CODE OF COMMERCE
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 appear in a written instrument, which
shall not produce any effect with respect to third persons if not
inscribed in the registry of vessels.
The ownership of a vessel shall likewise be acquired by possession in
good faith, continued for three years, with a just title duly recorded.
In the absence of any of these requisites, continuous possession for
ten years shall be necessary in order to acquire ownership.
A captain may not acquire by prescription the vessel of which he is in
command.
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[With respect to Article 573, read P.D. No. 474, Sections 3 & 12(h)
Presidential Decree No. 474
PROVIDING FOR THE REORGANIZATION OF MARITIME
FUNCTIONS IN THE PHILIPPINES, CREATING THE
MARITIME INDUSTRY AUTHORITY, AND FOR OTHER
PURPOSES
Section 3. Definition of Terms. The terms, as used, in this Decree,
shall have the following meaning, unless the context of the particular
usage of the term indicates otherwise;
a. "Maritime Industry", briefly referred to as "industry" in the
broadest concept of the term. All enterprises engaged in the business
of designing, constructing, manufacturing, acquiring, operating,
supplying, repairing and/or maintaining vessels, or component parts
thereof; of managing and/or operating shipping lines, stevedoring
arrastre and customs brokerage services, shipyards, drydocks, marine
railways, marine repair shops, shipping and freight forwarding
agencies and similar enterprises.
b. "Vessels" or "Watercraft" Any barge, lighter, bulk carrier,
passenger ship freighter, tanker, container ship, fishing boats or other
artificial contrivance utilizing any source of motive power, designed,
used or capable of being used as a means of water transportation
operating either as common contract carrier, including fishing vessels
covered under Presidential Decree No. 43, except (1) those owned
and/or operated by the Armed Forces of the Philippines and by
foreign governments for military purposes, and (ii) bancas, sailboats
and other waterborne contrivance of less than three gross tons
capacity and not motorized.
c. "Philippine national" A citizen of the Philippines; or a partnership
or association wholly owned by and composed of citizens of the
Philippines; or a corporation organized under the laws of the
Philippines of which at least sixty per cent of the capital stock
outstanding and entitled to vote is owned and held by Philippine
citizens; or a trustee of funds for pensions or other employee
retirement or separation benefits, where the trustee is a Philippine
national and at least sixty per cent of the funds will accrues to the
benefit of the Philippine nationals: Provided, That where a
corporation and its non-Filipino stockholders own stock in an
enterprise, at least sixty percent of the members of the governing
board of both corporations must be Philippine nationals.
d. "Philippine flag vessel" A vessel or watercraft registered under
Philippine laws.
e. "Foreign flag vessel" A vessel or watercraft registered under the
laws of a country other than the Philippines.
f. "Philippines shipping companies" Philippine nationals registered
and licensed under the laws of the Philippines to engage in the
business of overseas and/or domestic water transportation.
Section 12(h). Approve the sale, lease or transfer of management of
vessels owned by Philippine Nationals to foreign owned or controlled
enterprises.
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ARTICLE 574. Builders of vessels may employ the materials and
follow, with respect to their construction and rigging, the systems
most suitable to their interests. Ship owners and seamen shall be
subject to what the laws and regulations of the public administration
on navigation, customs, health, safety of vessels, and other similar
matters.
ARTICLE 575. Co-owners of vessels shall have the right of
repurchase and redemption in sales made to strangers, but they may
exercise the same only within the nine days following the inscription
of the sale in the registry, and by depositing the price at the same
time.
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[With respect to Article 575, read Article 1620 of Civil Code]
Article 1620. A co-owner of a thing may exercise the right of
redemption in case the shares of all the other co-owners or of any of
them, are sold to a third person. If the price of the alienation is
grossly excessive, the redemptioner shall pay only a reasonable one.
Should two or more co-owners desire to exercise the right of
redemption, they may only do so in proportion to the share they may
respectively have in the thing owned in common. (1522a)
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ARTICLE 576. In the sale of a vessel it shall always be understood as
included the rigging, masts, stores and engine of a streamer
appurtenant thereto, which at the time belongs to the vendor. 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
certified copy of the record sheet of the vessel in the registry up to the
date of the sale.
ARTICLE 577. If the alienation of the vessel should be made while it
is on a voyage, the freightage which it earns from the time it receives
its last cargo shall pertain entirely to the purchaser, and the payment
of the crew and other persons who make up its complement for the
same voyage shall be for his account.
