Sie sind auf Seite 1von 49

#TEAMDREAMWORKS

ALABA - ALANO - AMBROCIO - BAUCAN - BOLIGOR - CAGAMPANG - CAÑEDO - LAURENTE - MIRANDA - NENARIA

1.3 Aboitiz shipping Corp. V General Accident Fire and Life Assurance Corporation Ltd. GR No.

Transportation Law
100446 (Cited twice about Coverage; Negligence) - DAVE A.
1.4 Guison V Philippine Shipping Co. 69 Phil 536 - GRETCHEN
1.5 Yangco V Laserna 73 Phil 330 - VINA
1.6 Manila Steamship V Abdulhaman 100 Phil 32 (1956) (Cited twice, about Exceptions and
insurance/damages, I think) - VIENNA
1.7 Abueg V San Diego 77 Phil 730 (1946) (cited twice about vessel is insured; worker’s
compensation)- TERRY
1.8 Negros Navigation Co. Inc vs CA (GR No. 110398) - KAREEN
Thursday 5:30 to 7:30pm, Atty. Fe Bangoy 1.9 Philippine American General Insurance Co. Inc. V CA No 116940 - JANINE
1.10 Vasquez V CA (No citation, about Insurance) - MISHING
1.11 Philippine Shipping Co V Garcia (No citation, about Abandonment) - EUNICE
1.12 Yu Con V Ipil 41 Phil 770 - previously digested (copy paste nalang?) KAYE
Guidelines for Digests. Each digest must at least contain the following: 1.13 Phil. Refining Co. V Jarque GR No. 41506 - DAVE
1. Deadline: Every wednesday evening, or before thursday afternoon. 1.14 Rubiso and Calixto V Rivera 37 Phil 72 - GRETCHEN
2. Format: Use Arial, Size 10, Single spacing. Start each digest on the next page. The 1.15 Macondray and Co. Inc. V Acting Commissioner of Customs 62 SCRA 427 1975 - VINA
format of this document uses two columns. Font size of additional notes may be adjusted. 1.16 Caltex (Phil), Inc V Sulpicio Lines, Inc 315 SCRA 709 (cited twice about charter parties; effect
of charter on character of carrier) - VIENNA
3. Citation. Case name, GR No., Date.
1.17 Coastwise Lighterage Corp. V CA et al 245 SCRA 796 - TERRY
4. Doctrine/Topic. Just a short summary on the main point of the case or the issue 1.18 Litonjua Shipping Co. V national seamen Board 176 SCRA 189 (cited twice about bareboat
resolved. charter; contract of affreightment) - KAREEN
5. Relevant Facts only. Do not focus on the remedial/procedural issues. Petitioner’s 1.19 Planter’s Products, Inc V CA, et al 226 SCRA 478 (cited twice about contract of affreightment;
contentions and arguments + legal basis. effect of charter on character of carrier - JANINE
6. Relevant Issues only. No remedial/procedural issues unless somehow related with 1.20 Compagnie de Commerce V Hamburg America 36 Phil 590 - MISHING
Transportation Laws. 1.21 National Food Authority vs CA - EUNICE
1.22 Behn, Meyer and Co. V Banco- Español 11 Phil 253 - KAYE
7. Ruling. Provide a legal basis. Cite the article cited by the Supreme Court, or the previous
NEW CASES assigned 3/27/2018
jurisprudence. You may underline/bold it if you want to emphasize it. 2.1 A. Magsaysay Inc. V Agan No. L- 6393 January 11, 1955 (cited twice) DAVE
8. OPTIONAL: You can provide a simple list of the other issues discussed by the SC in 2.2 International harvester Co. V Hamburg-American Line 42 Phil 845 GRETCHEN
case someone’s interested to read the full text. 2.3 National Development Company V CA No L- 49407 Au 19 1988 (cited twice) VINA
2.4 Eastern Shipping Lines V Margarine- Ver kaufs – Union, No. L – 31087 Sept 27 1979 VIENNA
Case Digest Pool Members: 2.5 CB Williams V Teodoro Yanco No. 8325 March 10 1914 TERRY
2.6 The Government of the Philippine Islands V Phil. Steamship Co. Inc. et al No. 18957 January
1. Eunice
16 1923 KAREEN
2. Kaye L. 2.7 Gorgonio de Sarasola V Biao Sontua GR No. 22630 January 31 1925 JANINE
3. Dave 2.8 Luzon Stevedoring Corp V CA et al GR No. L – 58897 Dec 3, 1987 MISHING
4. Gretchen 2.9 Erlanger & Galinger V Swedish East Asiatic Co. Ltd 34 Phil 178 (1916) [cited twice] EUNICE
5. Vina 2.10 CS Robinson et al V The Ship Alta et al No. 3488 Aug 10 1907 KAYE
6. Vienna 2.11 Barrios V Go Thong & Co. No. L – 17192 March 30 1963 (7 SCRA 535) DAVE
7. Terry 2.12 Atlantic Gulf & Pacific Co. V Uchida Kisen Kaisha 42 Phil 320 (1921) GRETCHEN
2.13 Wallace V Pujalte & Co. , and Pujalte 34 Phil 511 (1915) VINA
8. Kareen
2.14 Fernandez, et al V Thompson et al No. 12475 march 21 1918 VIENNA
9. Janine Louise
10. Mishing

NOTE: NOT COMPLETE

JOSE MARIA COLLEGE OF LAW


Table of Contents - MARITIME CASES - FINALS
1.1 Philippine Shipping Co. et al V Francisco Garcia Vergara June 1 1906 - EUNICE
1.2 Monarch Insurance Co. Inc V CA June 8, 2000 (Cited twice sa syllabus, discussion about Real
and Hypothecary Nature Coverage; Negligence) - KAYE L.
#TEAMDREAMWORKS
ALABA - ALANO - AMBROCIO - BAUCAN - BOLIGOR - CAGAMPANG - CAÑEDO - LAURENTE - MIRANDA - NENARIA

1.1 "That which distinguishes the maritime from the civil law and even from the mercantile law in
GR No. 1600. June 1, 1906. general is the 'real' and hypothecary nature of the former, and the many securities of a 'real' nature
THE PHILIPPINE SHIPPING COMPANY ET AL., plaintiffs and appellants, that maritime customs from time immemorial, the laws, the codes, and the later jurisprudence, have
vs. FRANCISCO GARCIA VERGARA, defendant and appellee. provided for the protection of the various and conflicting interests which are ventured and risked in
maritime expeditions. * * * This repeals the civil law to such an extent that, in certain cases, where
Facts: The Philippine Shipping Company, the owner of the steamship Nuestra Sra. de Lourdes, the mortgaged property is lost no personal action lies against the owner or agent of the vessel."
while the defendant, Francisco Garcia Vergara, was the owner of the steamship Navarra. Both
ships collided with each other resulting to the entire loss of their respective cargoes. There are two reasons why it is impossible to do away with these privileges, to wit: (1) The risk to
which the thing is exposed, and (2) the 'real’ nature of the maritime law, exclusively 'real,' according
Philippine Shipping Company claims for indemnification of P44,000 for the loss of the said ship as to which the liability of the parties is limited to a thing which is at the mercy of the waves. If the
a result of the collision while Ynchausti & Co. also indemnification for the loss of the cargo. Later agent is only liable with the vessel and freight money and both may be lost through the accidents
on, Philippine Shipping Company reduced its claim to P18,000. The court found as a fact that "both
of navigation it is only just that the maritime creditor have some means of obviating this precarious
ships with their respective cargoes were entirely lost." And construing article 837 of the Code of
Commerce, the trial court held "that the defendant was not responsible to the plaintiff for the value nature of his rights by detaining the ship, his only security, before it is lost.
of the steamship Lourdes, with the costs against the latter."

Philippine Shipping Company appealed the judgment contending that Garcia-Vergara should be
liable and that it was immaterial whether the Navarra had been entirely lost, provided her value at
the time she was lost could be ascertained, since the extent of the liability of the owner of the
colliding vessel for the damages resulting from the collision is to be determined in accordance with
such value.

Issue: What is the extent of the liability, both of the agent and of the owner of the vessel?

Ruling: The SC held that Garcia-Vergara is liable for the indemnification to which the plaintiff is
entitled by reason of the collision, but he is not required to pay such indemnification for the reason
that the obligation thus incurred has been extinguished on account of the loss of the thing bound
for the payment thereof.

Article 837 of the Code of Commerce provides: "The civil liability contracted by the shipowners in
the cases prescribed in this section shall be understood as limited to the value of the vessel with
all her equipment and all the freight money earned during the voyage."

The owners and agents of a vessel causing the loss of another vessel by collision are not liable
beyond the vessel itself causing the collision and other things appertaining thereto.

This is the difference which exists between the lawful acts and lawful obligations of the captain and
the liability which he incurs on account of any unlawful act committed by him. In the first case, the
lawful acts and obligations of the captain beneficial to the vessel may be enforced as against the
agent for the reason that such obligations arise from ithe contract of agency (provided, however,
that the captain does not exceed his authority), while as to any liability incurred by the captain
through his unlawful acts, the ship agent is simply subsidiarily civilly liable. This liability of
the agent is limited to the vessel and it does not extend further. For this reason the Code of
Commerce makes the agent liable to the extent of the value of the vessel, as the codes of the
principal maritime nations provide, with the vessel, and not individually.

The spirit of the code is accurately set forth in a treatise in maritime law which provides:
#TEAMDREAMWORKS
ALABA - ALANO - AMBROCIO - BAUCAN - BOLIGOR - CAGAMPANG - CAÑEDO - LAURENTE - MIRANDA - NENARIA

1.2
G.R. No. 92735. June 8, 2000 In Aboitiz Shipping Corporation v. Court of Appeals, the Supreme Court held that the sinking
of the M/V P. Aboitiz was not due to the waves caused by tropical storm “Yoning” but due to the
MONARCH INSURANCE CO., INC., TABACALERA INSURANCE CO., INC. and Hon. Judge fault and negligence of Aboitiz, its master and crew.
AMANTE PURISIMA, petitioners, On the other hand, in the later case of Country Bankers Insurance Corporation v. Court of
vs. Appeals, the Supreme Court issued a Resolution on August 28, 1991 denying the petition for review
COURT OF APPEALS and ABOITIZ SHIPPING CORPORATION, respondents on the ground that the Court of Appeals committed no reversible error, thereby affirming and
adopting as its own, the findings of the Court of Appeals that force majeure had caused the M/V P.
Doctrine: Aboitiz to founder.
In cases involving the limited liability of shipowners, the initial burden of proof of negligence
or unseaworthiness rests on the claimants. However, once the vessel owner or any party asserts Guided by Supreme Court’s previous pronouncements and illuminated by the evidence now
the right to limit its liability, the burden of proof as to lack of privity or knowledge on its part with on record, it reiterated its findings in Aboitiz Shipping Corporation v. General Accident Fire and Life
respect to the matter of negligence or unseaworthiness is shifted to it. This burden, Aboitiz had Assurance Corporation, Ltd., that the unseaworthiness of the M/V P. Aboitiz had caused it to
unfortunately failed to discharge. founder. However, it took exception to the pronouncement therein that said unseaworthiness could
not be attributed to the shipowner but only to the negligent acts of the captain and crew of the M/V
Facts: P. Aboitiz.
Monarch and Tabacalera are insurance carriers of lost cargoes. They indemnified the shippers and
were consequently subrogated to their rights, interests and actions against Aboitiz, the cargo On the matter of Aboitiz’ negligence, SC adhered to their ruling in Aboitiz Shipping
carrier. Because Aboitiz refused to compensate Monarch, it filed two complaints against Aboitiz Corporation v. Court of Appeals, that found Aboitiz, and the captain and crew of the M/V P.
which were consolidated and jointly tried. Aboitiz to have been concurrently negligent.

