ACT NO.

2616 - THE SALVAGE LAW

Section 1. When in case of shipwreck, the vessel or its cargo shall be beyond the control of the crew, or shall have been
abandoned by them, and picked up and conveyed to a safe place by other persons, the latter shall be entitled to a reward for the
salvage.
Those who, not being included in the above paragraph, assist in saving a vessel or its cargo from shipwreck, shall be entitled to a
like reward.
Sec. 2. If the captain of the vessel, or the person acting in his stead, is present, no one shall take from the sea, or from the shores
or coast merchandise or effects proceeding from a shipwreck or proceed to the salvage of the vessel, without the consent of such
captain or person acting in his stead.
Sec. 3. He who shall save or pick up a vessel or merchandise at sea, in the absence of the captain of the vessel, owner, or a
representative of either of them, they being unknown, shall convey and deliver such vessel or merchandise, as soon as possible, to
the Collector of Customs, if the port has a collector, and otherwise to the provincial treasurer or municipal mayor.
Sec. 4. After the salvage is accomplished, the owner or his representative shall have a right to the delivery of the vessel or things
saved, provided that he pays, or gives a bond to secure, the expenses and the proper reward.
The amount and sufficiency of the bond, in the absence of agreement, shall be determined by the Collector of Customs or by the
Judge of the Court of First Instance of the province in which the things saved may be found.
Sec. 5. The Collector of Customs, provincial treasurer, or municipal mayor, to whom a salvage is reported, shall order:
a. That the things saved be safeguard and inventoried.
b. The sale at public auction of the things saved which may be in danger of immediate loss or of those whose conservation is
evidently prejudicial to the interests of the owner, when no objection is made to such sale.
c. The advertisement within the thirty days subsequent to the salvage, in one of the local newspapers or in the nearest newspaper
published, of all the details of the disaster, with a statement of the mark and number of the effects requesting all interested persons
to make their claims.
Sec. 6. If, while the vessel or things saved are at the disposition of the authorities, the owner or his representative shall claim them,
such authorities shall order their delivery to such owner or his representative, provided that there is no controversy over their
value, and a bond is given by the owner or his representative to secure the payment of the expenses and the proper reward.
Otherwise, the delivery shall nor be made until the matter is decided by the Court of First Instance of the province.
Sec. 7. No claim being presented in the three months subsequent to the publication of the advertisement prescribed in sub-section
(c) of Section five, the things save shall be sold at public auction, and their proceeds, after deducting the expenses and the proper
reward shall be deposited in the insular treasury. If three years shall pass without anyone claiming it, one-half of the deposit shall
be adjudged to him who saved the things, and the other half to the insular government.
Sec. 8. The following shall have no right to a reward for salvage or assistance:
a. The crew of the vessel shipwrecked or which was is danger of shipwreck;
b. He who shall have commenced the salvage in spite of opposition of the captain or his representative; and
c. He who shall have failed to comply with the provisions of Section three.
Sec. 9. If, during the danger, an agreement is entered into concerning the amount of the reward for salvage or assistance, its
validity may be impugned because it is excessive, and it may be required to be reduced to an amount proportionate to the
circumstances.
Sec. 10. In a case coming under the last preceding section, as well as in the absence of an agreement, the reward for salvage or
assistance shall be fixed by the Court of First Instance of the province where the things salvaged are found, taking into account
principally the expenditures made to recover or save the vessel or the cargo or both, the zeal demonstrated, the time employed, the
services rendered, the excessive express occasioned the number of persons who aided, the danger to which they and their vessels
were exposed as well as that which menaced the things recovered or salvaged, and the value of such things after deducting the
expenses.

Sec. 11. From the proceeds of the sale of the things saved shall be deducted, first, the expenses of their custody, conservation,
advertisement, and auction, as well as whatever taxes or duties they should pay for their entrance; then there shall be deducted the
expenses of salvage; and from the net amount remaining shall be taken the reward for the salvage or assistance which shall not
exceed fifty per cent of such amount remaining.
Sec. 12. If in the salvage or in the rendering of assistance different persons shall have intervened the reward shall be divided
between them in proportion to the services which each one may have rendered, and, in case of doubt, in equal parts.
Those who, in order to save persons, shall have been exposed to the same dangers shall also have a right to participation in the
reward.
Sec. 13. If a vessel or its cargo shall have been assisted or saved, entirely or partially, by another vessel, the reward for salvage or
for assistance shall be divided between the owner, the captain, and the remainder of the crew of the latter vessel, so as to give the
owner a half, the captain a fourth, and all the remainder of the crew the other fourth of the reward, in proportion to their respective
salaries, in the absence of an agreement to the contrary. The express of salvage, as well as the reward for salvage or assistance,
shall be a charge on the things salvaged on their value.
Sec. 14. This Act shall take effect on its passage.
Enacted: February 4, 1916