If the sale is made after the vessel has arrived at the port of its
destination, the freightage shall pertain to the vendor, and the
payment of the crew and other individuals who make up its
complement shall be for his account, unless the contrary is stipulated
in either case.
ARTICLE 578. If the vessel being on a voyage or in a foreign port,
its owner or owners should voluntarily alienate it, either to Filipinos
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 the
Republic of the Philippines at the port where it terminates its voyage
and said instrument shall produce no effect with respect to third
persons if it is not inscribed in the registry of the consulate. The
consul shall immediately forward a true copy of the instrument of
purchase and sale of the vessel to the registry of vessels of the port
where said vessel is inscribed and registered.
In every case the alienation of the vessel must be made to appear with
a statement of whether the vendor receives its price in whole or in
part, or whether he preserves in whole or in part any claim on said
vessel. In case the sale is made to a Filipino, this fact shall be stated
in the certificate of navigation.
When a vessel, being on a voyage, shall be rendered useless for
navigation, the captain shall apply to the competent judge on court of
the port of arrival, should it be in the Philippines; and should it be in
a foreign country, to the consul of the Republic of the Philippines,
should there be one, or, where there is none, to the judge or court or
to the local authority; and the consul, or the judge or court, shall order
an examination of the vessel to be made.
If the consignee or the insurer should reside at said port, or should
have representatives there, they must be cited in order that they may
take part in the proceedings on behalf of whoever may be concerned.
ARTICLE 579. After the damage to the vessel and the impossibility
of her being repaired, in order to continue the voyage had been
shown, its sale at public auction shall be ordered, subject to the
following rules:
1.The hull of the vessel, its rigging, engines, stores, and other articles
shall be appraised, after making an inventory, said proceedings to be
brought to the notice of the persons who may wish to take part in the
auction.
2.The order or decree ordering the auction to be held shall be posted
in the usual places, an announcement thereof to be inserted in the
Official Gazette and in two of the newspapers of the largest
circulation of the port where the auction is to be held, should there be
any. The period which may be fixed for the auction shall not be less
than twenty days.
3. These announcements shall be repeated every ten days, and their
publication shall be made to appear in the records.
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 while the vessel is in a foreign
country, the special provisions governing such cases shall be
observed.
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.
ARTICLE 589.If two or more persons should be part owners of a
merchant vessel, a partnership shall be presumed as established by
the coowners. This partnership shall be governed by the resolutions
of the majority of the members.
If the part owners should not be more than two, the disagreement of
views, if any, shall be decided by the vote of the member having the
largest interest. If the interests are equal, it should be decided by
lot.The person having the smallest share 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 may not be detained, attached or levied upon in execution in
its entirety, for the private debts of a part owner, but the proceedings
shall be limited to the interest which the debtor may have in the
vessel, without interfering with the navigation.
ARTICLE 591.All the part owners shall be liable, in proportion to
their respective ownership, for the expenses for repairing 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 for the maintenance, equipment, and provisioning of the
vessel, necessary for navigation.
ARTICLE 592. The resolution of the majority with regard to the
repair, equipment, and provisioning of the vessel in the port of
departure shall bind the minority, unless the minority
membersrenounce their interests, which must be acquired by the
other co-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 partnership and sale of the vessel shall also
be binding on the minority.
The sale of the vessel must be made at public auction, subject to the
provisions of the law of civil procedure, unless the co-owners
unanimously agree otherwise, saying always the right of repurchase
and redemption provided for in Article 575.
ARTICLE 593. The owners of a vessel shall have preference in her
charter over other persons, under the same conditions and price. If
two or more of them should claim this right, the one having the
greater interest shall be preferred; and should they have equal
interests, the matter shall be decided by lot.
ARTICLE 606. If the captain should be a co-owner of the vessel, he
may not be discharged unless the ship agent returns to him the
amount of his interest therein, which, in the absence of 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 co-owner should have
obtained the command of the vesselby virtue of a special agreement
contained in the articles of association, he may not be deprived of his
office except for the causes mentioned in Article 605.
ARTICLE 608. In case of the voluntary sale of the vessel, all
contracts between the ship agent and the captain shall terminate,
reserving to the latter his right to the indemnity which may pertain to
him, according to the agreements made with the ship 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 is found to be insolvent.