or claim exceeds Three Hundred Thousand Pesos (P300,000.00) or, in Metro Manila, where such demand of claim exceeds Four Hundred Thousand Pesos (P400,000.00)";

WHEREAS, there is a need to designate Regional Trial Courts with a special and summary procedure for cases in admiralty and maritime jurisdiction, as defined by BP Blg. 129, as amended;

WHEREAS, there is an urgency to provide parties in cases in admiralty and maritime jurisdiction a fast, reliable and efficient means of recourse to Philippine courts, and to enhance the administration of justice in admiralty and maritime cases through the development of judicial expertise;

WHEREAS, pursuant to Memorandum Order No. 23-2019 dated April 3, 2019, the Special Committee for the Rules of Procedure for Admiralty Cases was created and constituted as follows: xxxx

WHEREAS, pursuant to Section 5 (5), Article VIII of the 1987 Constitution, the Supreme Court is vested with the power to promulgate rules concerning the pleading, practice, and procedure in all courts;

WHEREAS, pursuant to Section 36 of the Judiciary Reorganization Act of 1980 (BP Blg. 129) and to achieve an expeditious determination of Admiralty cases, there is a need to promulgate the following Rules of Procedure for Admiralty Cases;

NOW, THEREFORE, acting on the recommendation of the Chairperson of the Special Committee for the Rules of Procedure for Admiralty Cases, the Court resolved to APPROVE the "The Rules of Procedure for Admiralty Cases."

The Rules of Procedure for Admiralty Cases shall take effect on January 1, 2020 following its publication in the Official Gazette or in two newspapers of national circulation.

September 17, 2019, Manila, Philippines.

The Rules of Procedure for Admiralty Cases

Pursuant to Section 36 of the Judiciary Reorganization Act of 1980 (Batas Pambansa Bilang 129) and to achieve an expeditious determination of Admiralty cases, the Court resolved to promulgate the following Rules of Procedure for Admiralty Cases.

PART I General Provisions

RULE I General Provisions

SECTION 1. Title. — These Rules shall be known as "The Rules of Procedure for Admiralty Cases."

SECTION 2. Objectives. — The objectives of these Rules are:

(a) To provide Regional Trial Courts with a special and summary procedure for Admiralty cases as defined by the Judiciary Reorganization Act of 1980, as amended;

(b) To provide parties in Admiralty cases a fast, reliable, and efficient means of recourse to Philippine courts; and

(c) To enhance the administration of justice in Admiralty cases in the Philippines through the development of judicial expertise.

SECTION 3. Definition of Terms. — As used in these Rules, the following definition of terms shall apply:

(a) Action in rem — an Admiralty action in rem, directed against a specific ship itself or its particular cargo or freight to satisfy the claim of the plaintiff out of the res.

i. Writ of Summons in Action In Rem (writ) — a written command in the name of the court directed against a person in control or possession of the property, or against a ship's Registry, for the latter to act or abstain from acting in some way (See Annex "A").

(b) Action in personam — an Admiralty action in personam, directed against a natural or juridical person who is the owner, charterer, or other person in possession and/or control of a ship or cargo.

i. Summons in Action In Personam (summons) — a written command in the name of the court directed to defendant to file an answer.

(d) Charter party — a marine contract by which an entire ship or some principal part thereof is let by the owner to another person for a specified time or use; this includes "bareboat" or "demise" charters, "time" charters, and "voyage" or "trip" charters.

(e) Freight — the price or compensation paid for the transportation of goods by a carrier, at sea, from port to port.

(f) Limitation action — an action by shipowners or other persons under any written law for the limitation of the amount of their liability in connection with a ship or other property.

(g) Limitation fund — a guarantee or deposit made by shipowners to meet any damage claim to facilitate the statutory limit of their liability for the negligence of their captains, officers, or such other persons operating the ship.

(h) Marine casualty — any damage against third persons which may arise from the conduct of the captain in the care of the goods which the vessel carries, as well as damages caused to persons or to cargo due to a collision through the fault, negligence, or lack of skill of the captain, sailing mate, or any other member of the complement.

(i) Maritime lien — legal claim or charge on property, either real or personal, as a collateral or security for the payment of some debt or obligation. It attaches to a property by operation of law and once attached, it follows the property until it is discharged.

(j) Protection and Indemnity Club — A non-governmental, non-profit mutual or cooperative association of marine insurance providers to members that consist of shipowners, operators, charterers and seafarers of the member companies.

(k) Relevant person — the person who would be liable on the claim in an action in personam.

(l) Ship — includes any description of a vessel used in navigation including hydrofoil boats, air-cushion vehicles, submersibles, floating crafts, and fixed or floating platforms.

(m) Vessel — every description of watercraft or other artificial contrivances used, or capable of being used, as a means of transportation on water, whether under its own means or not; it is generally a more comprehensive term than "ship."

(n) Warrant of Arrest of a Vessel, Cargo, or Freight — court process by which a ship, cargo, or freight is detained or restricted to secure a maritime claim (See Annex "B").

SECTION 4. Applicability. — These Rules shall govern the procedure in civil actions before the designated Admiralty courts involving claims and cases in Admiralty filed on the basis of shipping and other related laws, rules and regulations, such as, but not limited to, the following:

(a) The Spanish Code of Commerce of 1888, Book III on Maritime Commerce;

(b) An Act on Salvage and Rendering of Assistance to Vessels and Cargoes (Act No. 2616 [1916]);

(d) New Civil Code of the Philippines, Title VIII, Chapter 3, Section 3 on Common Carriers (Republic Act No. 386 [1949]);

(e) Maritime Industry Decree of 1974 (Presidential Decree No. 474 [1974]);

(f) Insurance Code, Chapter II, Title I on Marine Insurance (Presidential Decree No. 612 [1974], as amended);

(g) Revised Charter of the Philippine Ports Authority (Presidential Decree No. 857 [1975]);

(h) Marine Pollution Decree as to Ships (Presidential Decree No. 979 [1976]);

(i) Ship Mortgage Decree of 1978 (Presidential Decree No. 1521 [1978]);

(j) Philippine Overseas Shipping Development Act (Republic Act No. 7471 [1992]);

(k) Domestic Shipping Development Act of 2004 (Republic Act No. 9295 [2004]);

(l) Oil Spill Compensation Act of 2007 (Republic Act No. 9483 [2007]);

(m) Philippine Coast Guard Law of 2009 (Republic Act No. 9993 [2009]);

(n) Single Maritime Administration for STCW (Republic Act No. 10635 [2014]);

(o) Liberalization of Cabotage Law (Republic Act No. 10668 [2015]); and

(p) Naval Architecture and Marine Engineering Law (Republic Act No. 10698 [2015]).

Likewise, these Rules shall be interpreted and implemented consistently with the international standards and norms used in the international shipping industry, much of the substance of which may be found in the following international conventions and instruments, including their respective annexes and protocols:

(a) 1982 United Nations Convention on the Law of the Sea (UNCLOS);

(b) 1974 International Convention on the Safety of Life at Sea (SOLAS), and its applicable annexes and protocols;

(d) 1969 International Convention on Tonnage Measurement of Ships (TONNAGE);

(e) 1978/1995 International Convention on Standards of Training, Certification, and Watchkeeping (STCW);

(f) 1973/1978 International Convention for the Prevention of Pollution from Ships (MARPOL);

(g) 1952 International Convention relating to the Arrest of Sea-going Ships (ARREST);

(h) 1972 International Convention for Preventing Collisions at Sea (COLREGS); and

(i) Other conventions of the International Maritime Organization to which the Philippines is a party or signatory.

SECTION 5. Admiralty Cases. — In the implementation or enforcement of the above laws, rules and regulations, the Admiralty jurisdiction of the court refers to the jurisdiction to hear and determine any of the following maritime claims:

(a) Loss or damage caused by the operation of the ship;

(b) Loss of life or personal injury occurring, whether on land or on water, in direct connection with the operation of the ship;

(c) Salvage operations or any salvage agreement, including, if applicable, special compensation relating to salvage operations in respect of a ship which, by itself or its cargo, has threatened damage to the environment;

(d) Damage or threat of damage caused by the ship to the environment, coastline or related interests, including the carriage of waste, garbage, or pollution as cargo into the Philippines; measures taken to prevent, minimize, or remove such damage; compensation for such damage; costs of reasonable measures of reinstatement of the environment actually undertaken or to be undertaken; loss incurred or likely to be incurred by third parties in connection with such damage; and damage, costs, or loss of a similar nature to those identified in this subparagraph (d);

(e) Costs or expenses relating to the raising, removal, recovery, destruction or rendering harmless of a ship which is sunk, wrecked, stranded or abandoned, including anything that is or has been on board such ship, and costs or expenses relating to the preservation of an abandoned ship and maintenance of its crew;

(f) Any agreement relating to the use of a ship, including bareboat charter, charter by demise, time charter, voyage charter or contract of affreightment, and maritime contract of carriage, whether of goods or people, including bills of lading;

(g) General average;

(h) Towage;

(i) Pilotage;

(j) Goods, materials, provisions, bunkers, equipment (including containers) supplied or services rendered to the ship for its operation, management, preservation, or maintenance;

(k) Construction, reconstruction, repair, converting or equipping of the ship;

(l) Port, canal, dock, harbor and other waterway dues and charges;

(m) Wages and other sums due to the master, officers and other members of the ship's complement who are not Filipino citizens, in respect of their employment on the ship, including costs of repatriation and social insurance contributions payable on their behalf, initiated while the vessel is within Philippine jurisdiction;

(n) Disbursements incurred on behalf of the ship or its owners;

(o) Insurance premiums (including mutual insurance calls) in respect of the ship, payable by or on behalf of the shipowner or demise charterer;

(p) Any commissions, brokerages or agency fees payable in respect of the ship by or on behalf of the shipowner or demise charterer;

(q) Any dispute as to ownership or possession of the ship;

(r) Any dispute between co-owners of the ship as to the employment or earnings of the ship;

(s) A mortgage or a "hypothèque" or a charge of the same nature on the ship;

(t) Any dispute arising out of a contract for the sale of the ship; and

(u) Enforcement of foreign judgments and arbitral awards in relation to claims, or judgments and awards rendered under the Admiralty and maritime jurisdiction of a foreign court or arbitral tribunal, and subject to the procedures under Rule 39, Section 48 of the Rules of Court and the requirements of Republic Act No. 9285.

Provided, that such action, demand or claim shall be filed with the designated first- or second-level Admiralty courts, as the case may be, in accordance with their jurisdictional thresholds, as may be determined by law. In case the action, demand or claim is within the jurisdictional threshold of first-level courts, the case shall be filed before the first-level court and the Rules of Procedure for Admiralty Cases shall apply.

SECTION 6. Actions In Rem. — Actions in rem may be filed, even if the ship may be located outside the Philippines, in the following cases:

(a) Any claim to the possession or ownership of a ship or any share therein;

(b) Any question arising between the co-owners of a ship as to possession, employment, or earnings of that ship, including the settlement of any account outstanding and unsettled between the parties in relation to the ship;

(d) Any claim for the attachment, forfeiture or condemnation of a ship, or for the restoration of a ship;

(e) Any claim on the basis of a maritime lien or other charge on any ship, or other property for the amount claimed; and

(f) Enforcement of an arbitral award or foreign judgment against a ship.

SECTION 7. Actions In Personam. — At the plaintiff's option, an action in personam may also be filed where the defendant has his or her habitual residence or place of business in the Philippines, in the following instances:

(a) Any claim for damage done/inflicted by a ship;

(b) Any claim for damage received/sustained by a ship;

i. any defect in a ship or in her equipment; and

ii. the wrongful acts or omissions of the owners, charterers, or persons in possession or control of a ship, or the master or crew thereof, or any other person for whose wrongful acts or omissions the owners, charterers, or persons in possession or control of a ship are responsible, provided, that said acts or omissions are conducted in the navigation or management of the ship, in the loading, carriage or discharge of goods on, in or from the ship, or in the embarkation, carriage, or disembarkation of persons on, in or from the ship.

(d) Any claim for loss or damage to goods carried in a ship;

(e) Any claim arising out of any agreement relating to the carriage of goods in a ship or to the use or hire of a ship;

(f) Any claim in the nature of salvage of a ship, including claims for services rendered in saving life from a ship or any aircraft or in preserving cargo, apparel or wreck as are authorized to be made in connection with a ship or aircraft;

(g) Any claim in the nature of towage in respect of a ship;

(h) Any claim in the nature of pilotage in respect of a ship;

(i) Any claim in respect of goods or materials supplied to a ship for her operation or maintenance;

(j) Any claim in respect of the construction, repair or equipment of a ship of dock charges or dues;

(k) Any claim by a master, shipper, charterer, or agent in respect of disbursements made on account of a ship;

(l) Any claim arising out of an act which is or is claimed to be a general average act;

(m) Any claim arising out of bottomry; and

(n) Any claim arising out of a charter party of whatever kind.

PART II Civil Procedure

RULE 2 Pleadings and Parties

SECTION 1. Pleadings and Motions Allowed. — The pleadings and motions that may be filed are the complaint, third-party complaint, answer which may include compulsory counterclaims and cross-claims, answer to counterclaims and cross-claims, motion for intervention, and motion to avail of discovery procedures.

SECTION 2. Prohibited Pleadings or Motions. — The following pleadings or motions shall not be allowed:

(a) Motion to dismiss the complaint;

(b) Motion for bill of particulars;

(d) Motion to declare the defendant in default;

(e) Dilatory motion for postponement;

(f) Motion for new trial;

(g) Petition for certiorari, mandamus, or prohibition against any interlocutory order issued by the court; and

(h) Petition for relief from judgment.

SECTION 3. Verified Complaint. — The verified complaint shall state or contain:

(a) A statement that it is a case in Admiralty jurisdiction;

(b) The names, addresses, and other relevant personal or juridical circumstances of the parties;

(d) The law, rule, or regulation relied upon, violated, or sought to be enforced;

(e) Specification of all evidence supporting the cause of action, such as affidavits of witnesses, authenticated documentary evidence which must be attached to the complaint, and object evidence.

The affidavits shall be in question and answer form and shall comply with the rules on judicial affidavits. All other supporting documents and evidence will comply with the rules on admissibility of evidence. Official documents from a foreign jurisdiction shall be considered admissible when duly authenticated in accordance with The Hague Convention Abolishing the Requirement of Legalization for Foreign Public Documents, otherwise known as the Apostille Convention.

All parties are required to disclose and include all relevant documentary evidence, even if such may appear to contain admissions against interest;

(f) The reliefs prayed for. The verified complaint may also include a prayer for the immediate issuance ex parte of a Warrant of Arrest of a Vessel (WAVe), Cargo, or Freight. In such cases, it shall also comply with the requirements under Rule 6 herein; and

(g) A certification against forum shopping.

SECTION 4. Who May File. — Any real party in interest, including the government and juridical entities authorized by law, may file a civil action in Admiralty jurisdiction.

SECTION 5. Against Whom Filed. — A complaint in Admiralty jurisdiction may be filed against a ship, or against specific cargo or freight, or against the owners, charterers, other persons in possession or control of a ship and/or cargo, or other relevant persons.

SECTION 6. Service of the Complaint upon the Ship's Register or Consulate. — Upon the filing of the complaint, the plaintiff is required to furnish a copy thereof to the Ship's Register with which the ship is registered or, in the absence thereof, the consulate of the ship's flag. Proof of service upon the Ship's Register or appropriate consulate shall be attached to the complaint.

SECTION 7. Manner of Service. — In the case of ships of Philippine registry, service shall be made by sending a copy of the complaint and all its attachments personally or by personal courier upon the duly-designated receiving officer of the Maritime Industry Authority. In the case of ships flying the flag of a foreign country, service shall be made by sending a copy of the complaint and all its attachments with the consulate of the ship's flag State; provided, that if the foreign Ship's Registry allows service through electronic means of court processes, legal notices, pleadings and documents, the party may make use of such means subject to proof of such service.

SECTION 8. Assignment by Raffle. — The complaint shall be referred to the Admiralty court immediately upon filing if there is only one (1) designated branch in a multiple-sala court. If there are two (2) or more designated branches, the Clerk of Court shall immediately cause an electronic or special raffle, as the case may be, among the Admiralty courts on the same day the complaint is filed.

SECTION 9. Duty of the Court. — Upon referral of the complaint by the executive judge, the Admiralty court to which it was referred or raffled, as the case may be, may motu proprio dismiss the case outright on any of the grounds apparent therefrom for the dismissal of a civil action. If no ground for dismissal is found, the Admiralty court shall forthwith issue the writ or summons which shall state that the Rules of Procedure for Admiralty Cases shall apply.

SECTION 10. Service of Writs, Summons, Orders and Other Court Processes. — Writs, summons, orders and other court processes may be served by the sheriff, his deputy or other proper officers of the court.

The writs or summons shall be served immediately on the defendant upon order of the court, together with a copy of an order informing all parties that they have ten (10) calendar days within which to appear in court and file an answer. Writs or summons shall be served in accordance with the Rules of Court, except as provided under Section 11 hereof.

SECTION 11. Service of Writs and Summons. — (a) In an action in rem, a Writ of Summons in Action In Rem must be served on the ship against which the action is brought, except if the ship has been sold by the Sheriff upon lawful order of a court, in which case, a sealed copy of the writ must be filed with the Ship's Registry and the same shall be deemed to have been served on the day on which the copy was filed. Such service shall be effected against a ship, cargo, or freight as follows:

i. by serving the same personally upon the ship's captain or master on board the ship while it is within the jurisdiction of the Philippines;

ii. by affixing a copy of the writ for a short time on any mast of the ship or on the outside of any suitable part of the vessel's superstructure, visible to all who may board or enter the vessel;

iii. by affixing a copy of the writ in a sheltered, conspicuous part of the vessel visible to the person in actual possession and control thereof, such as the windows in front of the wheelhouse or bridge of the vessel; and

iv. in the case of cargo or freight in the custody of a person, by leaving the writ with such person.

(b) In an action in personam, summons shall be served in accordance with the Rules of Court insofar as they are not incompatible with these Rules.

In case the plaintiff files an action both in rem and in personam, that is, against the vessel and its owner, charterer, or other person in possession and control thereof, both the Writ of Summons in Action In Rem and ordinary summons shall be issued and served separately.

SECTION 12. Responsive Pleadings. — Within ten (10) calendar days from receipt of the writ or summons, the defendant shall file a verified answer to the complaint, third-party complaint, counterclaim, cross-claim, or intervention, as the case may be, and serve a copy thereof upon the plaintiff. Affirmative and special defenses not pleaded shall be deemed waived, except for lack of jurisdiction.

SECTION 13. Effect of Failure to Answer. — If the defendant fails to file an answer to the complaint within the period provided, the court motu proprio, or on motion of the plaintiff as may be warranted by the facts alleged in the complaint and limited to the reliefs prayed for, shall declare the defendant in default and render judgment based on the complaint and the evidence attached thereto.

RULE 3 Pre-Trial

SECTION 1. Notice of Pre-Trial. — Within two (2) calendar days from the filing of the last responsive pleading, the Branch Clerk of Court shall issue a notice of pre-trial to be held not later than twenty (20) calendar days from the filing of the last pleading.

SECTION 2. Briefs. — At least three (3) calendar days before the pre-trial, the parties shall submit pre-trial briefs containing the following:

(a) Statement of willingness to enter into an amicable settlement indicating the desired terms thereof;

(b) Summary of admitted facts and proposed stipulations of facts;

(c) Legal or factual issues to be tried and resolved. For each factual issue, the parties shall state all evidence to support their positions thereon. For each legal issue, parties shall state the applicable law and jurisprudence supporting their respective positions thereon;

(d) Affidavits of witnesses, documentary evidence, and, if necessary, object evidence in support of the answers and replies, which shall be attached to the brief; and

(e) Number and names of witnesses, and the substance of their affidavits.

Failure to comply with the required contents of a pre-trial brief may be a ground for contempt. Failure to file the pre-trial brief shall have the same effect as failure to appear at the pre-trial.

SECTION 3. Pre-Trial. — Not later than twenty (20) calendar days after the last pleading has been filed, pre-trial shall be held. The judge shall put the parties and their counsels under oath.

A record of the pre-trial shall be issued by the court immediately upon termination thereof, stating:

(a) Whether the parties have arrived at an amicable settlement;

(b) Stipulations or admissions of the parties, including documents admitted without need for further authentication;

(d) Schedule for examination of witnesses; and

(e) Such other matters as may facilitate the disposition of the case.

All judicial affidavits and documentary evidence shall be examined by the parties for accuracy and authenticity, and referred to and marked as described in the complaint and answer on record with the court and considered to be offered in evidence to prove the claims stated therein. The court shall not admit as evidence, for any purpose, any judicial affidavits or documents which have not been examined and marked during the pre-trial.

Unless the parties have reached an amicable settlement in the meantime, failure of either of the parties to appear in the pre-trial shall be a cause of dismissal of their respective claims or counter-claims, and the appearing party shall be entitled to judgment on his or her claims as warranted by the evidence submitted, but in no case greater than that stated in the complaint or answer. All cross-claims shall be dismissed.

Should the parties reach an amicable settlement, a copy of the agreement setting forth the terms of such settlement shall be submitted to the court at the pre-trial, and the court shall render judgment based on the terms and conditions thereof.

The judgment of the court upon the pre-trial, on account of non-appearance or amicable settlement, shall be final and binding upon the parties and constitute res judicata upon their respective claims and counter-claims.

SECTION 4. Judgment on the Pleadings or Summary Judgment. — After the pre-trial, if there are no more controverted facts or genuine issues pending, the court shall, without prejudice to a party moving for judgment on the pleadings under Rule 34 of the Rules of Court or summary judgment under Rule 35, motu proprio submit the case for judgment on the pleadings or summary judgment without need of position papers or memoranda. The ruling of the court to submit the case for summary judgment or judgment on the pleadings shall not be subject to appeal or certiorari. In such cases, judgment shall be rendered within fifteen (15) calendar days from termination of the pre-trial.

SECTION 5. Referral to Mediation. — If there are still facts to be controverted or issues to be resolved, the case may be immediately referred to mediation, which proceeding shall not exceed a period of thirty (30) calendar days, without further extension.

In case of an amicable settlement, the compromise agreement shall be immediately submitted to the court, which shall render a decision based on the compromise agreement within fifteen (15) calendar days.

If mediation fails, the assigned mediator shall immediately submit his report thereon, and the court shall conduct trial without referral to Judicial Dispute Resolution.

RULE 4 Trial

SECTION 1. Hearing and Cross-Examination of Witnesses. — Within ten (10) calendar days from date of pre-trial, if the case is not referred to mediation, or within thirty (30) calendar days from date of pre-trial if the case is referred to mediation and the same fails, the court shall hold trial for purposes of cross-examination of the parties' witnesses based on their judicial affidavits and documents annexed thereto submitted with the complaint or answer. No additional affidavits or evidence which were not previously agreed upon in the pre-trial shall be allowed.

SECTION 2. Continuous Trial. — The court shall conduct continuous trial which shall not exceed two (2) months from the date of the initial trial. The two-month period may be extended by the court in cases involving complex factual and legal issues which necessarily require additional time for their determination, but in no case shall the extension exceed one (1) month.

SECTION 3. Examination of Witnesses. — The court shall strictly adhere to the rule that a witness has to be fully examined in one (1) day, subject to the court's discretion of extending the examination for justifiable reason. After the presentation of the last witness, only oral offer of evidence shall be allowed, and the opposing party shall immediately and orally interpose his or her objections. The judge shall forthwith rule on the offer of evidence in open court.

The parties may agree that witnesses may be examined via videoconferencing in accordance with existing rules of the Supreme Court.

SECTION 4. Submission of Case for Decision. — After the last party has rested his or her case, the court shall issue an order submitting the case for decision. The court may, within ten (10) days from submission of the case for decision, require the parties to submit position papers within a non-extendible period of ten (10) days from notice.

SECTION 5. Submission of Position Papers. — Within a non-extendible period of ten (10) calendar days from submission of the case for decision, the court may require the simultaneous submission, in written and/or electronic form, of the parties' position papers based on the affidavits and evidence already submitted and on record. Position papers shall state the arguments of fact and law upon which the party seeks a favorable decision and shall substantially follow the form of a draft decision.

SECTION 6. Period to Decide. — Within fifteen (15) calendar days from the expiration of the period for filing of position papers, with or without position papers, the court shall render judgment.

RULE 5 Intervention

SECTION 1. Intervenors. — Where a ship against which an action in rem is brought is under arrest, a person who has a legal interest in the ship, cargo, or freight, or in the success of either of the parties, or an interest against both, or is so situated as to be adversely affected by a distribution or other disposition of the ship, but who is not a party to the action may, with leave of court, file a motion to intervene in the action at any time before submission of the case for decision by the court. A copy of the pleading in intervention shall be attached to the Motion for Intervention with leave of court.

A complaint-in-intervention must be supported by judicial affidavits and other supporting evidence, showing the interest of the intervenor in the ship within the court's custody. The court may consider whether or not the intervention will unduly delay or prejudice the adjudication of the rights of the original parties, and whether or not the intervenor's rights may be fully protected in a separate proceeding.

The time for filing responsive pleadings in intervention shall conform with the time limits in these Rules.

SECTION 2. Appearance. — A person granted leave to intervene must enter an appearance in the action within the period specified by the court, but in no case after the case has been submitted for decision.

PART III Arrest of a Vessel, Cargo, or Freight

RULE 6 Warrant of Arrest of Vessel, Cargo or Freight

SECTION 1. When Available, and Scope. — In an action in rem in Admiralty jurisdiction as defined in Part 1, Rule 1, Section 6 of these Rules, the plaintiff or defendant, as the case may be, may upon commencement of an action in rem, apply for a Warrant of Arrest of Vessel, Cargo, or Freight applicable against the vessel or ship, cargo, or freight subject of the action or counterclaim. The Warrant of Arrest may be issued together with the Writ of Summons in Action In Rem.

The Warrant of Arrest directs the Sheriff or a duly authorized person to arrest a specific vessel or ship, cargo, or freight while it is within the jurisdiction of a Philippine port, and detain the same within the port limits until further orders from the court. The same shall be valid for twelve (12) months from the date of its issuance.

SECTION 2. Requirements. — A Warrant of Arrest shall not be issued unless the party applying for the warrant or his or her duly authorized agent has filed an affidavit stating the following:

(a) In actions in rem:

i. The name, address and occupation of the applicant for the Warrant of Arrest of Vessel, Cargo, or Freight;

ii. The nature of the claim or counterclaim which has not been satisfied in respect of which the warrant is required, and if it arises in connection with a ship, the name of the ship; and

iii. The nature of the property to be arrested and, if the property is a ship, the name of the ship and the port of her registry.

(b) In actions both in rem and in personam:

i. The name of the person who would be liable on the claim in an action in personam, should the action be both in rem and in personam (the "relevant person");

ii. That the relevant person was the owner or charterer of, or person in possession or control of the ship, cargo, or freight in connection with which the claim arose;

iii. That at the time of the issuance of the writ, the relevant person was either the beneficial owner of all the shares in the ship, cargo, or freight in respect of which the warrant is required, or the charterer of a ship under a charter by demise; and

iv. In the case of a claim for possession of a ship or for wages, the nationality of the ship in respect of which the warrant is required, and that the copy of the writ and complaint have been sent to the Registry or consulate should the ship be of foreign nationality.

SECTION 3. Issuance of a Warrant of Arrest of Vessel, Cargo, or Freight. — Upon the commencement of the action, the plaintiff or defendant, as the case may be, may apply for a Warrant of Arrest for the arrest of the ship, cargo, or freight against which the action or any counterclaim in the action may be brought. No Warrant of Arrest shall be granted unless the arresting party has given a bond or security, including a corporate surety from a surety company accredited by the Supreme Court, executed in favor of the Admiralty court in the amount of thirty percent (30%) of the claim, but in no case less than five million pesos (P5,000,000.00), conditioned that the arresting party will pay all the costs which may be adjudged to the adverse party and all damages which he or she may sustain by reason of the arrest, if the court shall finally adjudge that the applicant was not entitled thereto.

A Warrant of Arrest shall not be issued without prior notice to the owner, charterer, master, or person in actual possession and control of the property at the time of application, and after due hearing. However, a plaintiff may request the issuance of a Warrant of Arrest of Vessel, Cargo or Freight ex parte in cases of extreme urgency where the complainant may suffer irreparable injury or gross inconvenience on account of the mobility or transportability of the ship, or the cargo, or the person in custody of the freight, against which the action in rem is directed. In such case, the court may issue ex parte a warrant which shall immediately be executed pursuant to Section 5 hereof.

SECTION 4. Payment of Port Fees and Charges. — The arresting party shall, in addition, pay all port fees, charges and expenses incurred in the preservation and maintenance of the ship or cargo during its arrest, until its release or sale.

SECTION 5. Execution of a Warrant of Arrest of Vessel, Cargo, or Freight. — A Warrant of Arrest of Vessel, Cargo, or Freight must be served on the ship, cargo, or freight against which it is issued. Service of a Warrant of Arrest shall be effected in the same manner as service of a Writ of Summons in Action In Rem specified in Rule 2, Section 11 (a) hereof. The warrant must also be served upon the master of the vessel or person in custody of the cargo or freight. The warrant of arrest shall likewise be served on the Ship Registry or consulate of the flag State of the ship, and annotated on the ship's certificate of registration.

While a ship is under arrest, its cargo may still be discharged.

A court-designated Sheriff serving a warrant of arrest may summon officers from the Philippine Coast Guard, Bureau of Customs, Philippine Ports Authority, or pertinent port authority, or any other law enforcement agency for assistance in enforcing the warrant. Officers so summoned shall be considered as duly deputized and shall assist in effecting the arrest when they can render such assistance without detriment to their safety. The Sheriff shall make a return on the Warrant of Arrest of Vessel, Cargo or Freight in accordance with the Rules of Court.

SECTION 6. Applications with Respect to Property under Arrest. — The Sheriff may at any time request the court to provide directions with respect to the property under arrest, and shall give notice thereof to any or all of the following persons who, in relation to the property, have:

(a) Caused a warrant for the arrest of the property to be executed by the Sheriff;

(b) Entered appearance in any action in which the property is under arrest; or

SECTION 7. Bail Bond. — A bail bond or security, including a corporate surety from a surety company accredited by the Supreme Court, in sufficient amount to answer for the arresting party's claims, may be given on behalf of a party to an action in rem to secure the release of the ship, cargo, or freight from arrest. The bail bond shall be filed with the court and notice thereon served on the adverse party. Upon receipt of the bail bond and finding that it is in good order, the court shall forthwith order the lifting of the warrant of arrest.

In case a warrant of arrest is issued against the cargo or freight only, the amount of the bail bond shall be based on the value of such cargo or freight subject of the arresting party's claim.

SECTION 8. Report on Arrest of Vessels, Cargo, or Freight. — The judge shall report to the Supreme Court, through the Office of the Court Administrator, every action taken on all Warrants of Arrest of Vessel, Cargo, or Freight, within fifteen (15) calendar days from the action taken.

RULE 7 Sale of Property in Custodia Legis

SECTION 1. Satisfaction of Final Judgment in Actions In Rem. — After finality of judgment, a ship or cargo which has been subject of a warrant of arrest, and has remained in custodia legis due to failure to file the appropriate bail bond, may be sold at public auction as directed by the court to satisfy the maritime claim upon motion of the prevailing party.

SECTION 2. Appointment of Appraisers. — Upon motion of the prevailing party for the sale of the arrested ship or cargo, the court may, within five (5) calendar days, cause the appointment of one or more appraiser/s who shall assign a value of the ship or cargo, and assist the Sheriff in the sale of the property.

Appraisers shall be appointed taking into account their specialized knowledge and expertise in the classification and valuation of ships, and familiarity with ships and ship management or operations.

Appraisers shall be entitled to compensation in the same manner as Sheriffs of the court, out of the proceeds of the sale.

SECTION 3. Order of Priority. — In case a judgment is rendered and there are numerous prevailing parties in an action in rem, they may file a motion before the court to determine the priority of the claims against the proceeds of the sale of the ship.

PART IV Special Proceedings

RULE 8 Limitation Action

SECTION 1. Purpose. — In a limitation action, the plaintiff, who may be a ship-owner, charterer, or other person in control or possession of a ship, seeks to limit his or her liability to the full amount of a limitation fund constituted for the purpose of satisfying claims in respect of a marine casualty involving the ship, which claims have not been otherwise settled by marine insurance or other means.

SECTION 2. When Available. — A plaintiff may initiate a limitation action only in the following cases:

(a) collisions;

(b) injuries to a third party; and

Provided, that the plaintiff abandons the vessel with all her appurtenances and equipment and freightage earned, or part thereof belonging to such plaintiff, during the last voyage.

Limitation action is not available in the following cases:

(a) injury or death to a passenger is due either to the fault of the shipowner, charterer, or other person in possession or control of the vessel;

(b) injury or death of a passenger due to the concurring fault of said person and the captain or master of the vessel;

(c) the vessel is insured and the injury or damage to persons or property, or death of a passenger, is covered by a separate insurance; and

(d) workmen's compensation claims.

SECTION 3. How Initiated. — The plaintiff may file a limitation action by a verified complaint, impleading any and all known defendants any time after a marine casualty that causes damage, injury, or death, and subsequent abandonment of the vessel, by notarial act filed with the Ship Registry, or total loss thereof in which case abandonment by notarial act is no longer necessary.

The complaint must be supported by judicial affidavit/s stating the plaintiff's cause of action, the names of the known defendants, and the addresses of each of those persons if known to the plaintiff. The complaint shall likewise be directed against any and all defendants whose names and personal circumstances may be unknown but are described generally and identifiable as a certain class, such as ship chandlers, cargo-owners, or passengers of a vessel at a specific time and place. The plaintiff shall disclose any and all contracts with third parties which may form the basis of liability relating to the ship involved in the action.

Separate summons shall be directly sent to the defendants specifically named in the complaint, at their residential or business address/es known to the plaintiff.

Notice of and summons to the limitation action against all other defendants, whether or not named in the complaint, shall be published in at least two (2) newspapers of general circulation, stating the title and purpose of the action, and the court where the same is pending.

The summons shall state a time and place for appearance of the defendants before the court at the hearing, which in no case shall be less than one (1) month from the date of filing of the complaint. No pre-trial is necessary, given the nature of the action.

SECTION 4. Defendants. — Upon receipt of notice and summons and at any time prior to the hearing, a defendant may enter an appearance as such by written notice of appearance, accompanied by a judicial affidavit setting forth the basis and substance of the claim as defendant.

Where the appearing defendant was not previously named specifically by the plaintiff and was apprised of the complaint only through published notice and summons, the defendant shall further state that he or she is submitting to the jurisdiction of the court, and provide the necessary address/es for purposes of service of all subsequent orders and processes of the court.

SECTION 5. Hearing. — At the hearing, the plaintiff shall submit a judicial affidavit setting forth his or her liability, the relevant facts and legal basis of his or her claim to a limitation thereof, the total amount of the limitation fund to be constituted and payments offered to be allocated to those whom the plaintiff admits to be liable.

Appearing defendants shall likewise submit their judicial affidavits setting forth the substance and basis of their respective claims. They may dispute only the plaintiff's right to limit his or her liability; in no case may the defendant dispute the total amount of the limitation fund. If it appears that the defendant does not have sufficient information to enable the court to decide whether or not to dispute the plaintiff's right to limit his or her liability, the court shall give such directions as may be appropriate to enable the defendant to obtain the necessary information and adjourn the hearing for that purpose.

Non-appearance at the hearing despite notice, by a defendant specifically named in the complaint and to whom summons had been served, shall be deemed a waiver of the right to dispute the plaintiff's right to limit his or her liability.

After reception of the plaintiffs' and defendants' respective evidence, the court shall conclude the hearing and submit the case for decision within fifteen (15) calendar days. The court shall decide whether or not the plaintiff is entitled to a limitation of liability, whether or not to constitute a limitation fund, and, if so, the terms and conditions for disbursement thereof.

SECTION 6. Constitution of the Limitation Fund. — The plaintiff may, upon order of the court, constitute a limitation fund by making a deposit to the court, or by producing a letter of undertaking from a Protection and Indemnity Club acceptable to the court. The fund may be constituted during the hearing, but not later than thirty (30) calendar days after the conclusion of the hearing.

Failure to constitute a sufficient limitation fund to satisfy claims within the said period shall be deemed a withdrawal of the action and warrants dismissal thereof. No amount shall be paid out of the limitation fund except upon the order of the court.

SECTION 7. Order of the Court Limiting the Plaintiff's Liability. — If it appears from the hearing that the plaintiff has the right to his or her limit liability, the court shall, within fifteen (15) calendar days after due consideration of the plaintiffs' and defendants' claims, issue an order limiting the plaintiff's liability and direct the defendants, and any other persons who may have claims, to file their respective claims against the limitation fund.

The order shall be served upon the plaintiff and the appearing defendants, and shall operate to protect the plaintiff with respect of claims by the appearing defendants, or persons claiming through or under them. The order shall also fix a time and place for the acceptance of claims filed by persons with claims against the plaintiff with respect of the casualty to which the action relates, but who were not properly summoned, or were unknown defendants, and who did not enter an appearance prior to the issuance of the order.

SECTION 8. Publication of the Order. — The court shall order the plaintiff to cause the publication of the order constituting the limitation fund in two (2) newspapers of general circulation, identifying the action, the casualty and the relation of the plaintiff thereto (whether as owner of a ship involved in the casualty or otherwise); stating that the order has been issued and specifying the amounts fixed thereby as the limit of the plaintiff's liability and the time allowed thereby for the filing of claims.

In no case shall claims be filed and accepted more than six (6) months from publication thereof.

SECTION 9. Satisfaction of Claims. — Claims filed within the time specified in the order of the court shall be duly recorded by the plaintiff or his or her duly authorized representative, and reported to the court at the end of the period for entering of appearances and making of claims, with proposals for their satisfaction through payment from the limitation fund. The court, upon review of the report and proposal for satisfaction, and finding the same to be in due and proper form, and within fifteen (15) calendar days from receipt, shall order payment of the claims under such terms and conditions as may be appropriate.

SECTION 10. Closure of the Limitation Action. — Upon final payment of all claims of all defendants or claimants, the plaintiff and the Sheriff shall make a report to the court, setting forth the complete list of appearing defendants with their respective claims, the payments made, and proof of receipt of such payments. The court shall thereafter issue an order declaring the limitation action closed.

