REPUBLIC ACT NO. 6106 - AN
ACT AMENDING REPUBLIC ACT NUMBERED ONE THOUSAND FOUR HUNDRED SEVEN, AS
AMENDED, TO PRESCRIBE THE RULES FOR FINANCING THE ACQUISITION OR
CONSTRUCTION OF VESSELS TO BE USED FOR OVERSEAS SHIPPING, TO ALLOW THE
CREATION OF A MARITIME LIEN THEREON, AND FOR OTHER PURPOSES
Section 1.
Republic Act Numbered One thousand four hundred seven, as amended, is
hereby further amended to include a new provision known as Section 11
½, which shall read as follows:
"Sec. 11 ½. 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 institutions, 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:
1. The name of the vessels;
2. The name of the parties;
3. The time and date of reception of the instrument;
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, except the following preferences in the
order stated:
1. Judicial costs of the proceedings;
2. Taxes due the Philippine Government;
3. Salaries and wages of the Captain and Crew of the
vessel during its last voyage;
4. General average or salvage including contract
salvage; bottomry loans; and indemnity due shippers for the value of
goods transported but which were not delivered to the consignee;
5. Costs of repair and equipment of the vessel, and
provisioning of food, supplies and fuel during the last voyage; and
6. Preferred mortgages registered prior in time.
"e. The lien of a preferred mortgage may be enforced
by suit in term 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 documented under the laws of said country.
"f. After the bill of judicial sale at 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.f 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
subsist 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 six, as amended by Republic Act Numbered Nine
hundred 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.
Sec. 3. This Act shall take effect upon its
approval.
Approved: August 4, 1969
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