Land Transportation and Traffic Code

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. SECTION I Owners of Vessels and Ship Agents