G.R. Nos. L-19815-16

May 19, 1966

FILEMON YEPES and MATEO SUSAYA, plaintiffs and appellees,

vs.
SAMAR EXPRESS TRANSIT, represented by PEDRO TY BELIZAR operator, defendant and appellant.
Lope C. Quimbo for defendant and appellant.
Nicolas A. Superable for plaintiffs and appellees.
DIZON, J.:
On July 23, 1959, appellees boarded appellant's Bus No. 56, with its driver, Alfredo Acol, at the wheel, at Borongan,
bound for Dolores, both of the province of Samar. While on its way the bus turned turtle and caught fire, causing
injuries to some of its passengers, amongst them the appellees who suffered serious burns. Appellant had them
taken to the Borongan Emergency Hospital in Borongan, Samar, where they received medical treatment, but were
later brought, upon their request, to the Leyte Provincial Hospital at Tacloban City, for further treatment. Appellant
paid all the expenses for their hospitalization and medical treatment. It appears that before their transfer to the Leyte
Provincial Hospital, appellees were asked to sign as, in fact, they signed the document Exhibit I wherein they stated
that "in consideration of the expenses which said operator has incurred in properly giving us the proper medical
treatment, we hereby manifest our desire to waive any and all claims against the operator of the Samar Express
Transit." This document notwithstanding, appellees filed with the lower court separate complaints for damages for
breach of contract of carriage (Civil Cases Nos. 2709 and 2815) against appellant. In its answers to the complaints
the latter invoked the following defenses: (a) that the accident was due to a fortuitous event beyond its control and/or
due to the negligence of one of its passengers, and (b) that the plaintiffs (appellees here) had waived their right to
claim for damages against it.
After a joint trial, the lower court rendered judgment ruling the above-mentioned waiver null and void as being
contrary to public policy, and awarding damages in the sum of P204.00 and P272.00 to appellees Filemon Yepes and
Mateo Susaya, respectively, and the further sum of P300.00 as attorney's fees, and costs. Hence the. present
appeal.
Sole contention of appellant is that the lower court erred in declaring that the "waiver" made by appellees pursuant to
Exhibit I is against public policy and morals, and therefore void. This claim, in our opinion, is without merit.
Even a cursory examination of the document mentioned above will readily show that appellees did not actually waive
their right to claim damages from appellant for the latter's failure to comply with their contract of carriage. All that said

document proves is that they expressed a "desire" to make the waiver which obviously is not the same as making
an actual waiver of their right. A waiver of the kind invoked by appellant must be clear and unequivocal (Decision of
the Supreme Court of Spain of July 8, 1887) which is not the case of the one relied upon in this
appeal.1wph1.t
In the light of the above conclusion, We deem it unnecessary to consider the question of whether or not such waiver if
actually made upon the consideration stated in the document already referred to, is against public policy and morals.
Wherefore, the decision appealed from is affirmed, with costs.
G.R. No. L-25292

November 29, 1969

ZAMBOANGA TRANSPORTATION COMPANY, INC., and ZAMBOANGA RAPIDS COMPANY, INC., petitioners,
vs.
THE COURT OF APPEALS and JOSE MARIO DAGAMANUEL, represented by PASCUALA JULIAN DE
PUNZALAN, respondents.
BARREDO, J.:
Appeal by certiorari from the decision of the Court of Appeals in CA-G.R. No. 28297-R, affirming, with modifications,
the decision of the Court of First Instance of Zamboanga City in its Civil Case No. 574 for breach of contract of
carriage wherein herein petitioners-appellants, along with their driver named Valeriano Marcos,1 were condemned
to pay damages to herein private respondent minor Jose Mario Dagamanuel, for the deaths of his father and mother
while on board a passenger bus owned (by purchase) and operated by petitioner-appellant Zamboanga
Transportation Co., Inc. but which, at the time of the mishap causing the deaths referred to, was still registered with
the Public Service Commission in the name of petitioner-appellant Zamboanga Rapids Co., Inc.
The appeal being purely on question of law, We quote the antecedent facts, as set forth in the pertinent portions of
the decision of the Court of Appeals appealed from, as follows:
In the evening of August 13, 1955, the spouses Ramon and Josefina Dagamanuel boarded a bus at Manicahan,
Zamboanga City, to attend a benefit dance at the Bunguiao Elementary School, also in Zamboanga City, where
Josefina was a public school teacher. After the dance, the couple boarded the same bus to return to Manicahan. At
around 1 o'clock in the early morning of August 14, 1955, the bus, with plate 1955 TPU-1137, and driven by
Valeriano Marcos, fell off the road and pinned to death the said spouses and several other passengers.
The plaintiff, the only child of the deceased spouses, through his maternal grandmother, as guardian ad-litem,
instituted this action against the defendants Zamboanga Transportation Co., Inc. and the Zamboanga Rapids Co.,
Inc. (hereinafter referred to as Zamtranco and Zambraco, respectively) for breach of contract of carriage, alleging that
the accident was due to the fault and negligence of the driver in operating the bus and due to the negligence of the
defendant companies in their supervision of their driver. The plaintiff asks for actual or compensatory damages in the
sum of P40,000, moral damages in the sum of P40,000, exemplary damages in the sum of P20,000, attorney's fees
in the sum of P5,000 and costs.
The Zamtranco filed a third-party complaint against the driver Marcos, admitting that 'it is the owner by purchase of
Motor Vehicle with plate number 1955 TPU-11327 and employer' of said driver, but contending, among others, that
the said driver had no authority to drive the bus, hence, the driver alone should be adjudged liable. In addition, the
said defendant company alleged that with intent to place his property beyond the reach of the creditors, the driver
sold his property to his brother, hence its additional prayer that the sale executed by the driver be declared null and
void. The Zambraco also filed a third-party complaint against the driver, admitting that "it is the registered owner of
Motor Vehicle with plate number 1955 TPU-11327 and employer of herein third-party defendant" (the driver), but also
contending, among others, that the accident occurred due solely to the negligence of the driver for taking out the bus
without authority from it. It also asked for the annulment of the deed of sale made by the driver of his property.

