Marine Trading vs.

Government (GR 13422, 8 November 1918)

En Banc, Malcolm (J):
On 10 August 1915, the Marine Trading Co. Inc. owned a launch named Active and the
Government of the Philippine Islands owned a launch named Bohol. Both launches were in use
upon the Pasig River in the city of Manila. About 8:00 a.m. of said date, in the Pasig River,
below and near the bridge of Spain, the launch Bohol was towing up the river two rudderless
scows or lighters, one behind the other. The scow nearest the launch was about 5 meters behind,
was empty, and was high in the water. The second lighter was tied to the rear of the first one,
with a distance of about 2 meters intervening, was loaded, and was lower in the water. The
Active was coming down the river from Pandacan toward Manila Bay. The patron of the Active
blew one blast of his whistle, and the patron of the Bohol answered with one whistle, which
indicated that the Active had a clear way and should pass to starboard. When under the bridge of
Spain, the Active passed the Bohol and the first scow towed by it. But when the Active was about
to pass the second scow, the latter swerved to the left, and its forward left end corner struck the
Active on the port side between the cabin and the bow with such force and impact that the launch
sank immediately. The Active was in good condition and state of operation before the collision
occurred. The launch was so seriously damaged by the collision and the sinking that it took the
sum of P9,677 to repair it. Act 2630 empowered the Marine Trading to bring action in the FI of
Manila to determine the responsibility and liability for a collision between its launch Active and
a scow towed by the Government launch Bohol, and to fix the damages, if any, to which the
former is entitled on account of the collision. Acting under this authority, the Marine Trading
Company began action to recover as damages from the Government of the Philippine Islands the
sum of P9,677, with interest and costs, because of the reckless and negligent acts of the
Governments agent and employee. The Attorney-General interposed a general denial. Judgment
was rendered by the Honorable George R. Harvey, judge of first instance, for the amount prayed
for by the company, with legal interest from 25 September 1916, the date of filing the complaint,
and costs of suit. Here, Act No. 2630 only authorized the court to fix the damages if any, and to
enter judgment accordingly. Unless damages can be interpreted to include interest and costs,
plaintiff cannot recover the same. This appearing to be a strained interpretation, we believe we
should hold to the view that since the government has not stipulated to pay interest or costs, the
courts should not include these items in the judgment. The Supreme Court affirmed the judgment
appealed from, with the modification for the deletion of theinterest and costs; without special
finding as to costs in this instance.
Smith Bell vs. CA (GR 56294, 20 May 1991)
On 3 May 1970, 3:50 a.m., on the approaches to the port of Manila near Caballo Island, a
collision took place between the M/V Don Carlos, an inter-island vessel owned and operated
by Carlos A. Go Thong and Company (Go Thong), and the M/S Yotai Maru, a merchant
vessel of Japanese registry. The Don Carlos was then sailing south bound leaving the port of
Manila for Cebu, while the Yotai Maru was approaching the port of Manila, coming in from
Kobe, Japan. The bow of the Don Carlos rammed the portside (left side) of the Yotai Maru
inflicting a 3 cm. gaping hole on her portside near Hatch 3, through which seawater rushed in
and flooded that hatch and her bottom tanks, damaging all the cargo stowed therein.
The consignees of the damaged cargo got paid by their insurance companies. The insurance
companies in turn, having been subrogated to the interests of the consignees of the damaged