Aboitiz rejected responsibility for the claims on the ground that the sinking of its cargo vessel was The failure of Aboitiz to present sufficient evidence to exculpate itself from fault
due to force majeure or an act of God. Aboitiz was subsequently declared as in default and allowed and/or negligence in the sinking of its vessel in the face of the foregoing expert testimony
Monarch and Tabacalera to present evidence ex-parte. constrains the Supreme Court to hold that Aboitiz was concurrently at fault and/or negligent
with the ship captain and crew of the M/V P. Aboitiz. This is in accordance with the rule that in
Issue: cases involving the limited liability of shipowners, the initial burden of proof of negligence or
Whether or not the limited liability rule applies in this case unseaworthiness rests on the claimants. However, once the vessel owner or any party asserts the
right to limit its liability, the burden of proof as to lack of privity or knowledge on its part with respect
Held: to the matter of negligence or unseaworthiness is shifted to it. This burden, Aboitiz had
No, the limited liability rule does not apply in this case. unfortunately failed to discharge.

“No vessel, no liability,” expresses in a nutshell the limited liability rule. The shipowner’s or agent’s
liability is merely co-extensive with his interest in the vessel such that a total loss thereof results in
its extinction. The total destruction of the vessel extinguishes maritime liens because there is no
longer any res to which it can attach. This doctrine is based on the real and hypothecary nature of
maritime law which has its origin in the prevailing conditions of the maritime trade and sea voyages
during the medieval ages, attended by innumerable hazards and perils. To offset against these
adverse conditions and to encourage shipbuilding and maritime commerce, it was deemed
necessary to confine the liability of the owner or agent arising from the operation of a ship to the
vessel, equipment, and freight, or insurance, if any.

This is not to say, however, that the limited liability rule is without exceptions, namely:
(1) where the injury or death to a passenger is due either to the fault of the shipowner,
or to the concurring negligence of the shipowner and the captain;
(2) where the vessel is insured; and
(3) in workmen’s compensation claims.
#TEAMDREAMWORKS
ALABA - ALANO - AMBROCIO - BAUCAN - BOLIGOR - CAGAMPANG - CAÑEDO - LAURENTE - MIRANDA - NENARIA

1.3
Aboitiz shipping Corp. V General Accident Fire and Life Assurance Corporation Ltd. GR No. 100446
FACTS: Aboitiz Shipping is the owner of M/V P. Aboitiz, a vessel which sank on a voyage from
Hongkong to the Philippines. This sinking of the vessel gave rise to the filing of several suits for
recovery of the lost cargo either by the shippers their successors-in-interest, or the cargo insurers
like General Accident (GAFLAC). Board of Marine Inquiry (BMI), on its initial investigation found
that such sinking was due to force majeure and that subject vessel, at the time of the sinking was
seaworthy. The trial court rules against the carrier on the ground that the loss did not occur as a
result of force majeure. This was affirmed by the CA and ordered the immediate execution of the
full judgment award.

However, other cases have resulted in the finding that vessel was seaworthy at the time of the
sinking, and that suchsinking was due to force majeure. Due to these different rulings, Aboitiz seeks
a pronouncement as to the applicability of the doctrine of limited liability on the totality of the claims
vis a vis the losses brought about by the sinking of the vessel M/V P. ABOITIZ, as based on the
real and hypothecary nature of maritime law. Aboitiz argued that the Limited Liability Rule warrants
immediate stay of execution of judgment to prevent impairment of other creditors' shares.

ISSUE: Whether the Limited Liability Rule arising out of the real and hypothecary nature of
maritime law should apply int this and related case

RULING: The SC ruled in the affirmative.The real and hypothecary nature of maritime law simply
means that the liability of the carrier in connection with losses related to maritime contracts is
confined to the vessel, which is hypothecated for such obligations or which stands as the guaranty
for their settlement. It has its origin by reason of the conditions and risks attending maritime trade
in its earliest years when such trade was replete with innumerable and unknown hazards since
vessels had to go through largely uncharted waters to ply their trade. It was designed to offset such
adverse conditions and to encourage people and entities to venture into maritime commerce
despite the risks and the prohibitive cost of shipbuilding.

Thus, the liability of the vessel owner and agent arising from the operation of such vessel were
confined to the vessel itself, its equipment,freight, and insurance, if any, which limitation served to
induce capitalists into effectively wagering their resources against the consideration of the large
profits attainable in the trade.The Limited Liability Rule in the Philippines is taken up in Book III of
the Code of Commerce, particularly in Articles 587,590, and 837, hereunder quoted in toto:

Art. 587. The ship agent shall also be civilly liable for the indemnities in favor of third persons which
may arise from the conduct of the captain in the care of the goods which he loaded on the vessel;
but he mayexempt himself therefrom by abandoning the vessel with all her equipment and the
freight it may have earned during the voyage.

Art. 590. The co-owners of a vessel shall be civilly liable in the proportion of their interests in the
commonfund for the results of the acts of the captain referred to in Art. 587. Each co-owner may
exempt himself from this liability by the abandonment, before a notary, of the part of the vessel
belonging to him.

Art. 837. The civil liability incurred by shipowners in the case prescribed in this section (on
collisions),shall be understood as limited to the value of the vessel with all its appurtenances and
freightage served during the voyage.The only time the Limited Liability Rule does not apply is when
there is an actual finding of negligence on the part of the vessel owner or agent.
#TEAMDREAMWORKS
ALABA - ALANO - AMBROCIO - BAUCAN - BOLIGOR - CAGAMPANG - CAÑEDO - LAURENTE - MIRANDA - NENARIA

1.4
[G.R. No. 46846; February 3, 1940]
Guison v. Philippine Shipping Co. 69 Phil 536
(The original case is in Spanish)

FACTS: Plaintiff, Guison, owns the steam launch "Martha" and the defendant Philippine Fish
Company owns the motorboat "Manila X", both in enrollment Port of Manila. On the morning of
March 4, 1936 both boats, being respectively maneuvering at the mouth of the Pasig River, had a
collision which resulted in the boat the "Martha" sank, causing the plaintiff damages in the amount
of P10,197.24. Plaintiff presented this action against the defendant for the recovery of this amount
of P10,197.24 that matter the damage suffered by him, because of the collision.

The Lower Court having come to the conclusion that the collision was due to recklessness and
negligence of the employer of the boat "Manila X" without any contributory negligence by the
pattern of "Marta" condemn the defendant to pay the claimed amount. The defendant asked for the
reconsideration of this judgment for a declaration that responsibility, in accordance with Article 837
of the Commercial Code, is limited to the value of your boat.

The appellate court on January 22, 1937, agreeing to the request of the defendant, modified its
decision in the sense that they understand the limited liability of the defendant to the value of the
boat "Manila X." The plaintiff presented except against the resolution of the Court by amending the
original decision in the sense described.

The appellate court on January 22, 1937, agreeing to the request of the defendant, modified its
decision in the sense that they understand the limited liability of the defendant to the value of the
boat "Manila X." The plaintiff presented except against the resolution of the Court by amending the
original decision in the sense described

ISSUE:
Whether the liability of the defendant in the circumstances of this case is limited to the value of the
boat.

HELD:
Yes. Article 837 of the Commercial Code declares it so strictly. In this sense the Court applied this
provision in the case against Garcia Philippine Shipping Co., stating that the maritime law is only
true character and limits the liability of the shipowner to the value of the ship (6 Phil. Rep., 291).
For the rest, the boat "Manila X", which is a boat used to navigate freshwater or saltwater, for
receiving and transporting people or things, enters the general concept of the word vessel is used
in Article 837 of the Commercial Code.

Moreover, no mention is made in the decision appealed circumstance that precludes this concept
to launch "Manila X." It is said that this boat "Manila X" followed in the possession of the defendant
for more than ten months after the collision to he had one with another vessel, having unworthy of
value as a result. This, however, would have been avoided if the defendant had taken over the boat
immediately after the collision, as collateral for your credit, whose real character entitled him to it.
the judgment appealed from with costs to the appellant was confirmed.
#TEAMDREAMWORKS
ALABA - ALANO - AMBROCIO - BAUCAN - BOLIGOR - CAGAMPANG - CAÑEDO - LAURENTE - MIRANDA - NENARIA

1.5 Europe, the liability of the shipowner was subsequently limited to his interest in the vessel.The
TEODORO R. YANGCO, ETC. Vs. MANUEL LASERNA, ET AL. policy which the rule is designed to promote is the encouragement of shipbuilding and investment
G.R. No. L-47447-47449 ;October 29, 1941 in maritime commerce.
MORAN, J.:
Digested by: Vina Cagampang In the light of all the foregoing, we therefore hold that if the shipowner or agent may in any way be
held civilly liable at all for injury to or death of passengers arising from the negligence of the captain
in cases of collisions or shipwrecks, his liability is merely co-extensive with his interest in the vessel
Doctrine: If the shipowner or agent may in any way be held civilly liable at all for injury to or death such that a total loss thereof results in its extinction. In arriving at this conclusion, we have not been
of passengers arising from the negligence of the captain in cases of collisions or shipwrecks, his unmindful of the fact that the ill-fated steamship is a common carrier and that the relationship
liability is merely co-extensive with his interest in the vessel such that a total loss thereof results in between the petitioner and the passengers who died in the mishap rests on a contract of carriage.
its extinction. But assuming that petitioner is liable for a breach of contract of carriage, the exclusively "real and
hypothecary nature" of maritime law operates to limit such liability to the value of the vessel, or
Facts: to the insurance thereon, if any.

On May 26, 1927, the steamer S.S. Negros, belonging to Teodoro R. Yangco, left the port of Whether the abandonment of the vessel sought by the petitioner in the instant case was in
Romblon on its return trip to Manila. Typhoon signal No. 2 was then up, of which fact the captain accordance with law or not, is immaterial. The vessel having totally perished, any act of
was duly advised and his attention thereto called by the passengers themselves before the vessel abandonment would be an idle ceremony.
set sail. The boat was overloaded. The boat encountered strong winds and rough seas. The captain
ordered the vessel to return to port, but in the maneuver, the vessel was caught sidewise by a big Judgement is reversed and petitioner is hereby absolved of all the complaints, without costs.
wave which caused it to capsize and sink. Many of the passengers died in the mishap including
the daughter of respondent Laserna. The respondents instituted separate civil actions against
petitioner here to recover damages for the death of the passengers aforementioned.

Issue: May the shipowner or agent, notwithstanding the total loss of the vessel as a result of the
negligence of its captain, be properly held liable in damages for the consequent death of its
passengers?

Ruling: NO.

Article 587 of the Code of Commerce: "The agent shall also be civilly liable for the indemnities in
favor of third persons which arise from the conduct of the captain in the care of the goods which
the vessel carried; but he may exempt himself therefrom by abandoning the vessel with all her
equipments and the freight he may have earned during the voyage."

The provision accords a shipowner or agent the right of abandonment; and by necessary
implication, his liability is con to that which he is entitled as of right to abandon - "the vessel with all
her equipments and the freight it may have earned during the voyage." It is true that the article
appears to deal only with the limited liability of shipowners or agents for damages arising from the
misconduct of the captain in the care of the goods which the vessel carries, but this is a mere
deficiency of language and in no way indicates the true extent of such liability. The consensus of
authorities is to the effect that notwithstanding the language of the aforequoted provision, the
benefit of limited liability therein provided for, applies in all cases wherein the shipowner or agent
may properly be held liable for the negligent or illicit acts of the captain.