Answering the complaint, the Zambraco alleges that it is engaged in land transportation business and that at the time
of the accident it was the registered owner of the ill-fated vehicle. In exculpation, it denies that Marcos was authorized

to operate the vehicle when it met with the accident. In its own answer, the Zambraco admits that it is also engaged in
land transportation business at the time of the accident, and likewise claims that Marcos had no authority to operate
the vehicle.
Finding that (1) the Zamtranco and the Zambraco were under one management at the time of the accident; (2) the
accident was due to the negligence of the driver who was under their employ; and (3) the sale made by Marcos of his
property was done with intent to defraud his creditors, the trial court rendered judgment (1) sentencing the three,
jointly and severally, to pay the plaintiff P16,000 for the death of the spouses, P4,000 as exemplary damages, P2,000
as attorney's fees, and costs; and (2) annulling the deed of sale executed by Marcos.
All the three defendants appealed. Marcos' appeal was later dismissed; hence as to him the judgment is already final
and executory.
In their joint brief, the two appellant companies allege that the trial court erred in (1) "deciding the case against the
defendant Zamboanga Transportation Company, Inc., it being the wrong party"; (2) "awarding damages based on an
alleged contract of carriage"; (3) "misquoting the very provision on which it based its decision, and consequently gave
a substantively wrong interpretation of the same to the detriment of the appellants"; (4) "awarding excessive
compensatory damages to the plaintiffs"; and (5) "awarding exemplary damages."
xxx

xxx

xxx

With respect to the contract of carriage, the testimony of the principal teacher Filoteo de los Reyes sufficiently
establishes the existence of such contract. The appellants have not introduced evidence to dispute the fact that De
los Reyes entered into a contract for the bus to make the trip to Bungiao, and that he paid for it. Neither have they
contradicted Marcos' affidavit (exh. C-28) to the effect that he was authorized by the manager of the Zamtranco to
make the trip in question.
xxx

xxx

xxx

This being a case of violation of a contract of carriage resulting in death to passengers, the presumption is that the
appellants as carriers have been at fault or have acted negligently (art. 1756, new Civil Code; Sy vs. Malate Taxicab,
L-8937, Nov. 29, 1957). This presumption can, however, be rebutted by (1) proof of extraordinary diligence or (2)
proof that the accident was due to a fortuitous event.
With respect to the first possible defense, the appellants have not even as much as hinted either at the trial or in this
appeal that they had exercised the diligence required of them as carriers. All they did was to deny that the driver was
authorized to operate the vehicle in question. As to the second, we note that only the driver has interposed fortuitous
event below, but as we have already noted, his appeal has been dismissed, and as to him, the decision a quo had
already become final and executory. Anent his second defense, the appellants have raised this belatedly, as they did
it only on appeal. At all events, the occurrence of fortuitous event is belied by the report of investigation (exh. C) to
the effect that the driver was under the influence of liquor, and that the bus was running at a fast clip in spite of the
fact that the road was slippery.
xxx

xxx

xxx

It is undisputed that Josefina was 32 years old it the time she died and a public school teacher receiving P120 a
month or P1,440 a year, with the prospect of increase in salary. The probabilities that she would live until she
reached the compulsory retirement age of 65 cannot be discounted for there is no evidence that she was suffering
from any sickness. There is likewise no dispute that her husband Ramon was 27 years old at the time of his death, a
farmer by calling and in good health. All these have been established, and the appellants have not presented rebuttal
evidence (t.s.n. 60. id). Allowing him a minimum income of P120 a month, he was earning at least P1,440 a year. The
probabilities of advancement are also not remote as he was still young.
xxx

xxx

xxx

. . . . The manner with which the driver operated the vehicle as described in exh. C, and appellants' absolute lack of
precaution in assigning the driver to this particularly dangerous night trip notwithstanding the driver's record of
previous traffic violations (exh. C-47), are so reprehensible as to call for the imposition of large exemplary damages
to serve as a deterrent to others. To us, the amount of P5,000 could serve the purpose.