cargo, commenced actions against Go Thong for damages sustained by the various shipments in
the then CFI of Manila. 2 cases were filed in the CFI of Manila. The first case, Civil Case 82567,
was commenced or 13March 1971 by Smith Bell and Company (Philippines), Inc. and
Sumitomo Marine and Fire Insurance Company Ltd., against Go Thong, in Branch 3, which was
presided over by Judge Bernardo P. Fernandez. The second case, Civil Case 82556, was filed on
15 March 1971 by Smith Bell and Company (Philippines), Inc. and Tokyo Marine and Fire
Insurance Company, Inc. against Go Thong in Branch 4, which was presided over by then Judge,
later Associate Justice of this Court, Serafin R. Cuevas. Civil Cases 82567 (Judge Fernandez)
and 82556 (Judge Cuevas) were tried under the same issues and evidence relating to the collision
between the Don Carlos and the Yotai Maru the parties in both cases having agreed that the
evidence on the collision presented in one case would be simply adopted in the other. In both
cases, the Manila CFI held that the officers and crew of the Don Carlos had been negligent,
that such negligence was the proximate cause of the collision and accordingly held Go Thong
liable for damages to the insurance companies. Judge Fernandez awarded the insurance
companies P19,889.79 with legal interest plus P3,000.00 as attorneys fees; while Judge Cuevas
awarded the insurance companies on two (2) claims US$68,640.00 or its equivalent in Philippine
currency plus attorneys fees of P30,000.00, and P19,163.02 plus P5,000.00 as attorneys
fees,respectively.
The decision of Judge Fernandez in Civil Case 82567 was appealed by Go Thong to the Court of
Appeals (CA-GR 61320-R). The decision of Judge Cuevas in Civil Case 82556 was also
appealed by Go Thong to the Court of Appeals (CA-GR 61206-R). Substantially identical
assignments of errors were made by Go Thong in the 2 appealed cases before the Court of
Appeals. In CA-GR 61320-R, the Court of Appeals through Reyes, L.B., J., rendered a Decision
on 8 August 1978 affirming the Decision of Judge Fernandez. Go Thong moved for
reconsideration, without success. Go Thong then went to the Supreme Court on Petition for
Review, the Petition (GR L-48839; Carlos A. Go Thong and Company v. Smith Bell and
Company [Philippines], Inc., et al.). In its Resolution dated 6 December 1978, the Supreme
Court, denied the Petition for lack of merit. Go Thong filed a Motion for Reconsideration; the
Motion was denied by the Supreme Court on 24 January 1979.
In CA-GR 61206-R, the Court of Appeals, on 26 November 1980, reversed the Cuevas Decision
and held the officers of the Yotai Maru at fault in the collision with the Don Carlos, and
dismissed the insurance companies complaint. Smith Bell & Co. and the Tokyo Marine & Fire
Insurance Co. Inc. asked for reconsideration, to no avail. Hence, the petition for review on
certiorari.
The Supreme Court reversed and set aside the Decision of the Court of Appeals dated 26
November 1980 in CA-GR 61206-R, and reinstated and affirmed the decision of the trial court
dated 22 September 1975 in its entirety; with costs against Go Thong.
Versoza vs. Lim (GR 20145, 15 November 1923)
At about 5:00 p.m. of 9 March 1921, the coastwise steamer Ban Yek left the port of Naga
on the Bicol River, in the Province of Camarines Sur, with destination to the City of Manila. At
the time of her departure from said port the sea was approaching to high tide but the current was
still running in through the Bicol River, with the result that the Ban Yek had the current against
her. As the ship approached the Malbong bend of the Bicol River, in the Municipality of Gainza,
another vessel, the Perla, was sighted coming up the river on the way to Naga. While the boats
were yet more than a kilometer apart, the Ban Yek gave two blasts with