While previously under the civil or common law, the owner of a vessel was liable to the full amount
for damages caused by the misconduct of the master, by the general maritime law of modern
#TEAMDREAMWORKS
ALABA - ALANO - AMBROCIO - BAUCAN - BOLIGOR - CAGAMPANG - CAÑEDO - LAURENTE - MIRANDA - NENARIA

1.6 MANILA. STEAMSHIP CO. v. INSA ABDUL-HAMAN 1. Due diligence was denied as defense to be exempt from liability.
GR No. L-9534, Sep 29, 1956 It is easy to see that to admit the defense of due diligence of a bonus paterfamilias (in
SUMMARY: the selection and vigilance of the officers and crew) as exempting the ship-owner from any liability
The present case involves tortious conduct resulting in a maritime collision; wherefore, for their faults, would render nugatory the solidary liability established by Article 827 of the Code
the liability of the shipowner is governed by the provisions of the Code of Commerce and not by of Commerce for the greater protection of injured parties. Ship owners would be able to escape
the Civil Code. liability in practically every case, considering that the qualifications and licensing of ship masters
and officers are determined by the State, and that vigilance is practically impossible to exercise
FACTS: over officers and crew of vessels at sea. To compel the parties prejudiced to look to the crew
Insa Abdulhaman together with his wife and five children boarded M/L Consuelo V in for indemnity and redress would be an illusory remedy for almost always its members are, from
Zamboanga City bound for Siokon under the command of Faustino Macrohon. On that same night, captains down, mere wage earners.
M/S Bowline Knot was navigating from Marijoboc towards Zamboanga. 2. That the Manila Steamship Co., owner of the M/S "Bowline Knot", is directly and
In the evening, while some of the passengers of the M/L Consuelo V were sleeping and primarily responsible in tort for the injuries caused to the plaintiff by the collision of said vessel with
some lying down awake, a collision occurred with M/V Bowline Knot. M/L Consuelo V capsized that the launch "Consuelo V", through the negligence of the crews of both vessels, and it may not
resulted to the death of 9 passengers and the loss of the cargoes on board. escape liability on the ground that it exercised due diligence in the selection and supervision of
Court of Appeals affirmed the findings of the Board of Marine Inquiry, that the the officers and crew of the "Bowline Knot";
commanding officer of the colliding vessels had both been negligent in operating their respective 3. That Lim Hong To, as owner of the motor launch "Consuelo V", having caused the
vessels. It held the owners of both vessels solidarily liable to plaintiff for damages caused to the same to sail without licensed officers, is liable for the injuries caused by the collision over and
latter under Article 827 of the Code of Commerce (but exempted defendant Lim Hong To from beyond the value of said launch;
liability due to the sinking and total loss of his vessel.) While Manila steamship, owner of the 4. That both vessels being at fault, the liability of Lim Hong To and Manila Steamship
Bowline Knot was ordered to pay all of plaintiff’s damages. Co. to the plaintiff herein is in solidum, as prescribed by Article 827 of the Code of Commerce.
Petitioner Manila Steamship Co. pleads that it is exempt from any liability under Article
1903 of the Civil Code because it had exercised the diligence of a good father of a family in the
selection of its employees, particularly the officer in command of the M/S Bowline Knot.

ISSUE: Whether or not petitioner Manila Steamship Co. is exempt from any liability under Art.
1903 of the Civil Code?

RULING:
No. Their defense for the exemption of their liability under Article 1903 is untenable.
While it is true that plaintiff's action against petitioner is based on a tort or quasi-delict, the tort in
question is not a civil tort under the Civil Code but a maritime tort resulting in a collision at sea,
governed by Articles 826-939 of the Code of Commerce. Under Article 827 of the Code of
Commerce, in case of collision between two vessels imputable to both of them, each vessel shall
suffer her own damage and both shall be solidarity liable for the damages occasioned to their
cargoes. The characteristic language of the law in making the "vessels" solidarity liable for the
damages due to the maritime collision emphasizes the direct nature of the responsibilities on
account of the collision incurred by the shipowner under maritime law, as distinguished from the
civil law and mercantile law in general. This direct responsibility is recognized in Article 618 of the
Code of Commerce under which the captain shall be civilly liable to the ship agent, and the
latter is the one liable to third persons, as pointed out in the collision case of Yueng Sheng
Exchange & Trading Co vs. Urrutia & Co.

It is a general principle, well established maritime law and custom, that shipowners and
ship agents are civilly liable for the acts of the captain (Code of Commerce, Article 586) and for
the indemnities due the third persons (Article 587); so that injured parties may. immediately look
for reimbursement to the owner of the ship, it being universally recognized that the ship master
or captain is primarily the representative of the owner (Standard Oil Co. vs. Lopez Castelo, 42
Phil. 256, 260). This direct liability, moderated and limited by the owner's right of abandonment of
the vessel and earned freight (Article 587), has been declared to exist, not only in case of breached
contracts, but also in cases of tortious negligence (Yu Biao Sontua vs. Osorio, 43 Phil. 511, 515)

OTHER ISSUE:
#TEAMDREAMWORKS
ALABA - ALANO - AMBROCIO - BAUCAN - BOLIGOR - CAGAMPANG - CAÑEDO - LAURENTE - MIRANDA - NENARIA

1.7 G.R. No. L-773 December 17, 1946 shipowner or agent under Arts 587 and 837 of the Code of Commerce is limited to the value of the
DIONISIA ABUEG, ET AL., plaintiffs-appellees, vessel with all her equivalent and freight earned during the voyage if the shipowner abandon the
vs. ship with all the equipment and freight. HOWEVER, it does not apply to Workmen’s Compensation
BARTOLOME SAN DIEGO, defendant-appellant. Act where even as in said case vessel was lost, the liability thereunder is still enforceable under
Padilla, J. against the employer or shipowner.

Summary: Abueg et al were workers for the vessel owned by San Diego. The vessel sank and
was lost. The widow of the three workers claim for benefits.

Facts: Dionisia Abueg is the widow of the deceased, Amado Nuñez, who was a machinist on
board the M/S San Diego II belonging to the defendant-appellant. In case CA-G.R. No. 774,
plaintiff-appellee, Marciana S. de Salvacion, is the widow of the deceased, Victoriano Salvacion,
who was a machinist on board the M/S Bartolome S also belonging to the defendant-appellant. In
case CA-G.R. No. 775, the plaintiff-appellee, Rosario R. Oching is the widow of Francisco Oching
who was a captain or patron of the defendant-appellant's M/S Bartolome S.

The M/S San Diego II and the M/S Bartolome, while engaged in fishing operations around Mindoro
Island on Oct. 1, 1941 were caught by a typhoon as a consequence of which they were sunk and
totally lost. Amado Nuñez, Victoriano Salvacion and Francisco Oching while acting in their
capacities perished in the shipwreck.

The real and hypothecary nature of the liability of the shipowner or agent embodied in the provisions
of the Maritime Law, Book III, Code of Commerce, had its origin in the prevailing continues of the
maritime trade and sea voyages during the medieval ages, attended by innumerable hazards and
perils. To offset against these adverse conditions and encourage shipbuilding and maritime
commerce, it was deemed necessary to confine the liability of the owner or agent arising from the
operation of a ship to the vessel, equipment, and freight, or insurance, if any, so that if the
shipowner or agent abandoned the ship, equipment, and freight, his liability was extinguished.

Issue: Was the liability of San Diego extinguished?

Ruling: NO. The liability is not extinguished as provided under the Workmen’s Compensation Act.
The provisions of the Code of Commerce invoked by appellant have no room in the application of
the Workmen's Compensation Act which seeks to improve, and aims at the amelioration of, the
condition of laborers and employees. It is not the liability for the damage or loss of the cargo or
injury to, or death of, a passenger by or through the misconduct of the captain or master of the
ship; nor the liability for the loss of the ship as result of collision; nor the responsibility for wages of
the crew, but a liability created by a statute to compensate employees and laborers in cases of
injury received by or inflicted upon them, while engaged in the performance of their work of
employment, or the heirs and dependents and laborers and employees in the event of death caused
by their employment. Such compensation has nothing to do with the provisions of the Code of
Commerce regarding maritime commerce. It is an item in the cost of production which must be
included in the budget of any well-managed industry.lawphil.net

Involved a claim under the Workmen’s Compensation Act for the deceased members of the crew
of 2 ships which sank after it was caught by a typhoon. SC reiterated that the liability of the
#TEAMDREAMWORKS
ALABA - ALANO - AMBROCIO - BAUCAN - BOLIGOR - CAGAMPANG - CAÑEDO - LAURENTE - MIRANDA - NENARIA

1.8 Petitioner Negros Navigation was found equally negligent in tolerating the playing of
[G.R. No. 110398. November 7, 1997] mahjong by the ship captain and other crew members while on board the ship and failing to keep
the M/V Don Juan seaworthy so much so that the ship sank within 10 to 15 minutes of its impact
NEGROS NAVIGATION CO., INC. vs. THE COURT OF APPEALS, RAMON MIRANDA, SPS.
with the M/T Tacloban City.
RICARDO and VIRGINIA DE LA VICTORIA
In addition, the Court found that the Don Juan was overloaded.
Doctrine: The carrier is liable for the damages to the full extent and not up to the value of
the vessel if it was established that the carrier was guilty of negligence, in failing to maintain the On the Doctrine of stare decisis: Adherence to the Mecenas case is dictated by this Courts
ship as seaworthy and in allowing the ship to carry more passengers than it was allowed to carry. policy of maintaining stability in jurisprudence in accordance with the legal maxim stare decisis et
non quieta movere (Follow past precedents and do not disturb what has been settled.) Where, as
FACTS: Private respondent Ramon Miranda purchased from the Negros Navigation Co., in this case, the same questions relating to the same event have been put forward by parties
Inc. four special cabin tickets for his wife, daughter, son and niece. The tickets were for Voyage similarly situated as in a previous case litigated and decided by a competent court, the rule of stare
No. 457-A of the M/V Don Juan. The Don Juan collided with the M/T Tacloban City, an oil tanker decisis is a bar to any attempt to relitigate the same issue
owned by the Philippine National Oil Company (PNOC) and the PNOC Shipping and Transport
Corporation (PNOC/STC). As a result, the M/V Don Juan sank. Several of her passengers perished
in the sea tragedy. The bodies of the four members of private respondents families were never
found.

Private respondents filed a complaint in the RTC against the Negros Navigation, the
Philippine National Oil Company (PNOC), and the PNOC Shipping and Transport Corporation
(PNOC/STC), seeking damages for the death of their family members. The RTC ruled in favor of
the complainants and ordered petitioner to pay for the damages. The CA affirmed the said decision.

ISSUE: Whether petitioner is liable for damages to the full extent.

RULING: YES.

The rule is well-entrenched in our jurisprudence that a shipowner may be held liable for
injuries to passengers notwithstanding the exclusively real and hypothecary nature of maritime law
if fault can be attributed to the shipowner.

Petitioner is guilty of negligence in (1) allowing or tolerating the ship captain and crew
members in playing mahjong during the voyage, (2) in failing to maintain the vessel seaworthy and
(3) in allowing the ship to carry more passengers than it was allowed to carry. Petitioner is,
therefore, clearly liable for damages to the full extent.

Prior to this case, a previous case was brought for the death of other passengers. Said
case is entitled Mecenas v. Intermediate Appellate Court. In that case it was found that although
the proximate cause of the mishap was the negligence of the crew of the M/T Tacloban City, the
crew of the Don Juan was equally negligent as it found that the latter’s master, Capt. Rogelio
Santisteban, was playing mahjong at the time of collision, and the officer on watch, Senior Third
Mate Rogelio De Vera, admitted that he failed to call the attention of Santisteban to the imminent
danger facing them. This Court found that Capt. Santisteban and the crew of the M/V Don Juan
failed to take steps to prevent the collision or at least delay the sinking of the ship and supervise
the abandoning of the ship.
#TEAMDREAMWORKS
ALABA - ALANO - AMBROCIO - BAUCAN - BOLIGOR - CAGAMPANG - CAÑEDO - LAURENTE - MIRANDA - NENARIA

1.9 THE PHILIPPINE AMERICAN GENERAL INSURANCE COMPANY, INC. v. COURT OF


APPEALS
G.R. No. 116940
June 11, 1997
Bellosillo, J.

