Significance of registration of transactions affecting vessels  Subsequently Bonifacio Gelito sold his share to his copartner

Sy Qui, as attested by the instrument Exhibit A, registered in

G.R. No. L-11407        October 30, 1917 the office of the Collector of Customs and made a part of his
FAUSTO RUBISO and BONIFACIO GELITO, plaintiff-appellee, answer;
vs.
 That the Chinaman, the absolute owner of the vessel, sold it
FLORENTINO E. RIVERA, defendant-appellant.
in turn to the defendant Rivera, according to the public
TORRES, J.:
instrument, also attached to his answer and that, for the
Facts: reason, Rivera took possession of said pilot boat Valentina, as
its sole owner.
o Counsel for plaintiff (Rubiso) brought suit in the Court of the First
Instance of this city and alleged in the complaint: CFI: Ruled in favor of plaintiff.
 That his clients were the owners of the pilot boat named o Counsel for the defendant appealed and moved for a new trial. This
Valentina, which had been in bad condition since the year
motion was denied
1914 and, on the date of the complaint, was stranded in the
place called Tingloy, of the municipality of Bauan, Batangas; The pilot boat Valentina was twice sold:
 That the defendant (Florentino E. Rivera) took charge or
possession of said vessel without the knowledge or consent
1. The sale of the vessel by Sy Qui to Florentino E. Rivera, on January
4, 1915, was entered in the customs registry only on March 17,
of the plaintiff and refused to deliver it to them, under claim
1915,
that he was the owner thereof;
2. Sale at public auction to Fausto Rubiso on the 23d of January of
 That such procedure on the defendant's part caused the
the same year, 1915, was recorded in the office of the Collector of
plaintiffs to suffer damages, not only because they could not
Customs on the 27th of the same month, and in the commercial
proceed to repair the vessel, but also because they were
registry on the 4th of March,
unable to derive profit from the voyages for which said pilot
boat was customarily used;
o Following; that is, the sale on behalf of the defendant Rivera was prior
 That the net amount of such uncollected profit was P1,750.
to that made at public auction to Rubiso, but the registration of this
latter sale was prior by many days to the sale made to the defendant.
o Counsel for the defendant entered a general and specific denial of all
the facts set forth in the complaint, with the exception of those Issue: Who has a better right over the vessel, the plaintiff or the
admitted in the special defense.
defendant?
 That the said pilot boat belonged to the concern named
"Gelito and Co.," Bonifacio Gelito being a copartner thereof Held: Fausto Rubiso
to the extent of two-thirds.
 Chinaman Sy Qui, to that of the one-third, of the value of said
vessel;
Ratio: Customs, who, since May 18, 1909, has been performing the duties of the
commercial register in place of this latter official.
Article 573 of the Code of Commerce provides, in its first paragraph:
In view of said legal provisions, it is undeniable that the defendant
Merchant vessels constitute property which may be acquired and Florentino E. Rivera's rights cannot prevail over those acquired by Fausto
transferred by any of the means recognized by law. The acquisition of a Rubiso in the ownership of the pilot boat Valentina, inasmuch as, though
vessel must be included in a written instrument, which shall not the latter's acquisition of the vessel at public auction, on January 23, 1915,
produce any effect with regard to third persons if not recorded in the was subsequent to its purchase by the defendant Rivera, nevertheless said
commercial registry. sale at public auction was antecedently recorded in the office of the
Collector of Customs, on January 27, and entered in the commercial
Pursuant to the above-quoted article, inscription in the commercial registry — an unnecessary proceeding — on March 4th; while the private
registry was indispensable, in order that said acquisition might affect, and and voluntary purchase made by Rivera on a prior date was not recorded
produce consequences with respect to third persons. in the office of the Collector of Customs until many days afterwards, that
is, not until March 17, 1915.
However, since the enactment of Act No. 1900, on May 18, 1909, said
article of the Code of Commerce was amended, as appears by section 2 of With respect to the rights of the two purchasers, whichever of them first
that Act, here below transcribed. registered his acquisition of the vessel is the one entitled to enjoy the
protection of the law, which considers him the absolute owner of the
Act No. 1900. purchased boat, and this latter to be free of all encumbrance and all claims
by strangers for, pursuant to article 582 of the said code, after the bill of
The documenting, registering, enrolling, and licensing of vessels in the judicial sale at auction has been executed and recorded in the
accordance with the Customs Administrative Act and customs rules and commercial registry, all the other liabilities of the vessel in favor of the
regulations shall be deemed to be a registry of vessels within the creditors shall be considered canceled.
meaning of the title two of the Code of Commerce, unless otherwise
provided in said Customs Administrative Act or in said customs rules The purchaser at public auction, Fausto Rubiso, who was careful to record
and regulations, and the Insular Collector of Customs shall perform the his acquisition, opportunely and on a prior date, has, according to the law,
duties of commercial register concerning the registering of vessels, as a better right than the defendant Rivera who subsequently recorded his
defined in title two of the Code of Commerce. purchase.

The requisite of registration in the registry, of the purchase of a vessel, is

necessary and indispensable in order that the purchaser's rights may be
maintained against a claim filed by a third person. Such registration is
required both by the Code of Commerce and by Act No. 1900. The
amendment solely consisted in charging the Insular Collector of Customs,
as at present, with the fulfillment of the duties of the commercial register
concerning the registering of vessels; so that the registration of a bill of
sale of a vessel shall be made in the office of the insular Collector of