her whistle, thus indicating an intention to pass on the left, or to her own port side. In reply to
this signal the Perla gave a single blast, thereby indicating that she disagreed with the signal
given by the Ban Yek and would maintain her position on the right, that is, would keep to the
starboard. The Ban Yek made no reply to this signal. As the Perla was navigating with the
current, then running in from the sea, this vessel, under paragraph 163 of Customs Marine
Circular 53, had the right of way over the Ban Yek, and the officers of the Perla interpreted the
action of the Ban Yek in not replying to the Perlas signal as an indication of acquiescence of the
officers of the Ban Yek in the determination of the Perla to keep to the starboard. The river at this
point is about 250 feet wide, and the courses thus being respectively pursued by the two vessels
necessarily tended to bring them into a head-on collision. When the danger of such an occurrence
became imminent, Captain Garrido of the Perla, seeing that he was shut off by the Ban Yek from
passing to the right, put his vessel to port, intending to avoid collision or minimize its impact by
getting farther out into the stream. An additional reason for this maneuver is that the captain of
the Ban Yek waived his hand to Garrido, indicating that the latter should turn his vessel towards
the middle of the stream. At about the same time that the Perla was thus deflected from her
course the engine on the Ban Yek was reversed and three blasts were given by this vessel to
indicate that she was backing. When the engine is reversed, a vessel swings to the right or left in
accordance with the direction in which the blades of the propeller are set; and as the Ban Yek
began to back, her bow was thrown out into the stream, a movement which was assisted by the
current of the river. By this means the Ban Yek was brought to occupy an oblique position across
the stream at the moment the Perla was passing; and the bow of the Ban Yek crashed into the
starboard bumpers of the Perla, carrying away external parts of the ship and inflicting material
damage on the hull. To effect the repairs thus made necessary to the Perla cost her owners the
sum of P17,827, including expenses of survey. Vicente Verzosa and Ruiz, Rementeria y
Compania, as owners of the coastwise vessel Perla, instituted the action before the CFI of
Manila, against Silvino Lim and Siy Cong Bieng & Company, Inc., as owner and agent,
respectively, of the vessel Ban Yek, for the purpose of recovering a sum of money alleged to be
the damages resulting to Versoza, et. al. from the collision; alleging that said collision was due to
the inexperience, carelessness and lack of skill on the part of the captain of the Ban Yek and to
his failure to observe the rules of navigation appropriate to the case. Lim, et. al. answered with a
general denial, and by way of special defense asserted, among other things, that the collision was
due exclusively to the inexperience and carelessness of the captain and officers of the steamship
Perla; for which reason Lim et. al., in turn, by way of counterclaim, prayed judgment for the
damages suffered by the Ban Yek from the same collision. At the hearing the trial judge absolved
Lim, et. al. from the complaint and likewise absolved Verzosa, et.al. from Lim, et. al.s
counterclaim. From this judgment both parties appealed.
The Supreme Court affirmed the judgment appealed from insofar as it absolves Versoza, et. al.,
and entered judgment for Versoza, et. al. to recover jointly and severally from Silvino Lim and
Siy Cong Bieng & Co. the sum of P17,827.00, with interest from the date of the institution of the
action, without special pronouncement as to costs of either instance.
Government vs. Philippine Steamship Co. (GR 18957, 16 January 1923)
At about 10 p.m. on 10 February 1920, the coastwise vessel Isabel (owned by Fernandez
Hermanos), equipped with motor and sails, left the port of Manila with primary destination to
Balayan, Batangas, carrying, among its cargo, 911 sacks of rice belonging to the Government of
the Philippine Islands and consigned to points in the south. After the boat had been under weigh

for about 4 hours, and had passed the San Nicolas Light near the entrance into Manila Bay, the
watch and the mate on the bridge of the Isabel discerned the light of another vessel, which
proved to be the Antipolo (owned by Philippine Steamship Co. Inc.), also a coastwise vessel, on
its way to Manila and coming towards the Isabel. At about the same time both the watch and
mate on the bridge of the Antipolo also saw the Isabel, the two vessels being then about one mile
and a half or two miles apart. Each vessel was going approximately at the speed of 6 miles an
hour, and in about 10 minutes they had together traversed the intervening space and were in close
proximity to each other. When the mate of the Antipolo, who was then at the wheel, awoke to the
danger of the situation and saw the Isabel almost on top of him, to use the words of the
committee on marine accidents reporting the incident, he put his helm hard to the starboard. As
chance would have it, however, the mate on the Isabel at this critical juncture lost his wits and, in
disregard of the regulations and of common prudence, at once placed his own helm hard to port,
with the result that his boat veered around directly in the path of the other vessel and a collision
became inevitable. Upon this the mate on the Antipolo fortunately stopped his engines, but the
Isabel continued with full speed ahead, and the two vessels came together near the bows. The
Isabel immediately sank, with total loss of vessel and cargo, though the members of her crew
were picked up from the water and saved.
The Government of the Philippine Islands sought to recover the sum of P14,648.25, the alleged
value of 911 sacks of rice which were lost at sea on 11 February 1920. In the CFI judgment was
entered for the recovery by the Government from the Philippine Steamship Company, Inc., of the
full amount claimed, with interest from the date of filing of the complaint. From this judgment,
said company appealed.
The Supreme Court affirmed the judgment appealed from; with costs against Philippine
Steamship Co. Inc.
Luzon Stevedoring Corporation vs. Court of Appeals
(156 SCRA 169)
A maritime collision occurred between the tanker CAVITE owned by LSCO and MV
Fernando Escano (a passenger ship) owned by Escano, as a result the passenger ship sunk. An
action in admiralty was filed by Escano against Luzon. The trial court held that LSCO Cavite
was solely to blame for the collision and held that Luzons claim that its liability should be
limited under Article 837 of the Code of Commerce has not been established. The Court of
Appeals affirmed the trial court. The SC also affirmed the CA. Upon two motions for
reconsideration, the Supreme Court gave course to the petition. The issue here is whether or not
in order to claim limited liability under Article 837 of the Code of Commerce, it is necessary that
the owner abandon the vessel. The Supreme Court held Yes, abandonment is necessary to claim
the limited liability wherein it shall be limited to the value of the vessel with all the
appurtenances and freightage earned in the voyage. However, if the injury was due to the ship
owners fault, the ship owner may not avail of his right to avail of limited liability by abandoning
the vessel. The real nature of the liability of the ship owner or agent is embodied in the Code of
Commerce. Articles 587, 590 and 837 are intended to limit the liability of the ship owner,
provided that the owner or agent abandons the vessel. Although Article 837 does not specifically
provide that in case of collision there should be abandonment, to enjoy such limited liability, said
article is a mere amplification of the provisions of Articles 587 and 590 which makes it a mere
superfluity. The exception to this rule in Article 837 is when the vessel is totally lost in which
case there is no vessel to abandon, thus abandonment is not required. Because of such loss, the