ACCORDINGLY, with the modification that the following damages are hereby awarded, to wit, (1) P12,000 for the
death of the spouses Ramon and Josefina Dagamanuel, (2) P11,520 for the loss of earnings of both spouses, (3)
P5,000 as moral damages, and (4) P5,000 as exemplary damages, the judgment a quo is affirmed in all other
respects, at defendants-appellants' cost.
In due time petitioners-appellants moved for the reconsideration of the above-quoted judgment of the Court of
Appeals, but the same was denied; hence, this appeal via the present petition for certiorari.
Petitioners now contend that the Court of Appeals committed the following errors:
I.
THE COURT OF APPEALS ERRED, AS A MATTER OF LAW AND APPLICABLE DECISIONS OF THE
SUPREME COURT, IN HOLDING PETITIONER ZAMTRANCO, THE UNREGISTERED OWNER OF THE ILLFATED VEHICLE, JOINTLY AND SEVERALLY LIABLE WITH THE ZAMBRACO, THE REGISTERED OWNER, AND
WITH THE DRIVER THEREOF.
II.
THE COURT OF APPEALS ERRED, AS A MATTER OF LAW AND APPLICABLE DECISIONS OF THE
SUPREME COURT, IN (A) AWARDING EXCESSIVE DAMAGES FOR THE DEATH OF THE PARENTS OF
RESPONDENT DAGAMANUEL; EXCESSIVE COMPENSATORY DAMAGES; AND EXCESSIVE MORAL
DAMAGES TO RESPONDENT, WITHOUT THE LATTER APPEALING THE DECISION OF THE TRIAL COURT,
AND (B) IN HOLDING PETITIONERS JOINTLY AND SEVERALLY LIABLE WITH THE DRIVER BY WAY OF
EXEMPLARY DAMAGES FOR THE LATTER'S WRONGFUL ACT.
That the Court of Appeals did not commit the first error assigned by appellants is obvious. While it is true that
according to previous decisions of this Court, transfer of a certificate of public convenience to operate a transportation
service is not effective and binding insofar as the responsibility of the grantee under the franchise in its relation to the
public is concerned, without the approval of the transfer by the Public Service Commission required by the Public
Service Act,2 and that in contemplation of law, the transferor of such certificate continues to be the operator of the
service as long as the transfer is not yet approved, and as such operator, he is the one responsible jointly and
severally with his driver for damages incurred by passengers or third persons in consequence of injuries or deaths
resulting from the operation of such service,3 We do not find any need for applying these rulings to the present
petitioners for the simple reason that in their respective third-party complaints, as noted by the Court of Appeals, they
both admitted separately that they are the owners of the bus involved in the incident in question and that Valeriano
Marcos, the driver of said bus at the time of said incident, was in their employ. And there is nothing strange in this
because, as found by said appellate court:
There is abundant evidence that although the Zambraco appears to be the registered owner, Zamtranco was in fact
the operator. To start with, there is the testimony of Filoteo de los Reyes, principal teacher of Josefina, to the effect
that for the trip to and from Bunguiao where the benefit dance was held, he contracted with Zamtranco at Tetuan
(t.s.n. 13-14, Aug. 7, 1956, Cabato); that he saw in Bunguiao the bus sent by Zamtranco (t.s.n. 33, id.); and that he
paid the fare to the driver of Zamtranco (t.s.n 21 id.). This testimony was never contradicted by the appellants, either
by documentary or testimonial evidence. . . .
In their own brief in this instance, appellants make these significant admissions:
The facts that TPU Bus No. 11327 which figured in the accident that caused the death of the spouses Ramon
Dagamanuel and Josefina Punzalan was registered in the name of Zambraco in the year 1955, is not disputed. At
that time, the sale and merger of this Zambraco with the Zamtranco was to be the subject of application with the
Public Service Commission. Pending such approval, the ill-fated bus was again registered in the name of the
Zambraco in the year 1956, according to the testimony given at the trial by Leonardo Galvez, then Acting Registrar of
the Motor Vehicle Office in Zamboanga.
Indeed, under these circumstances, We cannot find any reason to disagree with Mr. Justice Fred Ruiz Castro who
penned the appealed decision in his ruling to the effect that:
We do not find any application of the ruling in the foregoing cases to the case at bar. There, the registered owners
invariably sought to pass on liability to the actual operators on the pretext that they had already sold or transferred
their units to the latter, whereas in the present case, the registered owner, the Zambraco, admits whatever liability it
has and vigorously objects to any finding that the actual operator, the Zamtranco, is also liable with it, claiming that as
registered owner, it alone should be adjudged liable. We would not inquire into the motive of the Zambraco why
instead of sharing whatever liability it has with the Zamtranco, it prefers to shoulder it alone. But the fact stands out in

