National Development Company vs.

CA, 164 SCRA 593 (1988)

FACTS: NDC and MCP entered into an agreement by which NDC, as the first preferred mortagee of three
ocean-going vessels including the one with the name “Dona Nati” appointed MCP as its agent to manage
and operate said vessels in its behalf. E. Philipp Corp of New York loaded on board “Dona Nati” in San
Francisco, CA, a total of 1,200 bales of American New Cotton consigned to Manila Banking Corp and the
People’s Bank and Trust Co., acting for and in behalf of Pan Asiatic Commercial Co., Inc. who represents
Riverside Mills Corp. The vessel figured in a collision at Ise Bay, Japan with a Japanese vessel, as a result
of which the aforesaid cargo was lost and/or destroyed. Plaintiff Development and Insurance and Surety
Corp, as insurer, paid to Riverside Mills Corp the amount of the damaged and lost cargo, the latter being
the holder of the negotiable bills of lading duly indorsed. As a result of such payment, said insurer filed
an action to recover the amount from NDC and MCP. MCP contended that it cannot be held solidarily
liable with NDC because it is not a ship agent but a mere managing agent, and as such cannot be held
liable if it did not exceed its authority. NDC likewise denied liability.

ISSUE: Whether or not NDC and MCP are solidarily liable with each other

HELD: NDC and MCP are solidarily liable. Where collision is imputable to the preserve of a vessel, the
owner of the vessel at fault shall indemnify the losses and damages incurred after an expert appraisal.
Moreover, if the collision is imputable to both vessels, each one shall bear its own damages and both
shall be solidarily liable for the loss sustained by their cargoes. The agreement between NDC and MCP
shows that MCP is appointed as agent, a term broad enough to inherit the concept of shipagent in
maritime law. In fact, MCP was even infused with all the powers of the owner of the vessel, including
the power to contract in the name of NDC. Consequently, under the arrangements, MCP cannot escape
liability. Both owner and agent should be declared jointly and severally liable since the obligation which
is the subject of the action had its origin in a portion act and did not arise from contract. Consequently,
the agent, even though he may not be the owner of the vessel, is liable to the shippers and miners of
the cargoes transported by it.