liability of the owner or agent is extinguished. However, they are still personally liable for claims
under the Workmens Compensation Act and for repairs on the vessel prior to its loss. In case of
illegal or tortious acts of the captain, the liability of the owner and agent is subsidiary. In such
cases, the owner or agent may avail of Article 837 by abandoning the vessel. But if the injury is
caused by the owners fault as where he engages the services of an inexperienced captain or
engineer, he cannot avail of the provisions of Article 837 by abandoning the vessel. He is
personally liable for such damages. In this case, the Court held that the petitioner is a t fault and
since he did not abandon the vessel, he cannot invoke the benefit of Article 837 to limit his
liability to the value of the vessel, all appurtenances and freightage earned during the voyage.
Barrios vs. Go Thong (GR L-17192, 30 March 1963)
Honorio M. Barrios was, on May 1 and 2, 1958, captain and/or master of the MV Henry I
of the William Lines Incorporated, of Cebu City, plying between and to and from Cebu City and
other southern cities and ports, among which are Dumaguete City, Zamboanga City, and Davao
City. At about 8:00 p.m. of 1 May 1958, Barrios in his capacity as such captain and/or master of
the aforesaid MV Henry I, received or otherwise intercepted an S.O.S. distress signal by blinkers
from the MV Alfredo, owned and/or operated by Carlos A. Go Thong & Company. Acting on
and/or answering the S.O.S. call, Barrios, also in his capacity as captain and/or master of the MV
Henry I, which was then sailing or navigating from Dumaguete City, altered
the course of said vessel, and steered and headed towards the beckoning MV Don Alfredo, which
Barrios found to be in trouble, due to engine failure and the loss of her propeller, for which
reason, it was drifting slowly southward from Negros Island towards Borneo in the open China
Sea, at the mercy of a moderate easterly wind. At about 8:25 p.m. on the same day, the MV
Henry, under the command of Barrios, succeeded in getting near the MV Don Alfredo in fact
as near as 7 seven meters from the latter ship and with the consent and knowledge of the
captain and/or master of the MV Don Alfredo, Barrios caused the latter vessel to be tied to, or
well-secured and connected with tow lines from the MV Henry I; and in that manner, position
and situation, the latter had the MV Don Alfredo in tow and proceeded towards the direction of
Dumaguete City, as evidenced by a written certificate to this effect executed and accomplished
by the Master, the Chief Engineer, the Chief Officer, and the Second Engineer of the MV Don
Alfredo, who were then on board the latter ship at the time of the occurrence stated above. At
about 5:10 a.m., 2 May 1958, or after almost 9 hours during the night, with the MV Don Alfredo
still in tow by the MV Henry I, and while both vessels were approaching the vicinity of Apo
Island off Zamboanga town, Negros Oriental, the MV Lux, a sister ship of the MV Don Alfredo,
was sighted heading towards the direction of the aforesaid two vessels, reaching then 15 minutes
later, or at about 5:25 a.m. Thereupon, at the request and instance of the captain and/or master of
the MV Don Alfredo, Barrios caused the tow lines to be released, thereby also releasing the MV
Don Alfredo. Barrios concludes that they establish an impending sea peril from which salvage of
a ship worth more than P100 000.00, plus life and cargo was done, while Go Thong insists that
the facts made out no such case, but that what merely happened was only mere towage from
which Barrios cannot claim any compensation or remuneration independently of the shipping
company that owned the vessel commanded by him. Brought to the CFI of Manila (Civil Case
37219), the court therein dismissed the case; with cost against Barrios. Barrios interposed an
appeal.

The Supreme Court affirmed the decision of the lower court in all respects, with costs against
Barrios.