bold relief that although still the registered owner at the time of the accident, it had already sold the vehicle to
Zamtranco and the latter was actually operating it.
It is our view that it is for the better protection of the public that both the owner of record and the actual operator, as
held by us in the past, should be adjudged jointly and severally liable with the driver (see Dizon vs. Octavio, et al., 51
O.G. No. 8, 4059-4061; Castanares vs. Pages, CA-G.R. 21809-R, March 8, 1962; Redado vs. Bautista, CA-G.R.
19295-R, Sept. 19, 1961; Bering vs. Noeth, CA-G.R. 28483-R, April 29 1965).
The second assignment of error refers to the different items of damages awarded by the respondent court. Petitioners
complain that the same are excessive if not without legal basis. To a certain extent, petitioners are right.
It may be recalled that the trial court's judgment regarding the matter of damages was as follows:
1)

P8,000.00 for the death of Ramon Dagamanuel;

2)

P8,000.00 for the death of Josefina Punzalan;

3)

P4,000.00 as exemplary damages;

4)

P2,000.00 as attorney's fees; and

5)

Costs.

From this judgment, only petitioners appealed. Private respondents did not appeal. Accordingly, petitioners are
correct in inviting Our attention thus:
The respondent did not appeal any portion of the decision of the lower Court, thus indicating that he is fully satisfied
with the same. On the other hand, the driver of the ill-fated bus failed to perfect his appeal and consequently, as
against him, the decision of the lower Court is already final.
The lower Court rendered a decision against the driver of the bus and the two petitioners herein for the death of the
parents of the respondent in the sum of P16,000.00 together with P4,000.00 exemplary damages. But
notwithstanding the automatic exclusion of the driver from the effects of the appealed decision, the Court of Appeals,
while reducing the death award to P12,000.00 increased the exemplary damages to P5,000.00 adding thereto
P11,520.00 compensatory damages and P5,000.00 moral damages. We humbly contend that to award damages
when none was allowed by the lower Court, and to increase damages when the successful party did not appeal, is
simply improper and amounts to pure abuse of discretion on the part of the respondent appellate Court, contrary to
the doctrines laid down by the Honorable Supreme Court in the following cases, to wit:
"The discretion in fixing moral and exemplary damages primarily lay in the trial court and the same should be
respected. (Coleongco vs. Claparols, No. L-18616, March 31, 1964; emphasis ours)."
"It is well-settled rule in this jurisdiction that whenever an appeal is taken in a civil case, an appellee who has not
himself appealed cannot obtain from the appellate court any affirmative relief other than the ones granted in the
decision of the court below. An appellee, who is not appellant, may assign errors in his brief where his purpose is to
maintain the judgment on other grounds, but he may not do so if his purpose is to have the judgment modified or
reversed, for, in such a case, he must appeal. HERE, THE RESPONDENT DID NOT APPEAL AND SO IT WAS
ERROR FOR THE COURT OF APPEALS TO AWARD HIM A RELIEF NOT GRANTED BY THE LOWER COURT.
(Dy, et al. vs. Kuison, L-16654, Nov. 30, 1961; emphasis ours)."
Furthermore, it is respectfully submitted, that a child 3-year old, as the respondent herein was when his parents died,
cannot yet feel the mental anguish resulting from their death, as to warrant such excessive award of P5,000.00 moral
damages. We venture to ask, therefore, what degree of mental torture could have been possibly endured by a boy of
such tender age? We believe that the measure of moral damages, if any, must be commensurate with the mental
anguish suffered by the heir. (Mercado, et al. vs. Lira, et al., Nos. L-13328-29 and L-13358, Sept. 29, 1961.)
True it is, the awards of P8,000 each for the death of the parents of respondent Jose Mario Dagamanuel may not be
increased anymore, but We cannot say that they should be reduced. Quite, on the contrary, We consider the
judgment of the Court of Appeals in respect to the matter of damages to be more in accordance with the facts, except
perhaps, as to the item of moral damages, considering the tender age of the above-named respondent child, and We
would have upheld the same had private respondent appealed from the decision of the trial court.4 Indeed, the Court
of Appeals properly interpreted the P16,000 awarded by the trial court as including not only damages for the

deceased couple but also the other items of recoverable damages, like compensatory or actual, etc. Thus viewed, the
amounts awarded by the trial court cannot be considered excessive.
IN VIEW OF ALL THE FOREGOING, the judgment of the Court of Appeals is affirmed, with the modification that as to
damages, petitioners are sentenced to pay jointly and severally no more than the amounts of damages adjudged by
the trial court.
No costs in this instance.