Any amounts remaining after payment of the claims shall be released and returned, upon motion, to the plaintiff or his or her duly authorized representative. The closure of the limitation action shall become final and executory, upon the expiration of fifteen (15) calendar days from receipt by the plaintiff/s and the defendant/s of the order of closure. Such order shall be final and unappealable, and forever bar any and all claims against the plaintiff/s in respect of the casualty subject of the action. Closure of a limitation action, however, does not bar remedies against actions in fraud of creditors.

PART V Common Provisions

RULE 9 Common Provisions

SECTION 1. Payment of Filing and Other Legal Fees. — The payment of filing and all other legal fees by the plaintiff shall be made upon the filing of the complaint. No action shall be taken upon the prayer for issuance of a WAVe unless all legal fees have been paid and the plaintiff has undertaken to pay for port dues, charges and other expenses to be incurred in the maintenance of the property under arrest.

SECTION 2. Applicability of the Regular Rules. — The regular procedure prescribed in the Rules of Court, and other pertinent Supreme Court Circulars and Resolutions, shall apply to the Rules of Procedure for Admiralty Cases herein provided in a suppletory capacity insofar as they are not inconsistent herewith.

SECTION 3. Procedure on Pending Cases. — These Rules shall also apply to pending Admiralty cases with respect to the remainder of the proceedings.

SECTION 4. Appeal. — The judgment or final order shall be appealable to the appropriate court, except for limitation actions as provided in Rule 8, which shall decide the same in accordance with the provisions on appeals of the Rules of Court.

SECTION 5. Designation of Admiralty Courts. — The Supreme Court shall designate existing branches of the Regional Trial Courts as Admiralty courts which shall have jurisdiction over all actions in Admiralty.

SECTION 6. Monitoring, Evaluation and Training. — The application and adherence to the Rules of Procedure for Admiralty Cases shall be subject to periodic monitoring by the Sub-Committee, through the Office of the Court Administrator (OCA). For this purpose, all designated Admiralty courts shall accomplish and submit a periodic report of data in a form to be generated and distributed by the OCA.

Training of judges and courts personnel shall be undertaken by the Philippine Judicial Academy in coordination with the Sub-Committee.

SECTION 7. Effectivity. — The Rules of Procedure for Admiralty Cases shall take effect on January 1, 2020.

Published in the Philippine Daily Inquirer and The Philippine Star on October 20, 2019.

Warsaw Convention

October 12, 1929

WARSAW CONVENTION FOR THE UNIFICATION OF CERTAIN RULES RELATING TO INTERNATIONAL CARRIAGE BY AIR

The President of the German Reich, the Federal President of the Republic of Austria, His Majesty the King of the Belgians, the President of the United States of Brazil, His Majesty the King of the Bulgarians, the President of the Nationalist Government of China, His Majesty the King of Denmark and Iceland, His Majesty the King of Egypt, His Majesty the King of Spain, the Chief of State of the Republic of Estonia, the President of the Republic of Finland, the President of the French Republic, His Majesty the King of Great Britain, Ireland, and the British Dominions beyond the Seas, Emperor of India, the President of the Hellenic Republic, His Most Serene Highness the Regent of the Kingdom of Hungary, His Majesty the King of Italy, His Majesty the Emperor of Japan, the President of the Republic of Latvia, Her Royal Highness the Grand Duchess of Luxemburg, the President of the United Mexican States, His Majesty the King of Norway, Her Majesty the Queen of the Netherlands, the President of the Republic of Poland, His Majesty the King of Romania, His Majesty the King of Sweden, the Swiss Federal Council, the President of the Czechoslovak Republic, the Central Executive Committee of the Union of Soviet Socialist Republics, the President of the United States of Venezuela, His Majesty the King of Yugoslavia:

Having recognized the advantage of regulating in a uniform manner the conditions of international transportation by air in respect of the documents used for such transportation and of the liability of the carrier,

Having nominated to this end their respective Plenipotentiaries, who, being thereto duly authorized, have concluded and signed the following convention:

CHAPTER I Scope of Definitions

ARTICLE 1. (1) This convention shall apply to all international transportation of persons, baggage, or goods performed by aircraft for hire. It shall apply equally to gratuitous transportation by aircraft performed by an air transportation enterprise.

(2) For the purposes of this convention the expression "international transportation" shall mean any transportation in which, according to the contract made by the parties, the place of departure and the place of destination, whether or not there be a break in the transportation or a transshipment, are situated either within the territories of two High Contracting Parties, or within the territory of a single High Contracting Party, if there is an agreed stopping place within a territory subject to the sovereignty, suzerainty, mandate or authority of another power, even though that power is not a party to this convention. Transportation without such an agreed stopping place between territories subject to the sovereignty, suzerainty, mandate, or authority of the same High Contracting Party shall not be deemed to be international for the purposes of this convention.

(3) Transportation to be performed by several successive air carriers shall be deemed, for the purposes of this convention, to be one undivided transportation, if it has been regarded by the parties as a single operation, whether it has been agreed upon under the form of a single contract or of a series of contracts, and it shall not lose its international character merely because one contract or a series of contracts is to be performed entirely within a territory subject to the sovereignty, suzerainty, mandate, or authority of the same High Contracting Party.

ARTICLE 2. (1) This convention shall apply to transportation performed by the state or by legal entities constituted under public law provided it falls within the conditions laid down in Article 1.

2. This convention shall not apply to transportation performed under the terms of any international postal convention.

CHAPTER II Transportation Documents

SECTION I Passenger Ticket

ARTICLE 3. (1) For the transportation of passengers the carrier must deliver a passenger ticket which shall contain the following particulars:

(a) The place and date of issue;

(b) The place of departure and of destination;

(c) The agreed stopping places, provided that the carrier may reserve the right to alter the stopping places in case of necessity, and that if he exercises that right, the alteration shall not have the effect of depriving the transportation of its international character;

(d) The name and address of the carrier or carriers;

(e) A statement that the transportation is subject to the rules relating to liability established by this convention.

(2) The absence, irregularity, or loss of the passenger ticket shall not affect the existence or the validity of the contract of transportation, which shall none the less be subject to the rules of this convention. Nevertheless, if the carrier accepts a passenger without a passenger ticket having been delivered he shall not be entitled to avail himself of those provisions of this convention which exclude or limit his liability.

SECTION II Baggage Check

ARTICLE 4. (1) For the transportation of baggage, other than small personal objects of which the passenger takes charge himself, the carrier must deliver a baggage check.

(2) The baggage check shall be made out in duplicate, one part for the passenger and the other part for the carrier.

(3) The baggage check shall contain the following particulars:

(a) The place and date of issue;

(b) The place of departure and of destination;

(d) The number of the passenger ticket;

(e) A statement that delivery of the baggage will be made to the bearer of the baggage check;

(f) The number and weight of the packages;

(g) The amount of the value declared in accordance with article 22 (2);

(h) A statement that the transportation is subject to the rules relating to liability established by this convention.

(4) The absence, irregularity, or loss of the baggage check shall not affect the existence or the validity of the contract of transportation which shall nonetheless be subject to the rules of this convention. Nevertheless, if the carrier accepts baggage without a baggage check having been delivered, or if the baggage check does not contain the particulars set out at (d), (f), and (h) above, the carrier shall not be entitled to avail himself of those provisions of the convention which exclude or limit his ability.

SECTION III Air Waybill

ARTICLE 5. (1) Every carrier of goods has the right to require the consignor to make out and hand over to him a document called an "air waybill"; every consignor has the right to require the carrier to accept this document.

(2) The absence, irregularity, or loss of this document shall not affect the existence or the validity of the contract of transportation which shall, subject to the provisions of Article 9, be none the less governed by the rules of this convention.

ARTICLE 6. (1) The air waybill shall be made out by the consignor in three original parts and be handed over with the goods.

(2) The first part shall be marked "for the carrier", and shall be signed by the consignor. The second part shall be marked "for the consignee"; it shall be signed by the consignor and by the carrier and shall accompany the goods. The third part shall be signed by the carrier and handed by him to the consignor after the goods have been accepted.

(3) The carrier shall sign on acceptance of the goods.

(4) The signature of the carrier may be stamped; that of the consignor may be printed or stamped.

(5) If, at the request of the consignor, the carrier makes out the air waybill, he shall be deemed, subject to proof to the contrary, to have done so on behalf of the consignor.

ARTICLE 7. The carrier of goods has the right to require the consignor to make out separate waybills when there is more than one package.

ARTICLE 8. The air waybill shall contain the following particulars:

(a) The place and date of its execution;

(b) The place of departure and of destination;

(c) The agreed stopping places, provided that the carrier may reserve the right to alter the stopping places in case of necessity, and that if he exercises that right the alteration shall not have the effect of depriving the transportation of its international character;

(d) The name and address of the consignor;

(e) The name and address of the first carrier;

(f) The name and address of the consignee, if the case so requires;

(g) The nature of the goods;

(h) The number of packages, the method of packing, and the particular marks or numbers upon them;

(i) The weight, the quantity, the volume, or dimensions of the goods;

(j) The apparent condition of the goods and of the packing;

(k) The freight, if it has been agreed upon, the date and place of payment, and the person who is to pay it;

(l) If the goods are sent for payment on delivery, the price of the goods, and, if the case so requires, the amount of the expenses incurred;

(m) The amount of the value declared in accordance with Article 22 (2).

(n) The number of parts of the air waybill;

(o) The documents handed to the carrier to accompany the air waybill;

(p) The time fixed for the completion of the transportation and a brief note of the route to be followed, if these matters have been agreed upon;

(q) A statement that the transportation is subject to the rules relating to liability established by this convention.

ARTICLE 9. If the carrier accepts goods without an air waybill having been made out, or if the air waybill does not contain all the particulars set out in Article 8 (a) to (i), inclusive, and (q), the carrier shall not be entitled to avail himself of the provisions of this convention which exclude or limit his liability.

ARTICLE 10. (1) The consignor shall be responsible for the correctness of the particulars and statements relating to the goods which he inserts in the air waybill.

(2) The consignor shall be liable for all damages suffered by the carrier or any other person by reason of the irregularity, incorrectness or incompleteness of the said particulars and statements.

ARTICLE 11. (1) The air waybill shall be prima facie evidence of the conclusion of the contract, of the receipt of the goods and of the conditions of transportation.

(2) The statements in the air waybill relating to the weight, dimensions, and packing of the goods, as well as those relating to the number of packages, shall be prima facie evidence of the facts stated; those relating to the quantity, volume and condition of the goods shall not constitute evidence against the carrier except so far as they both have been, and are stated in the air waybill to have been, checked by him in the presence of the consignor, or relate to the apparent condition of the goods.

ARTICLE 12. (1) Subject to his liability to carry out all his obligations under the contract of transportation, the consignor shall have the right to dispose of the goods by withdrawing them at the airport of departure or destination, or by stopping them in the course of the journey on any landing, or by calling for them to be delivered at the place of destination, or in the course of the journey to a person other than the consignee named in the air waybill, or by requiring them to be returned to the airport of departure. He must not exercise this right of disposition in such a way as to prejudice the carrier or other consignors, and he must repay any expenses occasioned by the exercise of this right.

(2) If it is impossible to carry out the orders of the consignor the carrier must so inform him forthwith.

(3) If the carrier obeys the orders of the consignor for the disposition of the goods without requiring the production of the part of the air waybill delivered to the latter, he will be liable, without prejudice to his right of recovery from the consignor, for any damage which may be caused thereby to any person who is lawfully in possession of that part of the air waybill.

(4) The right conferred on the consignor shall cease at the moment when that of the consignee begins in accordance with Article 13, below. Nevertheless, if the consignee declines to accept the waybill or the goods, or if he cannot be communicated with, the consignor shall resume his right of disposition.

ARTICLE 13. (1) Except in the circumstances set out in the preceding article, the consignee shall be entitled, on arrival of the goods at the place of destination, to require the carrier to hand over to him the air waybill and to deliver the goods to him, on payment of the charges due and on complying with the conditions of transportation set out in the air waybill.

(2) Unless it is otherwise agreed, it shall be the duty of the carrier to give notice to the consignee as soon as the goods arrive.

(3) If the carrier admits the loss of the goods, or if the goods have not arrived at the expiration of seven days after the date on which they ought to have arrived, the consignee shall be entitled to put into force against the carrier the rights which flow from the contract of transportation.

ARTICLE 14. The consignor and the consignee can respectively enforce all the rights given them by Articles 12 and 13, each in his own name, whether he is acting in his own interest or in the interest of another, provided that he carries out the obligations imposed by the contract.

ARTICLE 15. (1) Articles 12, 13, and 14 shall not affect either the relations of the consignor and the consignee with each other or the relations of third parties whose rights are derived either from the consignor or from the consignee.

(2) The provisions of Article 12, 13, and 14 can only be varied by express provision in the air waybill.

ARTICLE 16. (1) The consignor must furnish such information and attach to the air waybill such documents as are necessary to meet the formalities of customs, octroi, or police before the goods can be delivered to the consignee. The consignor shall be liable to the carrier for any damage occasioned by the absence, insufficiency, or irregularity of any such information or documents, unless the damage is due to the fault of the carrier or his agents.

(2) The carrier is under no obligation to enquire into the correctness or sufficiency of such information or documents.

CHAPTER III Liability of the Carrier

ARTICLE 17. The carrier shall be liable for damage sustained in the event of the death or wounding of a passenger or any other bodily injury suffered by a passenger, if the accident which caused the damage so sustained took place on board the aircraft or in the course of any of the operations of embarking or disembarking.

ARTICLE 18. (1) The carrier shall be liable for damage sustained in the event of the destruction or loss of, or of damage to, any checked baggage or any goods, if the occurrence which caused the damage so sustained took place during the transportation by air.

(2) The transportation by air within the meaning of the preceding paragraph shall comprise the period during which the baggage or goods are in charge of the carrier, whether in an airport or on board an aircraft, or, in the case of a landing outside an airport, in any place whatsoever.

(3) The period of the transportation by air shall not extend to any transportation by land, by sea, or by river performed outside an airport. If, however, such transportation takes place in the performance of a contract for transportation by air, for the purpose of loading, delivery or transshipment, any damage is presumed, subject to proof to the contrary, to have been the result of an event which took place during the transportation by air.

ARTICLE 19. The carrier shall be liable for damage occasioned by delay in the transportation by air of passengers, baggage, or goods.

ARTICLE 20. (1) The carrier shall not be liable if he proves that he and his agents have taken all necessary measures to avoid the damage or that it was impossible for him or them to take such measures.

(2) In the transportation of goods and baggage the carrier shall not be liable if he proves that the damage was occasioned by an error in piloting, in the handling of the aircraft, or in navigation and that, in all other respects, he and his agents have taken all necessary measures to avoid the damage.

ARTICLE 21. If the carrier proves that the damage was caused by or contributed to by the negligence of the injured person the court may, in accordance with the provisions of its own law, exonerate the carrier wholly or partly from his liability.

ARTICLE 22. (1) In the transportation of passengers the liability of the carrier for each passenger shall be limited to the sum of 125,000 francs. Where, in accordance with the law of the court to which the case is submitted, damages may be awarded in the form of periodical payments, the equivalent capital value of the said payments shall not exceed 125,000 francs. Nevertheless, by special contract, the carrier and the passenger may agree to a higher limit of liability.

(2) In the transportation of checked baggage and of goods, the liability of the carrier shall be limited to a sum of 250 francs per kilogram, unless the consignor has made, at the time when the package was handed over to the carrier, a special declaration of the value at delivery and has paid a supplementary sum if the case so requires. In that case the carrier will be liable to pay a sum not exceeding the declared sum, unless he proves that the sum is greater than the actual value to the consignor at delivery.

(3) As regards objects of which the passenger takes charge himself the liability of the carrier shall be limited to 5,000 francs per passenger.

(4) The sums mentioned above shall be deemed to refer to the French franc consisting of 65½ milligrams of gold at the standard of fineness of nine hundred thousandths. These sums may be converted into any national currency in round figures.

ARTICLE 23. Any provision tending to relieve the carrier of liability or to fix a lower limit than that which is laid down in this convention shall be null and avoid, but the nullity of any such provision shall not involve the nullity of the whole contract, which shall remain subject to the provisions of this convention.

ARTICLE 24. (1) In the cases covered by Articles 18 and 19 any action for damages, however founded, can only be brought subject to the conditions and limits set out in this convention.

(2) In the cases covered by Article 17 the provisions of the preceding paragraph shall also apply, without prejudice to the questions as to who are the persons who have the right to bring suit and what are their respective rights.

ARTICLE 25. (1) The carrier shall not be entitled to avail himself of the provisions of this convention which exclude or limit his liability, if the damage is caused by his wilful misconduct or by such default on his part as, in accordance with the law of the court to which the case is submitted, is considered to be equivalent to wilful misconduct.

(2) Similarly the carrier shall not be entitled to avail himself of the said provisions, if the damage is caused under the same circumstances by any agent of the carrier acting within the scope of his employment.

ARTICLE 26. (1) Receipt by the person entitled to the delivery of baggage or goods without complaint shall be prima facie evidence that the same have been delivered in good condition and in accordance with the document of transportation.

(2) In case of damage, the person entitled to delivery must complain to the carrier forthwith after the discovery of the damage, and, at the latest, within 3 days from the date of receipt in the case of baggage and 7 days from the date of receipt in the case of goods. In case of delay the complaint must be made at the latest within 14 days from the date on which the baggage or goods have been placed at his disposal.

(3) Every complaint must be made in writing-upon the document of transportation or by separate notice in writing dispatched within the times aforesaid.

(4) Failing complaint within the times aforesaid, no action shall lie against the carrier, save in the case of fraud on his part.

ARTICLE 27. In the case of the death of the person liable, an action for damages lies in accordance with the terms of this convention against those legally representing his estate.

ARTICLE 28. (1) An action for damages must be brought, at the option of the plaintiff, in the territory of one of the High Contracting Parties, either before the court of the domicile of the carrier or of his principal place of business or where he has a place of business through which the contract has been made or before the court at the place of destination.

(2) Questions of procedure shall be governed by the law of the court to which the case is submitted.

ARTICLE 29. (1) The right to damages shall be extinguished if an action is not brought within 2 years, reckoned from the date of arrival at the destination, or from the date on which the aircraft ought to have arrived, or from the date on which the transportation stopped.

(2) The method of calculating the period of limitation shall be determined by the law of the court to which the case is submitted.

ARTICLE 30. (1) In the case of transportation to be performed by various successive carriers and falling within the definition set out in the third paragraph of Article 1, each carrier who accepts passengers, baggage or goods shall be subject to the rules set out in this convention, and shall be deemed to be one of the contracting parties to the contract of transportation insofar as the contract deals with that part of the transportation which is performed under his supervision.

(2) In the case of transportation of this nature, the passenger or his representative can take action only against the carrier who performed the transportation during which the accident or the delay occurred, save in the case where, by express agreement, the first carrier has assumed liability for the whole journey.

(3) As regards baggage or goods, the passenger or consignor shall have a right of action against the first carrier, and the passenger or consignee who is entitled to delivery shall have a right of action against the last carrier, and further, each may take action against the carrier who performed the transportation during which the destruction, loss, damage, or delay took place. These carriers shall be jointly and severally liable to the passenger or to the consignor or consignee.

CHAPTER IV Provisions Relating to Combined Transportation

ARTICLE 31. (1) In the case of combined transportation performed partly by air and partly by any other mode of transportation, the provisions of this convention shall apply only to the transportation, by air, provided that the transportation by air falls within the terms of Article 1.

(2) Nothing in this convention shall prevent the parties in the case of combined transportation from inserting in the document of air transportation conditions relating to other modes of transportation, provided that the provisions of this convention are observed as regards the transportation by air.

CHAPTER V General and Final Provisions

ARTICLE 32. Any clause contained in the contract and all special agreements entered into before the damage occurred by which the parties purport to infringe the rules laid down by this convention, whether by deciding the law to be applied, or by altering the rules as to jurisdiction, shall be null and void. Nevertheless for the transportation of goods arbitration clauses shall be allowed, subject to this convention, if the arbitration is to take place within one of the jurisdictions referred to in the first paragraph of article 28.

ARTICLE 33. Nothing contained in this convention shall prevent the carrier either from refusing to enter into any contract of transportation or from making regulations which do not conflict with the provisions of this convention.

ARTICLE 34. This convention shall not apply to international transportation by air performed by way of experimental trial by air navigation enterprises with the view to the establishment of regular lines of air navigation, nor shall it apply to transportation performed in extraordinary circumstances outside the normal scope of an air carrier's business.

ARTICLE 35. The expression "days" when used in this convention means current days, not working days.

ARTICLE 36. This convention is drawn up in French in a single copy which shall remain deposited in the archives of the Ministry for Foreign Affairs of Poland and of which one duly certified copy shall be sent by the Polish Government to the Government of each of the High Contracting Parties.

ARTICLE 37. (1) This convention shall be ratified. The instruments of ratification shall be deposited in the archives of the Ministry for Foreign Affairs of Poland, which shall give notice of the deposit to the Government of each of the High Contracting Parties.

(2) As soon as this convention shall have been ratified by five of the High Contracting Parties it shall come into force as between them on the ninetieth day after the deposit of the fifth ratification. Thereafter it shall come into force between the High Contracting Parties which shall have ratified and the High Contracting Party which deposits its instrument of ratification on the ninetieth day after the deposit.

(3) It shall be the duty of the Government of the Republic of Poland to notify the Government of each of the High Contracting Parties of the date on which this convention comes into force as well as the date of the deposit of each ratification.

ARTICLE 38. (1) This convention shall, after it has come into force, remain open for adherence by any state.

(2) The adherence shall be effected by a notification addressed to the Government of the Republic of Poland, which shall inform the Government of each of the High Contracting Parties thereof.

(3) The adherence shall take effect as from the ninetieth day after the notification made to the Government of the Republic of Poland.

ARTICLE 39. (1) Any one of the High Contracting Parties may denounce this convention by a notification addressed to the Government of the Republic of Poland, which shall at once inform the Government of each of the High Contracting Parties.

(2) Denunciation shall take effect six months after the notification of denunciation, and shall operate only as regards the party which shall have proceeded to denunciation.

ARTICLE 40. (1) Any High Contracting Party may, at the time of signature or of deposit of ratification or of adherence, declare that the acceptance which it gives to this convention does not apply to all or any of its colonies, protectorates, territories under mandate, or any other territory subject to its sovereignty or its authority, or any other territory under its suzerainty.

(2) Accordingly any High Contracting Party may subsequently adhere separately in the name of all or any of its colonies, protectorates, territories under mandate, or any other territory subject to its sovereignty or to its authority or any other territory under its suzerainty which have been thus excluded by its original declaration.

(3) Any High Contracting Party may denounce this Convention, in accordance with its provisions, separately or for all or any of its colonies, protectorates, territories under mandate, or any other territory subject to its sovereignty or to its authority, or any other territory under its suzerainty.

ARTICLE 41. Any High Contracting Party shall be entitled not earlier than two years after the coming into force of this convention to call for the assembling of a new international conference in order to consider any improvements which may be made in this convention. To this end it will communicate with the Government of the French Republic which will take the necessary measures to make preparations for such conference.

ADDITIONAL PROTOCOL With Reference to Article 2

The High Contracting Parties reserve to themselves the right to declare at the time of ratification or of accession that the first paragraph of Article 2 of this convention shall not apply to international transportation by air performed directly by the state, its colonies, protectorates, or mandated territories, or by any other territory under its sovereignty, suzerainty, or authority.

Parties to the Convention as of December 31, 1965:

Algeria

India

Argentina

Indonesia

Australia 1

Ireland

Austria

Israel

Belgium

Italy

Brazil

Ivory Coast

Bulgaria

Jamaica

Burma

Japan

Cameroon

Kenya

Canada 2

People's Democratic Republic of Korea

Ceylon

Laos

People's Republic of China

Latvia

Congo (Brazzaville)

Lebanon

Congo (Leopoldville)

Liberia

Cuba 2

Liechtenstein

Cyprus

Luxembourg

Czechoslovakia

Madagascar

Dahomey

Malawi

Denmark

Malaysia

Ethiopia

Mali

Finland

Malta

France

Mauritania

Gambia

Mexico

German Democratic Republic

Mongolian People's Republic

Federal Republic of Germany 3

Morocco

Ghana

Netherlands 4

Greece

New Zealand

Guinea

Niger

Hungary

Syrian Arab Republic

Iceland

Tanzania

Nigeria

Trinidad and Tobago

Norway

Tunisia

Pakistan 2

Uganda

Philippines

Union of Soviet Socialist Republics

Poland

United Arab Republic

Portugal

United Kingdom 5

Rumania

United States 2, 6

Rwanda

Upper Volta

Senegal

Venezuela

Sierra Leone

Vietnam

Somali Republic

Western Samoa

South Africa

Yugoslavia

Spain

Zambia

Sweden

Switzerland

Footnotes

Including Papua, Norfolk Islands and the trust territories of New Guinea and Nauru.
With reservation.
Including Land Berlin.
Including Surinam and Curacao.
Including Aden and Protectorate of South Arabia, Antigua, Ascencion Islands, Bahamas, Barbados, Basutoland, Bechuanaland, Bermuda, British Guiana, British Honduras British Solomon Islands, Brunei, Caicos, Caymen Islands, Channel Islands, Dominica, Falkland Islands, Fiji Islands, Gibraltar, Gilbert and Ellice Islands, Grenada, Hong Kong, Isle of Man, Mauritius, Montserrat, Rhodesia, St. Christopher, Nevis, St. Helena, St. Lucia, St. Vincent, Seychelles, Swaziland, Tonga, Turks, Virgin Islands.
Notification of denunciation received November 15, 1965, effective May 15, 1966.

Montreal Convention

May 28, 1999

CONVENTION FOR THE UNIFICATION OF CERTAIN RULES FOR INTERNATIONAL CARRIAGE BY AIR

THE STATES PARTIES TO THIS CONVENTION

RECOGNIZING the significant contribution of the Convention for the Unification of Certain Rules Relating to International Carriage by Air signed in Warsaw on 12 October 1929, hereinafter referred to as the “Warsaw Convention”, and other related instruments to the harmonization of private international air law;

RECOGNIZING the need to modernize and consolidate the Warsaw Convention and related instruments;

RECOGNIZING the importance of ensuring protection of the interests of consumers in international carriage by air and the need for equitable compensation based on the principle of restitution;

REAFFIRMING the desirability of an orderly development of international air transport operations and the smooth flow of passengers, baggage and cargo in accordance with the principles and objectives of the Convention on International Civil Aviation, done at Chicago on 7 December 1944;

CONVINCED that collective State action for further harmonization and codification of certain rules governing international carriage by air through a new Convention is the most adequate means of achieving an equitable balance of interests;

HAVE AGREED AS FOLLOWS:

Chapter I General Provisions

Article 1 — Scope of Application

1. This Convention applies to all international carriage of persons, baggage or cargo performed by aircraft for reward. It applies equally to gratuitous carriage by aircraft performed by an air transport undertaking.

2. For the purposes of this Convention, the expression international carriage means any carriage in which, according to the agreement between the parties, the place of departure and the place of destination, whether or not there be a break in the carriage or a transshipment, are situated either within the territories of two States Parties, or within the territory of a single State Party if there is an agreed stopping place within the territory of another State, even if that State is not a State Party. Carriage between two points within the territory of a single State Party without an agreed stopping place within the territory of another State is not international carriage for the purposes of this Convention.

3. Carriage to be performed by several successive carriers is deemed, for the purposes of this Convention, to be one undivided carriage if it has been regarded by the parties as a single operation, whether it had been agreed upon under the form of a single contract or of a series of contracts, and it does not lose its international character merely because one contract or a series of contracts is to be performed entirely within the territory of the same State.

4. This Convention applies also to carriage as set out in Chapter V, subject to the terms contained therein.

Article 2 — Carriage Performed by State and Carriage of Postal Items

1. This Convention applies to carriage performed by the State or by legally constituted public bodies provided it falls within the conditions laid down in Article 1.

2. In the carriage of postal items, the carrier shall be liable only to the relevant postal administration in accordance with the rules applicable to the relationship between the carriers and the postal administrations.

3. Except as provided in paragraph 2 of this Article, the provisions of this Convention shall not apply to the carriage of postal items.

Chapter II Documentation and Duties of the Parties Relating to the Carriage of Passengers, Baggage and Cargo

Article 3 — Passengers and Baggage

1. In respect of carriage of passengers, an individual or collective document of carriage shall be delivered containing:

an indication of the places of departure and destination;
if the places of departure and destination are within the territory of a single State Party, one or more agree stopping places being within the territory of another State, an indication of at least one such stopping place.

2. Any other means which preserves the information indicated in paragraph 1 may be substituted for the delivery of the document referred to in that paragraph. If any such other means is used, the carrier shall offer to deliver to the passenger a written statement of the information so preserved.

3. The carrier shall deliver to the passenger a baggage identification tag for each piece of checked baggage.

4. The passenger shall be given written notice to the effect that where this Convention is applicable it governs and may limit the liability of carriers in respect of death or injury and for destruction or loss of, or damage to, baggage, and for delay.

5. Non-compliance with the provisions of the foregoing paragraphs shall not affect the existence or the validity of the contract of carriage, which shall, nonetheless, be subject to the rules of this Convention including those relating to limitation of liability.

Article 4 — Cargo

1. In respect of the carriage of cargo, an air waybill shall be delivered.

2. Any other means which preserves a record of the carriage to be performed may be substituted for the delivery of an air waybill. If such other means are used, the carrier shall, if so requested by the consignor, deliver to the consignor a cargo receipt permitting identification of the consignment and access to the information contained in the record preserved by such other means.

Article 5 — Contents of Air Waybill or Cargo Receipt

The air waybill or the cargo receipt shall include:

(a) an indication of the places of departure and destination;

(b) if the places of departure and destination are within the territory of a single State Party, one or more agreed stopping places being within the territory of another State, an indication of at least one such stopping place; and

Article 6 — Document Relating to the Nature of the Cargo

The consignor may be required, if necessary to meet the formalities of customs, police and similar public authorities, to deliver a document indicating the nature of the cargo. This provision creates for the carrier no duty, obligation or liability resulting therefrom.

Article 7 — Description of Air Waybill

1. The air waybill shall be made out by the consignor in three original parts.

2. The first part shall be marked „for the carrier“; it shall be signed by the consignor. The second part shall be marked „for the consignee“; it shall be signed by the consignor and by the carrier. The third part shall be signed by the carrier who shall hand it to the consignor after the cargo has been accepted.

3. The signature of the carrier and that of the consignor may be printed or stamped.

4. If, at the request of the consignor, the carrier makes out the air waybill, the carrier shall be deemed, subject to proof to the contrary, to have done so on behalf of the consignor.

Article 8 — Documentation for Multiple Packages

When there is more than one package:

(a) the carrier of cargo has the right to require the consignor to make out separate air waybills;

(b) the consignor has the right to require the carrier to deliver separate cargo receipts when the other means referred to in paragraph 2 of Article 4 are used.

Article 9 — Non-compliance with Documentary Requirements

Non-compliance with the provisions of Articles 4 to 8 shall not affect the existence or the validity of the contract of carriage, which shall, nonetheless, be subject to the rules of this Convention including those relating to limitation of liability.

Article 10 — Responsibility for Particulars of Documentation

1. The consignor is responsible for the correctness of the particulars and statements relating to the cargo inserted by it or on its behalf in the air waybill or furnished by it or on its behalf to the carrier for insertion in the cargo receipt or for insertion in the record preserved by the other means referred to in paragraph 2 of Article 4. The foregoing shall also apply where the person acting on behalf of the consignor is also the agent of the carrier.

2. The consignor shall indemnify the carrier against all damage suffered by it, or by any other person to whom the carrier is liable, by reason of the irregularity, incorrectness or incompleteness of the particulars and statements furnished by the consignor or on its behalf.

3. Subject to the provisions of paragraphs 1 and 2 of this Article, the carrier shall indemnify the consignor against all damage suffered by it, or by any other person to whom the consignor is liable, by reason of the irregularity, incorrectness or incompleteness of the particulars and statements inserted by the carrier or on its behalf in the cargo receipt or in the record preserved by the other means referred to in paragraph 2 of Article 4.

Article 11 — Evidentiary Value of Documentation

1. The air waybill or the cargo receipt is prima facie evidence of the conclusion of the contract, of the acceptance of the cargo and of the conditions of carriage mentioned therein.

2. Any statements in the air waybill or the cargo receipt relating to the weight, dimensions and packing of the cargo, as well as those relating to the number of packages, are prima facie evidence of the facts stated; those relating to the quantity, volume and condition of the cargo do not constitute evidence against the carrier except so far as they both have been, and are stated in the air waybill or the cargo receipt to have been, checked by it in the presence of the consignor, or relate to the apparent condition of the cargo.

Article 12 — Right of Disposition of Cargo

1. Subject to its liability to carry out all its obligations under the contract of carriage, the consignor has the right to dispose of the cargo by withdrawing it at the airport of departure or destination, or by stopping it in the course of the journey on any landing, or by calling for it to be delivered at the place of destination or in the course of the journey to a person other than the consignee originally designated, or by requiring it to be returned to the airport of departure. The consignor must not exercise this right of disposition in such a way as to prejudice the carrier or other consignors and must reimburse any expenses occasioned by the exercise of this right.

2. If it is impossible to carry out the instructions of the consignor, the carrier must so inform the consignor forthwith.

3. If the carrier carries out the instructions of the consignor for the disposition of the cargo without requiring the production of the part of the air waybill or the cargo receipt delivered to the latter, the carrier will be liable, without prejudice to its right of recovery from the consignor, for any damage which may be caused thereby to any person who is lawfully in possession of that part of the air waybill or the cargo receipt.

4. The right conferred on the consignor ceases at the moment when that of the consignee begins in accordance with Article 13. Nevertheless, if the consignee declines to accept the cargo, or cannot be communicated with, the consignor resumes its right of disposition.

Article 13 — Delivery of the Cargo

1. Except when the consignor has exercised its right under Article 12, the consignee is entitled, on arrival of the cargo at the place of destination, to require the carrier to deliver the cargo to it, on payment of the charges due and on complying with the conditions of carriage.

2. Unless it is otherwise agreed, it is the duty of the carrier to give notice to the consignee as soon as the cargo arrives.

3. If the carrier admits the loss of the cargo, or if the cargo has not arrived at the expiration of seven days after the date on which it ought to have arrived, the consignee is entitled to enforce against the carrier the rights which flow from the contract of carriage.

Article 14 — Enforcement of the Rights of Consignor and Consignee

The consignor and the consignee can respectively enforce all the rights given to them by Articles 12 and 13, each in its own name, whether it is acting in its own interest or in the interest of another, provided that it carries out the obligations imposed by the contract of carriage.

Article 15 — Relations of Consignor and Consignee or Mutual Relations of Third Parties

1. Articles 12, 13 and 14 do not affect either the relations of the consignor and the consignee with each other or the mutual relations of third parties whose rights are derived either from the consignor or from the consignee.

2. The provisions of Articles 12, 13 and 14 can only be varied by express provision in the air waybill or the cargo receipt.

Article 16 — Formalities of Customs, Police or Other Public Authorities

1. The consignor must furnish such information and such documents as are necessary to meet the formalities of customs, police and any other public authorities before the cargo can be delivered to the consignee. The consignor is liable to the carrier for any damage occasioned by the absence, insufficiency or irregularity of any such information or documents, unless the damage is due to the fault of the carrier, its servants or agents.

2. The carrier is under no obligation to enquire into the correctness or sufficiency of such information or documents.

Chapter III Liability of the Carrier and Extent of Compensation for Damage

Article 17 — Death and Injury of Passengers — Damage to Baggage

1. The carrier is liable for damage sustained in case of death or bodily injury of a passenger upon condition only that the accident which caused the death or injury took place on board the aircraft or in the course of any of the operations of embarking or disembarking.

2. The carrier is liable for damage sustained in case of destruction or loss of, or of damage to, checked baggage upon condition only that the event which caused the destruction, loss or damage took place on board the aircraft or during any period within which the checked baggage was in the charge of the carrier. However, the carrier is not liable if and to the extent that the damage resulted from the inherent defect, quality or vice of the baggage. In the case of unchecked baggage, including personal items, the carrier is liable if the damage resulted from its fault or that of its servants or agents.

3. If the carrier admits the loss of the checked baggage, or if the checked baggage has not arrived at the expiration of twenty-one days after the date on which it ought to have arrived, the passenger is entitled to enforce against the carrier the rights which flow from the contract of carriage.

4. Unless otherwise specified, in this Convention the term “baggage” means both checked baggage and unchecked baggage.

Article 18 — Damage to Cargo

1. The carrier is liable for damage sustained in the event of the destruction or loss of, or damage to, cargo upon condition only that the event which caused the damage so sustained took place during the carriage by air.

2. However, the carrier is not liable if and to the extent it proves that the destruction, or loss of, or damage to, the cargo resulted from one or more of the following:

(a) inherent defect, quality or vice of that cargo;

(b) defective packing of that cargo performed by a person other than the carrier or its servants or agents;

(d) an act of public authority carried out in connection with the entry, exit or transit of the cargo.

3. The carriage by air within the meaning of paragraph 1 of this Article comprises the period during which the cargo is in the charge of the carrier.

4. The period of the carriage by air does not extend to any carriage by land, by sea or by inland waterway performed outside an airport. If, however, such carriage takes place in the performance of a contract for carriage by air, for the purpose of loading, delivery or transshipment, any damage is presumed, subject to proof to the contrary, to have been the result of an event which took place during the carriage by air. If a carrier, without the consent of the consignor, substitutes carriage by another mode of transport for the whole or part of a carriage intended by the agreement between the parties to be carriage by air, such carriage by another mode of transport is deemed to be within the period of carriage by air.

Article 19 — Delay

The carrier is liable for damage occasioned by delay in the carriage by air of passengers, baggage or cargo. Nevertheless, the carrier shall not be liable for damage occasioned by delay if it proves that it and its servants and agents took all measures that could reasonably be required to avoid the damage or that it was impossible for it or them to take such measures.

Article 20 — Exoneration

If the carrier proves that the damage was caused or contributed to by the negligence or other wrongful act or omission of the person claiming compensation, or the person from whom he or she derives his or her rights, the carrier shall be wholly or partly exonerated from its liability to the claimant to the extent that such negligence or wrongful act or omission caused or contributed to the damage. When by reason of death or injury of a passenger compensation is claimed by a person other than the passenger, the carrier shall likewise be wholly or partly exonerated from its liability to the extent that it proves that the damage was caused or contributed to by the negligence or other wrongful act or omission of that passenger. This Article applies to all the liability provisions in this Convention, including paragraph 1 of Article 21.

