WHEREAS,
one of the present needs of our country is a well-developed merchant
marine that would more effectively assist in the development of our
nation's economy; chanroblesvirtualawlibrary
WHEREAS, our shipping industry, facing fierce competition with the more
advanced and developed shipping industries of other maritime countries,
needs government assistance in its efforts at expansion;chanroblesvirtualawlibrary
WHEREAS, Republic Act No. 1407, otherwise known as "The Philippine
Overseas Shipping Act of 1955," has for its objectives to encourage and
assist the Philippine merchant marine, foster its development, provide
financial assistance in its shipbuilding program and promote shipping
in every way possible; chanroblesvirtualawlibrary
WHEREAS, Republic Act No. 6106, amending Republic Act No. 1407, which
allows the mortgage of Philippine vessels to shipbuilders or lending
institutions for the construction or purchase of ships on deferred
payment basis, has been amended by inserting Section 11-1/2; and
WHEREAS, there are certain provisions in Section 11-1/2 which act as
deterrents in the procurement of additional vessels;chanroblesvirtualawlibrary
NOW, THEREFORE, I, FERDINAND E. MARCOS, President of the Philippines,
by virtue of the powers vested in me by the Constitution as
Commander-in-Chief of all the Armed Forces of the Philippines, and
pursuant to Proclamation No. 1081 dated September 21, 1972, and General
Order No. 1 dated September 22, 1972, do hereby decree and order the
amendment of Section 11-1/2 of Republic Act No. 6106 amending Republic
Act 1407, as amended, as follows:cralaw:red
"Sec. 11-1/2.a. Any citizen of the Philippines, or
any association or corporation organized under the laws of the
Philippines, at least seventy-five per cent of the capital of which is
owned by citizens of the Philippines, engaged or which shall engage
exclusively in the overseas shipping business may, for the purpose of
financing the construction, acquisition or purchase of vessels for use
in overseas shipping, freely constitute a mortgage or any other lien or
encumbrance on such vessels and its equipment with any bank or other
financial institution, domestic or foreign.
"(b) The instrument of mortgage, lien or encumbrance
shall be recorded in the registry of vessels in the order of their
reception and shall show: chanroblesvirtualawlibrary
1. The name of the vessels;chanroblesvirtualawlibrary
2. The name of the parties;chanroblesvirtualawlibrary
3. The time and date of reception of the instrument;chanroblesvirtualawlibrary
4. The interest in the vessel transferred or
affected; and
5. The amount and date of maturity of any mortgage.
"A copy of the instrument of mortgage shall be furnished the Central
Bank of the Philippines.
"c. Any mortgage, lien or encumbrance, constituted in
accordance with this Act is a preferred mortgage and shall constitute a
maritime lien upon the mortgaged vessel in the amount of the
outstanding mortgage indebtedness secured by such vessel.
"d. A preferred mortgage shall have priority over all
claims against the vessel.
"e. The lien of a preferred mortgage may be enforced
by suit in rem or otherwise in the Philippines, or in any foreign
country in which the vessel shall be found pursuant to the procedure of
said country for the enforcement of ship mortgages constituting
maritime liens on vessels documents under the laws of said country.
"f. After the bill of judicial sale of public auction
has been executed, all claims against the vessel in favor of the
creditors shall be considered extinguished, and such claim shall
thereafter attach, in like amount and in accordance with their
respective priorities to the proceeds of the sale after satisfying the
preferred mortgage herein provided. If the proceeds of the judicial
sale should not be sufficient to pay all the creditors included in one
number or grade, the residue shall be divided among them pro rata. All
credits not paid, whether fully or partially, shall against as ordinary
credits enforceable by personal action against the debtor. The record
of the judicial sale shall be inscribed in the registry of vessels.
Sec. 2. The provisions of Commonwealth Act Numbered
Six hundred and six, as amended by Republic Act Numbered Nine hundred
and thirteen; the Code of Commerce, particularly Articles 580 and 584
thereof; and all other Acts, executive orders and regulations
inconsistent herewith are hereby repealed or modified
accordingly." chanroblesvirtualawlibrary
This Decree shall take effect immediately.
Done in the City of Manila,
this 16th day of June, in the year of Our Lord, nineteen hundred and
seventy-three.
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