CASE DIGEST in Transportaion Law: Zamboanga Transportation Co. vs. CA

GR L-25292, 29 November 1969)
FACTS: In the evening of 13 August 1955, the spouses Ramon and Josefina Dagamanuel boarded a bus at
Manicahan, Zamboanga City, to attend a benefit dance at the Bunguiao Elementary School, also in Zamboanga City,
where Josefina was a public school teacher. After the dance, the couple boarded the same bus to return to
Manicahan. At around 1 a.m. of 14 August 1955, the bus (1955 TPU-1137), and driven by Valeriano Marcos, fell off
the road and pinned to death the said spouses and several other passengers.
Jose Mario Dagamanuel, the only child of the deceased spouses, through his maternal grandmother as guardian adlitem, Pascuala Julian de Punzalan, instituted an action against Zamboanga Transportation Co., Inc. (Zamtanco) and
the Zamboanga Rapids Co., Inc. (Zambraco) for breach of contract of carriage, alleging that the accident was due to
the fault and negligence of the driver in operating the bus and due to the negligence of the companies in their
supervision of their driver. the trial court rendered judgment sentencing the three, jointly and severally, to indemnify
the private respondents. The CA affirmed the decision of the court a quo.
ISSUE: Whether or not Zamtranco and Zambraco are jointly and severally liable.
HELD: Yes.
While it is true that according to previous decisions of the Supreme Court, transfer of a certificate of public
convenience to operate a transportation service is not effective and binding insofar as the responsibility of the grantee
under the franchise in its relation to the public is concerned, without the approval of the transfer by the Public Service
Commission required by the Public Service Act, and that in contemplation of law, the transferor of such certificate
continues to be the operator of the service as long as the transfer is not yet approved, and as such operator, he is the
one responsible jointly and severally with his driver for damages incurred by passengers or third persons in
consequence of injuries or deaths resulting from the operation of such service, the Court does not find any need for
applying these rulings to the present case for the simple reason that in their respective third-party complaints, the
companies both admitted separately that they are the owners of the bus involved in the incident in question and that
Valeriano Marcos, the driver of said bus at the time of said incident, was in their employ.
There is no application of the ruling in the previous cases to the present case. There, the registered owners invariably
sought to pass on liability to the actual operators on the pretext that they had already sold or transferred their units to
the latter, whereas in the present case, the registered owner, the Zambraco, admits whatever liability it has and
vigorously objects to any finding that the actual operator, the Zamtranco, is also liable with it, claiming that as
registered owner, it alone should be adjudged liable. We would not inquire into the motive of the Zambraco why
instead of sharing whatever liability it has with the Zamtranco, it prefers to shoulder it alone. But the fact stands out in
bold relief that although still the registered owner at the time of the accident, it had already sold the vehicle to
Zamtranco and the latter was actually operating it.
For the better protection of the public that both the owner of record and the actual operator, as held by the Court in
the past, should be adjudged jointly and severally liable with the driver (see Dizon vs. Octavio, et al., 51 O.G. No. 8,
4059-4061; Castanares vs. Pages, CA-G.R. 21809-R, March 8, 1962; Redado vs. Bautista, CA-G.R. 19295-R, Sept.
19, 1961; Bering vs. Noeth, CA-G.R. 28483-R, April 29, 1965)

G.R. No. L-25266 January 15, 1975

AETNA INSURANCE COMPANY, plaintiff-appellant,
vs.