Article 21 — Compensation in Case of Death or Injury of Passengers

1. For damages arising under paragraph 1 of Article 17 not exceeding 100 000 Special Drawing Rights for each passenger, the carrier shall not be able to exclude or limit its liability.

2. The carrier shall not be liable for damages arising under paragraph 1 of Article 17 to the extent that they exceed for each passenger 100 000 Special Drawing Rights if the carrier proves that:

(a) such damage was not due to the negligence or other wrongful act or omission of the carrier or its servants or agents; or

(b) such damage was solely due to the negligence or other wrongful act or omission of a third party.

Article 22 — Limits of Liability in Relation to Delay, Baggage and Cargo

1. In the case of damage caused by delay as specified in Article 19 in the carriage of persons, the liability of the carrier for each passenger is limited to 4 150 Special Drawing Rights.

2. In the carriage of baggage, the liability of the carrier in the case of destruction, loss, damage or delay is limited to 1 000 Special Drawing Rights for each passenger unless the passenger has made, at the time when the checked baggage was handed over to the carrier, a special declaration of interest in delivery at destination and has paid a supplementary sum if the case so requires. In that case the carrier will be liable to pay a sum not exceeding the declared sum, unless it proves that the sum is greater than the passenger’s actual interest in delivery at destination.

3. In the carriage of cargo, the liability of the carrier in the case of destruction, loss, damage or delay is limited to a sum of 17 Special Drawing Rights per kilogramme, unless the consignor has made, at the time when the package was handed over to the carrier, a special declaration of interest in delivery at destination and has paid a supplementary sum if the case so requires. In that case the carrier will be liable to pay a sum not exceeding the declared sum, unless it proves that the sum is greater than the consignor’s actual interest in delivery at destination.

4. In the case of destruction, loss, damage or delay of part of the cargo, or of any object contained therein, the weight to be taken into consideration in determining the amount to which the carrier’s liability is limited shall be only the total weight of the package or packages concerned. Nevertheless, when the destruction, loss, damage or delay of a part of the cargo, or of an object contained therein, affects the value of other packages covered by the same air waybill, or the same receipt or, if they were not issued, by the same record preserved by the other means referred to in paragraph 2 of Article 4, the total weight of such package or packages shall also be taken into consideration in determining the limit of liability.

5. The foregoing provisions of paragraphs 1 and 2 of this Article shall not apply if it is proved that the damage resulted from an act or omission of the carrier, its servants or agents, done with intent to cause damage or recklessly and with knowledge that damage would probably result; provided that, in the case of such act or omission of a servant or agent, it is also proved that such servant or agent was acting within the scope of its employment.

6. The limits prescribed in Article 21 and in this Article shall not prevent the court from awarding, in accordance with its own law, in addition, the whole or part of the court costs and of the other expenses of the litigation incurred by the plaintiff, including interest. The foregoing provision shall not apply if the amount of the damages awarded, excluding court costs and other expenses of the litigation, does not exceed the sum which the carrier has offered in writing to the plaintiff within a period of six months from the date of the occurrence causing the damage, or before the commencement of the action, if that is later.

Article 23 — Conversion of Monetary Units

1. The sums mentioned in terms of Special Drawing Right in this Convention shall be deemed to refer to the Special Drawing Right as defined by the International Monetary Fund. Conversion of the sums into national currencies shall, in case of judicial proceedings, be made according to the value of such currencies in terms of the Special Drawing Right at the date of the judgement. The value of a national currency, in terms of the Special Drawing Right, of a State Party which is a Member of the International Monetary Fund, shall be calculated in accordance with the method of valuation applied by the International Monetary Fund, in effect at the date of the judgement, for its operations and transactions. The value of a national currency, in terms of the Special Drawing Right, of a State Party which is not a Member of the International Monetary Fund, shall be calculated in a manner determined by that State.

2. Nevertheless, those States which are not Members of the International Monetary Fund and whose law does not permit the application of the provisions of paragraph 1 of this Article may, at the time of ratification or accession or at any time thereafter, declare that the limit of liability of the carrier prescribed in Article 21 is fixed at a sum of 1 500 000 monetary units per passenger in judicial proceedings in their territories; 62 500 monetary units per passenger with respect to paragraph 1 of Article 22; 15 000 monetary units per passenger with respect to paragraph 2 of Article 22; and 250 monetary units per kilogramme with respect to paragraph 3 of Article 22. This monetary unit corresponds to sixty-five and a half milligrammes of gold of millesimal fineness nine hundred. These sums may be converted into the national currency concerned in round figures. The conversion of these sums into national currency shall be made according to the law of the State concerned.

3. The calculation mentioned in the last sentence of paragraph 1 of this Article and the conversion method mentioned in paragraph 2 of this Article shall be made in such manner as to express in the national currency of the State Party as far as possible the same real value for the amounts in Articles 21 and 22 as would result from the application of the first three sentences of paragraph 1 of this Article. States Parties shall communicate to the depositary the manner of calculation pursuant to paragraph 1 of this Article, or the result of the conversion in paragraph 2 of this Article as the case may be, when depositing an instrument of ratification, acceptance, approval of or accession to this Convention and whenever there is a change in either.

Article 24 — Review of Limits

1. Without prejudice to the provisions of Article 25 of this Convention and subject to paragraph 2 below, the limits of liability prescribed in Articles 21, 22 and 23 shall be reviewed by the Depositary at five-year intervals, the first such review to take place at the end of the fifth year following the date of entry into force of this Convention, or if the Convention does not enter into force within five years of the date it is first open for signature, within the first year of its entry into force, by reference to an inflation factor which corresponds to the accumulated rate of inflation since the previous revision or in the first instance since the date of entry into force of the Convention. The measure of the rate of inflation to be used in determining the inflation factor shall be the weighted average of the annual rates of increase or decrease in the Consumer Price Indices of the States whose currencies comprise the Special Drawing Right mentioned in paragraph 1 of Article 23.

2. If the review referred to in the preceding paragraph concludes that the inflation factor has exceeded 10 per cent, the Depositary shall notify States Parties of a revision of the limits of liability. Any such revision shall become effective six months after its notification to the States Parties. If within three months after its notification to the States Parties a majority of the States Parties register their disapproval, the revision shall not become effective and the Depositary shall refer the matter to a meeting of the States Parties. The Depositary shall immediately notify all States Parties of the coming into force of any revision.

3. Notwithstanding paragraph 1 of this Article, the procedure referred to in paragraph 2 of this Article shall be applied at any time provided that one-third of the States Parties express a desire to that effect and upon condition that the inflation factor referred to in paragraph 1 has exceeded 30 per cent since the previous revision or since the date of entry into force of this Convention if there has been no previous revision. Subsequent reviews using the procedure described in paragraph 1 of this Article will take place at five-year intervals starting at the end of the fifth year following the date of the reviews under the present paragraph.

Article 25 — Stipulation on Limits

A carrier may stipulate that the contract of carriage shall be subject to higher limits of liability than those provided for in this Convention or to no limits of liability whatsoever.

Article 26 — Invalidity of Contractual Provisions

Any provision tending to relieve the carrier of liability or to fix a lower limit than that which is laid down in this Convention shall be null and void, but the nullity of any such provision does not involve the nullity of the whole contract, which shall remain subject to the provisions of this Convention.

Article 27 — Freedom to Contract

Nothing contained in this Convention shall prevent the carrier from refusing to enter into any contract of carriage, from waiving any defences available under the Convention, or from laying down conditions which do not conflict with the provisions of this Convention.

Article 28 — Advance Payments

In the case of aircraft accidents resulting in death or injury of passengers, the carrier shall, if required by its national law, make advance payments without delay to a natural person or persons who are entitled to claim compensation in order to meet the immediate economic needs of such persons. Such advance payments shall not constitute a recognition of liability and may be offset against any amounts subsequently paid as damages by the carrier.

Article 29 — Basis of Claims

In the carriage of passengers, baggage and cargo, any action for damages, however founded, whether under this Convention or in contract or in tort or otherwise, can only be brought subject to the conditions and such limits of liability as are set out in this Convention without prejudice to the question as to who are the persons who have the right to bring suit and what are their respective rights. In any such action, punitive, exemplary or any other non-compensatory damages shall not be recoverable.

Article 30 — Servants, Agents — Aggregation of Claims

1. If an action is brought against a servant or agent of the carrier arising out of damage to which the Convention relates, such servant or agent, if they prove that they acted within the scope of their employment, shall be entitled to avail themselves of the conditions and limits of liability which the carrier itself is entitled to invoke under this Convention.

2. The aggregate of the amounts recoverable from the carrier, its servants and agents, in that case, shall not exceed the said limits.

3. Save in respect of the carriage of cargo, the provisions of paragraphs 1 and 2 of this Article shall not apply if it is proved that the damage resulted from an act or omission of the servant or agent done with intent to cause damage or recklessly and with knowledge that damage would probably result.

Article 31 — Timely Notice of Complaints

1. Receipt by the person entitled to delivery of checked baggage or cargo without complaint is prima facie evidence that the same has been delivered in good condition and in accordance with the document of carriage or with the record preserved by the other means referred to in paragraph 2 of Article 3 and paragraph 2 of Article 4.

2. In the case of damage, the person entitled to delivery must complain to the carrier forthwith after the discovery of the damage, and, at the latest, within seven days from the date of receipt in the case of checked baggage and fourteen days from the date of receipt in the case of cargo. In the case of delay, the complaint must be made at the latest within twenty-one days from the date on which the baggage or cargo have been placed at his or her disposal.

3. Every complaint must be made in writing and given or dispatched within the times aforesaid.

4. If no complaint is made within the times aforesaid, no action shall lie against the carrier, save in the case of fraud on its part.

Article 32 — Death of Person Liable

In the case of the death of the person liable, an action for damages lies in accordance with the terms of this Convention against those legally representing his or her estate.

Article 33 — Jurisdiction

1. An action for damages must be brought, at the option of the plaintiff, in the territory of one of the States Parties, either before the court of the domicile of the carrier or of its principal place of business, or where it has a place of business through which the contract has been made or before the court at the place of destination.

2. In respect of damage resulting from the death or injury of a passenger, an action may be brought before one of the courts mentioned in paragraph 1 of this Article, or in the territory of a State Party in which at the time of the accident the passenger has his or her principal and permanent residence and to or from which the carrier operates services for the carriage of passengers by air, either on its own aircraft, or on another carrier’s aircraft pursuant to a commercial agreement, and in which that carrier conducts its business of carriage of passengers by air from premises leased or owned by the carrier itself or by another carrier with which it has a commercial agreement.

3. For the purposes of paragraph 2,

(a) „commercial agreement“ means an agreement, other than an agency agreement, made between carriers and relating to the provision of their joint services for carriage of passengers by air;

(b) „principal and permanent residence“ means the one fixed and permanent abode of the passenger at the time of the accident. The nationality of the passenger shall not be the determining factor in this regard.

4. Questions of procedure shall be governed by the law of the court seized of the case.

Article 34 — Arbitration

1. Subject to the provisions of this Article, the parties to the contract of carriage for cargo may stipulate that any dispute relating to the liability of the carrier under this Convention shall be settled by arbitration. Such agreement shall be in writing.

2. The arbitration proceedings shall, at the option of the claimant, take place within one of the jurisdictions referred to in Article 33.

3. The arbitrator or arbitration tribunal shall apply the provisions of this Convention.

4. The provisions of paragraphs 2 and 3 of this Article shall be deemed to be part of every arbitration clause or agreement, and any term of such clause or agreement which is inconsistent therewith shall be null and void.

Article 35 — Limitation of Actions

1. The right to damages shall be extinguished if an action is not brought within a period of two years, reckoned from the date of arrival at the destination, or from the date on which the aircraft ought to have arrived, or from the date on which the carriage stopped.

2. The method of calculating that period shall be determined by the law of the court seised of the case.

Article 36 — Successive Carriage

1. In the case of carriage to be performed by various successive carriers and falling within the definition set out in paragraph 3 of Article 1, each carrier which accepts passengers, baggage or cargo is subject to the rules set out in this Convention and is deemed to be one of the parties to the contract of carriage in so far as the contract deals with that part of the carriage which is performed under its supervision.

2. In the case of carriage of this nature, the passenger or any person entitled to compensation in respect of him or her can take action only against the carrier which performed the carriage during which the accident or the delay occurred, save in the case where, by express agreement, the first carrier has assumed liability for the whole journey.

3. As regards baggage or cargo, the passenger or consignor will have a right of action against the first carrier, and the passenger or consignee who is entitled to delivery will have a right of action against the last carrier, and further, each may take action against the carrier which performed the carriage during which the destruction, loss, damage or delay took place. These carriers will be jointly and severally liable to the passenger or to the consignor or consignee.

Article 37 — Right of Recourse against Third Parties

Nothing in this Convention shall prejudice the question whether a person liable for damage in accordance with its provisions has a right of recourse against any other person.

Chapter IV Combined Carriage

Article 38 — Combined Carriage

1. In the case of combined carriage performed partly by air and partly by any other mode of carriage, the provisions of this Convention shall, subject to paragraph 4 of Article 18, apply only to the carriage by air, provided that the carriage by air falls within the terms of Article 1.

2. Nothing in this Convention shall prevent the parties in the case of combined carriage from inserting in the document of air carriage conditions relating to other modes of carriage, provided that the provisions of this Convention are observed as regards the carriage by air.

Chapter V Carriage by Air Performed by a Person other than the Contracting Carrier

Article 39 — Contracting Carrier — Actual Carrier

The provisions of this Chapter apply when a person (hereinafter referred to as „the contracting carrier“) as a principal makes a contract of carriage governed by this Convention with a passenger or consignor or with a person acting on behalf of the passenger or consignor, and another person (hereinafter referred to as „the actual carrier“) performs, by virtue of authority from the contracting carrier, the whole or part of the carriage, but is not with respect to such part a successive carrier within the meaning of this Convention. Such authority shall be presumed in the absence of proof to the contrary.

Article 40 — Respective Liability of Contracting and Actual Carriers

If an actual carrier performs the whole or part of carriage which, according to the contract referred to in Article 39, is governed by this Convention, both the contracting carrier and the actual carrier shall, except as otherwise provided in this Chapter, be subject to the rules of this Convention, the former for the whole of the carriage contemplated in the contract, the latter solely for the carriage which it performs.

Article 41 — Mutual Liability

1. The acts and omissions of the actual carrier and of its servants and agents acting within the scope of their employment shall, in relation to the carriage performed by the actual carrier, be deemed to be also those of the contracting carrier.

2. The acts and omissions of the contracting carrier and of its servants and agents acting within the scope of their employment shall, in relation to the carriage performed by the actual carrier, be deemed to be also those of the actual carrier. Nevertheless, no such act or omission shall subject the actual carrier to liability exceeding the amounts referred to in Articles 21, 22, 23 and 24. Any special agreement under which the contracting carrier assumes obligations not imposed by this Convention or any waiver of rights or defences conferred by this Convention or any special declaration of interest in delivery at destination contemplated in Article 22 shall not affect the actual carrier unless agreed to by it.

Article 42 — Addressee of Complaints and Instructions

Any complaint to be made or instruction to be given under this Convention to the carrier shall have the same effect whether addressed to the contracting carrier or to the actual carrier. Nevertheless, instructions referred to in Article 12 shall only be effective if addressed to the contracting carrier.

Article 43 — Servants and Agents

In relation to the carriage performed by the actual carrier, any servant or agent of that carrier or of the contracting carrier shall, if they prove that they acted within the scope of their employment, be entitled to avail themselves of the conditions and limits of liability which are applicable under this Convention to the carrier whose servant or agent they are, unless it is proved that they acted in a manner that prevents the limits of liability from being invoked in accordance with this Convention.

Article 44 — Aggregation of Damages

In relation to the carriage performed by the actual carrier, the aggregate of the amounts recoverable from that carrier and the contracting carrier, and from their servants and agents acting within the scope of their employment, shall not exceed the highest amount which could be awarded against either the contracting carrier or the actual carrier under this Convention, but none of the persons mentioned shall be liable for a sum in excess of the limit applicable to that person.

Article 45 — Addressee of Claims

In relation to the carriage performed by the actual carrier, an action for damages may be brought, at the option of the plaintiff, against that carrier or the contracting carrier, or against both together or separately. If the action is brought against only one of those carriers, that carrier shall have the right to require the other carrier to be joined in the proceedings, the procedure and effects being governed by the law of the court seized of the case.

Article 46 — Additional Jurisdiction

Any action for damages contemplated in Article 45 must be brought, at the option of the plaintiff, in the territory of one of the States Parties, either before a court in which an action may be brought against the contracting carrier, as provided in Article 33, or before the court having jurisdiction at the place where the actual carrier has its domicile or its principal place of business.

Article 47 — Invalidity of Contractual Provisions

Any contractual provision tending to relieve the contracting carrier or the actual carrier of liability under this Chapter or to fix a lower limit than that which is applicable according to this Chapter shall be null and void, but the nullity of any such provision does not involve the nullity of the whole contract, which shall remain subject to the provisions of this Chapter.

Article 48 — Mutual Relations of Contracting and Actual Carriers

Except as provided in Article 45, nothing in this Chapter shall affect the rights and obligations of the carriers between themselves, including any right of recourse or indemnification.

Chapter VI Other Provisions

Article 49 — Mandatory Application

Any clause contained in the contract of carriage and all special agreements entered into before the damage occurred by which the parties purport to infringe the rules laid down by this Convention, whether by deciding the law to be applied, or by altering the rules as to jurisdiction, shall be null and void.

Article 50 — Insurance

States Parties shall require their carriers to maintain adequate insurance covering their liability under this Convention. A carrier may be required by the State Party into which it operates to furnish evidence that it maintains adequate insurance covering its liability under this Convention.

Article 51 — Carriage Performed in Extraordinary Circumstances

The provisions of Articles 3 to 5, 7 and 8 relating to the documentation of carriage shall not apply in the case of carriage performed in extraordinary circumstances outside the normal scope of a carrier’s business.

Article 52 — Definition of Days

The expression “days” when used in this Convention means calendar days, not working days.

Chapter VII Final Clauses

Article 53 — Signature, Ratification and Entry into Force

1. This Convention shall be open for signature in Montreal on 28 May 1999 by States participating in the International Conference on Air Law held at Montreal from 10 to 28 May 1999. After 28 May 1999, the Convention shall be open to all States for signature at the Headquarters of the International Civil Aviation Organization in Montreal until it enters into force in accordance with paragraph 6 of this Article.

2. This Convention shall similarly be open for signature by Regional Economic Integration Organisations. For the purpose of this Convention, a „Regional Economic Integration Organisation“ means any organisation which is constituted by sovereign States of a given region which has competence in respect of certain matters governed by this Convention and has been duly authorized to sign and to ratify, accept, approve or accede to this Convention. A reference to a “State Party” or “States Parties” in this Convention, otherwise than in paragraph 2 of Article 1, paragraph 1(b) of Article 3, paragraph (b) of Article 5, Articles 23, 33, 46 and paragraph (b) of Article 57, applies equally to a Regional Economic Integration Organisation. For the purpose of Article 24, the references to “a majority of the States Parties” and „one-third of the States Parties“ shall not apply to a Regional Economic Integration Organisation.

3. This Convention shall be subject to ratification by States and by Regional Economic Integration Organisations which have signed it.

4. Any State or Regional Economic Integration Organisation which does not sign this Convention may accept, approve or accede to it at any time.

5. Instruments of ratification, acceptance, approval or accession shall be deposited with the International Civil Aviation Organization, which is hereby designated the Depositary.

6. This Convention shall enter into force on the sixtieth day following the date of deposit of the thirtieth instrument of ratification, acceptance, approval or accession with the Depositary between the States which have deposited such instrument. An instrument deposited by a Regional Economic Integration Organisation shall not be counted for the purpose of this paragraph.

7. For other States and for other Regional Economic Integration Organisations, this Convention shall take effect sixty days following the date of deposit of the instrument of ratification, acceptance, approval or accession.

8. The Depositary shall promptly notify all signatories and States Parties of:

(a) each signature of this Convention and date thereof;

(b) each deposit of an instrument of ratification, acceptance, approval or accession and date thereof;

(d) the date of the coming into force of any revision of the limits of liability established under this Convention;

(e) any denunciation under Article 54.

Article 54 — Denunciation

1. Any State Party may denounce this Convention by written notification to the Depositary.

2. Denunciation shall take effect one hundred and eighty days following the date on which notification is received by the Depositary.

Article 55 — Relationship with other Warsaw Convention Instruments

This Convention shall prevail over any rules which apply to international carriage by air:

1. between States Parties to this Convention by virtue of those States commonly being Party to

(a) the Convention for the Unification of Certain Rules Relating to International Carriage by Air Signed at Warsaw on 12 October 1929 (hereinafter called the Warsaw Convention);

(b) the Protocol to Amend the Convention for the Unification of Certain Rules Relating to International Carriage by Air Signed at Warsaw on 12 October 1929, Done at The Hague on 28 September 1955 (hereinafter called The Hague Protocol);

(c) the Convention, Supplementary to the Warsaw Convention, for the Unification of Certain Rules Relating to International Carriage by Air Performed by a Person Other than the Contracting Carrier, signed at Guadalajara on 18 September 1961 (hereinafter called the Guadalajara Convention);

(d) the Protocol to Amend the Convention for the Unification of Certain Rules Relating to International Carriage by Air Signed at Warsaw on 12 October 1929 as Amended by the Protocol Done at The Hague on 28 September 1955 Signed at Guatemala City on 8 March 1971 (hereinafter called the Guatemala City Protocol);

(e) Additional Protocol Nos. 1 to 3 and Montreal Protocol No. 4 to amend the Warsaw Convention as amended by The Hague Protocol or the Warsaw Convention as amended by both The Hague Protocol and the Guatemala City Protocol Signed at Montreal on 25 September 1975 (hereinafter called the Montreal Protocols); or

2. within the territory of any single State Party to this Convention by virtue of that State being Party to one or more of the instruments referred to in sub-paragraphs (a) to (e) above.

Article 56 — States with more than one System of Law

1. If a State has two or more territorial units in which different systems of law are applicable in relation to matters dealt with in this Convention, it may at the time of signature, ratification, acceptance, approval or accession declare that this Convention shall extend to all its territorial units or only to one or more of them and may modify this declaration by submitting another declaration at any time.

2. Any such declaration shall be notified to the Depositary and shall state expressly the territorial units to which the Convention applies.

3. In relation to a State Party which has made such a declaration:

(a) references in Article 23 to “national currency” shall be construed as referring to the currency of the relevant territorial unit of that State; and

(b) the reference in Article 28 to “national law” shall be construed as referring to the law of the relevant territorial unit of that State.

Article 57 — Reservations

No reservation may be made to this Convention except that a State Party may at any time declare by a notification addressed to the Depositary that this Convention shall not apply to:

(a) international carriage by air performed and operated directly by that State Party for non-commercial purposes in respect to its functions and duties as a sovereign State; and/or

(b) the carriage of persons, cargo and baggage for its military authorities on aircraft registered in or leased by that State Party, the whole capacity of which has been reserved by or on behalf of such authorities.

IN WITNESS WHEREOF the undersigned Plenipotentiaries, having been duly authorized, have signed this Convention.

DONE at Montreal on the 28th day of May of the year one thousand nine hundred and ninety-nine in the English, Arabic, Chinese, French, Russian and Spanish languages, all texts being equally authentic. This Convention shall remain deposited in the archives of the International Civil Aviation Organization, and certified copies thereof shall be transmitted by the Depositary to all States Parties to this Convention, as well as to all States Parties to the Warsaw Convention, The Hague Protocol, the Guadalajara Convention, the Guatemala City Protocol, and the Montreal Protocols.

CA No 146 Public Service Act

As amended by CA No 454, RA Nos 178, 723, 1270, 2031, 2677, 3792, 11659

CHAPTER I Organization

November 07, 1936

AN ACT TO REORGANIZE THE PUBLIC SERVICE COMMISSION, PRESCRIBE ITS POWERS AND DUTIES, DEFINE AND REGULATE PUBLIC SERVICES, PROVIDE AND FIX THE RATES AND QUOTA OF EXPENSES TO BE PAID BY THE SAME, AND FOR OTHER PURPOSES.

Be it enacted by the National Assembly of the Philippines:

SECTION 1. This Act shall be known as the "Public Service Act."

SEC. 2. There is created under the Department of Justice a commission which shall be designated and known as the Public Service Commission, composed of one Public Service Commissioner and five Associate Commissioners, and which shall be vested with the powers and duties hereafter specified. Whenever the word 'Commission' is used in this Act, it shall be held to mean the Public Service Commission, and whenever the word 'Commissioner' is used in this Act it shall be held to mean the Public Service Commissioner or anyone of the Associate Commissioners.

The Public Service Commissioner and the Associate Public Service Commissioners shall be natural born citizens and residents of the Philippines, not under thirty years of members of the Bar of the Philippines, with at least five years of law practice or five years of employment in government service requiring a lawyer's diploma; and shall be appointed by the President of the Philippines, with consent of the Commission on Appointments of the Congress of the Philippines: Provided, however, That the present Commissioner and the personnel of the Commission shall continue in office without the necessity of reappointment.

The Commissioners shall have the rank and privilege of retirement of Judges of the Courts of First Instance. (As amended by RA Nos 178, 2677)

SEC. 3. The Commissioner and Associate Commissioners shall hold office until they reach the age of seventy years, or until removed in accordance with the procedure prescribed in section one hundred and seventy-three of Act Numbered Twenty-seven hundred and eleven, known as the Revised Administrative Code: Provided, however, That upon retirement, any Commissioner or Associate Commissioner shall be entitled to all retirement benefits and privileges for Judges of the Courts of First Instance or under the retirement law to which he may be entitled on the date of his retirement. In case of the absence, for any reason, of the Public Service Commissioner, the Associate Commissioner with seniority of appointment shall act as Commissioner. If on account of absence, illness, or incapacity of any of the Commissioners, or whenever by reason of temporary disability of any Commissioner or of a vacancy occurring therein, the requisite number of Commissioners necessary to render a decision or issue an order in any case is not present, or in the event of a tie vote among the Commissioners, the Secretary of Justice may designate such number of Judges of the Courts of First Instance, or such number of attorneys of the legal division of the Commission, as may be necessary, to sit temporarily as Commissioners in the Public Service Commission.

The Public Service Commission shall sit individually or as a body en banc or in two divisions of three Commissioners each. The Public Service Commissioner shall preside when the Commission sits en banc and in one division. In the other division, the Associate Commissioner with seniority of appointment in that division shall preside. Five Commissioners shall constitute a quorum for sessions en banc and two Commissioners shall constitute a quorum for the sessions of a division. In the absence of a quorum, the session shall be adjourned until the requisite number is present.

All the powers herein vested upon the Commission shall be considered vested upon any of the Commissioners, acting either individually or jointly as hereinafter provided. The Commissioners shall equitably divide among themselves all pending cases and those that may hereafter be submitted to the Commission, in such manner and form as they may determine, and shall proceed to hear and determine the case assigned to each or to their respective divisions, or to the Commission en banc as follows: uncontested cases, except those pertaining to the fixing of rates, shall be decided by one Commissioner; contested cases and all cases involving the fixing of rates shall be decided by the Commission in division and the concurrence of at least two Commissioners in the division shall be necessary for the promulgation of a decision or non-interlocutory order in these cases: Provided, however, That any motion for reconsideration of a decision or non-interlocutory order of any Commissioner or division shall be heard directly by the Commission en banc and the concurrence of at least four Commissioners shall be necessary for the promulgation of a final decision or order resolving such motion for reconsideration. (As amended by RA Nos 178, 723, 2677)

SEC. 4. The Public Service Commissioner shall receive an annual compensation of thirteen thousand pesos; and each of the Associate Commissioners an annual compensation of twelve thousand pesos. The Commissioners shall be assisted by one chief attorney, one finance and rate regulation officer, one chief utilities regulation engineer, one chief accountant, one transportation regulation chief, one secretary of the Public Service Commission, and three public utilities advisers who shall receive an annual compensation of not less than ten thousand eight hundred pesos each; five assistant chiefs of division who shall receive an annual compensation of not less than nine thousand six hundred pesos each; twelve attorneys who shall receive an annual compensation of not less than nine thousand pesos each; and a technical and confidential staff to be composed of two certified public accountants, two electrical engineers, two mechanical or communication engineers, and two special assistants who shall receive an annual compensation of not less than seven thousand two hundred pesos each. (As amended by RA Nos 178, 723, 2677, 3792)

SEC. 5. The Public Service Commissioner, the Associate Public Service Commissioners, and all other officers and employees of the Public Service Commission shall enjoy the same privileges and rights as the officers and employees of the classified civil service of the Government of the Philippines. They shall also be entitled to receive from the Government of the Philippines their necessary traveling expenses while traveling on the business of the Commission, which shall be paid on proper voucher therefor, approved by the Secretary of Justice, out of funds appropriated for the contingent expenses of the Commission.

When the exigency of the service so requires, and With the approval of the Secretary of Justice, and subject to the provisions of Commonwealth Act Numbered Two hundred forty-six, as amended, funds may be set aside from the appropriations provided for the Commission and/or from the fees collected under Section forty of this Act to defray the expenses to be incurred by the Public Service Commissioner or any of the Associate Commissioners, officers or employees of the Commission to be designated by the Commissioner, with the approval of the Secretary of Justice, in the study of modern trends in supervision and regulation of public services. (As amended by RA No 3792)

SEC. 6. The Secretary of Justice, upon recommendation of the Public Service Commissioner, shall appoint all subordinate officers and employees of the Commit as may be provided in the Appropriation Act. The Public Service Commissioner shall have general executive control, direction, and supervision over the work of the Commission and of its members, body and personnel, and over all administrative business. (As amended by RA Nos 178, 3792)

SEC. 7. The secretary of the Commission, under the direction of the Commissioner, shall have charge of the administrative business of the Commission and shall perform such other duties as may be required of him. He shall be the recorder and official reporter of the proceedings of the Commission and shall have authority to administer oaths in all matters coming under the jurisdiction of the Commission. He shall be the custodian of the records, maps, profiles, tariffs, itineraries, reports, and any other documents and papers filed with the Commission or entrusted to his care and shall be responsible therefor to the Commission. He shall have authority to designate from time to time any of his delegates to perform the duties of deputy secretary with any of the Commissioners.

SEC. 8. The Commissioner shall furnish to the secretary such of its findings and decisions as in its judgment may be of general public interest; the secretary shall compile the same for the purpose of publication in a series of volumes to be designated "Reports of the Public Service Commission of the Philippines," which shall be published in such form and manner as may be best adapted for public information and use, and such authorized publications shall be competent evidence of the reports and decisions of the Commission therein contained without any further proof or authentication thereof.

SEC. 9. No member or employee of the Commission shall publicly have any official or professional relation with any public service as herein defined, or hold any other office of profit, or trust with the Government of the Philippines or of the United States.

SEC. 10. The Commission shall have its office in the City of Manila or at such other place as may be designated, and may hold hearings on any proceedings at such times and places, within the Philippines, as it may provide by order in writing: Provided, That during the months of April and May of each year, at least three Commissioners shall be on vacation in such manner that once every two years at least three of them shall be on duty during April and May: Provided, however, That in the interest of public service, the Secretary of Justice may require any or all of the Commissioners not on duty to render services and perform their duties during the vacation months. (As amended by RA Nos 178, 2677, 3792)

SEC. 11. The Commission shall have the power to make needful rules for its government and other proceedings not inconsistent with this Act and shall adopt a common seal; and judicial notice shall be taken of such seal. True copies of said rules and their amendments shall be promptly furnished to the Bureau of Printing and shall be forthwith published in the Official Gazette.

SEC. 12. The Commission shall report annually, as soon as practicable after the first day of January of each year, to the Secretary of Justice, making such recommendations as it may deem proper.

Provisions from RA No 11659

SECTION 1. Declaration of Policy. - The State recognize the role of the private sector as one of the main engines for national growth and development. It is hereby declared the policy of the State to encourage private enterprise and expand the base of investment in the country, with the goal of providing efficient, reliable and affordable basic services to all. These policies are fulfilled by: (a) ensuring effective regulation of public services; (b) providing reasonable rate of return to public services; (c) rationalizing foreign equity restrictions by clearly defining the term "public utilities"; and (d) instituting processes for the protection of national security.

SEC. 2. Definition of Terms. - For the purposes of this Act, the terms below shall be defined as follows:

(a) Administrative Agency or Administrative Agencies, as the case may be, refers to relevant government agencies, to which the powers and duties of the Public Service Commission were transferred pursuant to existing laws. All mention of the word "Commission" in this Act shall now refer to this term;

(b) Certificates refer to any franchise, certificate of public convenience, certificate of public convenience and necessity, concession, or any other appropriate form of authorization for the operation of a public service, including a public utility, as may be applicable;

(c) Concession refers to a contract granting a private concessionaire the privilege to, among others, finance, construct, manage, operate and/or maintain concession assets;

(d) Concessionaire refers to a person, corporation, firm or association awarded a concession;

(e) Critical Infrastructure refers to any public service which owns, uses, or operates systems and assets, whether physical or virtual, so vital to the Republic of the Philippines that the incapacity or destruction of such systems or assets would have a detrimental impact on national security, including telecommunications and other such vital services as may be declared by the President of the Philippines;

(f) Distribution of Electricity refers to the conveyance of electric power by a distribution utility through its distribution system as defined by Section 4(n) of Republic Act No. 9136, otherwise known as the "Electric Power Industry Reform Act of 2001", as amended;

(g) Foreign State-owned Enterprise refers to an entity in which a foreign State:

(i) directly or indirectly owns more than fifty-percent (50%) of the capital taking into account both the voting rights and beneficial ownership;

(ii) control, through ownership interests, the exercise of more than fifty percent (50%) of the voting rights; or

(iii) holds the power to appoint a majority of members of the board of directors or any other equivalent management body;

(h) National Security refers to the requirements and conditions necessary to ensure the territorial integrity of the country and the safety, security, and well-being of Filipino citizens;

(i) Petroleum and petroleum Product Pipeline Transmission Systems refer to the operation and maintenance of pipeline transmission systems to ensure an uninterrupted and adequate supply and transmission of petroleum and petroleum products to the public; and excludes petroleum pipeline systems operated exclusively for private or own use, or incidental to the operations of a distinct business;

(j) Philippine National refers to citizens, partnerships, associations, and corporations defined by Section 3(a) of Republic Act No. 7042, otherwise known as the "Foreign Investments Act of 1991", as amended;

(k) Public Utility Vehicles (PUVs) refer to internal combustion engine vehicles that carry passengers and/or domestic cargo for a fee, offering services to the public, namely trucks-for-hire, UV express service, public utility buses (PUBs), public utility jeepneys (PUJs), tricycles, filcabs, and taxis: Provided, That transport vehicles accredited with and operating through transport network corporations shall not be considered as public utility vehicles;

(l) Seaport refers to a place where ships may anchor or tie up for the purpose of shelter, repair, loading or discharge of passengers or cargo, or for other such activities connected with water-borne commerce, and including all the land and water areas and the structures, equipment and facilities related to these functions, as defined by the charters of relevant authorities or agencies, such as the Philippine Ports Authority, Subic Bay Metropolitan Authority, PHIVIDEC Industrial Estate Authority, Cebu Port Authority, local government units, and other similar agencies or government bodies;

(m) Telecommunications refers to any process which enables a telecommunications entity to relay and receive voice, data, electronic messages, written or printed matter, fixed or moving pictures, words, music or visible or audible signals or any control signals of any design and for any purpose by wire, radio or other electromagnetic, spectral, optical or technological means, as defined by Section 3(a) of Republic Act No. 7925, otherwise known as the "Public Telecommunications Policy Act of the Philippines", as amended, except passive telecommunications tower infrastructure and components, such as, but not limited to, poles, fiber ducts, dark fiber cables, and passive telecommunications tower infrastructure, as defined by the Department of Information and Communications Technology (DICT), and value-added services, as defined in Section 3(h) of Republic Act No. 7925, as amended;

(n) Transmission of Electricity refers to the conveyance of electricity through the high voltage backbone system, as defined by Section 4(cc) of Republic Act No. 9136, as amended;

(o) Water Pipeline Distribution Systems and Wastewater Pipeline Systems refer to the operation and maintenance of water pipeline distribution systems to ensure an uninterrupted and adequate supply and distribution of potable water for domestic and other purposes and the operation and maintenance of wastewater pipeline systems, except desludging companies and septic tanks, to ensure public health and safety, as regulated by Republic Act No. 6234, entitled "An Act Creating the Metropolitan Waterworks and Sewerage System and Dissolving the National Waterworks and Sewerage Authority; and for Other Purposes", as amended, and Presidential Decree No. 198, otherwise known as the "Provincial Water Utilities Act of 1973", as amended; and

(p) Sewerage Pipeline Systems refers to the operation and maintenance of sewerage pipeline systems to ensure public health and safety, as regulated by Republic Act No. 6234, as amended, and Presidential Decree No. 198, as amended.

SEC. 3. Recognition of Transfer of Jurisdiction to Various Administrative Agencies. - All references to the Public Service Commission in Commonwealth Act No. 146, as amended, shall pertain to any Administrative Agency to which the powers and duties of the Public Service Commission were transferred by subsequent laws, such as but not limited to:

(a) Civil Aeronautics Board (CAB);

(b) Civil Aviation Authority of the Philippines (CAAP);

(d) Department of Environment and Natural Resources (DENR);

(e) DICT;

(f) Department of Transportation (DOTr);

(g) Energy Regulatory Commission (ERC);

(h) Land Transportation Franchising and Regulatory Board (LTFRB);

(i) Land Transportation Office (LTO);

(j) Local Water Utilities Administration (LWUA);

(k) Maritime Industry Authority (MARINA);

(l) Metropolitan Waterworks and Sewerage System (MWSS);

(m) National Telecommunication Commission (NTC);

(n) National Water Resources Board (NWRB);

(o) Philippine National Railways (PNR);

(p) Philippine Ports Authority (PPA); and

(q) Toll Regulatory Board (TRB).

CHAPTER II Jurisdiction, Powers, and Duties of the Commission

SEC. 13. (a) The Commission shall have jurisdiction and supervision over all public services, including public utilities, and their franchises, equipment, and other properties, and in the exercise of its authority, it shall have the necessary powers and the aid of public force: Provided, That public services, including public utilities, owned or operated by government entities shall be regulated by the Commission in the same way as privately-owned public services.