Facts:
Coca-Cola Bottlers Philippines, Inc., loaded on board "MV Asilda," a vessel owned and operated
by respondent Felman Shipping Lines, Coca-Cola softdrink bottles to be transported from
Zamboanga City to Cebu City. The shipment was insured with petitioner Philippine American
General Insurance Co., Inc. However, the vessel sank in the waters bringing down her entire cargo
with her including the subject cases of Coca-Cola softdrink bottles.

Thereafter, the consignee Coca-Cola Bottlers Philippines, Inc., Cebu plant, filed a claim with
respondent Felman for recovery of damages. Respondent denied the claim thus prompting the
consignee to file an insurance claim with Philamgen which paid its claim.

Claiming its right of subrogation Philamgen sought recourse against respondent Felman which
disclaimed any liability for the loss. Consequently, Philamgen sued the shipowner for sum of money
and damages.

In its complaint Philamgen alleged that the sinking and total loss of "MV Asilda" and its cargo were
due to the vessel's unseaworthiness as she was put to sea in an unstable condition. Felman filed
a motion to dismiss alleging that no right of subrogation in favor of Philamgen was transmitted by
the shipper and that Felman had abandoned all its rights, interests and ownership over "MV Asilda".

Issue:
Whether Philamgen was properly subrogated to the rights and legal actions which the shipper had
against Felman?

Held:
Yes, generally in every marine insurance policy the assured impliedly warrants to the assurer that
the vessel is seaworthy and such warranty is as much a term of the contract as if expressly written
on the face of the policy. The result of the admission of seaworthiness by the assurer Philamgen
is in recognition of the realistic fact that cargo owners cannot control the state of the vessel. Thus
it can be said that with such categorical waiver, Philamgen has accepted the risk of
unseaworthiness so that if the ship should sink by unseaworthiness, as what occurred in this case,
Philamgen is liable.

On the legal basis for subrogation. Philamgen's action against Felman is squarely sanctioned by
Art. 2207 of the Civil Code which provides:
#TEAMDREAMWORKS
ALABA - ALANO - AMBROCIO - BAUCAN - BOLIGOR - CAGAMPANG - CAÑEDO - LAURENTE - MIRANDA - NENARIA

Art. 2207.If the plaintiff's property has been insured, and he has received indemnity from the
insurance company for the injury or loss arising out of the wrong or breach of contract complained
of, the insurance company shall be subrogated to the rights of the insured against the wrongdoer
or the person who has violated the contract. If the amount paid by the insurance company does
not fully cover the injury or loss, the aggrieved party shall be entitled to recover the deficiency from
the person causing the loss or injury.

In Pan Malayan Insurance Corporation v. Court of Appeals, we said the right of subrogation is not
dependent upon, nor does it grow out of any privity of contract or upon payment by the insurance
company of the insurance claim. It accrues simply upon payment by the insurance company of the
insurance claim.

The doctrine of subrogation has its roots in equity. Therefore, the payment made by Philamgen to
Coca-Cola Bottlers Philippines, Inc., gave the former the right to bring an action as subrogee
against Felman. Having failed to rebut the presumption of fault, the liability of Felman for the loss
of the Coca-Cola softdrink bottles is inevitable.
#TEAMDREAMWORKS
ALABA - ALANO - AMBROCIO - BAUCAN - BOLIGOR - CAGAMPANG - CAÑEDO - LAURENTE - MIRANDA - NENARIA

1.10 independent of the human will; (2) the occurrence must render it impossible for the debtor to fulfill
PEDRO VASQUEZ, SOLEDAD ORTEGA, CLETO B. BAGAIPO, AGUSTINA VIRTUDES, the obligation in a normal manner; and that (3) the obligor must be free of participation in, or
ROMEO VASQUEZ and MAXIMINA CAINAY, petitioners, aggravation of, the injury to the creditor." In the language of the law, the event must have been
vs. impossible to foresee, or if it could be foreseen, must have been impossible to avoid. There must
COURT OF APPEALS and FILIPINAS PIONEER LINES, INC., respondents. be an entire exclusion of human agency from the cause of injury or loss.
G.R. No. L-42926
September 13, 1985 Under the circumstances, while, indeed, the typhoon was an inevitable occurrence, yet, having
MELENCIO-HERRERA, J.: been kept posted on the course of the typhoon by weather bulletins at intervals of six hours, the
Digested by: Mishing Alaba captain and crew were well aware of the risk they were taking as they hopped from island to island
Typhoon "Klaring" – May of 1966. from Romblon up to Tanguingui. They held frequent conferences, and oblivious of the utmost
diligence required of very cautious persons, they decided to take a calculated risk. In so doing, they
FACTS: When the inter-island vessel MV "Pioneer Cebu" left the Port of Manila bound for Cebu, it failed to observe that extraordinary diligence required of them explicitly by law for the safety of the
had on board the spouses Alfonso Vasquez and Filipinas Bagaipo and a four-year old boy, Mario passengers transported by them with due regard for an circumstances and unnecessarily exposed
Marlon Vasquez, among her passengers. The MV "Pioneer Cebu" encountered typhoon "Klaring" the vessel and passengers to the tragic mishap. They failed to overcome that presumption of fault
and struck a reef in Malapascua Island and subsequently sunk. The aforementioned passengers or negligence that arises in cases of death or injuries to passengers.
were unheard from since then.

The parents of the victims (petitioners) seek the recovery of damages due to the loss of the three
passengers during said voyage. The respondent Filipinas Pioneer Lines, Inc. alleged that the
sinking of the vessel was caused by force majeure, and that their liability had been extinguished
by the total loss of the vessel.
● CFI – awarded damages, its officers and crew were already aware of the typhoon
● CA – reversed, absolved private respondent from any and all liability.

Info only: May not read.


When the vessel left Manila, its officers were already aware of the typhoon Klaring building up
somewhere in Mindanao. There being no typhoon signals on the route from Manila to Cebu, and
the vessel having been cleared by the Customs authorities, the MV "Pioneer Cebu" left on its
voyage to Cebu despite the typhoon.

ISSUE: Whether or not the loss of the vessel extinguished the liability of the carrier’s insurer - NO

RULING: The SC held that the loss of the vessel did not extinguish the liability of the carrier’s
insurer.

With respect to private respondent's submission that the total loss of the vessel extinguished its
liability pursuant to Article 587 of the Code of Commerce as construed in Yangco vs. Laserna, 73
Phil. 330 [1941], suffice it to state that even in the cited case, it was held that the liability of a
shipowner is limited to the value of the vessel or to the insurance thereon. Despite the total loss of
the vessel therefore, its insurance answers for the damages that a shipowner or agent may be held
liable for by reason of the death of its passengers.

OTHER ISSUE: W/N it is a fortuitous event – NO

Upon the evidence and the applicable law, we sustain the trial Court. "To constitute a caso fortuito
that would exempt a person from responsibility, it is necessary that (1) the event must be
#TEAMDREAMWORKS
ALABA - ALANO - AMBROCIO - BAUCAN - BOLIGOR - CAGAMPANG - CAÑEDO - LAURENTE - MIRANDA - NENARIA

1.11
GR No. 1600. June 1, 1906.
THE PHILIPPINE SHIPPING COMPANY ET AL., plaintiffs and appellants,
vs. FRANCISCO GARCIA VERGARA, defendant and appellee.

Facts: The Philippine Shipping Company, the owner of the steamship Nuestra Sra. de Lourdes,
while the defendant, Francisco Garcia Vergara, was the owner of the steamship Navarra. Both
ships collided with each other resulting to the entire loss of their respective cargoes.

Philippine Shipping Company claims for indemnification of P44,000 for the loss of the said ship as
a result of the collision while Ynchausti & Co. also indemnification for the loss of the cargo. Later
on, Philippine Shipping Company reduced its claim to P18,000. The court found as a fact that "both
ships with their respective cargoes were entirely lost." And construing article 837 of the Code of
Commerce, the trial court held "that the defendant was not responsible to the plaintiff for the value
of the steamship Lourdes, with the costs against the latter."

Philippine Shipping Company appealed the judgment contending that Garcia-Vergara should be
liable and that it was immaterial whether the Navarra had been entirely lost, provided her value at
the time she was lost could be ascertained, since the extent of the liability of the owner of the
colliding vessel for the damages resulting from the collision is to be determined in accordance with
such value.

Issue: Whether the shipowner can exempt himself from liability by abandoning the vessel and
freight money.

Ruling:
Yes. As evidence of the real nature of the maritime law we have; (1) the limitation of the liability of
the agents to the actual value of the vessel and the freight money, and (2) the right to retain the
cargo and the embargo and detention of the vessel even in cases where the ordinary civil law would
not allow more than a personal action against the debtor or person liable.

It will be observed that these rights are correlative, and are naturally so. If the agent can exempt
himself from liability by abandoning the vessel and freight money, thus avoiding the possibility of
risking his whole fortune in the business, it is also just that his maritime creditor may for any reason
attach the-vessel itself to secure his claim without waiting for a settlement of his rights by a final
judgment, even to the prejudice of a third person. For instance, where the vessel is lost the sailors
and members of the crew can not recover their wages; in case of collision, the liability of the agent
is limited as aforesaid, and in case of shipwreck, those who loan their money on the vessel and
cargo lose all their rights and can not claim reimbursement under the law.
#TEAMDREAMWORKS
ALABA - ALANO - AMBROCIO - BAUCAN - BOLIGOR - CAGAMPANG - CAÑEDO - LAURENTE - MIRANDA - NENARIA

1.12
No. 10195. December 29, 1916. Blanco, the commentator on mercantile law, in referring to the grammatical meaning of the
YU CON, plaintiff and appellee, words "ship" and "vessels," says, in his work aforecited, that these terms designate every kind of
vs. craft, large or small, whether belonging to the merchant marine or to the navy. And referring to their
GLICERIO IPIL, NARCISO LAURON, and JUSTO SOLAMO, defendants and appellants. juridical meaning, he adds: "This does not differ essentially from the grammatical meaning; the
words 'ship' and 'vessel' also designate every craft, large or small, so long as it be not an accessory
Doctrine: of another, such as the small boat of a vessel, of greater or less tonnage. This definition comprises
"Liability of carriers.—In order that a thing may be transported, it must be delivered to the carrier, both the craft intended for ocean or for coastwise navigation, as well as the floating docks, mud
as the Code says. From the time it is delivered to the carrier or shipper until it is received by the lighters, dredges, dumpscows or any other floating apparatus used in the service of an industry or
consignee, the carrier has it in his possession, as a necessary condition for its transportation, and in that of maritime commerce. * * *" (Vol. 1, p. 389.)
is obliged to preserve and guard it; wherefore it is but natural and logical that he should be
responsible for it. According to the foregoing definitions, then, we hold that the banca called Maria, chartered by
the plaintiff Yu Con from the defendant Narciso Lauron, was a "vessel", pursuant to the meaning
Facts: this word has in mercantile law, that is, in accordance with the provisions of the Code of Commerce
Yu Con was a merchant engaged in the sale of cloth and domestic articles. Having a share in a in force.
shop, or small store, situated in the town of Catmon Cebu, he had several times chartered from the
defendant Narciso Lauron, a banca named Maria. (2) Yes. The Supreme Court held that it was beyond all doubt that the loss or disappearance, on
the night aforementioned, of the P450, the property of the plaintiff, which, were in the possession
A sum of P450, was delivered by Yu Con to Glicerio Ipil and Justo Solamo, master and supercargo, of the defendants, the master and the supercargo of the banca Maria,occurred through the manifest
respectively, of a the banca Maria, which is engaged in the coastwise trade in the waters of the fault and negligence of said defendants, for, not only did they fail to take the necessary precautions
Philippine Islands, to be carried together with various merchandise from the port of Cebu to the in order that the stateroom containing the trunk in which they kept the money should be properly
town of Catmon of the Province of Cebu. This money disappeared from said craft, while it was guarded by members of the crew and put in such condition that it would be impossible to steal the
anchored in the port of Cebu and ready to sail for its destination, Catmon, and was not afterwards trunk from it or that persons not belonging to the vessel might force an entrance into the stateroom
found. The plaintiff based his action on the charge that the disappearance of said sum was due to from the outside, but also they did not expressly station some person inside the stateroom for the
the abandonment, negligence, or voluntary breach, on the part of the defendants, of the duty they guarding and safe-keeping of the trunk.
had in respect to the safe-keeping of the aforementioned sum. However, it was not proven nor was
there any indication that it was stolen by persons not belonging to the boat, nor that its It is unquestionable that the defendants Glicerio Ipil and Justo Solamo were the carriers of the
disappearance or loss was due to a fortuitous cause or to force majeure. said P450 belonging to the plaintiff, and that they received this sum from the latter for the purpose
of delivering it to the store of the town of Catmon, to which it had been consigned. Under such
Issues: circumstances, said defendants were the depositaries of the money.
(1) Whether or not the small banca Maria is considered a vessel "Liability of carriers.—In order that a thing may be transported, it must be delivered to
(2) Whether or not the master and supercargo of vessel is liable for loss of money entrusted to their the carrier, as the Code says. From the time it is delivered to the carrier or shipper until it
care. is received by the consignee, the carrier has it in his possession, as a necessary condition
(2) Whether or not the shipowner is liable for losses caused by captain for its transportation, and is obliged to preserve and guard it; wherefore it is but natural
and logical that he should be responsible for it.
Held:
(1) Yes. The small banca Maria is a vessel, according to the meaning and construction given to the The said two defendants being the depositaries of the sum in question, and they having failed to
word vessel in the Mercantile Code, in treating of maritime commerce, merce, under Title 1, Book exercise for its safe-keeping the diligence required by the nature of the obligation assumed by them
3. and by the circumstances of the time and the place, it is evident that, in pursuance of the provisions
"The word vessel serves to designate every kind of craft by whatever particular or technical of articles 1601 and 1602, in their relation to articles 1783 and 1784, and as prescribed in article
name it may now be known or which nautical advancements may give it in the future." 1770, of the Civil Code, they are liable for its loss or misplacement and must restore it to the plaintiff,
(Commentaries on the Code of Commerce, in the General Review of Legislation and together with the corresponding interest thereon as an indemnity for the losses and damages
Jurisprudence, founded by D. Jose Reus y Garcia, Vol. 2, p. 136.) caused him through the loss of the said sum.

