ARNOLD A. APDUA DOCTRINE OF INSCRUTABLE FAULT 1.

In case of losses and deteriorations suffered by a vessel and her cargo by reason of shipwreck or stranding, who bears the loss? a. The owner of the vessel shall bear all the loss of the vessel and her cargo. b. The captain shall be liable for all the losses of the vessel and her cargo. c. It 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. d. It shall be jointly shouldered by the owners, the part of the wreck which may be saved belonging to them in the same proportion. ANSWER: C. Article 840 of the Code of Commerce states that 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. 2. Who is liable in case where the shipwreck 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? a. Freighter b. Shipowner c. Captain d. Agent

ANSWER: C. Pursuant to Article 841 of the Code of Commerce, 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.

3. An act committed by the master or mariners of a ship for some unlawful or fraudulent purpose contrary to their duty to their owners, whereby the latter will sustain an injury. Intentional fraud or breach of trust, or willful violation of law, is necessary to constitute such offense.

a. Conspiracy b. Protest c. Arrival under Stress d. Barratry

ANSWER: B. Barratry as defined in American Insurance Law is "any willful misconduct on the part of master or crew in pursuance of some unlawful or fraudulent purpose without the consent of the owners, and to the prejudice of the owner's interest."

4. It is the compensation provided for in the contract of affreightment for the detention of the vessel beyond the time agreed on for loading and unloading. It is also the claim for damages for failure to accept delivery. a. Stevedoring b. Demurrage c. Custom Duties d. Barratry

ANSWER: B. Magellan Manufacturing Marketing Corp. v. Court of Appeals defined "demurrage" as follows: Demurrage, in its strict sense, is the compensation provided for in the contract of affreightment for the detention of the vessel beyond the time agreed on for loading and unloading. Essentially, demurrage is the claim for damages for failure to accept delivery. In a broad sense, every improper detention of a vessel may be considered a demurrage.

5. Statement 1: Shipwreck means a ship which has received injuries rendering it incapable of navigation; a loss of a vessel at sea; a maritime casualty which may be derelict or abandoned by the owner without hope or intention of recovery. Statement 2: In case of shipwreck, the captain shall make the proper protest at the first port within 72 hours.

a. Both statements are true. b. Both statements are false. c. First statement is True and while Second statement is False. d. First statement is False and while Second statement is True.

ANSWER: C. (1.) Suggested meaning of shipwreck. (2) Article 612 (15) of the Code of Commerce states that in case of wreck, the Captain shall make the proper protest in due form at the first port reached, before the competent authority within twenty-four hours, stating therein all the incidents of the wreck, in accordance with case 8 of this article.

6. Aside from payment of freight, an additional percentage is paid to the master of the ship for his care and trouble. This is known as: a. Demurrage b. Average c. Layday d. Primage

ANSWER: Primage is a commercial term signifying originally a small customary payment over and above the freight made to the master of the ship for his care and trouble. It is now generally included in the freight, as an additional percentage. It varies according to the usages of different ports and particular trades. (Encyclopedia Britannica)

7. It is a case when the charterer mans the vessel with his own people and becomes, in effect, the owner pro hac vice, subject to liability to others for damages caused by negligence. a. Demise or bareboat b. Time Charter c. Voyage Charter d. Contract of Lease

ANSWER: A. In the case of Lea Mer Industries vs. Malayan Insurance, it discussed that a Contract of Demise or Bareboat is a situation where the charterer will generally be considered as owner for the voyage or service stipulated. To create a demise, the owner of a vessel must completely and exclusively relinquish possession, command and navigation thereof to the charterer; anything short of such a complete transfer is a contract of affreightment (time or voyage charter party) or not a charter party at all.

8. Loans on bottomry or respondentia may be executed in the following forms except: a. By means of a verbal contract.

b. By means of a bond signed by the contracting parties and the broker who took part therein. c. d. By means of a private instrument. By means of a public instrument.

ANSWER: A. Article 720 of the Code of Commerce states that loans on bottomry or respondentia may be executed by means of a public instrument, a bond signed by the contracting parties and the broker who took part therein and 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.

9. Statement 1: In case of loan on bottomry, it may be made on the salaries of the crew of the vessel. Statement 2: It is allowed that expected profits may be the subjected of the loans on bottomry. a. Both statements are true. b. Both statements are false.

c. First statement is True and while Second statement is False. d. First statement is False and while Second statement is True.

ANSWER: B. Article 720 of the Code of Commerce states that no loans on bottomry may be made on the salaries of the crew or on the profits expected.