BARBER STEAMSHIP LINES, INC., and/or LUZON STEVEDORING CORPORATION and/or LUZON
BROKERAGE CORPORATION, defendants-appellees.
AQUINO, J.:
Aetna Insurance Company appealed on a legal question from the order of the Court of First Instance of Manila,
dismissing its amended complaint against Barber Line Far East Service on the ground of prescription.
The facts are as follows:
On February 22, 1965 Aetna Insurance Company, as insurer, filed a complaint against Barber Steamship Lines, Inc.,
Luzon Stevedoring Corporation and Luzon Brokerage Corporation.
It sought to recover from the defendants the sum of P12,100.06 as the amount of the damages which were caused to
a cargo of truck parts shipped on the SS Turandot. The insurer paid the damages to Manila Trading & Supply
Company, the consignee.
In a manifestation dated March 31, 1965, Barber Steamship Lines, Inc., without submitting to the court's jurisdiction,
alleged that it was a foreign corporation not licensed to do business in the Philippines, that it was not engaged in
business here, that it had no Philippine agent and that it did not own nor operate the SS Turandot.
On April 5, 1965 Barber Steamship Lines, Inc., again with the caveat that it was not submitting to the court's
jurisdiction, filed a motion to dismiss on the grounds of (a) lack of jurisdiction over the person and (b) that it was not
the real party in interest.
Barber Steamship Lines, Inc. alleged that the service of summons was not effected upon it in accordance with section
14, Rule 14 of the Rules of Court. It clarified that the summons intended for it was served upon Macondray & Co., Inc.
which was not its agent.
It asserted that it was not the real party in interest because according to the bill of lading annexed to the complaint the
owner of the SS Turandot, the carrying vessel, was the Wilh, Wilhemsen Group. (Note, however, that the same bill of
lading indicated that Barber Steamship Lines, Inc. was the vessel's agent).
Two days later, or on April 7, 1965 plaintiff Aetna Insurance Company filed a manifestation stating that the name of
defendant Barber Steamship Lines, Inc. was incorrect and that the correct name was Barber Line Far East Service.
Attached to the manifestation was an amended complaint containing the correction. Aetna Insurance Company
manifested that copies of the amended complaint would be served on the parties by means of alias summons.
On April 20, 1965 Aetna Insurance Company filed a motion for the admission of its amended complaint. Barber
Steamship Lines, Inc. opposed the motion. It contended that its pending motion to dismiss the original complaint
should first be resolved before the amended complaint may be admitted.
Judge Ramon O. Nolasco in an order dated April 19, 1965 dismissed the complaint against Barber Steamship Lines,
Inc. and directed that alias summonses be issued to the defendants named in the amended complaint.
On May 19, 1965 Barber Line Far East Service, supposedly without admitting to the court's jurisdiction, moved for the
dismissal of the amended complaint on the grounds (1) that it is not a juridical person and, hence, it could not be
sued; (2) that the court had no jurisdiction over its person; (3) that it was not the real party in interest and (4) that the
action had prescribed according to the bill of lading and the Carriage of Goods by Sea Act. Aetna Insurance
Company opposed the motion.
Judge Nolasco in his order of July 7, 1965 ruled that inasmuch as according to the complaint the shipment arrived in
Manila on February 22, 1964 and the amended complaint, impleading Barber Line Far East Service, was filed on
April 7, 1965, or beyond the one-year period fixed in the Carriage of Goods by Sea Act, the action had already
prescribed. The case was dismissed as to Barber Line Far East Service.

The legal question under the above facts is whether the action of Aetna Insurance Company against Barber Line Far
East Service, as ventilated in its amended complaint, which was filed on April 7, 1965, had prescribed.
As previously stated, the action was for the recovery of damages to a cargo of truck parts which was insured by
Aetna Insurance Company and which arrived in Manila on the SS Turandot and were delivered in bad order to the
consignee on February 25, 1968 (4 Record on Appeal).
The bill of lading covering the shipment provides:
19. In any event the Carrier and the ship shall be discharged from all liability in respect of loss or
damage unless suit is brought within one year after the delivery of the goods or the dates when the
goods should have been delivered. Suit shall not be deemed brought until jurisdiction shall have
been obtained over the Carrier and/or the ship by service of process or by an agreement to appear.
On the other hand, the Carriage of Goods by Sea Act, Commonwealth Act No. 65 (Public Act No. 521 of the 74th
Congress of the United States) provides:
RESPONSIBILITIES AND LIABILITIES
Section 3. xxx xxx xxx
(6) xxx xxx xxx
In any event the carrier and the ship shall be discharged from all liability in respect of loss or
damage unless suit is brought within one year after delivery of the goods or the date when the
goods should have been delivered: Provided, That, if a notice of loss or damage, either apparent or
concealed, is not given as provided for in this section, that fact shall not affect or prejudice the right
of the shipper to bring suit within one year after the delivery of the goods or the date when the
goods should have been delivered.
Aetna Insurance Company contends in this appeal that the trial court erred (1) in holding that the Barber Line Far
East Service was substituted for Barber Steamship Lines, Inc. and (2) in dismissing the action on the ground of
prescription.
There is no merit in the appeal. The trial court correctly held that the one-year statutory and contractual prescriptive
period had already expired when appellant company filed on April 7, 1965 its action against Barber Line Far East
Service. The one year period commenced on February 25, 1964 when the damaged cargo was delivered to the
consignee. (See Chua Kuy vs. Everrett Steamship Corporation, 93 Phil. 207; Yek Tong Fire & Marine Insurance Co.,
Ltd. vs. American President Lines, Inc., 103 Phil. 1125).
Appellant company invokes the rule that where the original complaint states a cause of action but does it imperfectly,
and afterwards an amended complaint is filed, correcting the defect, the plea of prescription will relate to the time of
the filing of the original complaint (Pangasinan Transportation Co. vs. Phil. Farming Co., Ltd., 81 Phil. 273). It
contends that inasmuch as the original complaint was filed within the one year period, the action had not prescribed.
That ruling would apply to defendants Luzon Stevedoring Corporation and Luzon Brokerage Corporation. But it would
not apply to Barber Line Far East Service which was impleaded for the first time in the amended complaint.
It should be recalled that the original complaint was dismissed as to Barber Steamship Lines, Inc. in the lower court's
order of April 19, 1965. New summons had to be issued to Barber Line Far East Service which had replaced Barber
Steamship Lines, Inc. as a defendant.
The filing of the original complaint interrupted the prescriptive period as to Barber Steamship Lines, Inc. but not as to
Barber Line Far East Service, an entity supposedly distinct from the former. Appellant's contention that there was
merely a correction in the name of a party-defendant is untenable. *