Nothing in this Act shall be interpreted to diminish, limit, or restrict the authority of Congress from granting franchises to public services, as may be provided by law. Any franchise or certificate necessary for the operation of a public service shall be granted by Congress unless otherwise previously delegated by law to the relevant Administrative Agencies.

(b) The term 'public service’ includes every person that now or hereafter may own, operate, manage, or control in the Philippines, for hire or compensation, with general or limited clientele, whether permanent, occasional or accidental, and done for general business purposes, any common carrier, railroad, street railway, traction railway, sub-way motor vehicle, either for freight or passenger, or both with or without fixed route and whatever may be its classification, freight or carrier service of any class, express service, steamboat, or steamship line, pontines, ferries, and water craft, engaged in the transportation of passengers or freight or both, shipyard, marine railway, marine repair shop, wharf or dock, ice plant, ice-refrigeration plant, canal, irrigation system, gas, electric light, heat and power, water supply and power, petroleum, sewerage system, wire or wireless communications systems, wire or wireless broadcasting stations and other similar public services: Provided, however, That a person engaged in agriculture, not otherwise a public service, who owns a motor vehicle and uses it personally and/or enters into a special contract whereby said motor vehicle is offered for hire or compensation to a third party or third parties engaged in agriculture, not itself or themselves a public service, for operation by the latter for a limited time and for a specific purpose directly connected with the cultivation of his or their farm, the transportation, processing, and marketing of agricultural products of such third party or third parties shall not be considered as operating a public service for the purposes of this Act.

(c) The word 'person' includes every individual, co-partnership, joint-stock company or corporation, whether domestic or foreign, their lessees, trustees or receivers, as well as any municipality, province, city, government-owned or controlled corporation, or agency of the Government of the Philippines, and whatever other persons or entities that may own or possess or operate public services. (As amended by CA No 454, RA Nos 1270, 2677, 11659)

(d) Public Utility. - Public Utility refers to a public service that operates, manages or controls for public use any of the following:

Distribution of Electricity;
Transmission of Electricity;
Petroleum and Petroleum Products Pipeline Transmission Systems;
Water Pipeline Distribution Systems and Wastewater Pipeline Systems, including sewerage pipeline systems;
Seaports; and
Public Utility Vehicles.

All concessionaires, joint ventures and other similar entities that wholly operate, manage or control for public use the sectors above are public utilities.

Nothing in this Act shall be interpreted as a requirement for legislative franchise where the law does not require any. No other person shall be deemed a public utility unless otherwise subsequently provided by law.

(e) Upon the recommendation of the National Economic and Development Authority (NEDA), the President may recommend to Congress the classification of a public service as a public utility on the basis of the following criteria:

The person or juridical entity regularly supplies and transmits and distributes to the public through a network a commodity or service of public consequence;
The commodity or service is a natural monopoly that needs to be regulated when the common good so requires. For this purpose, natural monopoly exists when the market demand for a commodity or service can be supplied by a single entity at a lower cost that by two or more entities;
The commodity or service is necessary for the maintenance of life and occupation of the public; and
The commodity or service is obligated to provide adequate service to the public on demand.

All public services, including those classified as public utilities under this Act, shall continue to be regulated and supervised by the relevant Administrative Agencies under existing laws.

A public service which is not classified as a public utility under this Act shall be considered a business affected with public interest for purposes of Sections 17 and 18 of Article XII of the Constitution.

Notwithstanding any law to the contrary, nationality requirements shall not be imposed by the relevant Administrative Agencies on any public service not classified as a public utility.

The NEDA shall provide periodic advice to Administrative Agencies on the proper application of the constitutional and other legal restrictions to local and foreign-owned subcontractors, without putting operational resiliency at risk. (As added by RA No 11659)

Sec. 14. The following are exempted from the provisions of the preceding section:

(a) Warehouses;

(b) Vehicles drawn by animals and bancas moved by oar or sail, and tugboats and lighters;

(d) Radio companies except with respect to the fixing of rates;

(e) Public services owned or operated by any instrumentality of the National Government or by any government-owned or controlled corporation, except with respect to the fixing of rates. (As amended by CA No 454, RA Nos 2031, 2677)

Sec. 15. With the exception of those.enumerated in the preceding section, no public service shall operate in the Philippines without possessing a valid and subsisting certificate from the Public Sendee Commission, known as 'certificate of convenience and public necessity, as the case may be, to the effect that the operation of said service and the authorization to do business will promote the public interests in a proper and suitable manner.

The Commission shall prescribe as a condition for the issuance of the certificate or authorization provided in the preceding paragraph that the service can be acquired by the Republic of the Philippines or any instrumentality thereof, or the issuing local government unit, upon payment of just compensation in accordance with the pertinent laws, rules, and regulations on expropriation; and likewise, that the certificate or authorization shall be valid only for a definite period of time and that the violation of any of theses conditions shall, after hearing, result in the immediate cancellation of the certificate or authorization without the necessity of any express action on the part of the issuing authority. (As amended by RA No 11659)

In estimating the depreciation, the effect of the use of the equipment, its actual condition, the age of the model, or other circumstances affecting its value in the market shall be taken into consideration.

The foregoing is likewise applicable to any extension or amendment of certificates actually in force and to those which may hereafter be issued, to permits to modify itineraries and time schedules of public services and to authorizations to renew and increase equipment and properties. (As amended by CA No 454)

SEC. 16. Proceedings of the Commission, upon notice and hearing.—The Commission shall have the power, upon notice and hearing in accordance with the rules and provisions of this Act:

To issue certificates authorizing the operation of public service within the Philippines whenever the Commission finds that the operation of the public service proposed and the authorization to do business will promote the public interest in a proper and suitable manner: Provided, That any certificate authorizing the operation, management or control of a public service shall only be issued to corporations, partnerships, associations or joint stock companies that are constituted and organized under the laws of the Philippines.
To approve, subject to constitutional limitations, any franchise or privilege granted under the provisions of Act Numbered Six hundred and sixty-seven, as amended by Act Numbered One thousand and twenty-two, by any political subdivision of the Philippines when, in the judgment of the Commission, such franchise or privilege will properly conserve the public interests, and the Commission shall in so approving impose such conditions as to construction, equipment, maintenance, service, or operation as the public interests and convenience may reasonably require, and to issue certificates of public convenience and necessity when such is required or provided by any law or franchise.
To fix and determine the fair and reasonable individual or joint rates, tolls, charges, classifications, tariffs or schedules thereof, as well as commutation, mileage, kilometrage, and other special rates which shall be imposed, observed, and followed thereafter by any public service when the public interest so requires: Provided, That the Commission may, in its discretion, approve rates proposed by public services provisionally and without necessity of any hearing; but it shall call a hearing thereon within fifteen (15) days, thereafter, upon publication and notice to the affected parties in the territory affected, to ratify its prior provisional approval or change, modify or later the approved rate based on public interest: Provided, further, That in case the public service equipment of an operator is used principally or secondarily for the promotion of a private business, the net profits of said private business shall be considered in relation with the public service of such operator for the purpose of fixing the rates: Provided, finally, That when the public interest requires, the Administrative Agency may establish and enforce a methodology for setting rates, taking into account all relevant considerations, including the efficiency of the regulated public service. The rates must be such as to allow the recovery of prudent and efficient costs and a reasonable rate of return to enable the public service to operate viably and efficiently. The Administrative Agency may adopt alternative forms consistent with internationally accepted rate-setting methodology. The adopted rate-setting methodology shall ensure a reasonable price of the commodity or service and that the rates prescribed shall not be discriminatory.

This provision shall not be interpreted as mandating rate regulation nor amending or repealing: (1) laws providing a deregulation policy, such as Republic Act No. 7925, otherwise known as the "Public Telecommunications Policy Act of the Philippines', as amended; Republic Act No. 8479, otherwise known as the 'Downstream Oil Industry Deregulation Act of 1998', as amended; Republic Act No. 9136, otherwise known as the 'Electric Power Industry Reform Act of 2001', as amended; Republic Act No. 9295, otherwise known as the 'Domestic Shipping Development Act of 2004', as amended; and Republic Act No. 6957, otherwise known as the 'BOT law', as amended; and (2) regulations promulgated by these Administrative Agencies to deregulate rates.

To fix just and reasonable standards, classifications, regulations, practices, measurements, or service to be furnished, imposed, observed, and followed thereafter by any public service.
To ascertain and fix adequate and serviceable standards for the measurement of quantity, quality, pressure, initial voltage, or other condition pertaining to the supply of the product or service rendered by any public service, and to prescribe reasonable regulations for the examination and test of such product or service and for the measurement thereof.
To establish reasonable rules, regulations, instructions, specifications, and standards, to secure the accuracy of all meters and appliances for measurements.
To compel any public service to furnish safe, adequate, and proper service as regards the manner of furnishing the same as well as the maintenance of the necessary material and equipment.
To require any public service to establish, construct, maintain, and operate any reasonable extension of its existing facilities, where, in the judgment of said Commission, such extension is reasonable and practicable and will furnish sufficient business to justify the construction and maintenance of the same, and when the financial condition of the said public service reasonably warrants the original expenditure required in making and operating such extension.
To direct any railroad, street railway or traction or company to establish and maintain at any junction or point of connection or intersection with any other line of said road or track, or with any other line of any other railroad, street railway or traction company, such just and reasonable connection as shall be necessary to promote the convenience of shippers of property, or of passengers, and in like manner to direct any railroad, street railway, or traction company engaged in carrying merchandise, to construct, maintain and operate, upon reasonable terms, a switch connection with any private sidetrack which may be constructed by any shipper to connect with the railroad, street railway or traction company line where, in the judgment of the Commission, such connection is reasonable and practicable, and can be put in with safety, and will furnish sufficient business to justify the construction and maintenance of the same.
To authorize, in its discretion, any railroad, street railway or traction company to lay its tracks across the tracks of any other railroad, street railway or traction company, or across any public highway.
To direct any railroad or street railway company to install such safety devices or adopt such other reasonable measures as may in the judgment of the Commission be necessary for the protection of the public at passing grade crossings of (1) public highways and railroads, (2) public highways and street railways, or (3) railroads and street railways.
To fix and determine proper and adequate rates of description of the property of any public service which will be observed in a proper and adequate depreciation account to be carried for the protection of stockholders, bondholders or creditors, in accordance with such rules, regulations, and forms of accounts as the Commission may prescribe. Said rates shall be sufficient to provide the amounts required over and above the expense of maintenance to keep such property in a state of efficiency corresponding to the progress of the industry. Each public service shall conform its depreciation accounts to the rates so determined and fixed, and, as may be required by the proper Administrative Agency, shall set aside the moneys so provided for out of its earnings and carry the same in a depreciation fund. The income from investments of money in such fund shall likewise be carried in such fund. This fund shall not be expended otherwise than for depreciation, improvements, new constructions, extensions or additions to the property of such public service.
To amend, modify or revoke at any time any certificate issued under the provisions of this Act, whenever the facts and circumstances on the strength of which said certificate was issued have been misrepresented or materially changed.
To suspend or revoke any certificate issued under the provisions of this Act whenever the holder thereof has violated or willfully and contumaciously refused to comply with any order, rule or regulation of the Commission or any provision of this Act: Provided, That the Commission, for good cause, may prior to the hearing suspend for a period not to exceed thirty days any certificate or the exercise of any right or authority issued or granted under this Act by order of the Commission, whenever such step shall in the judgment of the Commission be necessary to avoid serious and irreparable damage or inconvenience to the public or to private interests.
To fix, determine, and regulate, as the convenience of the State may require, a special type for auto-buses, trucks, and motor trucks, to be hereafter constructed, purchased, and operated by operators after the approval of this Act; to fix and determine a special registration fee for auto-buses, trucks, and motor trucks so constructed, purchased, and operated: Provided, That said fees shall be smaller than those charged for auto-buses, trucks, and motor trucks of types not made regulation under this subsection.
To suspend or revoke any certificate issued under the provisions of this Act when the holder thereof has failed for three (3) consecutive years the annual performance audit conducted by an independent evaluation team in accordance with the metrics to be set by the Administrative Agency. (As amended by RA No 11659)

SEC. 17. Proceedings of Commission without previous hearing.—The Commission shall have power, without previous hearing, subject to established limitations and exceptions and saving provisions to the contrary:

To investigate, upon its own initiative, or upon complaint in writing, any matter concerning any public service as regards matters under its jurisdiction; to require any public service to furnish safe, adequate, and proper service as the public interest may require and warrant; to enforce compliance with any standard, rule, regulation, order or other requirement of this Act or of the Commission, and to prohibit or prevent any public service as herein defined from operating without having first secured a certificate and require existing public services to pay the fees provided for in this Act for the issuance of the certificate, under the penalty, at the discretion of the Commission, of the revocation and cancellation of any acquired right.
To require any public service to pay the actual expenses incurred by the Commission in any investigation if it shall be found in the same that any rate, toll, charge, schedule, regulation, practice, act or service thereof is in violation of any provision of this Act or any certificate, order, rule, regulation or requirement issued or established by the Commission. The Commission may also assess against any public service reasonable costs with reference to such investigation.
From time to time appraise and value the property of any public service, whenever in the judgment of the Commission it shall be necessary so to do, for the purpose of carrying out any of the provisions of this Act, and in making such valuation the Commission may have access to and use any books, documents, or records in the possession of any department, bureau, office, or board of the Government of the Philippines or any political subdivision thereof.
To provide, on motion by or at the request of any or user of a public service, for the examination and test of any appliance used for the measuring of any product or service of a public service, and for that purpose, by its agents, experts, or examiners to enter upon any premises where said appliances may be, and other premises of the public service, for the purpose of setting up and using on said premises any apparatus necessary therefor, and to fix the fees to be paid by any consumer or user who may apply to the Commission for such examination or test to be made, and if the appliance be found defective or incorrect to the disadvantage of the consumer or user, to require the fees paid to be refunded to the consumer or user by the public service concerned.
To permit any street railway or traction company to change its existing gauge to standard steam railroad gauge, upon such terms and conditions as the Commission shall prescribe.
To grant to any public service special permits to make extra or special trips within the territory covered by its certificate of public convenience, and to make special excursion trips outside of its own territory if the public interest or special circumstances require it; Provided, however. That in case a public service cannot render such extra service on its own line or in its own territory, a special permit for such extra service may be granted to any other public service.
To require any public service to keep its books, records, and accounts so as to afford an intelligent understanding of the conduct of its business and to that end to require every such public service of the same class to adopt a uniform system of accounting. Such system shall conform to any system approved and confirmed by the Commission on Audit.
To require any public service to furnish annual reports of finances and operations. Such reports shall set forth in detail the capital! stock issued, the amounts of said capital stock paid up and the form of payment thereof; the dividends paid, the surplus, if any, and the number of stockholders; the consolidated and pending obligations, and the interest paid thereon; the cost and value of the property of the operator; concessions or franchises and equipment; the number of employees and salaries paid to each class; the accidents to passengers, employees, and other persons, and the causes thereof; the annual expenditures on improvements, the manner of their investment and nature of such improvements; the receipts and profits in each of the branches of the business and of whatever source; the operating and other expenses; the balance of profits and losses; and a complete statement of the annual financial operations of the operator, including an annual balance sheet. Such reports shall also contain any information which the Commission may require concerning freight and passenger rates, or agreements, compromises or contracts affecting the same. Said reports shall cover a period of twelve months, ending on December thirty-first of each year, and shall be sworn to by the officer or functionary of the public service authorized therefor. The Commission shall also have power to require from time to time special reports containing such information as above provided for or oh other matters as the Commission may deem necessary or advisable.
To require every public service to file with the Commission a statement in writing, verified by the oaths of the owner or the president and the secretary thereof, if a corporation, setting forth the name, title of office or position, and post-office address, and the authority, power, and duties of every officer, member of the board of directors, trustees, executive committee, superintendent, chief or head of construction and operation thereof, in such form as to disclose the source and origin of each administrative act, rule, decision, order or other action of the operator of such public service; and, within ten days after any change is made in the title of, or authority, powers or duties appertaining to any such office or position, or the person holding the same, file with the Commission a like statement, verified in like manner, setting forth such change.
To require any public service to comply with the laws of the Philippines and with any provincial resolution or municipal ordinance relating thereto and to conform to the duties imposed upon it thereby or by the provisions of its own charter, whether obtained under any general or special Jaw of the Philippines,
To investigate any or all accidents that may occur on the property of any public service or directly or indirectly arising from or connected with its maintenance or operation in the Philippines; to require any public service to give the Commission immediate and effective notice of all or any such accidents, and to make such order or recommendation with respect thereto as the public interest may warrant to require.
To require every public service as herein defined to file with it complete schedules of every classification employed and of every individual or joint rate, toll, fare or charge made, charged or exacted by it for any product supplied or service rendered within the Philippines, and, in the case of public carriers, to file with it a statement showing the itineraries or routes served as specified in such requirement. (As amended by RA No 11659)

CHAPTER III Operators of Public Services—Regulations and Prohibitions

SEC. 18. It shall be unlawful for any individual, partnership, association, corporation or joint-stock company, their lessees, trustees, or receivers appointed by any court whatsoever, or any municipality, province, or other department of the Government of the Philippines, to engage in any public service business without having first secured from the Commission a certificate as provided for in this Act, except grantees of legislative franchises expressly exempting such grantee from the requirement of securing a certificate from this Commission, as well as concerned at present existing expressly exempted from the jurisdiction of the Commission, either totally or in part, by the provisions of section thirteen of this Act. (As amended by RA No 11659)

SEC. 19. Unlawful acts.—It shall be unlawful for any public service:

To provide or maintain any service that is unsafe, improper, or inadequate, or withhold or refuse any service which can reasonably be demanded and furnished, as found and determined by the Commission in a final order which shall be conclusive and shall take effect in accordance with this Act, upon appeal or otherwise.
To make or give, directly or indirectly, by itself or through its agents, attorneys or brokers, or any of them, discounts or rebates on authorized rates, or grant credit for the payment of freight charges, or any undue or unreasonable preference or advantage to any person or corporation or to any locality or to any particular description of traffic or service, or subject any particular person or corporation or locality or any particular description of traffic to any prejudice or disadvantage in any respect whatsoever; to adopt, maintain, or enforce any regulation, practice or measurement which shall be found or determined by the Commission to be unjust, unreasonable, unduly preferential or unjustly discriminatory, in a final order which shall be conclusive and shall take effect in accordance with the provisions of this Act, upon appeal or otherwise.
To refuse or neglect, when requested by the Postmaster General or his authorized representative, to carry public mail on the regular trips of any public land transportation service maintained or operated by any such public service, upon such terms and conditions and for a consideration in such amounts as may be agreed upon between the Postmaster General and the public service carrier or fixed by the Commission in the absence of an agreement between the Postmaster General and the carrier. In case the Postmaster General and the public service carrier are unable to agree on the amount of the compensation to be paid for the carriage of the mail, the Postmaster General shall forthwith request the Commission to fix a just and reasonable compensation for such carriage and the same shall be promptly fixed by the Commission in accordance with section sixteen of this Act.
To refuse or neglect, when requested by the Administrative Agency to urgently use, deliver or render the public service for the purpose of avoiding further loss on human, material, economic, or environment during a state of calamity. (As amended by RA No 11659)

SEC. 20. Acts requiring the approval of the Commission.—Subject to established limitations and exceptions and saving provisions to the contrary, it shall be unlawful for any public service or for the owner, lessee or operator thereof, without the approval and authorization of the Commission previously had:

To adopt, establish, fix, impose, maintain, or collect or carry into effect any individual or joint rates, commutation, mileage or other special rate, toll, fare,charge, classification or itinerary. The Commission shall approve only those that are prudent and efficient and not any that are unjustly discriminatory or unduly preferential, only upon reasonable notice to the public services and other parties concerned . giving them a reasonable opportunity to be heard, and the burden of the proof to show that the proposed rates or regulation are prudent and efficient shall be upon the public service purposing the same.
To establish, construct, maintain, or operate new units or extend existing facilities or make any other addition to or general extension of the service: Provided, That only assets that are useful and necessary for the provision of the public service shall form part of the rate base as determined and approved by the Administrative Agency: Provided, further, That construction of such asset and implementation of such project may be allowed for emergency and other extraordinary cases: Provided, finally, That the public service provider files for approval of such extension or construction of facilities within sixty (60) days from implementation of the project, and without prejudice to the final determination by the Administrative Agency if the said asset is useful and necessary for inclusion in the rate base.

The Administrative Agency may issue regulations prescribing a shorter period than that provided in the preceding paragraphs only in cases of emergency, as may be certified by such Administrative Agency, requiring the installation, construction or maintenance of units, facilities or equipment.

To abandon any railroad station or stop the sale of passenger tickets, or cease to maintain an agent to receive and discharge freight at any station now or hereafter established at which passenger tickets are now or may hereafter be regularly sold, or at which such agent is now or may hereafter be maintained, or make any permanent change in its time tables or itineraries on any railroad or in its service.
To lay any railroad or street railway track across any highway, so as to make a new crossing at grade, or cross the tracks of any other railroad or street railway, provided that this subsection shall not apply to replacements of lawfully existing tracks.
To issue any share of stock without par value: Provided, That it shall be the duty of the Commission, after hearing, to approve any such time when satisfied that the same is to be made in accordance with law.
To capitalize any franchise in excess of the amount, inclusive of any tax or annual charge, actually paid to the Government of the Philippines or any political subdivision thereof as the consideration of said franchise; capitalize any contract for consolidation, merger, or lease, or issue any bonds or other evidence of indebtedness against or as a lien upon any contract for consolidation, merger, or lease; Provided, however, That the provisions of this section shall not prevent the issuance of stock, bonds, or other evidence of indebtedness subject to the approval of the Commission by any lawfully merged or consolidated public services not in contravention of the provisions of this section.
To sell, alienate, mortgage, encumber or lease its property, franchises, certificates, privileges, or rights, or any part thereof, or merge or consolidate its property, franchise, privileges or rights, or any part thereof, with those of any other public service. The approval therein required shall be given, after notice to the public and after hearing the persons interested at a public hearing, if it be shown that there are just and reasonable grounds for making the mortgage or encumbrance, for liabilities of more than one year maturity, or the sale, alienation, lease, merger, or consolidation to be approved, and that the same are not detrimental to the public interest, and in case of sale, the date on which the same is to be consummated shall be fixed in the order of approval: Provided, however, That nothing herein contained shall be construed to prevent the transaction from being negotiated or completed before its approval or to prevent the sale, alienation, or lease by any public service of any of its property in the ordinary course of its business: Provided, finally, That the need for approval of the sale, alienation, mortgage, encumbrance or lease will be required only for properties of the public service that are used and useful in the delivery of the required public service.
To sell or register in its books the transfer or sale of shares of its capital stock, if the result of that sale in itself or in connection with another previous sale, shall be to vest in the transferee more than forty per centum of the subscribed capital of said public service. Any transfer made in violation of this provision shall be void and of no effect and shall not be registered in the books of the public service corporation. Nothing herein contained shall be construed to prevent the holding of shares lawfully acquired. (As amended by CA No 454)
To sell, alienate or in any matter transfer shares of its capital stock to any alien if the result of that sale, alienation, or transfer in itself or in connection with another previous sale shall be the reduction to less than sixty percent (60%) of the capital stock belonging to Philippine Nationals in the operation of a public utility as required by the Constitution. Such sale, alienation or transfer shall be void and of no effect and shall be sufficient cause for ordering the cancellation of the certificate.
To issue, give or tender, directly or indirectly, any free ticket, free pass or free or reduced rate of transportation for passengers, except to the following persons:

officers, agents, employees, attorneys, physicians and surgeons of said public service, and members of their families;
inmates of hospitals or charity institutions, and persons engaged in charitable work;
indigent, destitute, and homeless persons when transported by charitable societies or hospitals, and the necessary agents employed in such transportation;
the necessary caretakers, going and returning, of live stock, poultry, fruit, and other freight under uniform and nondiscriminatory regulation;
employees of sleeping car corporations, express corporations, and telegraph and telephone corporations; railway and marine mail service employees, when traveling in the course of their official duty;
post-office inspectors, customs officers and inspectors, and immigration inspectors when engaged in inspection;
witnesses attending any legal investigation in which the public service is an interested party;
persons injured in accidents or wrecks, and physicians and nurses attending such persons;
peace officers and officers and men of regularly constituted fire departments. (As amended by CA No 454)

Adopt, maintain, or apply practices or measures, rules or regulations, to which the public shall be subject in its relations with the public service. (As amended by RA No 11659)

CHAPTER IV Penalties for Violations

SEC. 21. In the absences of any specific fine or penalty imposed under the Charter of the Administrative Agency or the special law governing the particular public service, any public service violating or failing to comply with the terms and conditions of any certificate or any order, decision or regulation of the Commission shall be subject to a fine of not lower than Five thousand pesos (P5,000.00) but not exceeding Two million pesos (P2,000,000.00) per day for every day during which such default or violation continues; and the Commission is hereby authorized and empowered to impose such fine, after due notice and hearing: Provided, That should a lesser fine or penalty be imposed under the Charter of the Administrative Agency or the special law governing the public service, the amount of fine or penalty provided for under this section shall apply.

In cases where rates collected by the public service exceed the rates authorized by the Administrative Agency, the Administrative Agency may order a refund to consumers in lieu of or in addition to the fine or penalty imposed under this Act or the special law governing the public service.

The fines so imposed shall be paid to the Government of the Philippine through the Commission, and failure to pay the fine or comply with the order to refund in any case within the time specified in the order or decision of the Commission shall be deemed good and sufficient reason for the suspension of the certificate of said public service until payment shall be made or the order is complied with. Payment may also be enforced by appropriate action brought in a court of competent jurisdiction. The remedy provided in this section shall not be a bar to, or affect any other remedy provided in this Act but shall be cumulative and additional to such remedy or remedies. (As amended by RA No 11659)

SEC. 22. Observance of the orders, decisions, and regulations of the Commission and of the terms and conditions of any certificate may also be enforced by mandamus or injunction in appropriate eases, or by action to compel the specific performance of the orders, decisions, and regulations so made, or of the duties imposed by law upon such public service: Provided, That the Commission may compromise any ease that may arise under this Act in such manner and for such amount as it may deem just and reasonable.

SEC. 23. Any public service corporation that shall perform, commit, or do any act or thing herein forbidden or prohibited or shall neglect, fail, or omit to do or perform any act or thing herein required to be done or performed, shall be punished, after notice and hearing, by a fine not exceeding Two million pesos (P2,000,000.00), or by imprisonment of not lower than six (6) years and one (1) day and not higher than twelve (12) years, or both, at the discretion of the court.

In case the services of any entity engaged in the operation and management of critical infrastructure are interrupted, it shall act on customer complaints within ten (10) days, or provide an action plan to be accomplished within a reasonable period, from the date the complaint, written or otherwise, was received. For this purpose, entities engaged in the operation and management of critical infrastructure shall file a monthly report to the appropriate regulatory agency detailing the service interruptions that occurred during the covered period, the complaints lodged before it, and the actions taken on each complaint. (As amended by RA No 11659)

SEC. 24. Any person, including juridical persons whether foreign or domestic, who shall knowingly and willfully perform, commit, or do, or participate in performing, committing, or doing, or who shall knowingly and willfully cause, participate, or join with others in causing any public service corporation or company to do, perform, or commit, or who shall advise, solicit, persuade, or knowingly and willfully instruct, direct, or order any officer, agent or employee of any public service corporation or company to perform, commit, or do any act or thing forbidden or prohibited by this Act, shall be punished, after notice and hearing, by a fine of not exceeding Two million pesos (P2,000,000.00), or imprisonment of not lower than six (6) years and one (1) day and not higher that twelve (12) years, or both, at the discretion of the court.

When the entities involved are juridical persons, the penalty of imprisonment shall be imposed on its officers, directors, or employees holding managerial positions, who are knowingly and willfully responsible for such violation. (As amended by RA No 11659)

SEC. 25. Any person, including juridical persons whether foreign or domestic, who shall knowingly and willfully neglect, fail, or omit to do or perform, or who shall knowingly and willfully cause or join or participate with others in causing any public service corporation or company to neglect, fail, or omit to do or perform, or who shall advise, solicit, or persuade, or knowingly and willfully instruct, direct, or order any officer, agent or employee of any public service corporation or company to neglect, fail, or omit to do any act or thing required to be done by this Act, shall be punished, after notice and hearing, by a fine not exceeding Two million pesos (P2,000,000.00) or by imprisonment of not lower than six (6) years and one (1) day and not higher that twelve (12) years, or both, at the discretion of the court. When the entities involved are juridical persons, the penalty of imprisonment shall be imposed on its officers, directors, or employees holding managerial positions, who are knowingly and willfully responsible for such violation. (As amended by RA No 11659)

SEC. 26. Any person who shall destroy, injure, or interfere with any apparatus or appliance owned or operated by or in charge of the Commission or its agents, shall be deemed guilty of a misdemeanor and upon conviction shall be punished, after notice and hearing, by a fine of the amount equivalent to the actual market value of the apparatus or appliance destroyed or injured plus a fine not exceeding Two million pesos (P2,000,000.00) or imprisonment of not lower than six (6) years and one (1) day and not higher than twelve (12) years, or both, at the discretion of the court. (As amended by RA No 11659)

SEC. 27. This Act shall not have the effect to release or waive any right of action by the Commission or by any person for any right, penalty, or forfeiture which may have arisen or which may arise, under any of the laws of the Philippines, and any penalty or forfeiture enforceable under this Act shall not be a bar to or affect a recovery for a right, or affect or bar any criminal proceedings against any public service or person or persons operating such public service, its officers, directors, agents, or employees.

SEC. 28. Violations of the orders, decisions, and regulations of the Commission and of the terms and conditions of any certificate issued by the Commission and violations of the provisions of this Act shall prescribe in accordance with Act No. 3326, entitled 'An Act to Establish Periods of Prescription for Violations Penalized by Special Acts and Municipal Ordinances and to Provide When Prescription Shall Begin to Run', as amended. (As amended by RA No 11659)

CHAPTER V Procedure and Review

SEC. 29. All hearings and investigations before the Commission shall be governed by rules adopted by the Commission, and in the conduct thereof the Commission shall not be bound by the technical rules of legal evidence: Provided, That the Hearing Officer may summarily punish for contempt by a fine not exceeding Two thousand pesos (P2,000.00) or by imprisonment not exceeding ten days, or both, any person guilty of misconduct in the presence of the Hearing Officer or so near the same as to interrupt the hearing or session or any proceedings before them, including cases in which a person present at a hearing, session, or investigation held by the Hearing Officer refuses to be sworn as a witness or to answer as such when lawfully required to do so. To enforce the provisions of this section, the Commission may, if necessary, request the assistance of the municipal or city police for the execution of any order made for said purpose. (As amended by RA No 11659)

SEC. 30.

The Commission may issue subpoenas and subpoenas duces tecum, for witnesses in any matter or inquiry pending before the Commission and require the production of all books, papers, tariffs, contracts, agreements, and all other documents, which the Commission may deem necessary in any proceeding. Such process shall be issued under the seal of the Commission, signed by one of the Hearing Office, and may be served by any person of full age, or by registered mail. Disobedience to or failure to comply with such subpoena, shall constitute indirect contempt, and may be instituted in the manner as provided in the Rules of Court before the appropriate court.
Any person who shall neglect or refuse to answer any lawful inquiry or produce before the Commission, books, papers, tariffs, contracts, agreements, and documents or other things called for by said Commission, if in his power to do so, in obedience to the subpoena or lawful inquiry of the Commission upon conviction thereof by a court of competent jurisdiction, shall be punished by a fine not exceeding Thirty thousand pesos (P30,000.00) or by imprisonment not exceeding six (6) months, or both, at the discretion of the court.
The officials and Hearing Officers of the Commission shall have the power to administer oaths in all matters under the jurisdiction of the Commission.
Any person who shall testify falsely or make any false affidavit or oath before the Commission or before any of its members shall be guilty of perjury, and upon conviction thereof in a court of competent jurisdiction, shall be punished as provided by law.
Witnesses appearing before the Commission in obedience to subpoena or subpoena duces tecum shall be entitled to receive the same fees and mileage as witness attending regional trial courts in civil cases.
Any person who shall obstruct the Commission or either of the Hearing Officers while engaged in the discharge of official duties, or who shall conduct himself in a rude, disrespectful or disorderly manner before the Commission or either of the Hearing Officers, while engaged in the discharge of official duties, or shall orally or in writing be disrespectful to, offend or insult either of the Hearing Officers on occasion or by reason of the performance of his official duties, upon conviction thereof by a court of competent jurisdiction, shall be punished for each offense by a fine not exceeding Thirty thousand pesos (P30,000.00), or by imprisonment not exceeding six (6) months, or both, at the discretion of the Court. (As amended by RA No 11659)

SEC. 31. No person shall be excused from testifying or from producing any book, document, or paper in any investigation or inquiry by or upon the hearing before the Commission, when ordered so to do by said Commission, except when the testimony or evidence required of him may tend to incriminate him. Without the consent of the interested party, no member or employee of the Commission shall be compelled or permitted to give testimony in any civil suit to which the Commission is not a party, with regard to secrets obtained by him in the discharge of his official duty.

SEC. 32. The Commission may, in any investigation or hearing, by its order in writing, cause the deposition of witnesses residing within or without the Philippines to be taken in the manner and under the conditions prescribed by the Rules of Court. Where witnesses reside in places distant from Manila and it would be inconvenient and expensive for them to appear personally before the Commission, the Commission may, by proper order, commission any clerk of the Regional Trial Court of the Philippines to take the deposition of witnesses in any case pending before the Commission. It shall be the duty of the official so commissioned, to designate promptly a date or dates for the taking of such deposition, giving timely notice to the parties, and on said date to proceed to take the deposition, reducing it to writing. After the depositions have been taken, the official so commissioned shall certify to the depositions taken and forward them as soon as possible to the Commission. It shall be the duty of the respective parties to furnish stenographers for taking and transcribing the testimony taken.

The Commission may also, by proper order, authorize any of the attorneys of the legal division or division chiefs of the Commission, if they be lawyers, to hear and investigate any case filed with the Commission and in connection therewith to receive such evidence as may be material thereto. At the conclusion of the hearing or investigation, the attorney or division chief so authorized shall submit the evidence received by him to the Commission to enable the latter to render its decision. (As amended by RA Nos 723, 11659)

SEC. 33. Every order made by the Commission shall be served upon the person or public service affected thereby, within ten days from the time said order is filed, by personal delivery or by ordinary mail, upon the attorney of record, or in case there be no attorney of record, upon the party interested; and in case such certified copy is sent by registered mail, the registry mail receipt shall be prima facie evidence of the receipt of such order by the public service in due course of mail. All orders of the Commission to continue an existing service or prescribing rates to be charged shall be immediately operative; all other orders shall become effective upon the dates specified therein: Provided, however, That orders, resolutions or decisions in controverted matters and not referring to the continuance of an existing service or prescribing rates to be charged shall not be effective unless otherwise provided by the Commission, and shall take effect thirty days after notice to the parties.

SEC. 34. Any interested party may request the reconsideration of any order, ruling, or decision of the Commission by means of a petition filed not latter than fifteen days after the date of the notice of the order, ruling or decision in question. The grounds on which the request for reconsideration is based shall be clearly and specifically stated in the petition. Copies of said petition shall be served on all parties interested in the matter. It shall be the duty of the Commission to call a hearing on said petition immediately, with notice to the parties, and after hearing to decide the same promptly, either denying the petition or revoking or modifying the order, ruling or decision under consideration.

SEC. 35. Any order, ruling, or decision of the Administrative Agency may be appealed in the manner and within the period prescribed under the Rules of Court and other pertinent laws. (As amended by RA No 11659)

SEC. 36. Any order, ruling, or decision of the Commission may be reviewed on the application of any person or public service affected thereby, by certiorari in appropriate cases, or by petition, to be known as Petition for Review, which shall be filed within thirty days from the notification of such order, ruling, or decision or, in case a petition for the reconsideration of such order, ruling, or decision is filed in accordance with the preceding section and the same is denied, it shall be filed within fifteen days after notice of the order denying reconsideration. Said petition shall be placed on file in the office of the clerk of the Supreme Court who shall furnish copies thereof to the Secretary of the Commission and other parties interested.

SEC. 37. The institution of a writ of certiorari or other special remedies in the Supreme Court shall in no case supersede or stay any order, ruling or decision of the Commission, unless the Supreme Court shall so direct, and the appellant may be required by the Supreme Court to give bond in such form and of such amount as may be deemed proper.

SEC. 38. The chief of the legal division or any other attorneys of the Commission shall represent the same in all judicial proceedings. It shall be the duty of the Solicitor General to represent the Commission in any judicial proceeding if, for special reasons, the Hearing Officer shall request his intervention. (As amended by RA Nos 178, 11659)

SEC. 39. Any proceeding in any court of the Philippines directly affecting an order of the Commission or to which the Commission is a party, shall have preference over all other civil proceedings pending in such court, except election cases.

CHAPTER VI Fees

SEC 40. Administrative Fees and Charges. - Administrative Agency may collect from any public service, including any public utility, reasonable fees and charges, and impose appropriate penalties and fines as provided by law: Provided, That such fees, charges, penalties and fines may be adjusted to its present value every five (5) years using the Consumer Price Index (CPI) as published by the Philippine Statistics Authority (PSA). (As amended by CA No 454, RA Nos 3792, 11659)

CHAPTER VII General and Transitory Provisions

SEC. 41. A substantial compliance with the requirements of this Act shall be sufficient to give effect to all the rules, orders, acts, and regulations of the Commission and they shall not be declared inoperative, illegal, or void for any omission of a technical nature in respect thereto.

SEC. 42. Copies of all official documents and orders filed or deposited in the office of the Commission, certified by either of the Commissioners, or by the Secretary to be a true copy of the original, under the seal of the Commission, shall be evidence In like manner as the originals in all courts of the Philippines.

SEC. 43. The Commission created under this Act shall succeed the Commission created under Act Numbered Thirty-one hundred and eight in the dispatch, hearing, and determination of all pending matters before the latter; and shall take charge of its archives, books, furniture, equipment, and other properties of whatsoever nature.

SEC. 44. In addition to the sum appropriated for the former Commission under Act Numbered Forty-one hundred and thirty-two, the General Appropriation Act for nineteen hundred and thirty-six, the sum of six thousand seven hundred and sixty-eight pesos and thirty-four centavos is hereby appropriated out of any funds in the Philippine Treasury not otherwise appropriated; and in addition to the sum appropriated under Act Numbered Thirty-eight, the General Appropriation Act for nineteen hundred and thirty-seven, the sum of twenty-three thousand six hundred and ten pesos, or so much thereof as may be necessary, is hereby appropriated out of any funds in the Philippine Treasury not otherwise appropriated, for carrying out the purposes of this Act.