According to the Dictionary of Legislation and Jurisprudence by Escriche, a vessel is any kind (3) Yes. The shipowner is also liable. In the light of the principles of modern law, of the standing
of craft, considering solely the hull. legal doctrine on the non-liability of the shipowner for the unlawful acts, that is, the crimes or quasi
#TEAMDREAMWORKS
ALABA - ALANO - AMBROCIO - BAUCAN - BOLIGOR - CAGAMPANG - CAÑEDO - LAURENTE - MIRANDA - NENARIA

crimes, committed by the captain and the crew, it is observed that it cannot be maintained in the
absolute and categorical terms in which it is formulated.

"It is well and good that the shipowner be not held criminally liable for such crimes or quasi
crimes; but he cannot be excused from liability for the damage and harm which, in consequence of
those acts, may be suffered by the third parties who contracted with the captain, in his double
capacity of agent and subordinate of the shipowner himself. In maritime commerce, the shippers
and passengers in making contracts with the captain do so through the confidence they have in
the shipowner who appointed him; they presume that the owner made a most careful investigation
before appointing him, and, above all, they themselves are unable to make such an investigation,
and even though they should do so, they could not obtain complete security, inasmuch as the
shipowner can, whenever he sees fit, appoint another captain instead.
"The shipowner is in the same case with respect to the members of the crew, for, though he
does not appoint directly, yet, expressly or tacitly, he contributes to their appointment.
"On the other hand, if the shipowner derives profits from the results of the choice of the captain
and the crew, when the choice turns out successful, it is also just that he should suffer the
consequences of an unsuccessful appointment, by application of the rule of natural law contained
in the Partidas, viz., that he who enjoys the benefits derived from a thing must likewise suffer the
losses that ensue therefrom.
#TEAMDREAMWORKS
ALABA - ALANO - AMBROCIO - BAUCAN - BOLIGOR - CAGAMPANG - CAÑEDO - LAURENTE - MIRANDA - NENARIA

1.13
#TEAMDREAMWORKS
ALABA - ALANO - AMBROCIO - BAUCAN - BOLIGOR - CAGAMPANG - CAÑEDO - LAURENTE - MIRANDA - NENARIA

1.14
RUBISO V. RIVERA 37 PHIL 72

FACTS:
Rubiso filed a complaint against Rivera for the recovery of a pilot boat. He alleged that he is the
rightful owner of a pilot boat, which was stranded and recovered by Rivera. The latter refused
to return the said boat as he alleged too that he was the owner thereof.

It was known that the original owners of the boat had secretly sold the pilot boat to Rivera on an
earlier date than the sale in a public auction to Rubiso. Nonetheless, material is the fact that the
entry into the customs registry of the sale of the boat was later than the recording of the sale to
Rubiso.

ISSUE:
Is registration necessary?

HELD:
Yes. The requisite of registration in the registry, of the purchase of the vessel, is necessary and
indispensable in order that the purchaser’s rights may be maintained against a third person.
Such registration is required both by the Code of Commerce and Act 1900. It is undeniable,
ergo, that Rivera doesn’t have a better right than Rubiso over the pilot boat.

Ships and vessels, whether moved by steam or by sail, partake, to a certain extent of the
nature and conditions of real property, on account of their value and importance in world commerce;
and for this, the provisions of the Code of Commerce are nearly identical with Article 573 of the
CC.
#TEAMDREAMWORKS
ALABA - ALANO - AMBROCIO - BAUCAN - BOLIGOR - CAGAMPANG - CAÑEDO - LAURENTE - MIRANDA - NENARIA

1.15 Macondray and Company Inc. vs. Acting Commissioner of Customs b. Three copies of the same manifest, one of which upon certification by the
G.R. No. L-25783 February 25, 1975 boarding official as to the correctness of the copy, shall be returned to the
ESGUERRA, J.: master; c. ....
Digested by: Vina Cagampang
Section 1005. Manifest required of vessel from foreign port. — Every vessel from a
foreign port must have on board a complete manifest of all her cargo.
Doctrine:
All of the cargo intended to be landed at a port, in the Philippines, must be described in
Under Sections 1004 and 1005 in relation to Section 2521 of the Tariff and Customs Code, a cargo separate manifests for each port of call therein. Each manifest shall include the port of
manifest should contain the true and accurate description of imported cargo and any deficiency departure and the port of delivery with the marks, numbers, quantity and description of
therein cannot be supplied by entries in the bill of lading the packages and the names of the consignees thereof.

The object of a manifest is to furnish the customs officers with a list to check against, to inform our Every vessel from a foreign port must have on board complete manifests of passengers
revenue officers what goods are being brought into the country, and to provide a safeguard against and their baggage, in the prescribed form, setting forth their destination and all particulars
goods being brought into this country on a vessel and then smuggled ashore. required by the immigration laws; ...

Section 2521. Failure to supply requisite manifests. — If any vessel or aircraft enters
Facts: or departs from a port of entry without submitting the proper manifests to the customs
authorities, or shall enter or depart conveying unmanifested cargo other than as stated in
On November 2, 1962, the vessel S/S TAI PING", of which petitioner is the local agent, arrived at the next proceeding section hereof, such vessel or aircraft shall be fined in a sum not
the port of Manila from San Francisco, California, U.S.A., conveying various shipments of exceeding ten thousand pesos.
merchandise, among which was a shipment of one (1) coil carbon steel, one (1) bundle carbon
steel flat and one (1) carton containing carbon tool holders carbide cutters, ground, all of which The same fine shall be imposed upon any arriving or departing vessel or aircraft if the
appeared in the Bill of Lading No. 22, consigned to Bogo Medellin Millings Co., Inc. The shipment, master or pilot in command shall fail to deliver or mail to the Auditor General a true copy
except the one (1) coil carbon steel was not reflected in the Inward Cargo Manifest as required of the manifest of the incoming or outgoing cargo, as required by law.
by Section 1005 in relation to Section 2521 of the Tariff and Customs Code of the Philippines.
Allied Brokerage Corporation, acting for and in behalf of Bogo Medellin Milling Co. requested The inclusion of the unmanifested cargoes in the Bill of Lading does not satisfy the requirement of
petitioner Macondray & Co., agent of the vessel S/S TAI PING", to correct the manifest of the the aforequoted sections of the Tariff and Customs Code. It is to be noted that nowhere in the said
steamer so that it may take delivery of the goods at Customs House. Meanwhile, the Collector of section is the presentation of a Bill of Lading required, but only the presentation of a Manifest
Customs required herein petitioner to explain and show cause why no administrative fine should containing a true and accurate description of the cargoes. This is for the simple reason that while
be imposed upon said vessel. Petitioner contends that the fact the whole shipment was indicated a manifest is a declaration of the entire cargo, a bill of lading is but a declaration of a specific part
in the bill of lading, it is clear that the deficiency of the original vessel's manifest was adequately of the cargo and is a matter of business convenience based exclusively on a contract. The object
supplied by the entries of said bill of lading and, therefore, no violation of the provision of the Tariff of a manifest is to furnish the customs officers with a list to check against, to inform our revenue
and Customs Code, was committed." officers what goods are being brought into the country, and to provide a safeguard against goods
being brought into this country on a vessel and then smuggled ashore. In short, while a bill of
Issue: Whether or not the inclusion of the unmanifested cargoes in the Bill of Lading satisfy the lading is ordinarily merely a convenient commercial instrument designed to protect the importer or
requirement of the aforequoted sections of the Tariff and Customs Code. consignee, a manifest of the cargo is absolutely essential to the exportation or importation of
property in all vessels, the evident intent and object of which is to impose upon the owners and
Ruling: officers of such vessel an imperative obligation to submit lists of the entire loading of the ship in the
prescribed form, to facilitate the labors of the customs and immigration officers and to defeat any
No. The inclusion of the unmanifested cargoes in the Bill of Lading does not satisfy the requirement attempt to make use of such vessels to secure the unlawful entry of persons or things into the
of the aforequoted sections of the Tariff and Customs Code country. Since therefore, the purpose served by the manifest is far different from that of the bill of
lading, We cannot acceptor place an imprimatur on the contention of petitioner that the entries in
Sections 1004 and 1005, in relation to section 2521 of the Tariff and Customs Code, explicitly the bill of lading adequately supplied the deficiency of the manifest and cured it of its infirmity. The
provide: mandate of the law is clear and We cannot settle for less. The law imposes the absolute obligation,
under penalty for failure, upon every vessel from a foreign port to have "on board complete written
Section 1004. Documents to be produced by master upon entry of a vessel — For or typewritten manifests of all her cargo, signed by the master". Where the law requires a manifest
the purpose of making entry of a vessel engaged in foreign trade, the master thereof shall to be kept or delivered, it is not complied with unless the manifest is true and accurate. (U.S. vs.
present the following documents, duly certified by him, to the customs boarding official:. The S.S. Islas Filipinos, No. 8746, 28 Phil. 291.297).
a. The original manifest of all cargo destined for the port, to be returned with the
indorsement of the boarding official;
Bill of Lading vs. Manifest:
#TEAMDREAMWORKS
ALABA - ALANO - AMBROCIO - BAUCAN - BOLIGOR - CAGAMPANG - CAÑEDO - LAURENTE - MIRANDA - NENARIA

Manifest Bill of Lading

As to declaration A declaration of the entire cargo A declaration of a specific part


of the cargo

As to its object(s) 1. To furnish the customs officers


with a list to check against;
2. To inform our revenue officers
what goods are being brought
into the country; and
3. To provide a safeguard against
goods being brought into this
country on a vessel and then
smuggled ashore

Essential to the exportation or Merely a convenient


importation of property in all vessels commercial instrument
designed to protect the
importer or consignee