In view of the foregoing considerations, the lower court's order of dismissal is affirmed. Costs against the plaintiffappellant.
SO ORDERED.

HOME INSURANCE COMPANY vs. AMERICAN STEAMSHIP AGENCIES, INC. and LUZON STEVEDORING
CORPORATION
G.R. No. L-25599 April 4, 1968
FACTS: Consorcio Pesquero del Peru of South America shipped freight pre-paid at Peru, jute bags of Peruvian fish
meal through SS Crowborough, covered by clean bills of lading. The cargo, consigned to San Miguel Brewery, Inc.,
now San Miguel Corporation, and insured by Home Insurance Company arrived in Manila and was discharged into
the lighters of Luzon Stevedoring Company. When the cargo was delivered to consignee San Miguel Brewery Inc.,
there were shortages causing the latter to lay claims against Luzon Stevedoring Corporation, Home Insurance
Company and the American Steamship Agencies (shipowner), owner and operator of SS Crowborough.
Because the others denied liability, Home Insurance Company paid SMBI the insurance value of the loss, as full
settlement of the claim. Having been refused reimbursement by both the Luzon Stevedoring Corporation and
American Steamship Agencies, Home Insurance Company, as subrogee to the consignee, filed against them before
the CFI of Manila a complaint for recovery of the payment paid with legal interest, plus attorneys fees.
In answer, Luzon Stevedoring Corporation alleged that it delivered with due diligence the goods in the same quantity
and quality that it had received the same from the carrier.
The CFI, after trial, absolved Luzon Stevedoring Corporation, having found the latter to have merely delivered what it
received from the carrier in the same condition and quality, and ordered American Steamship Agencies to pay Home
Insurance Company the amount demanded with legal interest plus attorneys fees.
Disagreeing with such judgment, American Steamship Agencies appealed directly to Us.
ISSUE: Is the stipulation in the charter party of the owners non-liability valid so as to absolve the American
Steamship Agencies from liability for loss?
HELD: The judgment appealed from is hereby reversed and appellant is absolved from liability to plaintiff.
YES
The bills of lading, covering the shipment of Peruvian fish meal provide at the back thereof that the bills of lading shall
be governed by and subject to the terms and conditions of the charter party, if any, otherwise, the bills of lading
prevail over all the agreements. On the bills are stamped Freight prepaid as per charter party. Subject to all terms,
conditions and exceptions of charter party dated London, Dec. 13, 1962.
Section 2, paragraph 2 of the charter party, provides that the owner is liable for loss or damage to the goods caused
by personal want of due diligence on its part or its manager to make the vessel in all respects seaworthy and to
secure that she be properly manned, equipped and supplied or by the personal act or default of the owner or its
manager. Said paragraph, however, exempts the owner of the vessel from any loss or damage or delay arising from
any other source, even from the neglect or fault of the captain or crew or some other person employed by the owner
on board, for whose acts the owner would ordinarily be liable except for said paragraph..
The provisions of our Civil Code on common carriers were taken from Anglo-American law. Under American
jurisprudence, a common carrier undertaking to carry a special cargo or chartered to a special person only, becomes
a private carrier. As a private carrier, a stipulation exempting the owner from liability for the negligence of its agent is
not against public policy, and is deemed valid.
Such doctrine We find reasonable. The Civil Code provisions on common carriers should not be applied where the
carrier is not acting as such but as a private carrier. The stipulation in the charter party absolving the owner from
liability for loss due to the negligence of its agent would be void only if the strict public policy governing common

carriers is applied. Such policy has no force where the public at large is not involved, as in the case of a ship totally
chartered for the use of a single party.
And furthermore, in a charter of the entire vessel, the bill of lading issued by the master to the charterer, as shipper, is
in fact and legal contemplation merely a receipt and a document of title not a contract, for the contract is the charter
party. The consignee may not claim ignorance of said charter party because the bills of lading expressly referred to
the same. Accordingly, the consignees under the bills of lading must likewise abide by the terms of the charter party.
And as stated, recovery cannot be had thereunder, for loss or damage to the cargo, against the shipowners, unless
the same is due to personal acts or negligence of said owner or its manager, as distinguished from its other agents or
employees. In this case, no such personal act or negligence has been proved.