SEC. 45. If, for any reason, any section, subsection, sentence, clause, or term of this Act is held to be constitutional, such decision shall not affect the validity of the other provisions of this Act.

SEC. 46. Act Numbered Thirty-two hundred and forty seven and Act Numbered Thirty-five hundred and eighteen shall continue in force and effect; but all provisions of Act Numbered Thirty-one hundred and eight and amendments thereof, and all other acts or parts of acts inconsistent with the provisions of this Act are hereby repealed.

SEC. 47. This Act shall take effect upon its approval.

Other Provisions from RA No 11659

SEC. 23. Powers of the President to Suspend or Prohibit Transaction or Investment. - In the interest of national security, the President, after review, evaluation and recommendation of the relevant government department or Administrative Agency, may, within sixty (60) days from the receipt of such recommendation, suspend or prohibit any proposed merger or acquisition transaction, or any investment in a public service that effectively results in the grant of control, whether direct or indirect, to a foreigner or a foreign corporation.

The Philippine Competition Commission (PCC) may be consulted on all matters relating to mergers and acquisitions.

The NEDA shall promulgate rules and regulations to implement the provisions of this section.

SEC. 24. Investments by an Entity Controlled by or Acting on Behalf of the Foreign Government, or Foreign State-owned Enterprises. - An entity controlled by or acting on behalf of the foreign government or foreign state-owned enterprises shall be prohibited from owning capital in any public service classified as public utility or critical infrastructure: Provided, That the prohibition shall apply only to investments made after the effectivity of this Act: Provided, further, That foreign state-owned enterprises which own capital prior to the effectivity of this law are prohibited from investing in additional capital upon the effectivity of this Act: Provided, finally, That notwithstanding the immediately preceding clause, the sovereign wealth funds and independent pensions funds of each state may collectively own up to thirty percent (30%) of the capital of such public services.

In the interest of national security, an entity controlled by or acting on behalf of the foreign government or foreign-owned enterprises shall not make any date or information disclosure, nor extend assistance, support or cooperation to any foreign government, instrumentalities or agents.

The NEDA shall promulgate rules and regulations to implement the provisions of this section.

SEC. 25. Reciprocity Clause. - Foreign nationals shall not be allowed to own more than fifty percent (50%) of the capital of entities engaged in the operation and management of critical infrastructure unless the country of such foreign national accords reciprocity to Philippine Nationals as may be provided by foreign law, treaty or international agreement. Reciprocity may be satisfied by according rights of similar value in other economic sectors. The NEDA shall promulgate rules and regulations for this purpose.

Unless otherwise provided by law, or by any international agreement, a public service shall employ a foreign national only after the determination of non-availability of a Philippine National who is competent, able and willing to perform the services for which the foreign national is desired.

Any foreign national seeking admission to the Philippines for employment purposes and any public service which desires to engage a foreign national for employment in the Philippines must obtain an employment permit pursuant to Presidential Decree No. 442, otherwise known as the "Labor Code of the Philippines", as amended.

Public services employing foreign nationals issued employment permits in industries to be determined by the Department of Labor and Employment (DOLE) shall implement an understudy/skills development program to ensure the transfer of technology/skills to Filipinos, whether next-in-rank or otherwise, with the potential of succeeding the foreign national in the same establishment or its subsidiary, within a specific period as may be determined by the DOLE, upon consultation with relevant government agencies and industry experts.

SEC. 26. Information Security. - Persons and companies engaged in the telecommunications business shall obtain and maintain certifications from an accredited certification body attesting to compliance with relevant ISO standards on information security, as prescribed by the DICT: Provided, That the maintenance of these certifications shall be a continuing qualification for retention of franchise or other authority to operate: Provided, further, That this section shall not apply to micro, small and medium enterprises under Republic Act No. 6977, otherwise known as the "Magna Carta for Micro, Small and Medium Enterprises (MSMEs)", as amended.

SEC. 27. Conduct of Regular Studies and Comprehensive Baseline Survey. - The NEDA shall conduct regular studies on whether regulatory reform is warranted in a public service sector to improve consumer welfare and to submit its recommendation to Congress.

The NEDA, in coordination with the relevant government agencies and local government units, shall conduct a comprehensive baseline survey of public services governance within six (6) months from the effectivity of this Act. Copies of the results of said survey shall be furnished to the Congress, the NEDA and the PCC.

SEC. 28. Congressional Oversight and Periodic Review. - A Congressional Oversight Committee shall be created that will monitor and evaluate the implementation of this Act every five (5) years commencing from the effectivity of this Act. The Congressional Oversight Committee shall be composed of the Chairperson of the Senate Committee on Public Services, the Chairperson of the House of Representatives Committee on Economic Affairs, and representatives of other relevant congressional committee.

SEC. 29. Performance Audit. - Administrative agencies must ensure the annual conduct of performance audit by an independent evaluation team to monitor cost, the quality of services provided to the public, and the ability of the public service provider to immediately and adequately respond to emergency cases: Provided, That in the case of critical infrastructure and public utilities, the performance audit shall include risk assessment, emergency response, and cybersecurity, among others. Metrics for various types of services must be established to sustain reliability, security, and safety of the public.

SEC. 30. Implementing Rules and Regulations. - All Administrative Agencies under Section 3 of this Act shall, in coordination with the NEDA, promulgate rules and regulations to implement the provisions of this Act within six (6) months from the effectivity of this Act.

SEC. 31. Interpretation. - This Act shall be subject to and consistent with the regulatory powers of the State to promote public interest in Article IX-C, Section 4 and Article XII, Section 17 of the Constitution.

No franchise, certificate, concession, or authorization granted by the appropriate Administrative Agencies pursuant to this Act shall be:

exclusive in character;
for a longer period than fifty (50) years: Provided, That if a public service has maintained an exemplary record in the delivery of services, and has made substantial investments on infrastructure, technology or equipment for its operations, such performance and size of investment shall be taken into consideration, and the application for renewal of the franchise, certificate, concession or authorization of the public service shall be given priority by the appropriate Administrative Agencies; and
granted except under the condition that it shall be subject to amendment, alteration, or repeal by Congress when the public interest so requires.

SEC. 32. Non-Impairment of Existing Agreements. - The application ad implementation of the pertinent provisions of this Act shall not impair vested rights or obligations of contracts. Current and subsisting concession agreements and other similar contracts of juridical persons with government agencies or government-owned and -controlled corporations covering activities hereunder classified as public utilities shall remain valid and in force in accordance with the existing terms and conditions the parties agreed to thereunder until the expiration or termination thereof.

SEC. 33. Separability Clause. - Should any portion or provision of this Act be declared unconstitutional, the remainder of this Act or any provision not affected thereby shall remain in force and effect.

SEC. 34. Repealing Clause. - All laws, decrees, orders, rules and regulations, or other issuances or parts thereof, inconsistent with the provisions of this Act are hereby repealed or modified accordingly.

The provisions on limitation on foreign ownership in the following laws are hereby amended or modified:

(a) Republic Act No. 6957, entitled, "An Act Authorizing the Financing, Construction, Operation and Maintenance of Infrastructure Projects by the Private Sector, and for Other Purposes", as amended;

(b) Republic Act No. 9295, otherwise known as the "Domestic Shipping Development Act of 2004", as amended;

(d) Republic Act No. 776, otherwise known as the "The Civil Aeronautics Act of the Philippines", as amended;

(e) Presidential Decree No. 1112, otherwise known as the "Toll Operation Decree", as amended;

(f) Department of Transportation Department Order No. 2018-13, as amended, on the classification of the Transport Network Companies and Transportation Network Vehicles Service as public utilities; and

(g) Republic Act No. 7925, otherwise known as the "Public Telecommunications Policy Act of the Philippines", as amended, on the classification of all telecommunications entities as public utilities.

Nothing herein shall be construed as amending or repealing laws and administrative regulations deregulating or delisting services, industries and/or rates.

SEC. 35. Effectivity. - This Act shall take effect fifteen (15) days after its publication in the Official Gazette or in a newspaper of general circulation.

Approved: March 21, 2022

________________________

Approved: November 7, 1936.

RA No 4136 Land Transportation and Traffic Code

As amended by BP Blg 74 and 398; PD Nos 843, 896, 1057, 1934, and 1950; RA Nos 6374, 10930, and 11057

CHAPTER I Preliminary Provisions

June 20, 1964

AN ACT TO COMPILE THE LAWS RELATIVE TO LAND TRANSPORTATION AND TRAFFIC RULES, TO CREATE A LAND TRANSPORTATION COMMISSION AND FOR OTHER PURPOSES

ARTICLE I Title and Scope of Act

SECTION 1. Title of Act. — This Act shall be known as the "Land Transportation and Traffic Code. "

SECTION 2. Scope of Act. — The provisions of this Act shall control, as far as they apply, the registration and operation of motor vehicles and the licensing of owners, dealers, conductors, drivers, and similar matters.

ARTICLE II Definitions

SECTION 3. Words and Phrases Defined. — As used in this Act:

"Motor Vehicle" shall mean any vehicle propelled by any power other than muscular power using the public highways, but excepting road rollers, trolley cars, street-sweepers, sprinklers, lawn mowers, bulldozers, graders, fork-lifts, amphibian trucks, and cranes if not used on public highways, vehicles which run only on rails or tracks, and tractors, trailers and traction engines of all kinds used exclusively for agricultural purposes.

Trailers having any number of wheels, when propelled or intended to be propelled by attachment to a motor vehicle, shall be classified as separate motor vehicle with no power rating.

"Passenger automobiles" shall mean all pneumatic-tire vehicles of types similar to those usually known under the following terms: touring car, command car, speedster, sports car, roadster, jeep, cycle car (except motor wheel and similar small outfits which are classified with motorcycles), coupe, landaulet, closed car, limousine, cabriolet, and sedan.

Motor vehicles with changed or rebuilt bodies, such as jeepneys, jitneys, or station wagons, using a chassis of the usual pneumatic-tire passenger automobile type, shall also be classified as passenger automobile, if their net allowable carrying capacity, as determined by the Commissioner of Land Transportation, does not exceed nine passengers and if they are not used primarily for carrying freight or merchandise.

The distinction between "passenger truck" and "passenger automobile" shall be that of common usage: Provided, That a motor vehicle registered for more than nine passengers shall be classified as "truck": And Provided, further, That a "truck with seating compartments at the back not used for hire shall be registered under special "S" classifications. In case of dispute, the Commissioner of Land Transportation shall determine the classification to which any special type of motor vehicle belongs.

"Articulated vehicle" shall mean any motor vehicle with a trailer having no front axle and so attached that part of the trailer rests upon motor vehicle and a substantial part of the weight of the trailer and of its load is borne by the motor vehicle. Such a trailer shall be called as "semi-trailer. "
"Driver" shall mean every and any licensed operator of a motor vehicle.
"Professional driver" shall mean every and any driver hired or paid for driving or operating a motor vehicle, whether for private use or for hire to the public.

Any person driving his own motor vehicle for hire is a professional driver.

"Owner" shall mean the actual legal owner of a motor vehicle, in whose name such vehicle is duly registered with the Land Transportation Commission.

The "owner" of a government-owned motor vehicle is the head of the office or the chief of the Bureau to which the said motor vehicle belongs.

"Dealer" shall mean every person, association, partnership, or corporation making, manufacturing, constructing, assembling, remodeling, rebuilding, or setting up motor vehicles; and every such entity acting as agent for the sale of one or more makes, styles, or kinds of motor vehicles, dealing in motor vehicles, keeping the same in stock or selling same or handling with a view to trading same.
"Garage" shall mean any building in which two or more motor vehicles, either with or without drivers, are kept ready for hire to the public, but shall not include street stands, public service stations, or other public places designated by proper authority as parking spaces for motor vehicles for hire while awaiting or soliciting business.
"Gross weight" shall mean the measured weight of a motor vehicle plus the maximum allowable carrying capacity in merchandise, freight and/or passenger, as determined by the Commissioner of Land Transportation.
"Highways" shall mean every public thoroughfare, public boulevard, driveway, avenue, park, alley and callejon, but shall not include roadway upon grounds owned by private persons, colleges, universities, or other similar institutions.
"The Commissioner of Land Transportation or his deputies" shall mean the actual or acting chief of the Land Transportation Commission or such representatives, deputies, or assistants as he may, with the approval of the Secretary of Public Works and Communications, appoint or designate in writing for the purpose contemplated by this Act.
"Parking or parked", for the purposes of this Act, shall mean that a motor vehicle is "parked" or "parking" if it has been brought to a stop on the shoulder or proper edge of a highway, and remains inactive in that place or close thereto for an appreciable period of time. A motor vehicle which properly stops merely to discharge a passenger or to take in a waiting passenger, or to load or unload a small quantity of freight with reasonable dispatch shall not be considered as "parked", if the motor vehicle again moves away without delay.
"Tourist" shall mean a foreigner who travels from place to place for pleasure or culture.

ARTICLE III Administration of Act

SECTION 4. Creation of the Commission. — (a) There is created under the Department of Public Works and Communications an office which shall be designated and known as the Land Transportation Commission, composed of one Commissioner and one Deputy Commissioner, who shall be vested with the powers and duties hereafter specified. Whenever the word "Commission" is used in this Act, it shall be deemed to mean the Land Transportation Commission, and whenever the word "Commissioner" is used in this Act, it shall be taken to mean the Commissioner or Deputy Commissioner, as the case may be.

(b) The Commissioner and Deputy Commissioner shall hold office until removed in accordance with the provisions of the Revised Administrative Code.

(c) The Commissioner shall receive an annual compensation of twenty thousand five hundred eighty pesos and the Deputy Commissioner, an annual compensation of eighteen thousand six hundred thirty-six pesos. The Commissioner shall be assisted by one head executive assistant (MV regulation adviser or chief), one administrative officer, one registration regulation chief, one inspection; examianation and licensing regulation chief, one law and traffic enforcement regulation chief, one provincial regulation chief, one utility and property regulation chief, one accounting officer, one internal chief auditor, one personnel officer III, one budget officer IV, and one chief medical division IV, who shall receive an annual compensation of fifteen thousand two hundred sixty-four pesos each; ten land transportation regional directors who shall receive an annual compensation of fourteen thousand five hundred thirty-two pesos each; ten transportation assistant regional directors, who shall receive an annual compensation of eleven thousand three hundred twenty-eight pesos each; and ten land transportation assistant regulation chiefs, who shall receive an annual compensation of thirteen thousand one hundred fifty-two pesos each; Provided, That the assistant chiefs of divisions shall receive an annual compensation of twelve thousand five hundred sixteen pesos each; the chiefs of sections, district supervisors, and land transportation registrars III shall receive an annual compensation of ten thousand two hundred sixty pesos each; the assistant district supervisors and hind transportation registrars II shall receive an annual compensation of eight thousand eight hundred thirty-two pesos each; the land transportation registrars I shall receive an annual compensation of seven thousand six hundred eight pesos each; and all other employees in the land transportation commission whose salaries are paid monthly shall receive an increase in an amount equivalent to eight WAPCO ranges each, but in no case shall an employee exceed the salary of his immediate superior.

(d) The Commission shall have its offices in Quezon City where the present Motor Vehicle Office is located, and shall establish a regional branch office each in Tuguegarao (Cagayan), Baguio City, Pasig (Rizal), Lipa City, San Fernando (La Union), Naga City, Cebu City, Iloilo City, Cagayan de Oro City, and Davao City, to be headed by a regional director who will have immediate administration, supervision and control over all activities and administration of the Commission in the respective regions.

The Commissioner shall be responsible for the administration of this Act and shall have, in connection therewith, the following powers and duties, in addition to those mentioned elsewhere in this Act:

With the approval of the Secretary of Public Works and Communications, to issue rules and regulations not in conflict with the provisions of this Act, prescribing the procedure for the examination, licensing and bonding of drivers; the registration and re-registration of motor vehicles, transfer of ownership, change of status; the replacement of lost certificates, licenses, badges, permits or number plates; and to prescribe the minimum standards and specifications including allowable gross weight, allowable length, width and height or motor vehicles, distribution of loads, allowable loads on tires, change of tire sizes, body design or carrying capacity subsequent to registration and all other special cases which may arise for which no specific provision is otherwise made in this Act.
To compile and arrange all applications, certificates, permits, licenses, and to enter, note and record thereon transfers, notifications, suspensions, revocations, or judgments of conviction rendered by competent courts concerning violations of this Act, with the end in view of preserving and making easily available such documents and records to public officers and private persons properly and legitimately interested therein.
To give public notice of the certificates, permits, licenses and badges issued, suspended or revoked and/or motor vehicles transferred and/or drivers bonded under the provisions of this Act.
The Commissioner of Land Transportation, with the approval of the Secretary of Public Works and Communications, may designate as his deputy and agent any employee of the Land Transportation Commission, or such other government employees as he may deem expedient to assist in the carrying out the provisions of this Act.
The Commissioner of Land Transportation and his deputies are hereby authorized to make arrest for violations of the provisions of this Act in so far as motor vehicles are concerned; to issue subpoena and subpoena duces tecum to compel the appearance of motor vehicle operators and drivers and/or other persons or conductors; and to use all reasonable means within their powers to secure enforcement of the provisions of this Act.
The Commissioner of Land Transportation or his deputies may at any time examine and inspect any motor vehicle to determine whether such motor vehicle is registered, or is unsightly, unsafe, overloaded, improperly marked or equipped, or otherwise unfit to be operated because of possible excessive damage to highways, bridges and/or culverts.
The Philippine Constabulary and the city and municipal police forces are hereby given the authority and the primary responsibility and duty to prevent violations of this Act, and to carry out the police provisions hereof within their respective jurisdictions: Provided, That all apprehensions made shall be submitted for final disposition to the Commissioner and his deputies within twenty-four hours from the date of apprehension.
All cases involving violations of this Act shall be endorsed immediately by the apprehending officer to the Land Transportation Commission. Where such violations necessitate immediate action, the same shall be endorsed to the traffic court, city or municipal court for summary investigation, hearing and disposition, but in all such cases, appropriate notices of the apprehensions and the dispositions thereof shall be given to the Commissioner of Land Transportation by the law-enforcement agency and the court concerned.

Notation of all such dispositions shall be entered in the records, and copy shall be mailed to the owner and to the driver concerned. (As amended by RA No 6374)

CHAPTER II Registration of Motor Vehicles

ARTICLE I Duty to Register, Reports, Applications, Classifications

SECTION 5. Compulsory registration of motor vehicles — (a) All motor vehicles and trailers of any type used or operated on or upon any highway of the Philippines must be registered with the Bureau of Land Transportation for the current year in accordance with the provisions of this Act.

(b) The dates of annual registration of motor vehicles shall be based on a registration scheme to be prepared by the Bureau of Land Transportation subject to the approval of the Minister of Transportation and Communications. The scheme shall provide for a system that will distribute the registration of motor vehicles equitably over different months in a calendar year. Said scheme and rates shall not be changed more often than once every three (3) years, and only upon due notice given to the public at least ninety (90) calendar days before the effectivity of such registration scheme.

Any registration of motor vehicles not renewed on or before the date fixed by the Bureau of Land Transportation shall become delinquent and invalid.

(c) Dealers' reports — Dealers shall submit to the Director of Land Transportation a report concerning the sale or transfer of or any other transaction involving motor vehicles, including such information as importation, manufacturing data, and number of stocks remaining, as the Director may require for the effective enforcement of the provisions of this Act within five (5) working days from such sale, transfer or transaction. Such dealers shall furnish also the buyer with a duplicate copy thereof, duly authenticated by the Director of Land Transportation.

(d) Unauthorized repair or change of engine serial number.—Unless satisfactorily explained to and approved by the Director of Land Transportation, no repair involving the restoration of the original or registered serial number as stamped on the engine shall be allowed. No change involving an alteration of or tampering with the original or registered engine serial number of a motor vehicle shall ever be allowed, and any motor vehicle with a trace of having its engine serial number altered or tampered with shall be refused registration or re-registration.

~~(e)~~ ~~Encumbrances of motor vehicles~~ — (as repealed by RA No 11057)

Cancellation or foreclosure of such mortgages, attachments, and other encumbrances shall likewise be recorded, and in the absence of such cancellation, no certificate of registration shall be issued without the corresponding notation of mortgage, attachment and/or other encumbrances.

Records of encumbrances of motor vehicles shall be kept by the Bureau of Land Transportation in chronological and/or alpha-numerical and/or any other sequence and shall contain, among other things, the time, date, number of the entry, and other cross-indexing entries for immediate data retrieval, in a 'Book of Motor Vehicle Encumbrances' referring to the creation, cancellation or foreclosure of the aforesaid mortgages, attachments or to other encumbrances.

The Bureau of Land Transportation shall collect a fee of Fifty Pesos (P50.00) for every annotation of a mortgage, attachment and/or other encumbrances or cancellation thereof. (As amended by BP Blg 74)

SECTION 5-A. Amnesty for Delinquent Motor Vehicle Owners.—All motor vehicle owners, whose vehicles are not currently registered and who shall register said motor vehicles, under the rates prescribed herein, on or before December 31, 1984, shall not be subject to the penalties prescribed for the period of delinquency. (As added by PD No 1950)

SECTION 5-B. Period for Registering Transfers of Ownership of Motor Vehicles and Penalties. Transfers of ownership of motor vehicles shall be registered within seven (7) days after the execution of the Deed of Sale, the Sheriff's sale, or other documents transferring ownership of motor vehicles. In the event of failure to register the transfer of ownership of motor vehicles within the period prescribed herein there shall be added to the amount collectible a surcharge of fifty per cent (50%). (As added by PD No 1950)

SECTION 6. Application and Payments for Registration. — Applications and payments for registration shall be made either personally or by registered mail, and the date of the cancellation of the postage stamps of envelopes containing money order or check shall be taken as the date of the application and/or payment for registration: Provided, That the application is properly prepared and the payment for registration is sufficient as required by law.

SECTION 7. Registration Classification. — The classification of vehicles shall be:

Private
For Hire
Government
Diplomatic

Within ninety days from the approval of this Act, appropriate subclassifications shall be determined by the Director of Land Transportation with the approval of the Minister of Transportation and Communications, taking into consideration the body configuration, weight, cubic displacement and/or number of cylinders of the motor vehicle.

Private—Motor vehicles registered under this classification shall not be used for hire under any circumstance.
For Hire—Motor vehicles registered under this classification are those covered by certificates of public convenience, or special permits issued by the Board of Transportation, and shall be subject to the provisions of the Public Service Act and the rules and regulations issued thereunder, as well as the provisions of this Act.
Government—Motor vehicles owned by the government of the Philippines or any of its political subdivisions shall be registered under this classification.
Diplomatic—Motor vehicles owned by foreign governments or by their duly accredited diplomatic officers in the Philippines and used in the discharge of their duties.

Tourists bringing their own motor vehicles to the Philippines may, however, without registering such motor vehicles, use the same during but not after ninety (90) days of their sojourn: Provided, That the motor vehicle displays the number plates for the current year of some other country or state, and said number plates as well as the name and address (permanent and temporary) of the owner thereof are registered in the Bureau of Land Transportation prior to the operation of the motor vehicle.

If such tourists remain in the Philippines longer than ninety (90) days, the motor vehicle shall not be operated unless registered in accordance with this Act and the corresponding registration fees paid. (As amended by PD No 1057, BP Blg 74)

ARTICLE II Registration Fees

SECTION 8. Schedule of Registration Fees. — Except as otherwise specifically provided in this Act, each application for registration of motor vehicles shall be accompanied by an annual registration fee in accordance with a schedule to be prepared by the Bureau of Land Transportation subject to the approval of the Minister of Transportation and Communications in consultation with the Minister of Finance. The fees in the schedule shall be fixed on the basis of the model, body configuration, weight, cubic displacement or number of cylinders of the motor and other relevant factors. Effective September 1, 1984 and until changed pursuant to this section, the schedule of registration fees shall be as follows:

Said schedule shall not be changed more often than once every three (3) years, and only upon due notice given to the public at least ninety (90) calendar days before the effectivity of such schedule; Provided, That registration fees for vehicles owned by the government and its political subdivisions shall be determined in consultation with the Minister of the Budget and Management and within the constraints imposed by available funds; Provided, further, That all motor vehicles, regardless of type and/or classification, which are exclusively used and operated on private roads shall:

be subject to a recording fee of Three Hundred Pesos (P300.00) only, for which stickers in lieu of regular plates shall be issued corresponding to the year of recording;
not be subject to the Road Users' Fee nor the Common Carriers Tax;
need not be physically brought to Bureau of Land Transportation Office for recording; and
need not be covered by compulsory vehicle insurance as required for registration purposes.''

For uniformity of registration fees and classification, all manufacturers and/or assemblers of motor vehicles, prior to the introduction of a new model motor vehicle, shall submit the specifications of said model to the Bureau of Land Transportation which shall determine under what schedule of registration fees the said model should fall. (As amended by PD Nos 843, 896, BP Blg 74, and PD No 1934)

SEC. 8-A. Road Users' Charge.— In addition to the registration fee imposed under Section 8, there shall be levied, assessed and collected, in lieu of the Energy Tax imposed under Section 2 of Presidential Decree No. 843, a Road Users' Charge in accordance with the following schedule: (As added by PD No 1934, amended by PD No 1950)

SEC. 8-B. Common Carriers Tax.— In addition to the Registration Fee imposed under Section 8 and the Road Users' Charge imposed in Section 8-A, there shall be levied, assessed and collected, in lieu of the Percentage Tax on Carriers and Keepers of garages imposed under Section 207 of the National Internal Revenue Code, a Common Carriers Tax on Keepers of garages, cars for rent or hire driven by the lessee, land transportation contractors, persons who transport by land passenger or freight for hire and common carriers by land, in accordance with the following schedule: (As added by PD No 1934)

Additional Provisions from PD No 1934

SECTION 4. Payment. — The Registration Fee, the Road Users' Charge and the Common Carriers' Tax shall be paid to the Bureau of Land Transportation at the time of registration of the vehicle.

SEC. 5. Penalties. — In the event of failure to pay the registration fee and/or the Road Charge on time, there shall be added to the amount collectible a surcharge of fifty percent (50%). In case of failure to pay the Common Carriers Tax on time, the provisions of the National Internal Revenue Code on delinquency in payment of taxes shall be applicable.

_________

SECTION 9. Permissible Weights and Dimensions of Vehicles in Highways Traffic. — (a) The maximum gross weight and measurement of motor vehicles, unladen or with load, permissible on public highways shall be as specified hereunder, subject to such regulations as the Commissioner with the approval of the Secretary of Public Works and Communications, may promulgate, from time to time, as the conditions of the public highways may warrant and the needs of the service may require.

Permissible maximum weights:

1. Per most heavily loaded wheel — three thousand six hundred kilograms;

2. Per most heavily loaded axle — eight thousand kilograms;

3. Per most heavily loaded axle group (the two axles of the group being at least one meter and less than two meters apart) — fourteen thousand five hundred kilograms.

An axle weight shall be the total weight transmitted to the road by all the wheels the centers of which can be included between the parallel transverse vertical planes one meter apart extending across the full width of the vehicles.

No provincial, city or municipal authority shall enact or enforce any ordinance or resolution regulating or prescribing the maximum gross weight of any motor vehicle.

(b) No motor vehicle operating as a single unit shall exceed the following dimensions:

Overall width — two and five-tenths meters

Overall height — four meters

Overall length:

Freight vehicles with two axles — ten meters

Passenger vehicles with two axles — eleven meters

Vehicles with three or more axles — fourteen meters

(c) No motor vehicle and/or trailer combination shall exceed eighteen meters in overall projected length, including any load carried on such vehicle and trailer.

(d) No articulated vehicles shall be allowed to draw or pull a trailer and no vehicle already drawing a trailer shall draw another.

SECTION 10. Special Permits, Fees For. — The Commissioner with the approval of the Secretary of Public Works and Communications, shall issue regulations and schedules of additional fees under which special permits may be issued in the discretion of the Commissioner or his deputies for each of the following special cases, without which special permit no vehicles shall be operated on the public highways:

To operate a motor vehicle or trailer outfit with wheel, axle, or axle group loads in excess of the limits fixed in subsection (a) of Section nine hereof or in any regulation issued by the Commissioner.
To operate a motor vehicle the size of which exceeds the limit of permissible dimensions specified in paragraph (b) of Section nine hereof.
To operate a motor vehicle with any part of the load extending beyond the projected width of the vehicle.
To pull two trailers behind a motor vehicle.
For any other special authority relating to the use of vehicles, not otherwise specifically provided herein.

SECTION 11. Additional Fees. — In addition to the fees elsewhere provided in this Act, for each change of registration, from private to for hire or vice-versa; revision of gross weight rating, change of tire size; transfer of ownership; replacement of a lost registration certificate, number plate, driver's license or permit; badge; preparation of affidavit or certified copy of records, or for any similar circumstances requiring the issue, revision, or reissue of a certificate of registration, driver's license, badge, permit, or other document, a fee of two pesos shall be collected.

The replacement of a lost or utterly spoiled certificate, number plate, license, badge or permit shall render the original invalid.

In case of request in writing for certification of data or facts involving two or more vehicles, a fee of five pesos a page or part thereof shall be collected for each certification.

SECTION 12. Fee for Original Registration for Part of Year. — If any application for the original registration is made during the first quarter of a calendar year, the total annual fee for the year shall be paid, if made during the second quarter, three-fourths of the annual fee for that year shall be paid, if made during the third quarter, one half of the annual fee shall be paid, and if made during the fourth quarter, one-fourth of the annual fee shall be paid.

Nothing in this section shall be construed as allowing quarterly renewals of registrations in order to avoid payment of fees in advance for the entire year.

SECTION 13. Payment of Taxes Upon Registration. — No original registration of motor vehicles subject to payment of taxes, customs duties or other charges shall be accepted unless proof of payment of the taxes due thereon has been presented to the Commission.

ARTICLE III Registration Certificates, Records, Number Plates

SECTION 14. Issuance of Certificates of Registration. — A properly numbered certificate of registration shall be issued for each separate motor vehicle after due inspection and payment of corresponding registration fees.

SECTION 15. Use and Authority of Certificate of Registration. — (a) The said certificate shall be preserved and carried in the car by the owner as evidence of the registration of the motor vehicle described therein, and shall be presented with subsequent applications for re-registration, transfer of ownership, or recording of encumbrances: Provided, That in lieu of the certificate of registration a true copy or photostat thereof may be carried in the motor vehicle.

(b) The certificate of registration issued under the provisions of this Act for any motor vehicle shall, while the same is valid and effective and has not been suspended or revoked, be the authority for the operation of such motor vehicle.

(c) No motor vehicle shall be operated on the public highways in a manner which would place it under a classification requiring the payment of a larger registration fee than that stated in the certificate of registration.

SECTION 16. Suspension of Registration Certificate. — If on inspection, as provided in paragraph (6) of Section four hereof, any motor vehicle is found to be unsightly, unsafe, overloaded, improperly marked or equipped, or otherwise unfit to be operated, or capable of causing excessive damage to the highways, or not conforming to minimum standards and specifications, the Commissioner may refuse to register the said motor vehicle, or if already registered, may require the number plates thereof to be surrendered to him, and upon seventy-two hours notice to the owner of the motor vehicle, suspend such registration until the defects of the vehicle are corrected and/or the minimum standards and specifications fully complied with.

Whenever it shall appear from the records of the Commission that during any twelve-month period more than three warnings for violations of this Act have been given to the owner of a motor vehicle, or that the said owner has been convicted by a competent court more than once for violation of such laws, the Commissioner may, in his discretion, suspend the certificate of registration for a period not exceeding ninety days and, thereupon, shall require the immediate surrender of the number plates.

Whenever a motor vehicle is found to be underweighed the owner thereof shall pay the difference in the registration fees corresponding to the shortage in weight plus a fifty per cent surcharge, and until such payment is made, the certificate of registration of the motor vehicle concerned shall be suspended by the Commissioner.

After two such suspension, re-registration of the vehicle concerned for one year may be denied.

The Commissioner shall notify the owner of the motor vehicle of any action taken by him under this section.

SECTION 17. Number Plates, Preparation and Issuance of . — (a) The Commissioner shall cause number plates to be prepared and issued to owners of motor vehicles and trailers registered under this Act, charging a fee of four pesos for each pair including the numerals indicating the year of registry: Provided, however, That in case no number plates are available, the Commissioner or his deputies may issue, without charge, a written permit temporarily authorizing the operation of any motor vehicles with other means of identification: Provided, further, That all motor vehicles exempted from payment of registration fees, motor vehicles for hire, and privately-owned motor vehicles shall bear plates so designed and painted with different colors to distinguish one class from another: Provided, furthermore, That the plates of motor vehicles exempted from payment of registration fees shall be permanently assigned to such motor vehicles during their entire lifetime while exempted from payment of the fees: And, provided, finally, That the owner thereof shall return such plates to the Land Transportation Commission within a period of seven working days after such owner has lost his exemption privilege or has transferred the vehicle to a non-exempt owner.

(b) In case the design of the number plate is such that the numerals indicating the year of registry are on a detachable tag, the Commissioner or his deputies may, in their discretion, issue the said tag only for subsequent re-registration charging a fee of one peso for each tag issued.

SECTION 18. Use of Number Plates. — At all times, every motor vehicle shall display in conspicuous places, one in front and one in the rear thereof, the said number plates.

The number plates shall be kept clean and cared for, and shall be firmly affixed to the motor vehicle in such a manner as will make it entirely visible and always legible.

Except in the case of dealer's number plates which may be used successively on various motor vehicles in stock, no person shall transfer number plates from one motor vehicle to another.

No dealer's number plate shall be used on any motor vehicle after said vehicle has been sold and delivered to a purchaser, and no dealer shall allow such dealer's number plates to be used on any motor vehicle after its sale and delivery to a purchaser.

CHAPTER III Operation of Motor Vehicle

ARTICLE I License to Drive Motor Vehicles

SECTION 19. Duty to have License. — Except as otherwise specifically provided in this Act, it shall be unlawful for any person to operate any motor vehicle without having in his possession a valid license to drive a motor vehicle.

The license shall be carried by the driver at all times when operating a motor vehicle, and shall be shown and/or surrendered for cause and upon demand to any person with authority under this Act to confiscate the same. (As amended by BP Blg 398)

~~SECTION 20.~~ ~~License for Enlisted Men Operating Government Motor Vehicles~~~~. —~~ (As repealed by BP Blg 398)

SECTION 21. Operation of Motor Vehicles by Tourists. — Bona fide tourist and similar transients who are duly licensed to operate motor vehicles in their respective countries may be allowed to operate motor vehicles during but not after ninety days of their sojourn in the Philippines.

If any accident involving such tourist or transient occurs, which upon investigation by the Commissioner or his deputies indicates that the said tourist or transient is incompetent to operate motor vehicles, the Commissioner shall immediately inform the said tourist or transient in writing that he shall no longer be permitted to operate a motor vehicle.

After ninety days, any tourist or transient desiring to operate motor vehicles shall pay fees and obtain and carry a license as hereinafter provided.

SECTION 22. Application for driver’s license, fees, examination. — Every person who desires to personally operate any motor vehicle shall file an application to the Director or his deputies for a license to drive motor vehicles: Provided, however, That no person shall be issued a professional driver’s license who is suffering from contagious diseases, such as tuberculosis, sexually transmitted diseases and epilepsy or who is an alcohol or drug addict or dependent.

Each such application, except in the case of enlisted men operating government-owned vehicles, shall be accomplished by a fee of five pesos, and shall contain such information respecting the applicant and his ability to operate motor vehicles, as may be required by the Bureau.

The Director or his deputies shall also ascertain that the applicant’s health, sight and hearing are sound and normal, and is physically and mentally fit to operate motor vehicles. To this end, the Director or his deputies shall require a certificate to that effect, signed by a reputable accredited physician.

An examination, theoretical and practical, to determine every applicant’s ability and fitness to operate motor vehicles to be conducted by the Director in such form and manner as he shall prescribe shall also be required. A manual containing the general scope of the examinations and such information as may be necessary for the guidance of the applicants and for the purpose of effectivity and implementation of this Act may be published in an official language and distributed at no cost to the applicants.

No application for a driver’s license shall be received, unless the applicant:

For a professional driver’s license, is at least eighteen years of age, possesses a valid student-driver’s permit and has undergone instruction in the operation of motor vehicles for at least five months under a qualified instructor: Provided, however, That the period of time the applicant has operated a motor vehicle with a non-professional driver’s license shall be credited against the period of instruction required herein; and
For a non-professional driver’s license, is at least seventeen years of age, possesses a valid student-driver’s permit and has undergone instruction in the operation of motor vehicles for at least a month. (As amended by BP Blg 398)

SECTION 23. Issuance of Driver's License, Fees and Validity. — If, after such examination, the Land Transportation Office (LTO) Head or his/her deputies find that the applicant possesses the necessary qualification and proficiency in the operation of motor vehicles, is able to read and write any of the official languages or a major dialect and knows how to read and interpret various traffic signs, signals and road markings, a professional or nonprofessional license may be issued to such applicant upon payment of the fee prescribed in accordance with law, and which shall not cost more than the governments's procurement expense, but prior to the issuance of said license, the applicant shall present himself/ herself in person and have his/her photograph taken by the LTO. All driver's licences issued shall be signed in the presence of the LTO Head or his/her deputies and shall bear, among others, the full name, date of birth, height, weight, sex, color of eyes, blood type, complete current address, biometrics, license number, and its date of issue and expiration.

In this issuance of licenses, the LTO shall now use such process or adopt such measures as will prevent any alteration or falsification of a license or will enable the LTO to detect any unauthorized license. The LTO shall create an online process for the renewal of professional and nonprofessional licenses within one (1) year from the effectivity of this Act.

Except for student permits, all drivers' licenses shall be valid for five (5) years reckoned from the birthdate of the licensee, unless sooner revoked or suspended: Provided, however, That subject to Section 26 hereof, any holder of a professional or nonprofessional driver's license who has not committed any violation of Republic Act No. 4136 and other traffic laws, rules and regulations during the five (5)-year period shall be entitled to a renewal of such license for ten (10) years, subject to the restrictions as may be imposed by the LTO.