Intent 1. To impose upon the owners


and officers of such vessel an
imperative obligation to submit
lists of the entire loading of the
ship in the prescribed form;
2. To facilitate the labors of the
customs and immigration
officers and to defeat any
attempt to make use of such
vessels to secure the unlawful
entry of persons or things into
the country.
#TEAMDREAMWORKS
ALABA - ALANO - AMBROCIO - BAUCAN - BOLIGOR - CAGAMPANG - CAÑEDO - LAURENTE - MIRANDA - NENARIA

1.16 CALTEX (PHILIPPINES), INC. vs SULPICIO LINES,INC., GO SIOC SO, ENRIQUE S.


GO, EUSEBIO S. GO, CARLOSS. GO, VICTORIANO S. GO, DOMINADOR S. GO, RICARDO
S.GO, EDWARD S. GO, ARTURO S. GO, EDGAR S. GO, EDMUNDS. GO, FRANCISCO
SORIANO, VECTOR SHIPPING CORPORATION, TERESITA G. CAÑEZAL AND SOTERA
E.CAÑEZAL
G.R. No. 131166. September 30, 1999

Facts:
On December 20, 1987, motor tanker MV Vector, carrying petroleum products of Caltex,
collided in the open sea with passenger ship MV Doña Paz, causing the death of all but 25 of the
latter’s passengers. Among those who died were Sebastian Canezal and his daughter Corazon
Canezal. On March 22, 1988, the board of marine inquiry found that Vector Shipping Corporation
was at fault. On February 13, 1989, Teresita Cañezal and Sotera E. Cañezal, Sebastian Cañezal’s
wife and mother respectively, filed with the Regional Trial Court of Manila a complaint for damages
arising from breach of contract of carriage against Sulpicio Lines. Sulpicio filed a third-party
complaint against Vector and Caltex. The trial court dismissed the complaint against Caltex, but
the Court of Appeals included the same in the liability. Hence, Caltex filed this petition.

Issue:
Is the charterer of a sea vessel liable for damages resulting from a collision between the
chartered vessel and a passenger ship?

Held:
First: The charterer has no liability for damages under Philippine Maritime laws.

Petitioner and Vector entered into a contract of affreightment, also known as a voyage charter.

A charter party is a contract by which an entire ship, or some principal part thereof, is let by the
owner to another person for a specified time or use; a contract of affreightment is one by which the
owner of a ship or other vessel lets the whole or part of her to a merchant or other person for the
conveyance of goods, on a particular voyage, in consideration of the payment of freight. A contract
of affreightment may be either time charter, wherein the leased vessel is leased to the charterer for
a fixed period of time, or voyage charter, wherein the ship is leased for a single voyage. In both
cases, the charter-party provides for the hire of the vessel only, either for a determinate period of
time or for a single or consecutive voyage, the ship owner to supply the ship’s store, pay for the
wages of the master of the crew, and defray the expenses for the maintenance of the ship. If the
charter is a contract of affreightment, which leaves the general owner in possession of the ship as
owner for the voyage, the rights and the responsibilities of ownership rest on the owner. The
charterer is free from liability to third persons in respect of the ship.

Second: MT Vector is a common carrier


#TEAMDREAMWORKS
ALABA - ALANO - AMBROCIO - BAUCAN - BOLIGOR - CAGAMPANG - CAÑEDO - LAURENTE - MIRANDA - NENARIA

The charter party agreement did not convert the common carrier into a private carrier. The parties
entered into a voyage charter, which retains the character of the vessel as a common carrier. It is
imperative that a public carrier shall remain as such, notwithstanding the charter of the whole or
portion of a vessel by one or more persons, provided the charter is limited to the ship only, as in
the case of a time-charter or voyage charter. It is only when the charter includes both the vessel
and its crew, as in a bareboat or demise that a common carrier becomes private, at least insofar
as the particular voyage covering the charter-party is concerned. Indubitably, a ship-owner in a
time or voyage charter retains possession and control of the ship, although her holds may, for the
moment, be the property of the charterer. A common carrier is a person or corporation whose
regular business is to carry passengers or property for all persons who may choose to employ and
to remunerate him. 16 MT Vector fits the definition of a common carrier under Article 1732 of the
Civil Code.

The public must of necessity rely on the care and skill of common carriers in the vigilance over the
goods and safety of the passengers, especially because with the modern development of science
and invention, transportation has become more rapid, more complicated and somehow more
hazardous. For these reasons, a passenger or a shipper of goods is under no obligation to conduct
an inspection of the ship and its crew, the carrier being obliged by law to impliedly warrant its
seaworthiness.

Third: Is Caltex liable for damages under the Civil Code?

The charterer of a vessel has no obligation before transporting its cargo to ensure that the vessel
it chartered complied with all legal requirements. The duty rests upon the common carrier simply
for being engaged in "public service." The relationship between the parties in this case is governed
by special laws. Because of the implied warranty of seaworthiness, shippers of goods, when
transacting with common carriers, are not expected to inquire into the vessel’s seaworthiness,
genuineness of its licenses and compliance with all maritime laws. To demand more from shippers
and hold them liable in case of failure exhibits nothing but the futility of our maritime laws insofar
as the protection of the public in general is concerned. Such a practice would be an absurdity in a
business where time is always of the essence. Considering the nature of transportation business,
passengers and shippers alike customarily presume that common carriers possess all the legal
requisites in its operation.
#TEAMDREAMWORKS
ALABA - ALANO - AMBROCIO - BAUCAN - BOLIGOR - CAGAMPANG - CAÑEDO - LAURENTE - MIRANDA - NENARIA

1.17 Coastwise Lighterage v CA the cargo which petitioner-carrier was transporting, it was not the carrier which paid the value
G.R. No. 114167. July 12,1995 thereof to Pag-asa Sales, Inc. but the latter's insurer, herein private respondent PhilGen.
Francisco R. J.
Article 2207 of the Civil Code is explicit on this point:
Art. 2207. If the plaintiffs property has been insured, and he has received indemnity from the
Facts: Pag-asa Sales, Inc. entered into a contract to transport molasses from the province of insurance company for the injury or loss arising out of the wrong or breach of contract complained
Negros to Manila with Coastwise Lighterage Corporation (Coastwise for brevity), using the latter's of, the insurance company shall be subrogated to the rights of the insured against the wrongdoer
dumb barges. The barges were towed in tandem by the tugboat MT Marica, which is likewise owned or the person who violated the contract. . . .
by Coastwise.
This legal provision containing the equitable principle of subrogation has been applied in a long
Upon reaching Manila Bay, while approaching Pier 18, one of the barges, "Coastwise 9", struck an line of cases including Compania Maritima v. Insurance Company of North America Fireman's Fund
unknown sunken object. The forward buoyancy compartment was damaged, and water gushed in Insurance Company v. Jamilla & Company, Inc. and Pan Malayan Insurance Corporation v. Court
through a hole "two inches wide and twenty-two inches long"1 As a consequence, the molasses at of Appeals wherein this Court explained:
the cargo tanks were contaminated and rendered unfit for the use it was intended. This prompted
the consignee, Pag-asa Sales, Inc. to reject the shipment of molasses as a total loss. Thereafter, Article 2207 of the Civil Code is founded on the well-settled principle of subrogation. If the insured
Pag-asa Sales, Inc. filed a formal claim with the insurer of its lost cargo, herein private respondent, property is destroyed or damaged through the fault or negligence of a party other than the assured,
Philippine General Insurance Company (PhilGen, for short) and against the carrier, herein then the insurer, upon payment to the assured will be subrogated to the rights of the assured to
petitioner, Coastwise Lighterage. Coastwise Lighterage denied the claim and it was PhilGen which recover from the wrongdoer to the extent that the insurer has been obligated to pay. Payment by
paid the consignee, Pag-asa Sales, Inc., the amount of P700,000.00, representing the value of the the insurer to the assured operated as an equitable assignment to the former of all remedies which
damaged cargo of molasses. the latter may have against the third party whose negligence or wrongful act caused the loss. The
right of subrogation is not dependent upon, nor does it grow out of, any privity of contract or upon
In turn, PhilGen then filed an action against Coastwise Lighterage before the Regional Trial Court written assignment of claim. It accrues simply upon payment of the insurance claim by the insurer.
of Manila, seeking to recover the amount of P700,000.00 which it paid to Pag-asa Sales, Inc. for
the latter's lost cargo. PhilGen now claims to be subrogated to all the contractual rights and claims Undoubtedly, upon payment by respondent insurer PhilGen of the amount of P700,000.00 to Pag-
which the consignee may have against the carrier, which is presumed to have violated the contract asa Sales, Inc., the consignee of the cargo of molasses totally damaged while being transported
of carriage. by petitioner Coastwise Lighterage, the former was subrogated into all the rights which Pag-asa
Sales, Inc. may have had against the carrier, herein petitioner Coastwise Lighterage.
Issue: First, whether or not petitioner Coastwise Lighterage was transformed into a private carrier,
by virtue of the contract of affreightment which it entered into with the consignee, Pag-asa Sales,
Inc. Corollarily, if it were in fact transformed into a private carrier, did it exercise the ordinary
diligence to which a private carrier is in turn bound?

Second, whether or not the insurer was subrogated into the rights of the consignee against the
carrier, upon payment by the insurer of the value of the consignee's goods lost while on board one
of the carrier's vessels.

Ruling:

As a common carrier, petitioner is liable for breach of the contract of carriage, having failed to
overcome the presumption of negligence with the loss and destruction of goods it transported, by
proof of its exercise of extraordinary diligence.

On the issue of subrogation, which petitioner contends as inapplicable in this case, we once more
rule against the petitioner. We have already found petitioner liable for breach of the contract of
carriage it entered into with Pag-asa Sales, Inc. However, for the damage sustained by the loss of
#TEAMDREAMWORKS
ALABA - ALANO - AMBROCIO - BAUCAN - BOLIGOR - CAGAMPANG - CAÑEDO - LAURENTE - MIRANDA - NENARIA

1.18 vice, and not the general owner of the vessel, is held liable for the expenses of the voyage including
G.R. No. L-51910 August 10, 1989 the wages of the seamen.

