Land Transportation and Traffic Code

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 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