The local government units (LGUs), the Metropolitan Manila Development Authority (MMDA) or other agencies lawfully issuing traffic violation receipts shall report within a reasonable time, to be determined in the implementing rules and regulations (IRR), the details of the traffic violation to the LTO, which shall serve as the repository of all traffic violation records. (As amended by BP Blg 398, RA No 10930)

SEC. 23-A. Establishment of Stricter Rules Before the Issuance of Driver's License.- The LTO shall promulgate prerequisites and guidelines before the grant of driver's licenses to ensure that these are issued only to deserving applicants with sufficient driving skills and knowledge on road safety and proper road courtesy.

Toward this end, the conduct of theoretical and practical examinations, among others, must sufficiently measure the competency of drivers and must be designed to the type of license applied for and its corresponding restrictions: Provided, That for professional drivers, the tests must be appropriate to the vehicle and type of service the applicant intends to operate. (As added by RA No 10930)

SEC. 23-B. Penalties.- Without prejudice to the penalties provided under the Revised Penal Code and other applicable laws, the penalties corresponding to the following acts shall be imposed by the appropriate agency or officer:

Any officer who, in any manner, issues a driver's license without the necessary examinations, connives with the applicant for the irregular issuance of a license, or who, by gross negligence, issues a driver's license to an unqualified applicant shall suffer a penalty of removal from the service with all the accessory penalties attached thereto;
A fine in the amount of Twenty thousand pesos (P20,000.00) shall be imposed upon an applicant for a driver's license found to have committed any of the following acts:

Willful misrepresentation with respect to material information in one's application;
Connivance with the officer in the irregular conduct of examinations or issuance of license;
Falsification of documents; or
Cheating during examinations.

Any or all of the acts abovementioned shall be punished whether or not a license was granted by reason of such misrepresentation, connivance, falsification or cheating.

In addition to the abovementioned fine, the driver's license of an erring applicant, if one is granted by reason of such misrepresentation, connivance, falsification or cheating, shall be revoked, and the applicant shall be prohibited from applying for a period of two (2) years. The repetition os such offense shall warrant the perpetual disqualification from being granted a driver's license in addition to the fine above-stated; and

A holder of a driver's license who acts in violation of the provisions of Republic Act No. 4136 and other existing traffic laws shall suffer corresponding penalties as may be provided by law and other issuances.

In case of death or physical injuries resulting in the loss of any part of the victim's body or the use thereof, insanity, imbecility, impotence or blindness, or incapacity to work for more than ninety (90) days, the license of the offending driver shall be revoked for a period of four (4) years, after a finding by the court that such driver was negligent or at fault.

The Department of Transportation (DOTr) and the LTO shall, in coordination with the Land Transportation Franchising and regulatory Board (LTFRB) and other concerned agencies and private stakeholders, aggressively and regularly conduct a nationwide information, education and communication (IEC) campaign on road safety, including the list of measures implemented pursuant to and violations punishable under this Act. (As added by RA No 10930)

SECTION 24. Use of driver's license and identification card. — Every license issued under the provisions of this Act to any driver shall entitle the holder thereof, while the same is valid and effective, to operate motor vehicles described in such license: Provided, however, That every licensed professional driver, before operating a public utility vehicle registered under classification (b) of Section seven hereof, as amended by Batas Pambansa Bilang 74, shall secure from the Director, upon payment of the sum of five pesos, a driver’s identification card which he shall, at all times while so operating a public utility vehicle, display in plain sight in the vehicle being operated. The identification card shall be issued simultaneously with the license.

It shall be unlawful for any duly licensed driver to transfer, lend or otherwise allow any person to use his license for the purpose of enabling such person to operate a motor vehicle.

No owner of a motor vehicle shall engage, employ, or hire any person to operate such motor vehicle, unless the person sought to be employed is a duly licensed professional driver. (As amended by BP Blg 398)

SECTION 25. Driver's Records. — Any driver who changes his address shall, within fifteen days, notify the Commissioner in writing of his new address, name and address of his new employer, the number of the motor vehicle he is employed to operate, and such other information as the Commissioner may require.

SECTION 26. Renewal or replacement of lost license. — Any license not renewed on or before the last working day prior to the expiry date of such license as provided for in the third paragraph of Section twenty-three of this Act shall become delinquent and invalid, except when the license is surrendered to the Director or his deputies on or before the last working day prior to the expiry date of such license as hereinabove specified in order to avoid payment of the delinquency fees.

For a renewal of a delinquent license, there shall be collected as delinquency fee, in addition to the basic fee as prescribed, an amount equivalent to fifty per cent of said basic fee.

Every applicant for renewal of license to operate any motor vehicle shall present to the Director or his deputies, in person, the license issued to the applicant for the previous period, together with the basic fee hereinabove prescribed, and, in the case of professional drivers, three copies of a readily recognizable photograph of the applicant taken by the Bureau. In case the applicant for renewal has committed three or more offenses within a period of one year, or has suffered any injury or illness that impairs his ability to operate motor vehicles, he shall be required to undergo a theoretical and practical examination in order to determine his ability and fitness to operate motor vehicles.

Lost License. In case the license has been lost or cannot be produced, the licensee shall apply for a duplicate of the original on file with the Bureau by filing a sworn statement that such license has been lost and that a thorough and diligent search was futile and in accordance with the procedure which the Director is hereby authorized to promulgate, subject to the approval of the Minister of Transportation and Communications.

The Director or his deputies are hereby authorized to administer the oath in connection with such application. (As amended by BP Blg 398)

SECTION 27. Authority to suspend, revoke and reinstate driver’s license. — Without prejudice to the authority of the court in appropriate cases and except as herein otherwise provided, the Director shall have exclusive power and authority to suspend or revoke for cause any driver’s license issued under the provisions of this Act.

The Director may suspend for a period not exceeding three months or, after hearing, revoke any driver’s license and may order such license, whether confiscated by, and/or in the possession of, any other law enforcement agencies deputized in accordance with paragraph (d) (1) of Section four of this Act, to be delivered to him whenever he has reason to believe that the holder thereof is an improper person to operate motor vehicles, or in operating or using a motor vehicle in, or as an accessory to, the commission of any crime or act which endangers the public. Any deputy of the Director may. for the same cause, suspend for a period not exceeding three months any driver’s license issued under the provisions of this Act; Provided, that such suspension may be appealed to the Director who may, after reviewing the case, confirm, reverse or modify the action taken by such deputy.
Whenever during any twelve-month period a driver shall have been convicted at least three times for the violations of any provisions of this Act or of any regulations issued by the Director or any municipal or city ordinance relating to motor vehicle traffic not in conflict with any of the provisions of this Act, the Director may revoke or suspend the license of such driver for a period not exceeding two years.
The license suspended or revoked under the provisions of subsections (a) and (b) of this section shall not be reinstated by the Director, unless the driver has furnished a bond in accordance with Section twenty-nine of this Act and only after the Director has satisfied himself that such driver may again safely be permitted to operate a motor vehicle.
A decision of the Director revoking or refusing the reinstatement of a license under the provisions of this section may be appealed to the Minister of Transportation and Communications. (As amended by BP Blg 398)

SECTION 28. Driver's Bond. — The Director before reinstating any driver’s license which has been suspended or revoked under the provisions of the preceding section or of any provisions of this Act, may require such driver to post a bond in the sum of five thousand pesos conditioned upon the satisfaction and payment of any claim which may be filed or of any execution which may be issued against such driver in any case wherein said driver may be held answerable while operating motor vehicles. The bond required in this section shall be in such form as to render sureties liable at least for a period of not less than one year nor more than three years: Provided, however, That upon written application to the Director for release from such bond, the Director may, after revoking or suspending the driver’s license, authorize the release of the bondsmen from further responsibility thereunder: Provided further, That should the director decide not to revoke the license of a driver who has been convicted of homicide through reckless imprudence, or of violation of the speed limit or of reckless driving at least three times within a twelve-month period, the said driver shall post a bond in the sum of not less than ten thousand pesos, conditioned upon the payment of any claim which may be filed or any execution which may be issued against him in any case wherein said driver may be held answerable while operating motor vehicles. (As amended by BP Blg 398)

SECTION 29. Confiscation of driver's license. — Law enforcement and peace officers of other agencies duly deputized by the Director shall, in apprehending a driver for any violation of this Act or any regulations issued pursuant thereto, or of local traffic rules and regulations not contrary to any provisions of this Act, confiscate the license of the driver concerned and issue a receipt prescribed and issued by the Bureau therefor which shall authorize the driver to operate a motor vehicle for a period not exceeding seventy-two hours from the time and date of issue of said receipt. The period so fixed in the receipt shall not be extended, and shall become invalid thereafter. Failure of the driver to settle his case within fifteen days from the date of apprehension will be a ground for the suspension and/or revocation of his license. (As amended by BP Blg 398)

SECTION 30. Student-Driver's Permit. — Upon proper application and the payment of the fee prescribed in accordance with law, the Director or his deputies may issue student-driver’s permits, valid for one year to persons not under sixteen years of age, who desire to learn to operate motor vehicles.

A student-driver who fails in the examination on a professional or non-professional license shall continue as a student-driver and shall not be allowed to take another examination at least one month thereafter. No student-driver shall operate a motor vehicle, unless possessed of a valid student-driver’s permit and accompanied by a duly licensed driver.

The licensed driver duly accredited by the Bureau, acting as instructor to the student-driver, shall be equally responsible and liable as the latter for any violation of the provisions of this Act and for any injury or damage done by the motor vehicle on account or as a result of its operation by a student-driver under his direction. (As amended by BP Blg 398)

ARTICLE II Illegal Use of Licenses, Number Plates, Etc.

SECTION 31. Imitation and False Representations. — No person shall make or use or attempt to make or use a driver's license, badge, certificate of registration, number plate, tag, or permit in imitation or similitude of those issued under this Act, or intended to be used as or for a legal license, badge, certificate, plate, tag or permit, or with intent to sell or otherwise dispose of the same to another. No person shall falsely or fraudulently represent as valid and in force any driver's license, badge, certificate, plate, tag or permit issued under this Act which is delinquent or which has been revoked or suspended.

No person shall, knowingly and with intent to deceive, make one or more false or fraudulent statements in an application for the registration of vehicles, or for a driver's license.

ARTICLE III Passengers and Freight

SECTION 32. (a) Exceeding registered capacity, issuance of conductor’s license, validity and fee. No person operating any motor vehicle shall allow more passengers or more freight or cargo in his vehicle than its registered carrying capacity. In the case of public utility trucks or buses, the conductor shall be exclusively liable for the violations of this section or of Section thirty-two, letter (c) hereof: Provided, That the conductor before being employed by any public service operator shall get a permit or license from the Bureau and pay the fee prescribed in accordance with law, for said license or permit issued in his favor, which shall be valid for three years, and the same is renewable on or before the last working day prior to or on his birthdate, attaching a readily recognizable photograph taken by the Bureau and after presentation of a medical certificate of fitness of applicant.

Passenger trucks may be allowed to construct any cargo-carrying device at the rear or at the side of the truck, subject to the approval of the Director: Provided, however, That the total weight of the device, including the cargo, shall not exceed one hundred kilos.

(b) Carrying of passengers and freight on top of vehicles. No person operating a motor vehicle shall allow any passenger to ride on the cover or top of such vehicles: Provided, however, That, subject to such conditions as may be contained in permits that may be issued by the Director, baggage or freight may be carried on the top of a truck so long as the weight thereof does not exceed twenty kilos per square meter and is distributed in such a manner as not to endanger the passengers or stability of the truck.

(c) Riding on running boards. No driver shall allow any person to ride on the running board, step board, or mudguard of his motor vehicle for any purpose while the vehicle is in motion. (As amended by BP Blg 398)

SECTION 33. Passenger or Freight Capacity Marked on Vehicle. — All passengers automobiles for hire shall have the registered passenger capacity plainly and conspicuously marked on both sides thereof, in letters and numerals not less than five centimeters in height.

All motor trucks, whether for passenger or freight, private, or for hire, shall have the registered passenger gross and net weight capacities plainly and conspicuously marked on both sides thereof, in letters and numerals not less than five centimeters in height.

ARTICLE IV Accessories of Motor Vehicles

SECTION 34. (a) Tires of Motor Vehicles. — No motor vehicle with metallic tires shall be operated upon any public highway, and solid tires whenever used shall be of sufficient thickness to prevent the metal rims thereof from coming in direct contact with the road.

(b) Brakes. — Every motor vehicle with four or more wheels shall be provided with dual hydraulic brake system so that in case of hydraulic line failure affecting the braking efficiency of any of the four wheels at least either the front or rear wheels shall retain normal braking capabilities. In the absence of such dual braking system every motor vehicle with four or more wheels shall be provided with safety valve devices of such design and make so that failure of the hydraulic braking system of the vehicle because of leakage in the line or other parts of the system will not affect all wheels but rather render at all times effective the braking power of either the two front wheels or the two rear wheels when brakes are applied. This requirement, however, does not apply to motor vehicles equipped with pneumatic braking system.

(b-1) Horns. — Every motor vehicle shall be provided with a horn or signaling devise in good working order: Provided, however, That no horn or signaling device emitting an exceptionally loud, startling, or disagreeable sound shall be installed or used on any motor vehicle.

All authorized emergency vehicles, such as ambulance and police cars and fire wagons used for emergency calls shall be equipped with a bell, siren, or exhaust whistle of a type approved by the Commissioner, and no such device shall be installed or used in any other vehicle.

No vehicle not classified as a motor vehicle under this Act shall be equipped with a horn or signaling device similar to the horn customarily used on motor vehicles.

(c) Headlights. — Every motor vehicle of more than one meter of projected width, while in use on any public highway shall bear two headlights, one on each side, with white or yellowish light visible from the front, which, not later than one-half hour after sunset and until at least one-half four before sunrise and whenever weather conditions so require, shall both be lighted.

Additional lamps and light may be carried, but no red lights shall be visible forward or ahead of the vehicle. Trucks, buses, trailers, and other similar vehicles must carry, while in use on any public highway during night-time, colored riding lights on each of the four corners not more than ten centimeters from the top.

All motor vehicles shall be equipped with devices for varying the intensity of light, and the driver must dim the headlights or tilt the beams downward whenever the vehicle is being operated on well-lighted streets within the limits of cities, municipalities, and thickly populated barrios or districts, or whenever such vehicle meets another vehicle on any public highway.

(d) Taillights. — Every motor vehicle and trailer shall, during the above-mentioned hours, also bear on each side in the rear a lamp showing a red light visible at least one hundred meters from the rear of the vehicle and a lamp throwing a white light upon the number plate issued for such vehicle.

(e) Stop lights. — Every motor vehicle shall be equipped at the rear with at least one lamp which shall throw a sustained bright red light visible under all conditions, even under bright sunlight, when the brakes are applied. Each bus, truck, trailer or similar vehicle shall be equipped, as its stop light at or near its rear center, with a lamp at least twelve centimeters in diameter with the word "stop" inscribed in the center.

(f) Motorcycle and other vehicle lights. — Every motor vehicle of less than one meter of projected width shall be subject to the preceding provisions of this section, except that one headlight and one taillight shall be required. No signal light shall be necessary.

Additional lamps may be carried provided they comply with the preceding provisions of this section.

Every motor vehicle, or whatever style, kind, make, character, or nature, when upon a highway during the hours above-mentioned, whether in motion or not, shall have one or more lights so arranged that the same shall be visible at least fifty meters from the front and the rear of such vehicle.

(g) Lights when parked or disabled. — Appropriate parking lights or flares visible one hundred meters away shall be displayed at a corner of the vehicle whenever such vehicle is parked on highways or in places that are not well-lighted or is placed in such manner as to endanger passing traffic.

(h) Windshield wiper. — Every motor vehicle shall be equipped with a mechanically or electrically operated device for wiping off raindrops or other moisture from its front windshield.

(i) Use of red flag. — Whenever the load of any vehicle extends more than one meter beyond the bed or body thereof, there shall be displayed at every projecting end of such load a red flag not less than thirty centimeters both in length and width, except that during the hours fixed under subsection (c), there shall be displayed, in lieu of the required red flags, red lights visible at least fifty meters away.

(j) Mufflers. — Every motor vehicle propelled by an internal combustion engine shall be equipped with a muffler, and whenever said motor vehicle passes through a street of any city, municipality, or thickly populated district or barrio, the muffler shall not be cut out or disconnected. No motor vehicle shall be operated in such a manner as to cause it to emit or make any unnecessary or disagreeable odor, smoke or noise.

CHAPTER IV Traffic Rules

ARTICLE I Speed Limit and Keeping to the Right

SECTION 35. Restriction as to Speed. — (a) Any person driving a motor vehicle on a highway shall drive the same at a careful and prudent speed, not greater nor less than is reasonable and proper, having due regard for the traffic, the width of the highway, and of any other condition then and there existing; and no person shall drive any motor vehicle upon a highway at such a speed as to endanger the life, limb and property of any person, nor at a speed greater than will permit him to bring the vehicle to a stop within the assured clear distance ahead.

(b) Subject to the provisions of the preceding paragraph, the rate of speed of any motor vehicle shall not exceed the following:

A physician or his driver when the former responds to emergency calls;
The driver of a hospital ambulance on the way to and from the place of accident or other emergency;
Any driver bringing a wounded or sick person for emergency treatment to a hospital, clinic, or any other similar place;
The driver of a motor vehicle belonging to the Armed Forces while in use for official purposes in times of riot, insurrection or invasion;
The driver of a vehicle, when he or his passengers are in pursuit of a criminal;
A law-enforcement officer who is trying to overtake a violator of traffic laws; and
The driver officially operating a motor vehicle of any fire department, provided that exemption shall not be construed to allow unless or unnecessary fast driving of drivers aforementioned.

SECTION 36. Speed Limits Uniform Throughout the Philippines. — No provincial, city or municipal authority shall enact or enforce any ordinance or resolution specifying maximum allowable speeds other than those provided in this Act.

SECTION 37. Driving on Right Side of Highway. — Unless a different course of action is required in the interest of the safety and the security of life, person or property, or because of unreasonable difficulty of operation in compliance herewith, every person operating a motor vehicle or an animal-drawn vehicle on a highway shall pass to the right when meeting persons or vehicles coming toward him, and to the left when overtaking persons or vehicles going the same direction, and when turning to the left in going from one highway to another, every vehicle shall be conducted to the right of the center of the intersection of the highway.

SECTION 38. Classification of Highways. — Public highways shall be properly classified for traffic purposes by the provincial board, municipal board or city council having jurisdiction over them, and said provincial board, municipal board or city council shall provide appropriate signs therefor, subject to the approval of the Commissioner. It shall be the duty of every provincial, city and municipal secretary to certify to the Commissioner the names, locations, and limits of all "through streets" designated as such by the provincial board, municipal board or council.

ARTICLE II Overtaking and Passing a Vehicle, and Turning at Intersections

SECTION 39. Overtaking a Vehicle. — The driver of any motor vehicle overtaking another vehicle proceeding in the same direction shall pass at a safe distance to the left thereof, and shall not again drive to the right side of the highway until safely clear of such overtaken vehicle except that on a highway, within a business or residential district, having two or more lanes for the movement of traffic in one direction, the driver of a vehicle may overtake and pass another vehicle on the right. Nothing in this section shall be construed to prohibit a driver overtaking and passing, upon the right, another vehicle which is making or about to make a left turn.

SECTION 40. Driver to Give Way to Overtaking Vehicle. — The driver of a vehicle about to be overtaken and passed by another vehicle approaching from the rear shall give way to the overtaking vehicle on suitable and audible signal being given by the driver of the overtaking vehicle, and shall not increase the speed of his vehicle until completely passed by the overtaking vehicle.

SECTION 41. Restrictions on Overtaking and Passing. —

The driver of a vehicle shall not drive to the left side of the center line of a highway in overtaking or passing another vehicle proceeding in the same direction, unless such left side is clearly visible, and is free of oncoming traffic for a sufficient distance ahead to permit such overtaking or passing to be made in safety.
The driver of a vehicle shall not overtake or pass another vehicle proceeding in the same direction, when approaching the crest of a grade, not upon a curve in the highway, where the driver's view along the highway is obstructed within a distance of five hundred feet ahead, except on a highway having two or more lanes for movement of traffic in one direction where the driver of a vehicle may overtake or pass another vehicle: Provided, That on a highway within a business or residential district, having two or more lanes for movement of traffic in one direction, the driver of a vehicle may overtake or pass another vehicle on the right.
The driver of a vehicle shall not overtake or pass any other vehicle proceeding in the same direction, at any railway grade crossing, nor at any intersection of highways unless such intersection or crossing is controlled by traffic signal, or unless permitted to do so by a watchman or a peace officer, except on a highway having two or more lanes for movement of traffic in one direction where the driver of a vehicle may overtake or pass another vehicle on the right. Nothing in this section shall be construed to prohibit a driver overtaking or passing upon the right another vehicle which is making or about to make a left turn.
The driver of a vehicle shall not overtake or pass, or attempt to pass, any other vehicle, proceeding in the same direction, between any points indicated by the placing of official temporary warning or caution signs indicating that men are working on the highway.
The driver of a vehicle shall not overtake or pass, or attempt to overtake or pass, any other vehicle proceeding in the same direction in any "no-passing or overtaking zone."

ARTICLE III Right of Way and Signals

SECTION 42. Right of Way. — (a) When two vehicles approach or enter an intersection at approximately the same time, the driver of the vehicle on the left shall yield the right of way to the vehicle on the right, except as otherwise hereinafter provided. The driver of any vehicle traveling at an unlawful speed shall forfeit any right of way which he might otherwise have hereunder.

(b) The driver of a vehicle approaching but not having entered an intersection, shall yield the right of way to a vehicle within such intersection or turning therein to the left across the line of travel of such first-mentioned vehicle, provided the driver of the vehicle turning left has given a plainly visible signal of intention to turn as required in this Act.

(c) The driver of any vehicle upon a highway within a business or residential district shall yield the right of way to a pedestrian crossing such highway within a crosswalk, except at intersections where the movement of traffic is being regulated by a peace officer or by traffic signal. Every pedestrian crossing a highway within a business or residential district, at any point other than a crosswalk shall yield the right of way to vehicles upon the highway.

(d) The driver of a vehicle upon a highway shall bring to a full stop such vehicle before traversing any "through highway" or railroad crossing: Provided, That when it is apparent that no hazard exists, the vehicle may be slowed down to five miles per hour instead of bringing it to a full stop.

SECTION 43. Exception to the Right of Way Rule. — (a) The driver of a vehicle entering a highway from a private road or drive shall yield the right of way to all vehicles approaching on such highway.

(b) The driver of a vehicle upon a highway shall yield the right of way to police or fire department vehicles and ambulances when such vehicles are operated on official business and the drivers thereof sound audible signal of their approach.

(c) The driver of a vehicle entering a "through highway" or a "stop intersection" shall yield the right of way to all vehicles approaching in either direction on such "through highway": Provided, That nothing in this subsection shall be construed as relieving the driver of any vehicle being operated on a "through highway" from the duty of driving with due regard for the safety of vehicles entering such "through highway" nor as protecting the said driver from the consequence of an arbitrary exercise of such right of way.

SECTION 44. Signals on Starting, Stopping or Turning. —

The driver of any vehicle upon a highway, before starting, stopping or turning from a direct line, shall first see that such movement can be made in safety, and if any pedestrian may be affected by such movement, shall give a clearly audible signal by sounding the horn, and whenever the operation of any other vehicle approaching or following may be affected by such movement, shall give a signal plainly visible to the driver of such other vehicles of the intention to make such movement.
The signal herein required shall be given by means of extending the hand and arm beyond the left side of the vehicle, or by an approved mechanical or electrical signal device.

ARTICLE IV Turning and Parking

SECTION 45. Turning at Intersections. — (a) The driver of a vehicle intending to run to the right at an intersection shall approach such intersection in the lane for traffic nearest to the right-hand side of the highway and, in turning, shall keep as close as possible to the right-hand curb or edge of the highway.

(b) The driver of a vehicle intending to turn to the left shall approach such intersection in the lane for traffic to the right of and nearest to the center line of the highway, and, in turning, shall pass to the left of the center of the intersection, except that, upon highways laned for traffic and upon one-way highways, a left turn shall be made from the left lane of traffic in the direction in which the vehicle is proceeding.

(c) For the purpose of this section, the center of the intersection shall mean the meeting point of the medial lines of the highways intersecting one another, except when it is occupied by a monument, grass plot or any permanent structure, other than a traffic control device.

SECTION 46. Parking Prohibited in Specified Places. — No driver shall park a vehicle, or permit it to stand, whether attended or unattended, upon a highway in any of the following places:

Within an intersection.
On a crosswalk.
Within six meters of the intersection of curb lines.
Within four meters of the driveway entrance to and fire station.
Within four meters of a fire hydrant.
In front of a private driveway.
On the roadway side of any vehicle stopped or parked at the curb or edge of the highway.
At any place where official signs have been erected prohibiting parking.

SECTION 47. Parked Vehicle. — Whenever a motor vehicle is parked unattended on any highway, the driver thereof must turn off the ignition switch and stop the motor and notch effectively the hand brake.

ARTICLE V Miscellaneous Traffic Rules

SECTION 48. Reckless Driving. — No person shall operate a motor vehicle on any highway recklessly or without reasonable caution considering the width, traffic, grades, crossing, curvatures, visibility and other conditions of the highway and the conditions of the atmosphere and weather, or so as to endanger the property or the safety or rights of any person or so as to cause excessive or unreasonable damage to the highway.

SECTION 49. Right of Way for Police and Other Emergency Vehicles. — Upon the approach of any police or fire department vehicle, or of an ambulance giving audible signal, the driver of every other vehicle shall immediately drive the same to a position as near as possible and parallel to the right-hand edge or curb of the highway, clear of any intersection of highways, and shall stop and remain in such position, unless otherwise directed by a peace officer, until such vehicle shall have passed.

SECTION 50. Tampering with Vehicles. — No unauthorized person shall sound the horn, handle the levers or set in motion or in any way tamper with a damage or deface any motor vehicle.

SECTION 51. Hitching to a Vehicle. — No person shall hang on to, or ride on, the outside or the rear end of any vehicle, and no person on a bicycle, roller skate or other similar device, shall hold fast to or hitch on to any moving vehicle, and no driver shall knowingly permit any person to hang on to or ride, the outside or rear end of his vehicle or allow any person on a bicycle, roller skate or other similar device to hold fast or hitch to his vehicle.

SECTION 52. Driving or Parking on Sidewalk. — No person shall drive or park a motor vehicle upon or along any sidewalk, path or alley not intended for vehicular traffic or parking.

SECTION 53. Driving while under the Influence of Liquor or Narcotic Drug. — No person shall drive a motor vehicle while under the influence of liquor or narcotic drug.

SECTION 54. Obstruction of Traffic. — No person shall drive his motor vehicle in such a manner as to obstruct or impede the passage of any vehicle, nor, while discharging or taking on passengers or loading or unloading freight, obstruct the free passage of other vehicles on the highway.

SECTION 55. Duty of Driver in Case of Accident. — In the event that any accident should occur as a result of the operation of a motor vehicle upon a highway, the driver present, shall show his driver's license, give his true name and address and also the true name and address of the owner of the motor vehicle.

No driver of a motor vehicle concerned in a vehicular accident shall leave the scene of the accident without aiding the victim, except under any of the following circumstances:

1. If he is in imminent danger of being seriously harmed by any person or persons by reason of the accident;

2. If he reports the accident to the nearest officer of the law; or

3. If he has to summon a physician or nurse to aid the victim.

CHAPTER V Penal and Other Provisions

ARTICLE I Penalties

SECTION 56. Penalty for Violation. — The following penalties shall be imposed for violations of this Act:

For registering later than seven days after acquiring title to an unregistered motor vehicle or after conversion of a registered motor vehicle requiring larger registration fee than for which it was originally registered, or for a renewal of a delinquent registration, the penalty shall be a fine of fifty per cent of the registration fees corresponding to the portion of the year for which the vehicle is registered for use.
For failure to sign driver’s license or to carry same while driving, one hundred pesos fine.
Driving a vehicle with a delinquent or invalid driver’s license, two hundred pesos fine or imprisonment not exceeding ten days, at the discretion of the court.
Driving a motor vehicle with delinquent, suspended or invalid registration, or without registration or without the proper license plate for the current year, three hundred pesos fine or imprisonment not exceeding fifteen days, at the discretion of the court.
Driving a motor vehicle without first securing a driver’s license, five hundred pesos fine and imprisonment of not exceeding fifteen days.
Driving a motor vehicle while under the influence of liquor or narcotic drug, a fine of not less than one thousand pesos or imprisonment of not less than three nor more than six months, or both, at the discretion of the court.
Violation of Sections thirty-two, thirty-four (a), (b), and (b-1), thirty-five and forty-six, a fine not exceeding one hundred pesos: Provided, however, That in the case of violation of Section thirty-four (b) the vehicle or vehicles affected may not be allowed to operate, unless the requirement provided in this section are complied with.
Violations of Sections forty-nine, fifty-one, and fifty-two, a fine of not less than twenty-five pesos nor more than fifty pesos.
For using or attempting to use a driver’s license, identification card, certificate of registration, number plate, tag or permit in similitude of those issued under this Act, or falsely or fraudulently representing as valid and in force any driver’s license under this Act which is delinquent or which has been suspended or revoked, a fine of not less than one thousand nor more than three thousand pesos or imprisonment of not more than six months, or both, at the discretion of the court.

For making, manufacturing, distributing or selling a driver’s license, identification card, certificate of registration, number plate, tag or permit in imitation or similitude of those issued under this Act, the penalties under the provisions of the Revised Penal Code.

If the violation is committed by a public officer or employee, the offender shall furthermore suffer perpetual absolute disqualification.

For using private passenger automobiles, private trucks, private motorcycles, and motor wheel attachments for hire, in violation of Section seven, subsections (a), (b), and (c), of this Act, a fine of two hundred pesos and suspension of driver’s license for a period of three months for the first conviction; a fine of three hundred pesos and six months imprisonment of one year and permanent revocation of the driver’s license for the third conviction.
For permitting, allowing, consenting to, or tolerating the use of privately-owned motor vehicles for hire in violation of Section seven, subsections (a), (b), and (c), of this Act, there shall be imposed upon the owner of the vehicle as fine of five hundred pesos and the certificate of registration shall be suspended for a period of three months for the first conviction, and an increase of one hundred pesos in the fine and one month’s suspension of the registration for each subsequent conviction.
For violation of any provisions of this Act or regulations promulgated pursuant hereto, not hereinbefore specifically punished, a fine of not less than one hundred nor more than five hundred pesos shall be imposed.
In the event an offender cannot pay any fine imposed pursuant to the provisions of this Act, he shall be made to undergo subsidiary imprisonment as provided for in the Revised Penal Code.
If, as the result of negligence or reckless or unreasonable fast driving, any accident occurs resulting in death or injury of any person, the motor vehicle operator at fault shall, upon conviction, be punished under the provisions of the Revised Penal Code. (As amended by BP Blg 398)

SECTION 57. Punishment for Other Offenses. — The conviction of any person for any offense under this Act shall not bar his prosecution for any other offense which may have been committed by such person concurrently with the commission of the offense of which he was convicted or in doing the act or series of acts which constituted the offense of which he was convicted.

SECTION 58. Duty of Clerks of Court. — It is hereby made the duty of clerks of the Court of First Instance, the City Court of Municipal Court trying traffic violation cases to certify to the Commission the result of any case, whether criminal or civil, involving violations of any provision of this Act or of other laws and ordinances relating to motor vehicles. Said certificate shall specifically contain the name of the driver or owner of the vehicle involved, his address, the number of his license and/or of the certificate or registration of his vehicle, and the date thereof, and the offense of which he was convicted or acquitted.

ARTICLE II Collection of Fees, Taxes and Fines, Liens, Allotment of Funds

SECTION 59. (a) Collection of Fees; National and Local Taxes; Toll Fees. — The collection of all fees, taxes, and fines, under the provisions of this Act shall be made in accordance with regulations to be prescribed by the Commissioner and approved jointly by the Auditor General.

(b) No taxes or fees other than those prescribed in this Act shall be imposed for the registration or operation or on the ownership of any motor vehicle, or for the exercise of the profession of chauffeur, by any municipal corporation, the provisions of any city charter to the contrary notwithstanding: Provided, however, That any provincial board, city or municipal council or board or other competent authority may enact and collect such reasonable and equitable toll fees for the use of such bridges and ferries, within their respective jurisdiction, as may be authorized and approved by the Secretary of Public Works and Communications, and also for the use of such public roads, as may be authorized by the President of the Philippines upon recommendation of the Secretary of Public Works and Communications, but in none of these cases shall any toll fees be charged or collected until and unless the approved schedule of tolls has been posted legibly in a conspicuous place at such toll station.

SECTION 60. The Lien Upon Motor Vehicles. — Any balance of fees for registration, re-registration or delinquent registration of a motor vehicle, remaining unpaid and all fines imposed upon any vehicle owner, shall constitute a first lien upon the motor vehicle concerned.

The Commission is hereby vested with authority to issue a warrant of constructive or actual distraint or and levy to any owner of motor vehicle who has any balance of fees for registration, re-registration or delinquent registration of a motor vehicle remaining unpaid, which upon demand by the Commissioner of the Land Transportation Commission or any of his deputies executing such warrant, the owner of the said vehicle shall surrender same at the time demanded, except when the attachment or execution is under any judicial process. Any owner who fails or refuses to surrender any of such property or vehicle not so surrendered shall be punished by a fine not exceeding the amount of the fees (including penalties and interests, if any) for the collection of which such warrant has been issued, together with the costs and interests, if any, from the time of such surrender. In addition, such owner shall be punished by a fine of not more than three hundred pesos or an imprisonment not more than six months, or both.

SECTION 61. Disposal of Monies Collected. — Monies collected under the provisions of this Act shall accrue to the General Fund. The Director of Land Transportation shall collect the Registration Fees, Road Users' Charges and Common Carriers Tax as deputy of the Commissioner of Internal Revenue and shall turn over the proceeds thereof within 10 days after the end of each month to the Treasurer of the Philippines, together with a monthly collection report, copy of which shall be furnished to the Commissioner of Internal Revenue. (As amended by RA No 6374, PD No 1934)

ARTICLE III Final Provisions

SECTION 62. No provincial board, city or municipal board or council shall enact or enforce any ordinance or resolution in conflict with the provisions of this Act, or prohibiting any deputy or agent of the Commission to enforce this Act within their respective territorial jurisdiction and the provisions of any charter to the contrary notwithstanding.

SECTION 63. Repeal of Laws and Ordinances. — Act Numbered Thirty-nine hundred ninety-two, as amended, and all laws, executive orders, ordinances, resolutions, regulations, or parts thereof in conflict with the provisions of this Act are repealed: Provided, however, That nothing contained in this Act shall be construed as limiting or superseding any provisions of the Public Service Act, as amended, with respect to the control by the Public Service Commission of motor vehicles operating as public service, nor shall any provision of this Act be construed as limiting or abridging the powers conferred upon and exercised by the Public Service Commission with regards to the control and supervision of the operation of such motor vehicles as public service.

SECTION 64. Appropriation. — To carry out effectively the provisions of this Act, the amount of two hundred fifty thousand pesos is hereby appropriated out of the fees collected under this Act, in addition to the appropriations provided in the General Appropriations Act, for the expense of this Commission for the fiscal year beginning July first, nineteen hundred and sixty-four, to June thirtieth, nineteen hundred and sixty-five: Provided, however, That any savings in the appropriations of the Motor Vehicles Office for the fiscal year beginning July first, nineteen hundred and sixty-three, to June thirtieth, nineteen hundred and sixty-four shall likewise be available for this purpose.

SECTION 65. Separability. — If any provisions of this Act or the application thereof to any person or circumstance is held invalid, the remainder of the Act, and the application of such provision to other persons or circumstances, shall not be affected thereby.

SECTION 66. Effectivity. — This Act shall take effect upon its approval.

Approved: June 20, 1964

Published in the Official Gazette, Vol. 61, No. 15, p. 2168 on April 12, 1965

Code of Commerce for Maritime Law

BOOK II Special Commercial Contracts

TITLE VII Commercial Contracts for Transportation Overland

ARTICLE 360. The shipper may, without changing the place where the delivery is to be made, change the consignment of the goods delivered to the carrier, and the latter shall comply with his orders, provided that at the time of making the change of the consignee the bill of lading subscribed by the carrier be returned to him, if one were issued, exchanging it for another containing the novation of the contract.

The expenses arising from the change of consignment shall be defrayed by the shipper.

ARTICLE 361. Merchandise shall be transported at the risk and venture of the shipper, if the contrary was not expressly stipulated.

Therefore, all damages and impairment suffered by the goods during the transportation, by reason of accident, force majeure, or by virtue of the nature or defect of the articles, shall be for the account and risk of the shipper.

The proof of these accidents is incumbent on the carrier.

ARTICLE 362. The carrier, however, shall be liable for the losses and damages arising from the causes mentioned in the foregoing article if it is proved that they occurred on account of his negligence or because he did not take the precautions usually adopted by careful persons, unless the shipper committed fraud in the bill of lading, making him believe that the goods were of a class or quality different from what they really were.

If, notwithstanding the precaution referred to in this article, the goods transported run the risk of being lost on account of the nature or by reason of an unavoidable accident, without there being time for the owners of the same to dispose thereof, the carrier shall proceed to their sale, placing them for this purpose at the disposal, of the judicial authority or the officials determined by special provisions.

ARTICLE 363. With the exception of the cases prescribed in the second paragraph of Article 361, the carrier shall be obliged to deliver the goods transported in the same condition in which, according to the bill of lading, they were at the time of their receipt, without any detriment or impairment, and should he not do so, he shall be obliged to pay the value of the goods not delivered at the point where they should have been and at the time the delivery should have taken place.

If part of the goods transported should be delivered the consignee may refuse to receive them, when he proves that he can not make use thereof without the others.

ARTICLE 364. If the effect of the damage referred to in Article 361 should be only a reduction in the value of the goods, the obligation of the carrier shall be reduced to the payment of the amount of said reduction in value, after appraisal by experts.

ARTICLE 365. If, on account of the damage, the goods are rendered useless for purposes of sale or consumption in the use for which they are properly destined the consignee shall not be bound to receive them, and may leave them on the hands of the carrier, demanding payment therefor at current market prices.

If among the goods damaged there should be some in good condition and without any defect whatsoever, the foregoing provision shall be applicable with regard to the damaged ones, and the consignee shall receive those which are sound, this separation being made by distinct and separate articles, no object being divided for the purpose, unless the consignee proves the impossibility of conveniently making use thereof in this form.