LITONJUA SHIPPING COMPANY INC. vs. NATIONAL SEAMEN BOARD and GREGORIO P.
Treating Fairwind as owner pro hac vice, petitioner Litonjua having failed to show that it
CANDONGO was not such, the Court believes and so hold that petitioner Litonjua, as Philippine agent of the
charterer, may be held liable on the contract of employment between the ship captain and the
FACTS: Petitioner Litonjua is the duly appointed local crewing Managing Office of the private respondent.
Fairwind Shipping Corporation. The M/V Dufton Bay is an ocean-going vessel of foreign registry
owned by the R.D. Mullion Ship Broking Agency Ltd. While the Dufton Bay was under charter by SECOND BASIS:
Fairwind, the vessel's master contracted the services of private respondent Gregorio Candongo to There is a second and ethically more compelling basis for holding petitioner Litonjua liable
serve as Third Engineer for a period of twelve (12) months. This agreement was executed before on the contract of employment of private respondent. The charterer of the vessel, Fairwind, clearly
the Cebu Area Manning Unit of the NSB. Thereafter, private respondent boarded the vessel. Before benefitted from the employment of private respondent as Third Engineer of the Dufton Bay. There
expiration of his contract, private respondent was required to disembark at Port Kelang, Malaysia, is also no question that petitioner Litonjua did assist the Master of the vessel in locating and
and was returned to the Philippines. The cause of the discharge was described in his Seaman's recruiting private respondent as Third Engineer of the vessel as well as ten (10) other Filipino
Book as 'by owner's arrange". seamen as crew members. In so doing, petitioner Litonjua certainly in effect represented that it was
taking care of the crewing and other requirements of a vessel chartered by its principal, Fairwind.
Shortly after returning to the Philippines, private respondent filed a complaint before
public respondent NSB, for violation of contract, against Mullion as the shipping company and Therefore, private respondent was properly regarded as an employee of the charterer
petitioner Litonjua as agent of the shipowner and of the charterer of the vessel. Fairwind and that petitioner Litonjua may be held to answer to private respondent for the latter's
claims as the agent in the Philippines of Fairwind.
The hearing officer of the NSB rendered a judgment by default, thereby ordering R.D.
Mullion Shipbrokers Co., Ltd., and Litonjua Shipping Co., Inc., jointly and solidarily to pay Gregorio ADDITIONAL:
Candongo. There are three (3) distinguishable types of charter parties: (a) the "bareboat" or "demise" charter;
(b) the "time" charter; and (c) the "voyage" or "trip" charter.
Petitioner Litonjua contends that the shipowner, not the charterer, was the employer of
private respondent; and that liability for damages cannot be imposed upon petitioner which was a A bareboat or demise charter is a demise of a vessel, much as a lease of an unfurnished house is
mere agent of the charterer. It is insisted that private respondent's contract of employment and a demise of real property. The shipowner turns over possession of his vessel to the charterer, who
affidavit of undertaking clearly showed that the party with whom he had contracted was Mullion, then undertakes to provide a crew and victuals and supplies and fuel for her during the term of the
the shipowner, represented by the ship's master. Petitioner Litonjua thus argues that being the charter. The shipowner is not normally required by the terms of a demise charter to provide a crew,
agent of the charterer and not of the shipowner, it accordingly should not have been held liable on and so the charterer gets the "bare boat", i.e., without a crew. Sometimes, of course, the demise
the contract of employment of private respondent. charter might provide that the shipowner is to furnish a master and crew to man the vessel under
the charterer's direction, such that the master and crew provided by the shipowner become the
ISSUE: Whether or not Litonjua may be held liable to the private respondent on the agents and servants or employees of the charterer, and the charterer (and not the owner) through
contract of employment. the agency of the master, has possession and control of the vessel during the charter period.

RULING: YES. There are two (2) grounds upon which petitioner Litonjua may be held A time charter, upon the other hand, like a demise charter, is a contract for the use of a vessel for
liable to the private respondent on the contract of employment. a specified period of time or for the duration of one or more specified voyages. In this case,
however, the owner of a time-chartered vessel (unlike the owner of a vessel under a demise or
FIRST BASIS: bare-boat charter), retains possession and control through the master and crew who remain his
The first basis is the charter party which existed between Mullion, the shipowner, and employees. What the time charterer acquires is the right to utilize the carrying capacity and facilities
Fairwind, the charterer. Their agreement is under a bareboat or demise charter. It is well settled of the vessel and to designate her destinations during the term of the charter.
that in a demise or bare boat charter, the charterer is treated as owner pro hac vice of the vessel,
the charterer assuming in large measure the customary rights and liabilities of the shipowner in
relation to third persons who have dealt with him or with the vessel. In such case, the Master of
the vessel is the agent of the charterer and not of the shipowner. The charterer or owner pro hac
#TEAMDREAMWORKS
ALABA - ALANO - AMBROCIO - BAUCAN - BOLIGOR - CAGAMPANG - CAÑEDO - LAURENTE - MIRANDA - NENARIA

A voyage charter, or trip charter, is simply a contract of affreightment, that is, a contract for the
carriage of goods, from one or more ports of loading to one or more ports of unloading, on one or
on a series of voyages. In a voyage charter, master and crew remain in the employ of the owner of
the vessel.
#TEAMDREAMWORKS
ALABA - ALANO - AMBROCIO - BAUCAN - BOLIGOR - CAGAMPANG - CAÑEDO - LAURENTE - MIRANDA - NENARIA

1.19 PLANTERS PRODUCTS, INC. v. COURT OF APPEALS


G.R. No. 101503
September 15, 1993
Bellosillo, J.

Facts:
Planters Products, Inc. purchased from Mitsubishi, Urea fertilizer which the latter shipped in bulk
aboard the cargo vessel M/V "Sun Plum" owned by private respondent Kyosei Kisen Kabushiki
Kaisha. Prior to its voyage, a time charter-party on the vessel was entered into between Mitsubishi
as shipper/charterer and KKKK as shipowner.

Upon arrival of the vessel at her port of call, it took eleven days for PPI to unload the cargo.
Thereafter, a private marine and cargo surveyor, was hired by PPI to determine the "outturn" of the
cargo shipped. The survey report revealed a shortage in the cargo and that a portion of the Urea
fertilizer was contaminated with dirt.

Consequently, PPI sent a claim letter to Soriamont Steamship Agencies, the resident agent of the
carrier, KKKK, of the alleged shortage in the goods shipped and the diminution in value of that
portion said to have been contaminated with dirt.

Respondent SSA explained that the request was denied by them because they had nothing to do
with the discharge of the shipment. Hence, PPI filed an action for damages. The defendant carrier
argued that the strict public policy governing common carriers does not apply to them because they
have become private carriers by reason of the provisions of the charter-party.

Issues:
(1) Whether a common carrier becomes a private carrier by reason of a charter-party?

Held:
(1) No, it is not disputed that respondent carrier, in the ordinary course of business, operates as a
common carrier, transporting goods indiscriminately for all persons. When petitioner chartered the
vessel M/V "Sun Plum", the ship captain, its officers and compliment were under the employ of the
shipowner and therefore continued to be under its direct supervision and control. This is evident in
the present case considering that the steering of the ship, the manning of the decks, the
determination of the course of the voyage and other technical incidents of maritime navigation were
all consigned to the officers and crew who were screened, chosen and hired by the shipowner.
#TEAMDREAMWORKS
ALABA - ALANO - AMBROCIO - BAUCAN - BOLIGOR - CAGAMPANG - CAÑEDO - LAURENTE - MIRANDA - NENARIA

1.20 part of the defendants to transfer and deliver the cargo to the destinations as stipulated in the
G.R. No. L-10986 March 31, 1917 charter party.
COMPAGNIE DE COMMERCE ET DE NAVIGATION D'EXTREME ORIENT, plaintiff-appellant,
vs. The defendant's agent in Manila, Behn, Meyer & Company offered to purchase the cargo from the
THE HAMBURG AMERIKA PACKETFACHT ACTIEN GESELLSCHAFT, defendant-appellant. plaintiff, but the latter never received the cable messages so they never answered. When a survey
CARSON, J.: was done on the ship, it was found that the cargo was infested with beetles, so Behn, Meyer &
Company asked for court authority to sell the cargo and the balance to be dumped at sea. The
Warning: Hello taas ang case and lisod siya sabton ☹I hope masabtan ni siya :D proceeds of the sale were deposited in the court, waiting for orders as to what to do with it. Behn,
Meyer & Company wrote the plaintiff again informing the latter of the disposition which it made
COMPAGNIE DE COMMERCE upon the cargo. Plaintiff answered that it was still waiting for orders as to what to do.
● plaintiff
● corporation organized in France, with a branch in Saigon Plaintiff wants all the proceeds of the sale to be given to them (as damages for the defendants’
● Cargo Owner failure to deliver the cargo to the destinations Dunkirk and Hamburg), while defendants contended
that they have a lien on the proceeds of the sale (amount due to them because of the upkeep and
HAMBURG AMERIKA maintenance of the ship crew and for commissions for the sale of the cargo).
● Defendant
● organized in Germany, with a principal office in Hamburg, Germany and represented in The trial court ruled in favor of the plaintiffs.
Manila by Behn, Meyer & Company.
● Shipowner ISSUE: Is Hamburg (defendant) entitled to freight?
*not sure if this is the correct statement of the issue but it’s about freight, some discussions are
SUMMARY OF FACTS: Hamburg Amerika chartered plaintiff’s vessel Sambia. There was a war in about PIL*
Europe. The master was told to take refuge at a neutral port. No attempt was made on the part of
the defendants to transfer and deliver the cargo to the destinations as stipulated in the charter RULING: NO.
party. The claim advanced on behalf of the shipowner for freights is wholly without merit. Under
the terms of the contract of affreightment, the amount of the freight was made payable on
RULING from Atty. Bangoy’s Syllabus delivery of the cargo at the designated port of destination. It is clear then, that under the
● The failure of the captain or master to carry goods on his ship or to send them to the point terms of that instrument freight never became payable. Carrying the cargo from Saigon to
of destination in another vessel resulted in the abandonment upon any claim for freight Manila was not even a partial performance of a contract to carry it from Saigon to Europe;
thereon, except where it has been made payable in advance. and even it if could be treated as such, the shipowner would have no claim for freight, in the
absence of any agreement, express or implied, to make payment for a partial performance
of the contract.
FACTS: Compagnie De Commerce (plaintiff) alleged that on June 17, 1914, Hamburg Amerika
(defendant) chartered and hired unto plaintiff the steamship or vessel called the Sambia for the The citation from Carver (section 307) referred to in the decision of the trial court is as follows:
purpose of carrying a full cargo of rice, rice bran and cargo meal from the port of Saigon to the port
of Dunkirk and Hamburg, via Suez Canal, upon the terms and conditions set forth and contained Should the master relinquish the attempt either to carry on the goods in his own ship or to
in the written charter party made and executed between the said parties. There were rumors of send them to their destination in another ship, he will thereby wholly abandon any claim for
impending war between Germany and France and other nations of Europe. The master of the freight in respect to them, unless it has been made payable in advance, or irrespective of
steamship was told to take refuge at a neutral port (because Saigon was a French port). Plaintiff delivery. Where freight is only payable on delivery, no part is earned until it is earned
asked for compulsory detention of its vessel to prevent its property from leaving Saigon. However, completely. So that whether the abandonment of the voyage be due to inability, or prevention of
the Governor of Saigon refused to issue an order because he had not been officially notified of the the ship, or to the necessity of selling the goods, either to raise funds for the ship's repairs or their
declaration of the war. owner's interest, the shipowner loses the whole freight.
On the other hand, if the cargo be accepted at the port of refuge under an agreement that delivery
The said steamship sailed from Saigon, having cleared officially for Dunkirk and Hamburg, but the there shall be treated as a performance by the shipowner of his contract; or if the owner of the
master and the agent of said steamship also obtained and took along a bill of health for Manila, goods, by any act or default, prevents the shipowner from carrying them on to their destination, the
issued by the United States consul at Saigon. The steamship remained continuously in Manila and whole of the freight becomes at once payable.
defendant said that it will be compelled to stay until the war ceases. No attempt was made on the
#TEAMDREAMWORKS
ALABA - ALANO - AMBROCIO - BAUCAN - BOLIGOR - CAGAMPANG - CAÑEDO - LAURENTE - MIRANDA - NENARIA

Also sometimes the shipowner becomes entitled, by agreement, on delivery at a port of refuge, to
freight in proportion to the part of the voyage which has been accomplished. This subject will be
discussed more fully hereafter. Here it is enough to say that no agreement of this kind can arise,
by implication, unless the cargo owner has consented to accept the goods under circumstances
which left him an option to have them carried on to their destination by the shipowner, in his own
or some other vessel.

Where the vessel has been abandoned at sea by the master and crew, without any intention
of returning to her, the freighter is entitled to treat the contract as abandoned; so that if she
be brought into port by salvors, he may claim the goods without becoming liable to pay
freight.