The same provision shall be applied to merchandise in bales or packages, with distinction of the packages which appear sound.

ARTICLE 366. Within the twenty-four hours following the receipt of the merchandise a claim may be brought against the carrier on account of damage or average found therein on opening the packages, provided that the indications of the damage or average giving rise to the claim can not be ascertained from the exterior of said packages, in which case said claim would only be admitted on the receipt of the packages.

After the periods mentioned have elapsed, or after the transportation charges have been paid, no claim whatsoever shall be admitted against the carrier with regard to the condition in which the goods transported were delivered.

ARTICLE 367. If there should occur doubts and disputes between the consignee and the carrier with regard to the condition of goods transported at the time of their delivery to the former, the said goods shall be examined by experts appointed by the parties, and a third one, in case of disagreement, appointed by the judicial authority, the result of the examination being reduced to writing; and if the persons interested should not agree to the report of the experts and could not settle their disputes, said judicial authority shall order the deposits of the merchandise in a safe warehouse, and the parties interested shall make use of their rights in the proper manner.

ARTICLE 368. The carrier must deliver to the consignee without any delay or difficulty the merchandise received by him, by reason of the mere fact of being designated in the bill of lading to receive it; and should said carrier not do so he shall be liable for the damages which may arise therefrom.

ARTICLE 369. Should the consignee be not found at the domicile indicated in the bill of lading, or should refuse to pay the transportation charges and expenses, or to receive the goods, the deposit of said goods shall be ordered by the municipal judge, where there is no judge of first instance, to be placed at the disposal of the shipper or sender, without prejudice to a person having a better right, this deposit having all the effects of a delivery.

ARTICLE 370. If a period has been fixed for the delivery of the goods, it must be made within the same, and otherwise the carrier shall pay the indemnity agreed upon in the bill of lading, neither the shipper nor consignee being entitled to anything else.

Should no indemnity have been agreed upon and the delay exceeds the time fixed in the bill of lading, the carrier shall be liable for the damages which may have been caused by the delay.

ARTICLE 371. In cases of delay on account of the fault of the carrier, referred to in the foregoing articles, the consignee may leave the goods transported on the hands of the carrier, informing him thereof in writing before the arrival of the same at the point of destination.

When this abandonment occurs, the carrier shall satisfy the total value of the goods, as if they had been lost or mislaid.

Should the abandonment not occur the indemnity for loss and damages on account of the delays can not exceed the current price of the goods transported on the day and at the place where the delivery was to have been made. The same provision shall be observed in all cases where this indemnity is due.

ARTICLE 372. The appraisement of the goods which the carrier must pay in case of their being lost or mislaid shall be fixed in accordance with what is stated in the bill of lading, no proofs being allowed on the part of the shipper that there were among the goods declared therein articles of greater value, and money.

Horses, vehicles, vessels, equipment, and all the other principal and accessory means of transportation, shall be especially obligated in favor of the shipper, although with relation to railroads said obligation shall be subordinated to the provisions of the laws of concession with regard to property and to those of this Code with regard to the manner and form of making attachments and retentions against the said companies.

ARTICLE 373. A carrier who delivers merchandise to a consignee by virtue of agreements or combined services with other carriers shall assume the obligations of the carriers who preceded him, reserving his right to proceed against the latter if he should not be directly responsible for the fault which gives rise to the claim of the shipper or of the consignee.

The carrier making the delivery shall also assume all the actions and rights of those who may have preceded him in the transportation.

The sender and the consignee shall have an immediate right of action against the carrier who executed the transportation contract, or against the other carriers who received the goods transported without reserve.

The reservations made by the latter shall not exempt them, however, from the liabilities they may have incurred by reason of their own acts.

ARTICLE 374. The consignees to whom the remittance may have been made can not defer the payment of the expenses and transportation charges on the goods that they received after twenty-four hours have elapsed from the time of the delivery; and in case of delay in making this payment, the carrier may request the judicial sale of the goods he transported to a sufficient amount to cover the transportation charges and the expenses incurred.

ARTICLE 375. The goods transported shall be specifically obligated to answer for the transportation charges and for the expenses and fees caused by the same during their transportations, or until the time of their delivery.

This special right shall be limited to eight days after the delivery has been made, and after said prescription the carrier shall have no further right of action than that corresponding to an ordinary creditor.

ARTICLE 376. The preference of the carrier to the payment of what is due him for the transportation and expenses of the goods delivered to the consignee shall not be affected by the bankruptcy of the latter, provided the action is brought within the eight days mentioned in the foregoing article.

ARTICLE 377. The carrier shall be liable for all the consequences arising from noncompliance on his part with the formalities prescribed by the laws and regulations of the public administration during the entire course of the trip and on the arrival at the point of destination, except when his omission arises from his having been induced into error by false statements of the shipper in the declaration of the merchandise.

If the carrier has acted in accordance with a formal order received from the shipper or consignee of the merchandise both shall incur liability.

ARTICLE 378. Transportation agents shall be obliged to keep a special registry, with the formalities required by Article 36, in which there shall be entered, in progressive order of numbers and dates, all the goods the transportation of which is undertaken, stating the circumstances required by Articles 350 et seq. for the responsive bills of lading.

ARTICLE 379. The provisions contained in Articles 349 et seq. shall also be understood as relating to persons who, although they do not personally effect the transportation of commercial goods, contract to do so through others, either as contractors for a special and fixed transaction or as freight and transportation agents.

In either case they shall be subrogated to the place of the carriers with regard to the obligations and liability of the latter, as well as with regard to their right.

BOOK III Maritime Commerce

TITLE I 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 be included in a written instrument, which shall not produce any effect with regard to third persons if not recorded in the mercantile registry.

The ownership of a vessel shall also be acquired by the possession thereof in good faith for three years, with a good title duly recorded.

In the absence of any of these requisites, uninterrupted possession for ten years shall be necessary in order to acquire ownership.

A captain can not acquire by prescription the ship of which he is in command.

ARTICLE 574. The builders of vessels may employ the material and with regard to their construction and rigging may follow the system which is most convenient to their interests. Ship agents and seamen shall be subject to the provisions of the laws and regulations of the public administration on navigation, customs, health, safety of the vessels, and other similar provisions.

ARTICLE 575. Part owners of vessels shall enjoy the right of option of purchase and withdrawal in the sales made to strangers; but they can only exercise it within the nine days following the record of the sale in the registry and by delivering the price at once.

ARTICLE 576. The rigging, tackle, stores, and engine of a vessel, if it is a steamer, shall always be understood as included in the sale thereof if they are owned by the vendor at the time of the sale.

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 certificate of the record of the vessel in the registry up to the date of the sale.

ARTICLE 577. If the alienation of the vessel should take place while said vessel is on a voyage, the purchaser shall receive all the freights it earns from the time it received its last cargo, and the payment of the crew and other persons which go to make up its complement shall be paid by the purchaser for the said voyage.

If the sale takes place after the arrival of the vessel at the port of its destination, the freights shall belong to the vendors and he shall pay the crew and other persons which go to make up its complement, unless there is an agreement to the contrary in either case.

ARTICLE 578. If, the steamer being on a voyage or in a foreign port, her owner or owners should voluntarily alienate her either to Spaniards * 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 Spain * of the port where she terminates her voyage, and said instrument shall have no effect with regard to third persons if it is not recorded in the registry of the consulate. The consul shall immediately forward a true copy of the bill of purchase of the vessel to the [commercial registry] of the port where said vessel is recorded and registered.

In every case the alienation of the vessel must be stated, indicating whether the vendor receives the full price or part thereof, or whether he retains any interest in said vessel in full or in part. In case the sale is made to a Spaniard, * this fact shall be stated in the certificate of navigation.

When, the ship being on a voyage, it should be rendered useless for navigation, the captain shall apply to the judge or court of competent jurisdiction of the port of arrival, should it be a foreign port, to the consul of Spain, * should there be one or to the judge, or court, or local authority in the absence of the former; and the consul, or the judge, or court, or in their absence, the local authority, shall order an examination of the vessel to be made.

If the consignee or the underwriter should reside at said port, or should have representatives there, they must be cited in order to take part in the proceedings for the account of whom it may concern.

ARTICLE 579. After the damage to the vessel has been proven as well as the impossibility of her being repaired, to continue the voyage, her sale at public auction shall be ordered, subject to the following rules:

1. The hull of the vessel, her rigging, engines, stores, and other articles shall be appraised by means of an inventory, said proceedings being brought to the notice of the persons who may wish to take part in the auction.

2. The order or decree ordering the public auction shall be posted in the usual places, and shall be advertised in the newspapers of the port where the auction is to be held, should there be any, and in the other newspapers which the court may determine.

The period which may be fixed for the auction can not be less than twenty days.

3. These advertisements shall be repeated every ten days, and their publication shall be stated in the proceedings.

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 when the vessel is in a foreign country, the special provisions governing such cases shall be observed.

ARTICLE 580. In all judicial sales of vessels for the payment of creditors, the said creditors shall have preference in the order stated:

1. The credits in favor of the public treasury proven by means of an official certificate of the 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.

4. The salaries of the caretakers and watchmen of the vessel and any other expense connected with the preservation of said vessel, from the time of arrival until her sale, which appear to have been paid or are due by virtue of a true account approved by the judge or court.

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 their last voyage, which shall be verified by virtue of the liquidation made from the rolls of the crew and account books 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 parts of the freight the captain may have sold in order to repair the vessel, provided the sale has been ordered by a judicial instrument executed with the formalities required in such cases, and recorded in the certificate of the registry of the vessel.

8. The part of the price which has not been paid the last vendor, the credits pending for the payment of material and work in the construction of the vessel, when it has not navigated, and those arising from the repair and equipment of the vessel and its provisioning with victuals and fuel during its last voyage.

In order that the credits provided for in this subdivision may enjoy the preference they must appear by contracts recorded in the commercial registry, or if they were contracted for the vessel while on a voyage and said vessel has not returned to the port of her registry, they must be made under the authority required for such cases and entered in the certificate of registry of the said vessel.

9. The amounts borrowed on bottomry bonds before the departure of the vessel, proven by means of the contracts executed according to law and recorded in the commercial registry; the amounts borrowed during the voyage with the authority mentioned in the foregoing subdivision, filling the same requisites, and the insurance premium, proven by the policy of the contract or certificate taken from the books of the broker.

10. The indemnity due the shippers 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 either appear in a judicial or arbitration decision.

ARTICLE 581. If the proceeds of the sale are not sufficient to pay all the creditors included in one number or grade, the amount shall be divided among them pro rata.

ARTICLE 582. After the bill of the judicial sale at auction has been executed and recorded in the commercial registry, all the other liabilities of the vessel in favor of the creditors shall be considered canceled.

But if the sale should have been voluntary, and took place while the vessel was on a voyage, the creditors shall retain their rights against the vessel until her return to the port of her registry, and three months after the record of sale in the commercial registry, or after her arrival.

ARTICLE 583. If the ship being on a voyage the captain should find it necessary to contract one or more of the obligations mentioned in Nos. 8 and 9 of Article 580, he shall apply to the judge or court if he is in Spanish * territory, and otherwise to the consul of Spain, * should there be one, and, in his absence to the judge or court or to the proper local authority, presenting the certificate of the registry of the vessel 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 in the certificate of their result, in order that it may be recorded in the registry when the vessel returns to the port of her registry, or so that it can be admitted as a legal and preferred obligation in case of sale before the return, by reason of the sale of the vessel by virtue of a declaration of unseaworthiness.

The lack of this formality shall make the captain personally liable to the creditors who may be prejudiced through his fault.

ARTICLE 584. The vessels subject to the 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 are, at the instance of any of the creditors; but if they should be freighted and ready to sail the attachment can not take place except for debts contracted for the preparation and provisioning of the vessel for the same voyage, and even then the attachment shall be dissolved if any person interested in her sailing should give bond for the return of the vessel within the period fixed in the certificate of navigation, and binding himself to pay the debt in so far as it may be legal, should the vessel be delayed in her return even if it were caused by some fortuitous event.

For debts of any other kind whatsoever not included in the said Article 580, the vessel can only be attached 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 II Persons Who May Take Part in Maritime Commerce

SECTION I Owners of Vessels and Ship Agents

ARTICLE 586. The owner of a vessel and the 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 therein.

By agent is understood the person intrusted with the provisioning of a vessel, or who represents her in the port in which she happens to be.

ARTICLE 587. The agent shall also 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 equipments and the freight he may have earned during the voyage.

ARTICLE 588. Neither the owner of the vessel nor the agent shall be liable for the obligations contracted by the captain if the latter exceeds his powers and privileges which are his by reason of his position or have been conferred upon him by the former.

However, if the amounts claimed were made use of for the benefit of the vessel, the owner or agent shall be liable.

ARTICLE 589. If two or more persons should be part owners of a merchant vessel, an association shall be presumed as established by the part owners.

This association shall be governed by the resolutions of a majority of the members.

A majority shall be the relative majority of the voting members.

If there should be only two part owners, in case of disagreement the vote of the member having the largest interest shall be decisive. If the interests are equal, it shall be decided by lot.

The representation of the smallest part 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.

A vessel can not be detained, attached or levied upon execution in her entirety for the private debts of a part owner, but the proceedings shall be limited to the interest the debtor may have in the vessel, without interfering with her navigation.

ARTICLE 590. 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 Article 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.

ARTICLE 591. All the part owners shall be liable, in proportion to their respective ownership, for the expenses of repairs to 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 of maintenance, equipment, and provisioning of the vessel, necessary for navigation.

ARTICLE 592. The resolutions of the majority with regard to the repair, equipment, and provisioning of the vessel in the port of departure shall bind the majority unless the partners in the minority renounce their participation therein, which must be acquired by the other part 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 association and sale of the vessel shall also be binding on the minority.

The sale of the vessel must take place at a public auction, subject to the provisions of the law of civil procedure unless the part owners unanimously agree otherwise, the right of option to purchase and to withdraw mentioned in Article 575 being always reserved in favor of said part owners.

ARTICLE 593. The owners of a vessel shall have preference in her charter to other persons, offering equal conditions and price. If two or more of the former should claim said right the one having greater interest shall be preferred, and should they have an equal interest it shall be decided by lot.

ARTICLE 594. The part owners shall elect the manager who is to represent them in the capacity of agent.

The appointment of director or agent shall be revocable at the will of the members.

ARTICLE 595. The agent, be he at the same time an owner of a vessel or a manager for an owner or for an association of co-owners, must be qualified to trade and must be recorded in the merchant's registry of the province.

The agent shall represent the ownership of the vessel, and may in his own name and in such capacity take judicial and extrajudicial steps in all that relates to commerce.

ARTICLE 596. The agent may discharge the duties of captain of the vessel, subject, in every case, to the provisions contained in Article 609.

If two or more co-owners request the position of captain, the disagreement shall be decided by a vote of the members; and if the vote should result in a tie, the position shall be given to the part owner having the larger interest in the vessel.

If the interest of the petitioners should be the same, and there should be a tie, the matter shall be decided by lot.

ARTICLE 597. The agent shall select and come to an agreement with the captain, and shall contract in the name of the owners, who shall be bound in all that refers to repairs, details of equipment, armament, provisions, fuel, and freight of the vessel, and, in general, in all that relates to the requirements of navigation.

ARTICLE 598. The agent can not order a new voyage, nor make contracts for a new charter, nor insure the vessel, without the authority of her owner or by virtue of a resolution of the majority of the co-owners, unless these privileges were granted him in the certificate of his appointment.

If he should insure the vessel without authority therefor he shall be secondarily liable for the solvency of the underwriter.

ARTICLE 599. The managing agent of an association, shall give his co-owners 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 the disposal of the same.

ARTICLE 600. After the account of the managing agent has been approved by a relative majority, the co-owners shall satisfy 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 have a right of action to secure execution, 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 the resolution.

ARTICLE 601. Should there be any profits, the co-owners may demand of the managing agent the amount due them, by means of an executory action without further requisites than the acknowledgment of the signatures of the instrument approving the account.

ARTICLE 602. The agent shall indemnify the captain for all the expenses he may have incurred from his own funds or from those of other persons, for the benefit of the vessel.

ARTICLE 603. Before a vessel goes out to sea the agent shall have at his discretion, a right to discharge the captain and members of the crew whose contract did not state a definite period nor a definite voyage, paying them the salaries earned according to their contracts, and without any indemnity whatsoever, unless there is a special 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 the return to the place where the contract was made, unless there are good reasons for the discharge, all in accordance with Articles 636 et seq. of this Code.

ARTICLE 605. If the contracts of the captain and members of the crew with the agent should be for a definite period or voyage, they can not be discharged until the fulfillment of their contracts, except for reasons of insubordination in serious matters, robbery, theft, habitual drunkenness, and damage caused to the vessel or to its cargo by malice or manifest or proven negligence.

ARTICLE 606. If the captain should be a part owner in the vessel, he can not be discharged without the agent returning him the amount of his interest therein, which, in the absence of an 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 part owner should have obtained the command of the vessel by virtue of a special agreement contained in the articles of co-partnership, he can not be deprived thereof except for the reasons mentioned in Article 605.

ARTICLE 608. In case of the voluntary sale of the vessel, all contracts between the agent and captain shall terminate, the right to proper indemnity being reserved in favor of the captain, according to the agreements made with the 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 should be insolvent.

SECTION II Captains and Masters of Vessels

ARTICLE 609. Captains and masters of vessels must be Spaniards * having legal capacity to bind themselves in accordance with this Code, and must prove that they have the skill, capacity, and qualifications required to command and direct the vessel, as established by marine laws, ordinances, or regulations, or by those of navigation, and that they are not disqualified according to the same for the discharge of the duties of that position. t

If the owner of a vessel desires to be the captain thereof and does not have the legal qualifications therefor, he shall limit himself to the financial administration of the vessel, and shall intrust her navigation to a person possessing the qualifications required by said ordinances and regulations.

ARTICLE 610. The following powers are inherent in the position of captain or master of a vessel:

1. To appoint or make contracts with the crew in the absence of the agent and propose said crew, should said agent be present; but the agent shall not be permitted to 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 agent.

3. To impose, in accordance with the agreements and the laws and regulations of the merchants marine, on board the vessel, correctional punishment upon those who do not comply with his orders or who conduct themselves against discipline, holding a preliminary investigation on the crimes committed on board the vessel on the high seas, which shall be turned over to the authorities, who are to take cognizance thereof, at the first port touched.

4. To make contracts for the charter of the vessel in the absence of the agent or of her consignee, acting in accordance with the instructions received and protecting the interests of the owner most carefully.

5. To adopt all the measures which may be necessary to keep the vessel well supplied and equipped, purchasing for the purpose all that may be necessary, provided there is no time to request instructions of the agent.

6. To make, in similar urgent cases and on a voyage, the repairs to the hull and engines of the vessel and to her rigging and equipment which are absolutely necessary in order for her to be able to continue and conclude her voyage; but if she 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 foregoing article, the captain, when he has no funds and does not expect to receive any from the agent, shall procure the same in the successive order stated below:

1. By requesting said funds of the consignees or correspondents of a vessel.

2. By applying to the consignees of the cargo or to the persons interested therein.

3. By drawing on the agent.

4. By borrowing the amount required by means of a bottomry bond.

5. By selling a sufficient amount of the cargo to cover the amount absolutely necessary to repair the vessel, and to equip her to pursue the voyage.

In the two latter cases he must apply to the judicial authority of the port, if in Spain * and to the Spanish * consul, if in a foreign country; and where there should be none, to the local authority, proceeding in accordance with the prescriptions of Article 583, and with the provisions of the law of civil procedure.

ARTICLE 612. The following obligations are inherent in the office of captain:

1. To have on board before starting on a voyage a detailed inventory of the hull, engines, rigging, tackle, stores, and other equipments of the vessel; the navigation certificate; the roll of the persons who make up the crew of the vessel, and the contracts entered into with the crew; the list of passengers; the health certificate; the certificate of the registry proving the ownership of the vessel, and all the obligations which encumber the same up to that date; the charters or authenticated copies thereof; the invoices or manifest of the cargo, and the instrument of the expert visit or inspection, 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 note of the number of folios it contains, signed by the maritime official, and in his absence by the competent authority.

In the first book, which shall be called "log book," he shall enter every day the condition of the atmosphere, the prevailing winds, the course sailed, the rigging carried, the horsepower of the engines, the distance 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 is its cause, as well as the imperfections and averages of the cargo, and the effects and consequence of the jettison, should there be any; and in cases of grave resolutions which require the advice or a meeting of the officers of the vessel, or even of the passengers and crew, he shall record the decision adopted. For the informations indicated he shall make use of the binnacle book, and of the steam or engine book kept by the engineer.

In the second book, called the "accounting book," he shall enter all the amounts collected and paid for the account of the vessel, entering specifically article by article, the sources of the collection, and the amounts invested in provisions, repairs, acquisition of rigging or goods, fuel, outfits, wages, and all other expenses. 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, either directly or by delivery to their families.

In the third book, called "freight book," he shall record the entry and exit of all the goods, stating their marks and packages, names of the shippers and of the consignees, ports of loading and unloading, and the freight earned. In the same book he shall record the names and places of sailing of the passengers and the number of packages of which their baggage consists, and the price of the passage.

4. To make, before receiving the freight, with the officers of the crew, and the two experts, if required by the shippers and passengers, an examination of the vessel, in order to ascertain whether she is watertight, and whether the rigging and engines are in good condition; and if she has the equipment required for good navigation, preserving a certificate of the memorandum of this inspection, signed by all the persons who may have taken part therein, under their liability.

The experts shall be appointed one by the captain of the vessel and the other one by the persons who request the examination, and in case of disagreement a third shall be appointed by the marine authority of the port.

5. To remain constantly on board the vessel with the crew during the time the freight is taken on board and carefully watch the stowage thereof; not to consent to any merchandise or goods of a dangerous character to be taken on, such as inflammable or explosive substances, without the precautions which are recommended for their packing, management and isolation; not to permit that any freight be carried on deck which by reason of its disposition, 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 it takes place, he allows merchandise to 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 agent.

6. To demand a pilot at the expense of the vessel whenever required by navigation, and principally when a port, canal, or river, or a roadstead or anchoring place is to be entered with which neither he, the officers nor the crew are acquainted.

7. To be on deck at the time of sighting 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.

8. To present himself, when making a port in distress, to the maritime authority if in Spain * and to the Spanish * consul if in a foreign country, before twenty-four hours have elapsed, and make a statement of the name, registry, and port of departure of the vessel, of its cargo, and reason of arrival, which declaration shall be vised by the authority or by the consul if after examining the same it is found to be acceptable, giving the captain the proper certificate in order to show his arrival under stress and the reasons therefor. In the absence of marine officials or of the consul, the declaration must be made before the local authority.

9. To take the steps necessary before the competent authority in order to enter in the certificate of the Commercial Registry of the vessel the obligations which he may contract in accordance with Article 583.

10. To put in a safe place and keep 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 as witnesses, and, in their absence, of members of the crew.

11. To conduct himself according to the rules and precepts contained in the instructions of the agent, being liable for all that he may do in violation thereof.

12. To give an account to the agent from the port where the vessel arrives, of the reason thereof, taking advantage of the semaphore, telegraph, mail, etc., according to the cases; notify him the freight he may have received, stating the name and domicile of the shippers, freight earned, and amounts borrowed on bottomry bond, advise him of his departure, and give him any information and data which may be of interest.

13. To observe the rules on the situation of lights and evolutions to prevent collisions.

14. To remain on board in case of danger to the vessel, until all hope to save her is lost, and before abandoning her to hear the officers of the crew, abiding by the decision of the majority; and if he should have to take a boat 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 he shall make the proper protest in due form at the first port reached, before the competent authority or the Spanish * consul, within twenty-four hours, stating therein all the incidents of the wreck, in accordance with case 8 of this article.

16. To comply with the obligations imposed by the laws and rules of navigation, customs, health, and others.

ARTICLE 613. A captain who navigates for freight in common or on shares can not make any transaction for his exclusive account, and should he do so the profit shall belong to the other persons in interest, and the losses shall be for his own exclusive account.

ARTICLE 614. A captain who, having made an agreement to make a voyage, should not fulfill his obligation, without being prevented by an accident case or by force majeure, shall pay for all the losses his action may cause, without prejudice to criminal penalties which may be proper.

ARTICLE 615. Without the consent of the agent, the captain can not 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 article, the substitute as well as the captain may be discharged by the agent.

ARTICLE 616. If the provisions and fuel of the vessel are consumed before arriving at the port of destination, the captain shall decide, with the consent of the officers of the same, to make 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 turn said provisions over for the common consumption of all persons on board, paying the price thereof immediately, or at the latest, at the first port reached.

ARTICLE 617. The captain can not contract loans on respondentia, and should he do so the contracts shall be void.

Neither can 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 provided there does not exist any other kind of lien or obligation thereon. When he is permitted to do so, he must necessarily state what interest he has in the vessel.

In case of violation of this article the principal, interest, and costs shall be charged to the private account of the captain, and the agent may furthermore have the right to discharge him.

ARTICLE 618. The captain shall be civilly liable to the 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 his 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.

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 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 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 exception whatsoever shall exempt him from this obligation.

7. For those arising by reason of his voluntarily entering a port other than his destination, with the exception of the cases or without the formalities referred to in Article 612.

8. For those arising by reason of the non-observance of the provisions contained in the regulations for lights and evolutions for the purpose of preventing collisions.

ARTICLE 619. The captain shall be liable for the cargo from the time it is turned over to him at the dock, or afloat alongside the ship, at the port of loading until he delivers it on the shores or on the discharging wharf, of 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 reason of force majeure; but he shall always be so — no agreement to the contrary being valid — for those arising through his own fault.

Neither shall he be personally liable for the obligations he may have contracted for the repair, equipment, and provisioning of the vessel, which shall be incurred by the agent, unless the former has expressly bound himself personally or signed a draft or promissory note in his name.

ARTICLE 621. A captain who borrows money on bottomry, or who pledges or sells merchandise or provisions in other cases and without the formalities prescribed in this Code, shall be liable for the principle, interest, and costs, and shall indemnify for the damages he may cause.

The captain who commits fraud in his accounts shall reimburse the amount defrauded, and shall be subject to the provisions contained in the Penal Code.

ARTICLE 622. If when on a voyage the captain should receive news 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 to receive final orders from the agent or shippers.

ARTICLE 623. If he should find himself being attacked by a privateer and after having done all that was possible to avoid the encounter and have resisted the delivery of the equipment of the vessel or of its cargo, they should be forcibly taken away from him, or he should be obliged to deliver them, he shall make an entry in his freight book and shall prove the fact before the competent authority at the first port he touches.

After the force majeure has been proven, 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 the twenty-four hours following his arrival, and shall ratify it within the same period when he arrives at the place of his destination, immediately preceding with the proof of the facts, it not being permitted to open the hatches until 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 the facts.

The authority or the consul abroad shall verify the said facts, receiving a sworn statement of the members of the crew and passengers who may have been saved, and taking the other steps which may assist in arriving at the facts, drafting a certificate of the result of the proceedings in the log book and in that of the sailing mate, and shall deliver the original records of the proceedings to the captain, stamped and folioed, with a memorandum of the folios, which he must rubricate, for their presentation to the judge or court of the port of destination.

The statement of the captain shall be believed if it is in accordance with those of the crew and passengers; if they disagree, the latter shall be accepted, unless there is proof to the contrary.

ARTICLE 625. The captain, under his personal liability, as soon as he arrives at the port of destination, obtains the necessary permission from the health and customs officers and fulfills the other formalities required by the regulations of the administration, shall turn over the cargo, without any defalcation, to the consignees, and, in a proper case, the vessel, rigging, and freights to the agent.

If, by reason of the absence of the consignee or on account of the nonappearance of a legal holder of the invoices, the captain does not know to whom he is to make the legal delivery of the cargo, he shall place it at the disposal of the proper judge or court or authority, in order that he may decide with regard to its deposit, preservation, and custody.

SECTION III Officers and Crews of Vessels

ARTICLE 626. In order to be a sailing mate it shall be necessary:

1. To have the conditions required by the marine or navigation laws or regulations.

2. Not to be disqualified in accordance therewith for the discharge of the position.

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, obligations, and responsibilities.

ARTICLE 628. The sailing mate must supply himself with charts of the waters which are to be navigated, with the maps and quadrants or sextants 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 fault in this matter.

ARTICLE 629. The sailing mate shall personally and specially keep a book folioed and stamped on all its pages, called the "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 and 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 furnaces fired, the steam pressure, the number of revolutions, and under the name of "incidents" the revolutions made, the meetings with other vessels, and all the particulars and accidents 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 make the remarks he may consider necessary in the presence of the other officers of the vessel. If the captain should still insist on his objection, the sailing mate shall make the proper protest, signed by him and by another one of the officers in the log book, and shall obey the captain, who shall be the only one liable for the consequences of his order.

ARTICLE 631. The sailing mate shall be liable for all the damages suffered by the vessel and cargo by reason of his negligence or want of skill, without prejudice to the criminal liability which may arise, if a felony or misdemeanor were committed.

ARTICLE 632. It shall be the duty of the second mate:

1. To watch over the preservation of the hull, and rigging of the vessel, and to take charge 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 lost.

2. To take care that the cargo is well arranged, keeping the vessel always ready for evolutions.

3. To preserve order, discipline, and good service among the crew, requesting the necessary orders and instructions of the captain, and quickly informing him 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 instructions received, and see that it is exactly and carefully carried out.

5. To take charge by inventory of the rigging and all the equipments of the vessel, if it should be laid up, unless the 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 possess the qualifications which the laws and regulations require, and not to be disqualified in accordance therewith to hold said position. Engineers shall be considered as officers of the vessel, but they shall exercise no command nor intervention except that which refers to the motive power.

2. When there are two or more engineers on one 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 furthermore have the motive power under his charge, as well as the spare pieces, instruments, and implements belonging thereto, the fuel, the lubricating material and, finally, all which comes under the jurisdiction of an engineer on board a vessel.

3. He shall keep the engines and boilers in good condition and in state of cleanliness, and shall order what may be proper in order that they may always be ready for regular use, being liable for the accidents or damages which may arise by reason of his want of skill or negligence to the motive apparatus, or to the vessel and cargo, without prejudice to the criminal liability which may be proper if a felony or misdemeanor is proven.

4. He shall make no change in the motive apparatus, nor shall he repair the averages he may have noticed in the same, nor change the normal speed of its movement without the prior authority of the captain, to whom, if he should object to their being made, he shall state the reasons he may deem proper 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 protest, entering the same in the engine book, and shall obey the captain, who shall be the only one liable for the consequences of his order.

5. He shall inform the captain of any average which may occur to the motive apparatus, and shall inform him when 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, frequently advising him furthermore of the consumption of fuel and lubricating material.

6. He shall keep a book or registry called the "Engine Book," in which there shall be entered all the data that refer to the work of the engines, such as, for example, the number of furnaces fired, the steam pressure in the boilers and cylinders, the vacuum in the condenser, the temperatures, the degree of saturation of the water, the consumption of fuel and lubricating material, and under the heading of "Noteworthy occurrences" the average and imperfections which occur in the engines and boilers, the causes therefor, and the means employed to repair the same. There shall also be stated, taking the information from the binnacle book, and direction of the wind, the rigging set, and the speed of the vessel.

ARTICLE 633. The second mate shall take command of the vessel in case of the impossibility or disability of the captain and sailing mate, assuming in such case their powers and liability.

ARTICLE 634. The captain may make up his crew with the number he may consider advisable, and in the absence of Spanish * sailors he may ship foreigners residing in the country, the number thereof not to exceed one-fifth of the total crew. If in foreign ports the captain should not find a sufficient number of Spanish *sailors, he may make up the crew with foreigners, with the consent of the consul or marine authorities.

The agreements which the captain may make with the members of the crew and others who go to make up the complement of the vessels, 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, signed by the parties thereto, and vised by the marine authority if they are executed in Spanish * territory, or by the consuls or consular agents of Spain * if executed abroad, stating therein all the obligations which each one contracts and all the rights they acquire, said authorities taking care that these obligations and rights are recorded in a concise and clear manner, which will not give rise to doubts or claims.

The captain shall take care to read to them the articles of this Code, which concern them, stating that they were read in the said document.

If the book includes the requisites prescribed in Article 612, and there should not appear any signs of alterations in its clauses, it shall be admitted as evidence in questions which may arise between the captain and the crew with regard to the agreements contained therein and the amounts paid on account of the same.

Every member of the crew may request a copy of the captain, signed by the latter, of the agreement and of the liquidation of his wages, as they appear in the book.

ARTICLE 635. A sailor who has been contracted to serve on a vessel can not rescind his contract nor fail to comply therewith except by reason of a legitimate impediment which may have occurred.

Neither can he pass from the service of one vessel to another without obtaining the written consent of the vessel on which he may be.

If, without obtaining said permission, the sailor 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 look for a person to substitute him at his expense.

Said sailor shall furthermore lose the wages earned on his first contract to the benefit of the vessel for which he may have signed.

A captain who, knowing that a sailor is in the service of another vessel, should have made a new agreement with him, without having requested the permission referred to in the foregoing paragraphs, shall be personally liable to the captain of the vessel to which the sailor first belonged for that part of the indemnity, referred to in the third paragraph of this article, which the sailor could not pay.

ARTICLE 636. Should a fixed period for which a sailor has signed not be stated, he can not be discharged until the end of the return voyage to the port where he enrolled.

ARTICLE 637. Neither can the captain discharge a sailor during the time of his contract except for sufficient cause, the following being considered as such:

1. The perpetration of a crime which disturbs order on the vessel.

2. Repeated offenses of insubordination, against discipline, or against the fulfillment of the service.

3. Repeated incapacity or negligence in the fulfillment of the service to be rendered.

4. Habitual drunkenness.

5. Any occurrence which incapacitates the sailor to carry out the work under his charge, with the exception of the provisions contained in Article 644.

6. Desertion.

The captain may, however, before setting out on a voyage and without giving any reason whatsoever, refuse to permit a sailor he may have engaged from going on board and may 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 service of the former. Should this not be the case, it shall be paid by the captain personally.

After the vessel has sailed, and during the voyage and until the conclusion thereof, the captain can not abandon any member of his crew on land or on the sea, unless, by reason of being guilty of some crime, his imprisonment and delivery to the competent authority is proper in the first port touched, which will be obligatory on the captain.

ARTICLE 638. If, the crew having been engaged, the voyage is revoked by the will of the agent or of the charterers before or after the vessel has put to sea or if the vessel is in the same manner given a different destination than that fixed in the agreement with the crew, the latter shall be indemnified because of the rescission of the contract according to the case, viz:

1. If the revocation of the voyage should be decided 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, there shall be graduated what may be due for said month and days, calculating the same in proportion to the estimated duration of the voyage, 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 one month more or less, 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 sailors engaged for a fixed amount for the voyage shall receive the salary which may have been offered them in full 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 said sailors the passage to the said port or to the port of sailing of the vessel, as may be convenient for them.

4. If the agent or the charterers of the vessel should give said vessel a destination other than 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 for other reasons, should give rise to an increase of wages, the latter shall be privately regulated, or through amicable arbitrators in case of disagreement. Even though the voyage may be 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 originate from the shippers or charterers, the agent shall have a right to demand of them the indemnity which is justly due.

ARTICLE 639. If the revocation of the voyage should arise from a just cause independent of the will of the agent or charterers, and the vessel should not have left the port, the members of the crew shall not have any other right than to receive 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 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 agent.

5. The inability of the vessel to navigate.

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 the captain may deem it 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 the 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 engagement shall be rescinded and the crew shall be paid what they should have earned, according to the contract, if the voyage had been made. And if the agreement had been made for a fixed sum for the voyage, the contract must be complied within the terms agreed upon.

In the fifth case, the crew shall not have any other right than be entitled to recover 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 loss suffered, always reserving the criminal liability which may be proper.

ARTICLE 642. If the crew has been engaged to work 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 paid into the common funds of the vessel by the persons liable for said occurrences.

ARTICLE 643. 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 that of the agent for the recovery of the advances made.

If a portion of the vessel or freight should be saved, or part of either, 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 value of the freightage or the cargo saved; but sailors who are engaged on shares shall not have any right whatsoever to the salvage of the hull, but only on the portion of the freightage saved. If they should have worked to collect the remainder of the ship-wrecked vessel, they shall be given an award in proportion to the efforts made and to the risks encountered in order to accomplish the salvage.

ARTICLE 644. A sailor 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 be caused by an injury received in the service or defense of the vessel the sailor shall be attended and cured from the common funds, there being deducted before anything else from the proceeds of the freight, the cost of the attendance and cure.

ARTICLE 645. If a sailor should die during the voyage his heir shall be given the wages earned and not received, according to his engagement and the reason for his death, namely —

If he should have died a natural death and should have been engaged on wages there shall be paid what may have been earned up to the date of his death.

If the engagement had been made for a fixed sum for the whole voyage there shall be paid half the amount earned if the sailor died on the voyage out, and the whole amount if he died on the return voyage.

And if the engagement had been made on shares and the death should have occurred after the voyage was begun, the heirs shall be paid the entire portion due the sailor; but should the latter have died before the departure of the vessel from the port, the heirs shall not be entitled to claim anything.

If the death should have occurred in the defense of the vessel, the sailor shall be considered as living, and his heirs shall be paid, at the end of the voyage, the full amount of wages or the full part of the profits due him as to the others of his grade.

The sailor shall likewise be considered as present in the event of his capture when defending the vessel, in order 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 freights shall be liable for the wages earned by the crew engaged per month or for the trip, the liquidation and payment ought to take place between one voyage and the other.

After a new voyage has been undertaken, credits such as the former shall lose their right of preference.

ARTICLE 647. The officers and the crew of the vessel shall be exempted from all obligations contracted, if they deem it proper, in the following cases:

1. If, before the beginning of the voyage, the captain attempts to change it, or there occurs a naval war with the power to which the vessel was destined.

2. If a disease should break out and be officially declared 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 embarked, from the captain to the cabin boy, necessary for the management, evolutions, and service, and there shall, therefore, be understood as included in the complement the crew, sailing mates, engineers, stokers, and other persons not having a specific name; but there shall not be included the passengers nor the persons the vessel is only transporting.

SECTION IV Supercargoes

ARTICLE 649. Supercargoes shall discharge on board the vessel the administrative duties which the agent or shippers may have assigned 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 shall respect the latter in his duties as chief of the vessel.

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.

ARTICLE 650. All the provisions contained in the second section of Title III, Book II, with regard to qualifications, manner of making contracts, and liabilities of factors shall be applicable to supercargoes.

ARTICLE 651. Supercargoes can 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 a special authorization thereto from the principals.

TITLE III Special Contracts of Maritime Commerce

SECTION I Charter Parties

1. 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 can not do so, by two witnesses at their request.

The charter party shall include, besides the conditions unrestrictedly stipulated, the following statements:

1. The kind, name, and tonnage of the vessel.

2. Her flag and port of registry.

3. The name, surname, and domicile of the captain.

4. The name, surname, and domicile of the 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 weight, or measure which they respectively bind themselves to load and transport, or whether it is the total cargo.

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 rate of demurrage.

ARTICLE 653. If the freight 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, which shall be the only instrument with regard to the freight to determine the rights and obligations of the owner, of the captain, and of the charterer. t

ARTICLE 654. The charter parties executed with the intervention of a broker, who certifies to the authenticity of the signatures of the contracting parties made in his presence, shall be full evidence in court; and if said signatures should not agree the ones identical with the signatures the broker must keep in his registry, if kept in accordance to law, shall be final.

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.

Should no broker have taken part in the charter party and should the signatures not have been 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 agent shall be valid and efficient, even though in executing them he should have acted in violation of the orders and instructions of the agent or shipowner; but the latter shall have a right of action against the captain to recover damages.

ARTICLE 656. If in the charter party the time in which the loading and unloading is to take place is not stated, the customs of the port where these acts take place shall be observed. After the period stipulated or the customary one has passed, and should there not be in the freight contract an express clause fixing the indemnification for the delay, the captain shall be entitled to demand demurrage for the usual 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 another one at his expense, in good condition, to take the cargo to its destination, for which purpose he shall be obliged to look for a vessel not only at the port of arrival but in the other ports within a distance of 150 kilometers.

If the captain should not furnish a vessel to take the cargo to its destination, either through indolence or malice, the freighters, after a demand of the captain to charter a vessel within an unextendible period, may charter one and apply to the judicial authority requesting that the charter party which may have been made be immediately approved.

The same authority shall judicially compel the captain to confirm the charter made by the shippers for his account and under his responsibility.

If the captain, notwithstanding his efforts, should not find a vessel to charter, he shall deposit the cargo at the disposal of the freighters, to whom he shall communicate the facts on the first opportunity presenting itself, the charter being regulated in such cases by the distance covered by the vessel, there being no right to any indemnification whatsoever.

ARTICLE 658. The freight shall be paid according to the conditions stipulated in the contract, and should they not be specific, or should they be ambiguous, the following rules shall be observed:

1. If the vessel has been chartered by months or by days, the freight shall begin to run from the day the loading of the vessel is begun.

2. In charters made for a fixed period, the freight shall begin from that very day.

3. If the freight is charged according to weight, the payment shall be made according to gross weight, including the containers, such as barrels or any other objects containing the cargo.

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 requirements, shall pay freight. t

The price of this merchandise shall be fixed according to the success 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 said merchandise would have brought in the sale.

The same rule shall be observed in the payment of the freight which shall be in full if the vessel arrives at her destination, and in proportion to the distance covered if she should be lost beforehand.

ARTICLE 660. Merchandise jettisoned for the common safety shall not pay freight; but its value shall be considered as general average, and shall be computed in proportion to the distance covered when it was jettisoned.

ARTICLE 661. Neither shall merchandise which was lost by reason of shipwreck or stranding pay freight, nor that seized by pirates or enemies.

If the freight should have been paid in advance, it shall be returned, unless there was an agreement to the contrary.

ARTICLE 662. If the vessel or the merchandise should be recovered, or should the goods of the shipwreck be picked up, the freight corresponding to the distance covered by the vessel transporting the cargo shall be paid; and should the vessel be repaired and transport said merchandise to the port of destination, the full freight shall be paid, without prejudice to what may be due by reason of the average.

ARTICLE 663. Merchandise which is damaged or reduced on account of its own defects or bad quality and condition of the packing, or by reason of an accidental case, shall pay full freight, and as was 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 freight fixed in the contract for the same.

ARTICLE 665. The cargo shall be specially liable for the payment of the freight expenses, and duties arising therefrom, which must be reimbursed by the shippers, as well as for the part of the general average which may be due, but it shall not be legal for the captain to delay unloading on account of delay in complying with this obligation.

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 freight, expenses, and averages due him, reserving the right to demand the balance due him therefor if the proceeds of the sale should not have sufficed to cover his credit.

ARTICLE 667. The goods loaded shall be liable in the first place for their freight and expenses 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 case of bankruptcy of the freighter or consignee should occur.

This right can not be 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.

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 the merchandise in so far as necessary to pay the freight and other expenses on the same.

The sale shall likewise take place when the goods deposited run the risk of deteriorating or by reason of their condition or for other reasons the expenses of preservation and custody should be disproportionate to the value thereof.

2. Rights and Obligations of Owners

ARTICLE 669. The owners or the captain shall observe in charter parties the capacity of the vessel or that expressly designated in the registry of the same, a difference greater than 2 per cent between that stated and her true capacity not being permissible.

If the owners or the captain should contract to carry a greater amount of cargo than the vessel can hold, in view of her tonnage, they shall indemnify the freighters whose contracts they do not fulfill for the losses they may have caused them by reason of their default, according to the cases, viz:

If the vessel has been chartered by one freighter 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 charter should be reduced in proportion to the cargo 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.

If, on the contrary, there should be several charter parties, and by reason of the want of space all the cargo contracted for can not be received, 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 place corresponding to them in the order of the dates of their contracts.

Should there be no priority, the charterers may load, if they wish, pro rata of the amounts of weight or space they may have engaged, and the person from whom the vessel was chartered shall be obliged to indemnify them for the loss and damage.

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 can 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 being defrayed by him, as well as the increase, should there be any, in the price of the charter. Should he not be able to make this change, the voyage shall be undertaken at the time agreed upon; and should no time have been fixed, within fifteen days from the time of beginning to load, should nothing to the contrary have been 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 freighter shall have a right to demand that the vessel put to sea with the cargo she may have on board.

ARTICLE 671. After three-fifths of the vessel is loaded, the person from whom she is chartered can not, without the consent of the charterers or freighters 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 the person who did not consent to the change.

ARTICLE 672. If the vessel has been chartered in whole, the captain can not, without the consent of the person chartering her, accept freight from any other person; and should he do so, said charterer may oblige him to unload it and require him to indemnify him for the losses suffered thereby.

ARTICLE 673. The person from whom the vessel is chartered shall be liable for all the losses caused 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 to put to sea at the proper time through a notary or judicially.

ARTICLE 674. If the charterer should carry to the vessel more freight 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 freighters, but if in order to stow said freight it should be necessary to stow it in such manner as to throw the vessel out of trim the captain must refuse it or unload it at the expense of its owner.

The captain may likewise, before leaving the port, unload the merchandise placed on board clandestinely, or transport it, if he can do so and keep 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 await his instructions, and in the meantime the lay days agreed upon shall begin to run, or those allowed by custom in the port, unless there is a special 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 for her 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, should one have taken place 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 be enforced if the captain should not have any instructions from the charterer, and a declaration of war or a blockade should take place during the voyage.

In such case the captain shall be obliged to make the nearest safe and neutral port, and request and await orders from the freighter; and the expenses incurred and salaries earned during the detention shall be paid as general average.

If, by orders of the freighter, the cargo should be discharged at the port of arrival, the freight for the voyage out shall be paid in full.

ARTICLE 678. If the time necessary, in the opinion of the judge or court, in which to receive orders from the freighters should have elapsed without the captain having received any instructions, the cargo shall be deposited, and it shall be liable for the payment of the freight and expenses incurred by reason of the delay which shall be paid from the proceeds of the part first sold.

3. Obligations of Charterers

ARTICLE 679. The charterer of an entire vessel may subcharter the whole or part thereof for the amounts he may consider most convenient, without the captain being allowed to refuse to receive on board the freight delivered by the second charterers, provided the conditions of the first charter are not changed, and that the person from whom the vessel is chartered be paid the full price agreed upon even though the full cargo is not embarked, with the limitation established in the next article.

ARTICLE 680. A charterer who does not make up the full cargo he bound himself to ship shall pay the freightage of the amount he fails to ship, if the captain did not take other freight to make up the cargo of the vessel, in which case he shall pay the first charterer the difference should there be any.

ARTICLE 681. If the charterer should ship goods different from those indicated 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 shipped should have been for the purpose of illicit commerce, and was 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 agreed, they can not demand any indemnity whatsoever of the charterer for the damage caused the vessel.

ARTICLE 683. In case of making a port to repair the hull, machinery, or equipment of the vessel, the freighters must wait until the vessel is repaired, being permitted to unload her at their own expense should they deem it advisable.

If, for the benefit of the cargo subject to deterioration, the freighters or the court, or the consul, or the competent authority in a foreign land should order the merchandise to be unloaded, the expenses of loading and unloading 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 freight, the expenses of the stop made at his request, and the losses and damages caused the other freighters, should there be any.

ARTICLE 685. In charters for transportation of general freight any of the freighters may unload the merchandise before the beginning of the voyage, by paying one-half the freight, the expense of stowing and restowing the cargo, and any other damage which may be caused 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 freight due and the other expenses to which he may be liable for said cargo.

The primage must be paid in the same proportion and at the same time as the freight, all the changes and modifications to which the latter should be subject also governing the former.

ARTICLE 687. The charters and freighters can not abandon merchandise damaged on account of the inherent vice of the goods or by reason of an accidental case, for the payment of the freight and other expenses.

The abandonment shall be proper, however, if the cargo should consist of liquids and should they have leaked out, there not remaining in the containers more than one-quarter of their contents.

4. Total or Partial Rescissions of Charter Parties

ARTICLE 688. A charter party may be annulled at the request of the charterer:

1. If before loading the vessel he should abandon the charter, paying half of the freightage agreed upon.

2. If the capacity of the vessel should not agree with that stated in the certificate of the tonnage, or if there is an error in the statement of the flag under which she sails.

3. If the vessel should not be placed at the disposal of the charterer within the period and in the manner agreed upon.

4. If, after the vessel has put to sea, she should return to the port of departure, on account of risk of pirates, enemies, or bad weather, and the freighters 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 losses he may suffer.

In the fourth case the person from whom the vessel was chartered shall have a right to the freightage in full for the voyage out.

If the charter should have been made by the months, the charterers shall pay the full freightage for one month, if the voyage were to a port in the same waters, and two months, if the voyage were to a port in different waters.

From one port to another of the Peninsula and adjacent islands, the freightage for one month only shall be paid.

5. If a vessel should make a port during the voyage in order to make urgent repairs and the freighters should prefer to dispose of the merchandise.

When the delay does not exceed thirty days, the freighters shall pay the full freight for the voyage out.

Should the delay exceed thirty days, they shall only pay the freight 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 for the lay days and extra lay days elapsed.

2. If the person from whom the vessel was chartered should sell her before the charterer has begun to load her and the purchaser should load her 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 her 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 action 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 going to sail.

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 the merchandise of the vessel at the said port.

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 agent.

5. The impossibility of the vessel to navigate, without fault of the captain or agent.

The unloading shall be made for the account of the charterer.

ARTICLE 691. If the vessel can not put to sea on account of the closing of the port of departure, or any other temporary cause, the charter shall be in force without any 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 the reloading should continue after the reason 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 freight 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.

5. Passengers on Sea Voyages

ARTICLE 693. Should the passage price not have been agreed upon, the judge or court shall summarily fix it, after a statement 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, can 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 passage agreed upon.

If there should be understood in the price stipulated the expenses of subsistence, the judge, or court, hearing experts if he considers it necessary, shall fix the amount to be paid the vessel.

Should another passenger be received in the place of the deceased, nothing shall be paid by said heirs.

ARTICLE 697. If before beginning the voyage it should be suspended through the sole fault of the captain or agent, the passengers shall be entitled to have their passage refunded and to recover for losses and damages; but if the suspension was due to an accidental cause, or to force majeure, or to any other cause beyond the control of the captain or agent, the passengers shall only be entitled to the return of the passage money.

ARTICLE 698. In case a voyage already begun should be interrupted the passengers shall be obliged only to pay the passage in proportion to the distance covered, and shall not be entitled to recover for losses and damages if the interruption is due to an accidental cause or to force majeure, but have a right to indemnity if the interruption should have been caused by the captain exclusively. If the interruption should be by reason of the disability of the vessel, and the passenger should agree to await her repair, he can not be required to pay any increased price of passage, but his living expenses during the delay shall be for his own account.

In case the departure of the vessel is delayed the passengers have a right to remain on board and to be furnished with food for the account of the vessel, unless the delay is due to an accidental cause or to force majeure. If the delay should exceed ten days, the passengers who request it shall be entitled to the return of the passage; and if it were due exclusively to the captain or agent they may furthermore demand indemnity for losses and damages.

A vessel which is exclusively destined 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 her itinerary.

ARTICLE 699. After the contract has been rescinded, before or after the commencement of the voyage, the captain shall have a right to claim payment for what he may have furnished the passengers.

ARTICLE 700. In all that relates to the preservation of order and police on board the vessel the passengers shall conform to the orders given by the captain, without any distinction whatsoever.

ARTICLE 701. The convenience or the interest of the passengers shall not obligate nor empower the captain to stand in shore or enter places which may take the vessel out of her course, nor to remain in the ports he must or is under the necessity of touching for a period longer than that required for the business of the navigation.

ARTICLE 702. In the absence of an agreement to the contrary, it shall be understood that the maintenance of the passengers during the voyage is included in the price of the passage; but should said maintenance be for the account of the latter, the captain shall be under the obligation, in case of necessity, to furnish them the victuals at a reasonable price necessary for their maintenance.

ARTICLE 703. A passenger shall be looked upon as a shipper in so far as the goods he carries on board are concerned, and the captain shall not be liable for what said passenger may preserve 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 price of the passage and expenses of maintenance, may retain the goods belonging to the passenger, and in case of the sale of the same he shall be given preference over the other creditors, acting in the same way as in the collection of freight.

ARTICLE 705. In case of the death of a passenger during the voyage the captain is authorized, with regard to the body, to take the steps required by the circumstances, and shall carefully take care of the papers and goods there 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.

6. Bills of Lading

ARTICLE 706. The captain and the freighter of the vessel are obliged to draft the bill of lading, in which there 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 to order.

6. The quantity, quality, number of packages, and marks of the merchandise.

7. The freight and the primage stipulated.

The bill of lading may be issued to bearer, to order, or in the name of a specific person, and must be signed within twenty-four hours after the cargo has been received on board, the freighter being able to request the unloading thereof at the expense of the captain should he not sign it, and in every case indemnity for the losses and damages suffered thereby.

ARTICLE 707. Four true copies of the original bill of lading shall be made, all of which shall be signed by the captain and by the freighter. Of these copies the freighter shall keep one and send another to the consignee; the captain shall take two, one for himself and another for the agent.

There may, furthermore, be made as many copies of the bill of lading as may be considered necessary by the persons interested; but when they are issued to order or to the bearer there shall be stated in all the copies, be they either of the first four or of the subsequent ones, the destination of each one, stating whether it is for the agent, for the captain, for the freighter, or for the consignee. If the copy sent to the latter should be duplicated there must be stated in said duplicate this fact, and that it is not valid except in case of the loss of the first one.

ARTICLE 708. The bills of lading issued to the bearer sent to the consignee shall be transferable by the actual delivery of the instrument; and by virtue of an indorsement, those issued to order.

In either case, the person to whom the bill of lading is transferred shall acquire all the rights and actions of the assignor 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 underwriters, proof to the contrary being reserved by the latter.

ARTICLE 710. Should the bills of lading not agree, and there should not be observed any correction or erasure in any of them, those possessed by the freighter or consignee signed by the captain shall be proof against the captain or agent in favor of the consignee or freighter; and those possessed by the captain or agent signed by the freighter shall be proof against the freighter or consignee in favor of the captain or agent.

ARTICLE 711. The legitimate holder of a bill of lading who does not present it to the captain of the vessel before her unloading, obliging the latter thereby to unload it and place it in deposit, shall be liable for the cost of warehousing and other expenses arising therefrom.

ARTICLE 712. The captain can not himself change the destination of merchandise. In admitting this change at the instance of the freighter, he must first take up the bills of lading he may have issued, under the penalty of being liable for the cargo to the legitimate holder of the same.

ARTICLE 713. If before delivering the cargo a new bill of lading should be demanded of the captain, it being alleged that the previous ones are not presented on account of their loss or for any other sufficient cause, he shall be obliged to issue it, provided 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, when the bills of lading referred to therein are in question, under the penalty otherwise to be liable for said cargo if not properly delivered through his fault.

ARTICLE 714. If before the vessel puts to sea the captain should die or should discontinue in his position through any accident, the freighters shall have a right to demand of the new captain the ratification of the first bills of lading, and the latter must do so, provided all the copies previously issued be presented or returned to him, and it should appear from an examination of the cargo that they are correct.

The expenses arising from the examination of the cargo shall be defrayed by the 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, according to the case, for the delivery of the cargo and the payment of the freightage and proper expenses.

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 delivering the same, the person presenting the copy first issued, with the exception of the case when the latter one was issued on account of the loss of the first one, and if they are held by different persons.

In such case, as well as when only second or 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 that through him it may be delivered 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 subalterns for partial deliveries of the cargo which may have been made.

ARTICLE 718. After the cargo has been delivered, the bills of lading which the captain signed shall be returned to him, or at least the copy by reason of which the delivery is made, with the receipt for the merchandise mentioned therein.

The delay on the part of the consignee shall make him liable for the damages which may be caused the captain thereby.

SECTION II Loans on Bottomry and Respondentia

ARTICLE 719. A loan on bottomry or respondentia shall be considered that which the repayment of the sum loaned and the premium stipulated, under any condition whatsoever, depends on the safe arrival in port of the goods on which it is made, or of their value in case of accident.

ARTICLE 720. Loans on bottomry or respondentia may be executed:

1. By means of a public instrument.

2. By means of a bond signed by the contracting parties and the broker who took part therein. t

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 commercial registry, without which requisites the credits originating from the same 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 commercial registry of the port of registry of the vessel before eight days have elapsed from the date of her arrival. If said eight days should elapse without the record having been made in the commercial registry, the contracts made during the voyage of a vessel shall not have any effect with regard to third persons, except from the day and date of their entry.

In order that the bonds of the contracts celebrated in accordance with No. 2 may have legal force, they must conform to the registry of the broker who took part therein. In those celebrated in accordance with No. 3 the acknowledgment of the signature must precede.

Contracts which are not reduced to writing shall not be the basis for a judicial action.

ARTICLE 721. In a bottomry or respondentia bond there 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 domicile of the person giving and of 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 for which the risk is run.

ARTICLE 722. The bonds may be issued to order, in which case they shall be transferable by indorsement, and the assignee shall acquire all the rights and run all the risks corresponding to the indorser.

ARTICLE 723. Loans may be made in goods and in merchandise, their value being fixed in order to determine the amount 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 cargo.

If the loan is constituted on the hull of the vessel, there shall be understood as also subject to the liability of the loan, the rigging, equipment and other goods, provisions, fuel, steam engines, and the freight earned during the voyage subject to the loan.

If the loan is made on the cargo, all that constitutes the same shall be subject to the repayment; and if on a particular object of the vessel or of the cargo, the object exclusively and specifically mentioned only shall be liable.

ARTICLE 725. No loans can be made on the salaries of the crew, nor on the profits which it is expected to earn.

ARTICLE 726. If the lender should prove that he loaned a larger amount than the value of the article liable for the bottomry loan, by reason of fraudulent measures employed by the borrower the loan shall only be valid for the amount at which said object is appraised by experts.

The surplus principal shall be returned with legal interest for the whole period of the duration of the disbursement.

ARTICLE 727. If the full amount of the loan contracted to load the vessel should not be made use of for the cargo, the surplus shall be returned before clearing.

The same procedure shall be observed with regard to the goods taken as a loan if they could not all have been 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 of the latter which belongs to the captain, if the other owners or their agents should not have given their express authorization thereto 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 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 any risk, the contract shall be considered an ordinary loan, the borrower being under the obligation to return the principal and interest at the legal rate, if the interest stipulated should not have been 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 by the inverse order to that of their dates.

The loans for the last voyage shall have preference over prior ones.

Should several loans have been made at a port made under stress and for the same purpose, all of them shall be paid pro rata.

ARTICLE 731. The actions which may be brought by the lender shall be extinguished by the absolute loss of the goods on which the loan was made, if said loss arose from an accident of the sea at the time and during the voyage designated in the contract, and should it be proven that the cargo was on board; but this shall not take place if the loss were caused by the inherent defect of the thing or through the fault or malice of the borrower, or through barratry on the part of the captain, or if it were caused by damages suffered by the vessel as a consequence of being engaged in contraband, or if it arose through loading the merchandise on a vessel other than that designated in the contract, unless this change should have been made by reason of force majeure.

The proof of the loss is incumbent upon the person who received the loan, as well as the proof of the existence in the vessel of the goods declared to the lender as the object thereof.

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 was 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 it not have been stated in the contract for what period the lender runs the risk, the said risk 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 it is loaded on the shore or wharf of the port of shipment until unloaded in the port of consignment.

ARTICLE 734. In case of shipwreck the amount liable for the return of the loan shall be reduced to the proceeds of the goods saved, after the costs of the salvage have been deducted.

If the loan were on the vessel or any of her parts, the freightage earned during the voyage for which said loan was contracted shall also be liable for its payment, as far as it is available.

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 shall be divided, in case of shipwreck, between the lender and the underwriter, in proportion to the legitimate interest of each one, taking into consideration, for this purpose only, the principal with relation 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 the repayment of the principal or premiums of the loan, the former only shall bear legal interest.

TITLE IV Risks, Damages and Accidents of Maritime Commerce

SECTION I 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 navigation for the preservation of the vessel or cargo, or both.

2. All damages or deterioration the vessel may suffer from the time she puts to sea from the port of departure until she casts anchor in the port of destination, and those suffered by the merchandise from the time it is loaded in the port of shipment until it is unloaded in the port of consignment.

ARTICLE 807. The petty and ordinary expenses of navigation, such as pilotage of coasts and ports, lighterage and towage, anchorage dues, 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 expenses common to navigation shall be considered ordinary expenses to be defrayed by the shipowner, unless there is a special agreement to the contrary.

ARTICLE 808. Averages shall be:

1. Simple or particular.

2. General or gross.

ARTICLE 809. Simple or particular averages shall be, as a general rule, all the expenses and damages caused to the vessel or to her cargo which have not redounded to the benefit and common profit of all the persons interested in the vessel and her cargo, and especially the following:

1. The damages suffered by the cargo from the time of its embarkation until it is unloaded, either on account of the nature of the goods or by reason of an accident at sea or force majeure, and the expenses incurred to avoid and repair the same.

2. The damages suffered by the vessel in her hull, rigging, arms, and equipment, for the same causes and reasons, from the time she puts to sea from the port of departure until she anchored in the port of destination.

3. The damages 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 should be detained or embargoed by a legitimate order or force majeure, if the charter should have been 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 cover any other requirement of the vessel against which the proper amount shall be charged.

7. The victuals and wages of the crew during the time the vessel is in quarantine.

8. The damage suffered by the vessel or cargo by reason of an impact or collision with another, if it were accidental and unavoidable. If the accident should occur through the fault or negligence of the captain, the latter shall be liable for all the damage caused.

9. Any damage suffered by the cargo through the faults, 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 freight.

ARTICLE 810. The owner of the goods which gave rise to the expense or suffered the damage shall bear the simple or particular averages.

ARTICLE 811. General or gross averages shall be, as a general rule, all the damages and expenses which are deliberately caused in order to save the vessel, her 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 cargo captured by enemies, privateers, or pirates, and the provisions, wages, and expenses of the vessel detained during the time the arrangement or redemption is taking place.

2. The goods jettisoned to lighten the vessel, whether they belong to the vessel, to the cargo, or to the crew, and the damage suffered through said act by the goods kept.

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 her 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 through the opening made in the vessel in order to drain her and prevent her sinking.

6. The expenses caused through floating a vessel intentionally stranded for the purpose of saving her.

7. The damage caused to the vessel which it is necessary to break open, scuttle, or smash in order to save the cargo.

8. The expenses of curing and maintaining the members of the crew who may have been wounded or crippled in defending or saving the vessel.

9. The wages of any member of the crew detained 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 it should be embargoed or detained by force majeure or by order of the Government, or in order to repair the damage caused for the common good.

11. The loss suffered in the value of the goods sold at arrivals under stress in order to repair the vessel because 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, a previous resolution of the captain, adopted after deliberation with the sailing mate and other officers of the vessel, and with a hearing of the persons interested in the cargo who may be present, shall be required.

If the latter shall object, and the captain and officers, or a majority, or the captain, if opposed to the majority, should consider certain measures necessary, they may be executed under his liability, without prejudice to the freighters exercising their rights against the captain before the judge or court of competent jurisdiction, if they can prove that he acted with malice, lack of skill, or negligence.

If the persons interested in the cargo, being on the vessel, should not be heard, they shall not contribute to the gross average, which contribution shall be paid by the captain, unless the urgency of the case should be such that the time necessary for previous deliberation was lacking.

ARTICLE 814. The resolution adopted to cause the damages which constitute a general average must necessarily be entered in the log book, stating the motives and reasons therefor, the votes against it, and the reasons for the disagreement should there be any, and the irresistible and urgent causes which moved 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 by the captain and by the officers of the vessel.

In the minutes and after the resolution there shall be stated in detail all the goods cast away, 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 twenty-four hours after his arrival, and to ratify it immediately by an oath.

ARTICLE 815. The captain shall supervise 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 handling of the vessel or damage her, preferring, if possible, the heaviest ones and those of least utility and value.

2. Those in the hold, 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 in so far 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 made up before the departure, in accordance with the first paragraph of Article 612.

ARTICLE 817. If in lightening a vessel on account of a storm, in order to facilitate her entry into a port or roadstead, part of her 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 has originated from a gross average, the amount thereof being distributed between the entire vessel and cargo which caused the same.

If, on the contrary, the merchandise transferred should be saved and the vessel should be lost, no liability can 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 II Arrivals Under Stress

ARTICLE 819. If the captain during the navigation should believe that the vessel can not continue the voyage 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 her to navigate, he shall assemble the officers and shall call 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 reasons should be considered well founded, it shall be decided to make the nearest and most convenient port drafting and entering in the log book the proper minutes, which shall be signed by all.

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. The arrival under stress shall not be considered legal 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 justifiable facts.

3. If the injury to the vessel should have been caused by reason of her not being repaired, rigged, equipped, and arranged in a convenient manner for the voyage, or by reason of some erroneous order of the captain.

4. Whenever malice, negligence, want of foresight, or lack of skill on the part of the captain is the reason for the act causing the damage.

ARTICLE 821. The expenses caused by the arrival under stress shall always be for the account of the shipowner or agent, but the latter shall not be liable for the damage which may be caused the shippers by reason of the arrival under stress, provided the latter is legitimate.

Otherwise, the shipowner or agent and the captain shall be jointly liable.

ARTICLE 822. If in order to make repairs to the vessel or because there should be danger of the cargo suffering damage it should be necessary to unload, the captain must request authorization of the judge or court of competent jurisdiction to lighten the vessel, and do so with the knowledge of the person interested or representative of the cargo, should there be one.

In a foreign port, it shall be the duty of the Spanish * consul, where there is one, to give the authorization.

In the first case, the expenses shall be defrayed by the ship agent or owner, and in the second, they shall be for the account of the owners of the merchandise, for whose benefit the act took place.

If the unloading should take place for both reasons, the expenses shall be defrayed in proportion to the value of the vessel and that of the cargo.

ARTICLE 823. The care and preservation of the cargo which has been unloaded shall be in charge of 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 judge or court of competent jurisdiction or 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 the procedure, under the penalty of answering to the shipper for the price the merchandise would have brought if it should have arrived at the port of its destination in good condition.

ARTICLE 825. The captain shall answer for the damages caused by his delay, if the reason for the arrival under stress having ceased, he should not continue the voyage.

If the reason for said arrival should have been the fear of enemies, privateers, or pirates, before sailing, a discussion and resolution of a meeting of the officers of the vessel and persons interested in the cargo who may be present shall take place, in accordance with the provisions contained in Article 819.

SECTION III Collisions

ARTICLE 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.

ARTICLE 827. If both vessels may be blamed for the collision, each one shall be liable for his own damages, and both shall be jointly responsible for the losses and damages suffered by their cargoes.

ARTICLE 828. The provisions of the foregoing article are applicable to the case in which it can not be decided which of the two vessels was the cause of the collision.

ARTICLE 829. In the cases above mentioned the civil action of the owner against the person liable for the damage is reserved, as well as the criminal liabilities which may be proper.

ARTICLE 830. If a vessel should collide with another by reason of an accident or through force majeure, each vessel and her cargo shall be liable for their own damage.

ARTICLE 831. If a vessel should be forced to collide with another one by a third vessel, the owner of the third vessel shall indemnify for 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 in her immediate vicinity, causing them damage, the injury occasioned shall be looked upon as particular average to the vessel run into.

ARTICLE 833. A vessel shall be presumed as lost thru a collision which, upon being run into, sinks immediately, and also any vessel which is obliged to make a port to repair the damages caused by the collision should be lost during the voyage, or should be obliged to be stranded in order to be saved.

ARTICLE 834. If the vessels colliding 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 can not be admitted if a protest or declaration is not presented within twenty-four hours to the competent authority of the point where the collision took place, or that of the first port of arrival of the vessel, if in Spain, * and to the consul of Spain * if it should have occurred in a foreign country.

ARTICLE 836. In so far as the damages caused to persons or to the cargo are concerned, the absence of a protest can 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 contracted by the shipowners in the cases prescribed in this section, shall be understood as limited to the value of the vessel with all her appurtenances and all the freight 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 occur between Spanish * vessels in foreign waters, or if it should take place in open waters, and the vessels should make a foreign port, the Spanish * consul in said port shall hold a summary investigation of the accident, forwarding the proceedings to the captain-general of the nearest department * for continuation and conclusion.

SECTION IV 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 of the wreck which may be saved belonging to them in the same proportion.

ARTICLE 841. If the wreck or stranding should arise through the malice, negligence, or lack of skill of the captain, or because the vessel put to sea insufficiently repaired and prepared, the owner or the freighters may demand indemnity of the captain for the damages caused to the vessel or 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 liable 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 to any other obligation, if the merchandise should be sold.

ARTICLE 843. If several vessels navigate under convoy, and any of them should be wrecked, the cargo saved shall be distributed among the rest in the proportion to the amount each one can receive.

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 complaint 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.

Should it not be possible to transfer to the other vessels the entire cargo of the one wrecked, the goods of the highest value and smallest volume shall be saved first, the designation thereof being made by the captain, in concurrence with 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 intervention, at the disposal of their legitimate owners.

In case of changing his course, should he be able to unload them at the port to which they were consigned, the captain may make said port if the shippers or supercargoes present consent thereto, as well as the officers and passengers of the vessel; but he can not do so, even with said consent, in time of war or when the port is difficult to make and dangerous.

All the expenses of this arrival shall be defrayed by the owners of the cargo, as well as the payment of the freight, which, taking into consideration the circumstances of the case, are fixed by agreement or by a judicial decision.

ARTICLE 845. If there should not be on the vessel any person interested in the cargo to pay the expenses and freight corresponding to the salvage, the judge or court of competent jurisdiction 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 the period of one year it should not have been possible to ascertain who are its legitimate owners.

In both cases the proceedings regarding publicity and formalities prescribed in Article 579 shall be observed, and the net proceeds of the sale shall be deposited in a safe place, in the judgment of the judge or court, in order to be turned over to the legitimate owners thereof.

TITLE V Proof and Liquidation of Averages

SECTION I Provisions Common to All Kinds of Averages

ARTICLE 846. The persons 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. t

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 take place in the port of unloading should it be a Spanish * port.

3. Should the average have occurred outside of the waters under the jurisdiction of the Philippines or the cargo should have been sold in a foreign port by reason of an arrival under stress, the liquidations shall be made in the port of arrival.

4. If the average should have occurred near the port of destination, so that said port can be made, the proceedings treated of in Rules 1 and 2 shall be held there.

ARTICLE 847. In case of making the liquidation of the averages privately by virtue of agreement, as well as when a judicial authority takes part therein 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 not have a legitimate representative, the liquidation shall be made by the consul in a foreign port, and where there is none, by the judge or court of competent jurisdiction, according to the laws of the country, and for the account of the proper person.

When the representative is a person well known in the place where the liquidation takes place, his intervention shall be admitted and produce legal effects, even though he be authorized only by a letter of the shipowner, freighter, or underwriter.

ARTICLE 848. Claims for averages shall not be admitted if they do not exceed 5 percent of the interest which the claimant may have in the vessel or cargo if it is gross average, and 1 percent of the goods damaged if particular average, deducting in both cases the expenses of appraisal, unless there is an agreement to the contrary.

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 the period of three-days has elapsed, 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 or the cargo, or of both, should take place on the same voyage, the expenses and damages corresponding to each one shall be determined separately in the port where the repairs are made or where the cargo is discharged, or sold, or the merchandise is benefited.

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 the benefiting of the merchandise, that they separate and detail exactly in their appraisements or estimates and accounts all the expenses and damages belonging to each average, and in those of each average those corresponding to the vessel and to the cargo, stating also separately whether there are or not any damages proceeding from the nature of the goods, and not by reason of a sea accident; and in case there should be expenses common to the different averages and to the vessel and her cargo, there must be calculated the amount corresponding to each and stated distinctly.

SECTION II 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 call all the persons 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 this shall be done should the persons interested agree.

Should an agreement not be possible, the captain shall apply to the judge or court of competent jurisdiction, who shall be the one of the port where these proceedings are to be held in accordance with the provisions of this Code, or to the consul of Spain, * should there be one, and otherwise to the local authority when they are to be held in a foreign port.

ARTICLE 852. If the captain should not comply with the provisions contained in the foregoing article, the shipowner or agent or the freighters 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 judge or court, before the acceptance, an examination of the vessel and of the repairs required shall be made, as well as an estimate of their cost, separating these losses and damages from those arising from the natural vice of the thing.

The experts shall also declare whether the repairs can be made immediately, or whether it is necessary to unload the vessel to examine and repair her.

With regard to the merchandise, if the average should be visible at a mere glance, the examination thereof must be made before it is delivered. Should it not be visible at the time of unloading, said examination may be held after the delivery provided it is done within forty-eight hours from the unloading and without prejudice to the other proofs which the experts may deem necessary.

ARTICLE 854. The appraisement of the goods which are to contribute to the gross average, and that of those which constitute the average, shall conform 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 thereof at the port of unloading, deducting the freights, customs duties, and charges for unloading, as may appear from a material inspection of the same, not taking into consideration the bills of lading, unless there is an agreement to the contrary.

2. If the liquidation is to take place in the port of sailing, the value of the merchandise loaded shall be fixed by the purchase price, including the expenses until they are put on board, excluding the insurance premium.

3. If the merchandise should be damaged, it shall be appraised at its true value.

4. If the voyage should be interrupted, the merchandise having been sold in a foreign port and the average can not be estimated, there shall be taken as the contributing capital the value of the merchandise in the port of arrival, or the net proceeds obtained at the sale thereof.

5. Merchandise lost, which should constitute the gross average, shall be appraised at the value merchandise of its kind may have in the port of unloading, provided its kind and quality appears in the bill of lading; and should this not be the case, the invoices of the purchase issued in the port of shipment shall be taken as a basis, adding to its value the expenses and freights subsequently arising.

6. The masts cut down, the sails, cables, and other equipment of the vessel rendered useless for the purpose of saving her, 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 in regard to anchors and chains.

7. The vessel shall be appraised at her real value in her condition at the time.

8. The freights 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 it be saved; but there shall be no right to indemnity if it should be lost by reason of being jettisoned for general 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 freighters for the loss of the jettison, if the storage on the upper deck took place without the consent of the latter.

ARTICLE 856. Provisions and munitions of war which the vessel may have on board shall not contribute to the gross average, nor the clothing used by the captain, officers, and crew.

There shall also be excepted the clothing used by the freighters, supercargoes, and passengers who may be on board at the time of the jettison.

Neither shall the goods jettisoned contribute to the payment of the gross averages which may occur to those saved in a different and subsequent risk.

ARTICLE 857. After the appraisement of the goods saved has been concluded by the experts, as well as that of the goods lost which constitute the gross average, and after the repairs have been made to the vessel, should any have to be made, and in such case after the approval of the accounts of the same 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.

ARTICLE 858. In order to effect the liquidation the liquidator shall examine the sworn statement of the captain, comparing it, if necessary, with the log book and all the contracts which may have been made between 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 this 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 be corrected, if possible, and otherwise he shall include it in the preliminaries 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 a statement of experts.

3. The 50 per cent of the amount of the freight, 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.

ARTICLE 859. The underwriters of the vessel, of the freight, and of the cargo shall be obliged to pay for the indemnity of the gross average in so far as is required of each one of these objects respectively.

ARTICLE 860. If, notwithstanding the jettison of the merchandise, breakage of masts, ropes, and equipment, the vessel should be lost running said risk, no contribution whatsoever by reason of gross average shall be proper.

The owners of the goods saved shall not be liable for the indemnity of those jettisoned, lost, or damaged.

ARTICLE 861. If, after the vessel having been saved from the risk which gave rise to the jettison, she 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 their condition at the time, deducting the expenses incurred in saving them.

ARTICLE 862. If, notwithstanding the saving of the vessel and of her 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 indemnity for the average unless the loss should occur by an act of the owner or consignee.

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 other persons interested in the cargo the amount he may have received, deducting the damage caused by the jettison and the expenses incurred in their recovery.

In the latter case, the amount returned shall be distributed between 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 distribution, and he shall be liable to the owners of the goods averaged for the losses they suffer through his delay or negligence.

ARTICLE 867. If the contributors should not pay the amount of the assessment within the third day after having been requested to do so, the goods saved shall be attached, at the request of the captain, and shall be sold to cover the payment.

ARTICLE 868. If the persons 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.

SECTION III Liquidation of Ordinary Averages

ARTICLE 869. The experts which the judge or court or the persons interested may appoint, according to the cases, shall proceed with the appraisement and examination of the averages in the manner prescribed in Article 853 and in Article 854, Rules 2 to 7, in so far as they are applicable.

Laws on Transportation and Public Utilities

Search for more eCodals

Page updated

Google Sites

Report abuse