In The Cito, the Court of Appeal decided that the ship owner had no claim for freight after the
abandonment; but declined to say that that put an end to the contract of affreightment. By the
abandonment the shipowners gave the cargo owners a right to elect to treat the contract as at and
end. "We do not decided what would have been the result if, after the ship had been brought in as
it was by the salvors, and before the cargo owners had come ion and excercised their right to the
cargo, the shipowners had given bail for the ship and cargo, and had carried the cargo on.”
#TEAMDREAMWORKS
ALABA - ALANO - AMBROCIO - BAUCAN - BOLIGOR - CAGAMPANG - CAÑEDO - LAURENTE - MIRANDA - NENARIA

1.21 G.R. No. 96453. August 4, 1999.* but failed to occupy. Explicit and succinct is the law that the liability for deadfreight is on the
NATIONAL FOOD AUTHORITY, ROSELINDA GERALDEZ, RAMON SARGAN and ADELINA charterer. The law in point is Article 680 of the Code of Commerce, which provides:
A. YAP, petitioners,
vs. “Art. 680. A charterer who does not complete the full cargo he bound himself to ship shall
THE HON. COURT OF APPEALS and HONGFIL SHIPPING CORPORATION, respondents. pay the freightage of the amount he fails to ship, if the captain does not take other freight to
complete the load of the vessel, in which case the first charterer shall pay the difference,
Doctrine: should there be any.”
- Deadfreight is the amount paid by or recoverable from a charterer of a ship for the portion
of the ship’s capacity the latter contracted for but failed to occupy; Liability for deadfreight NFA based their contention on the phrase 200,000 bags more or less meaning, NFA can only pay
is on the charterer. for the amount which is actually unloaded, and in this instance, less than 200,000 bags. The SC
- Demurrage is the sum fixed in a charter party as a renumeration to the owner of the ship held that such contention is untenable. The words “more or less” when used in relation to quantity
for the detention of his vessel beyond the number of days allowed by the charter party for or distance, are words of safety and caution, intended to cover some slight or unimportant
loading or unloading or for sailing; Liability for demurrage exists only when expressly inaccuracy. It allows an adjustment to the demands of circumstances which do not weaken or
stipulated in the contract. destroy the statements of distance and quantity when no other guides are available.

Facts: Moreover, the letter of agreement between NFA and Hongfil covered 200,000 bags of corn grains
National Food Authority (NFA), thru its officers, entered into a “Letter of Agreement for but only 166,798 bags were unloaded at the Port of Manila. Consequently, shut-out load or
Vessel/Barge Hire” with Hongfil Shipping Corporation for the shipment of 200,000 bags of corn deadfreight of 33,201 bags at P7.30 per bag or P242,367.30 should be paid by NFA to Hongfil
grains from Cagayan de Oro City to Manila. Shipping Corporation.

The vessel arrived in Cagayan on February 6,1987 and notified the provincial manager of NFA in
Cagayan about its readiness to load, the latter received the notification on February 9, 1987. LIABILITY ON THE DEMURRAGE
(2) No. NFA is not liable for the demurrage.
Later, Gold City Integrated Port Services, Inc. (INPORT), the arrestre firm in Cagayan, certified that
it’ll take 7 days, 8 hours and 43 minutes to load the 200,000 bags of NFA corn grains. However, it Demurrage is the sum fixed in a charter party as a renumeration to the owner of the ship for the
took 21 days, 15 hours and 18 minutes to finish because a strike was staged by the arrastre workers detention of his vessel beyond the number of days allowed by the charter party for loading or
and the stevedores refused to attend to their work. (Period: Feb 10, 1987-March 4, 1987) unloading or for sailing. Liability for demurrage, using the word in its strict technical sense, exists
only when expressly stipulated in the contract.
On March 6, 1987, it was allowed to depart for Manila. It arrived at Manila on March 11 and a
certification of discharging rate was issued at the instance of Hongfil stating that it would take 12 Shipper or charterer is liable for the payment of demurrage claims when he exceeds the period for
days, 6 hours and 22 minutes to discharge the bags of corn grains. loading or unloading as agreed upon or the agreed “laydays.” The period for such may or may not
be stipulated in the contract. A charter party may either provide for a fixed laydays or contain
Unfortunately, unloading only commenced on March 15, 1987. It took a period of 20 days, 14 hours general or indefinite words such as “customary quick dispatch” or “as fast as the steamer can load.”
and 33 minutes to finish the unloading due to the unavailability of a berthing space for the vessel.
(Period: March 15, 1987-April 4, 1987) In this case, the charter party provides merely for a general or indefinite words of “customary quick
dispatch.”
After the discharging was completed, NFA paid Hongfil the amount of the shipment which was less
than what was stipulated. Hongfil, however, billed NFA, claiming payment for freight covering the The stipulation “Laydays (Loading and Unloading): Customary Quick Dispatch” implies that loading
shut-out load or deadfreight as well as demurrage, allegedly sustained during the loading and and unloading of the cargo should be within a reasonable period of time. Due diligence should be
unloading of subject shipment of corn grains. NFA refused to pay which prompted Hongfil to file an exercised according to the customs and usages of the port or ports of call. The circumstances
action action against NFA and its officers for recovery of deadfreight and demurrage. obtaining at the time of loading and unloading are to be taken into account in the determination of
“Customary Quick Dispatch.”
Issues:
(1) Whether NFA can be held liable for the deadfreight What is a reasonable time depends on the existing as opposed to normal circumstances, at the
(2) Whether NFA can be held liable for the demurrage port of loading and the custom of the port.

Ruling: While what was certified to by the arrastre did not tally with the actual period of loading and
LIABILITY ON DEADFREIGHT unloading, it appears that the cause of delay was not imputable to either of the parties. The cause
(1) Yes. NFA is liable for the deadfreight. of delay during the loading was the strike staged by the crew of the arrastre operator, and the
unavailability of a berthing space for the vessel during the unloading. The lack of a berthing space
Under the law, the cargo not loaded is considered as deadfreight. It is the amount paid by or was understandable under the circumstances since the North Harbor in Manila, where the
recoverable from a charterer of a ship for the portion of the ship’s capacity the latter contracted for unloading took place, is a large port but there was congestion due to the number of ships or vessels
which were all waiting to dock.
#TEAMDREAMWORKS
ALABA - ALANO - AMBROCIO - BAUCAN - BOLIGOR - CAGAMPANG - CAÑEDO - LAURENTE - MIRANDA - NENARIA

Delay in loading or unloading, to be deemed as a demurrage, runs against the charterer as


soon as the vessel is detained for an unreasonable length of time from the arrival of the
vessel because no available berthing space was provided for the vessel due to the negligence of
the charterer or by reason of circumstances caused by the fault of the charterer.

In the present case, charterer NFA could not be held liable for demurrage for the delay
resulting from the aforementioned circumstances. The provision “Laydays: Customary Quick
Dispatch” invoked by Hongfil is unavailing as a basis for requiring the charterer to pay for
demurrage absent convincing proof that the time for the loading or unloading in question was
beyond the “reasonable time” within the contemplation of the charter party. Here, the Supreme
Court holds that the delay sued upon was still within the “reasonable time” embraced in the
stipulation of “Customary Quick Dispatch.”

Furthermore, the subject contract of affreightment contains an express provision


“Demurrage/Dispatch: NONE,” the same left the parties with no other recourse but to apply the
literal meaning of such stipulation. The cardinal rule is that where, as in this case, the terms of the
contract are clear and leave no doubt over the intention of the contracting parties, the literal
meaning of its stipulations is controlling.

The provision “Demurrage/Dispatch: NONE” can be interpreted as a waiver by Hongfil of


the right to claim for demurrages. Waiver is a renunciation of what has been established in favor
of one or for his benefit, because he prejudices nobody thereby; if he suffers loss, he is the one to
blame. As Hongfil freely entered into subject charter party which providing for
“Demurrage/Dispatch: NONE,” it cannot escape the inevitable consequence of its inability to collect
demurrage. Well-settled is the doctrine that a contract between parties which is not contrary to law,
morals, good customs, public order or public policy, is the law binding on both of them.
#TEAMDREAMWORKS
ALABA - ALANO - AMBROCIO - BAUCAN - BOLIGOR - CAGAMPANG - CAÑEDO - LAURENTE - MIRANDA - NENARIA

1.22 and if he had left on the 19th he would have had on board plenty of water for his trip to Manila.
No. 4395. September 9, 1908. Moreover, there was evidence undisputed that, although by the terms of the charter party the
BEHN, MEYER & Co., LTD., plaintiffs and appellees, charterers were bound to pay for the water, yet it was the universal custom for the captain to furnish
vs. the water and charge the charterers therefor.
EL. BANCO ESPAÑOL-FILIPINO, defendant and appellant.
It was proven that they had made a contract with Pujalte & Co., by the terms of which they had
Facts: agreed to transport 200 head of cattle from Phu Yen to Manila in this boat and were to receive
On November 3, 1906, Sander, Wieler & Co., as agents for the German steamship Hilary, chartered therefor P12 for each cow and P13 for each carabao. Pujalte & Co. had ready for transportation
her to the interveners, Siu Liong & Co., of Manila. Ullman acted as agent for Pujalte & Co., of 202 head of cattle and the testimony was that, although the contract mentioned 200, yet they had
Manila. This firm had made a contract with the interveners for the transportation from Phu Yen a right thereunder to transport 200, or 202, or 204. This freight, amounting to P2,476, the charterers
Harbor to Manila of 200 head of cattle. have never received from Pujalte & Co., and of course have no claim against them therefor. Their
failure to receive it was directly due to the violation of the terms of the contract by the captain in his
Upon the arrival of the ship there on the November 18, Ullman was all ready to proceed with the refusal to take the cattle on board when they were ready to be shipped, and that violation was the
loading. He went on board the vessel the afternoon of her arrival and told the captain that he was direct and.proximate cause of the loss to the charterers of this P2,476.
prepared to load 202 head of cattle. One hundred and fifty of these were cows and 52 carabaos.
The captain told him that he might load the cows, but that he could not load the carabaos. If the captain had complied with the contract and loaded the cattle at Phu Yen when he should
At that time, the weather was fine and continued so until about 10 o’clock the morning of the 19th. have done so, not more than two days would have been used there. Not more than three days
were used in unloading here. The time employed at Iloilo does not appear and in no event could
The weather was then very stormy and he did not succeed in getting on board until half past 1 that be considered, for that voyage was the subject of a special contract. So that even if the delay
in the afternoon. The captain then consented to receive the carabaos on board. The weather, from the 24th of November to the 27th be charged to the charterers, no more than nine days were
however, was so bad that they could not be shipped, and it remained in this condition from that consumed, which was the time allowed by the charter party.
time until the 27th, when the ship sailed for Manila without the cattle.

On November 26, he made demand on Ullman for 30 tons of fresh water, saying that Ullman
would not be permitted to ship his cattle unless he brought with them that amount. Ullman
stated that he was unable to do so. On November 27, the captain wrote a letter to Ullman telling
him that he saw that it was impossible for him to load the cattle or to bring the water, and that he
would leave that afternoon for Manila, which he did.

On December 3, the vessel arrived in Manila. By the terms of the charter party, the freight for the
voyage from Saigon to Manila, which was 9,250 Hong Kong dollars, was to be paid on or before
the delivery of the cargo and cattle at Manila.

The charterers refused to pay it; application was then made by Behn, Meyer & Co. to the defendant
bank, and it refused to pay, saying that the damages they suffered is caused by the violation on
the part of the captain of the terms of the charter party in refusing to receive the cattle on board at
Phu Yen on the 19th day of November.

Issue:
Whether or not the refusal of the captain was a violation of the terms of the charter party

Held:
Yes. The captain violated the terms of the charter party in refusing on November 8 to receive on
board the carabaos which Ullman then had ready to embark. If the captain had agreed to take the
carabaos on board when he was first asked to, he would have left Phu Yen on the 19th in the
afternoon. The evidence shows that the journey from Phu Yen to Manila is one of about four days,
#TEAMDREAMWORKS
ALABA - ALANO - AMBROCIO - BAUCAN - BOLIGOR - CAGAMPANG - CAÑEDO - LAURENTE - MIRANDA - NENARIA

2.1 Third, that from the expenses or damages caused follows the successful saving
of the vessel and cargo.
G.R. No. L-6393 January 31, 1955
Fourth, that the expenses or damages should have been incurred or inflicted
A. MAGSAYSAY INC., plaintiff-appellee, after taking proper legal steps and authority.
vs.
ANASTACIO AGAN, defendant-appellant. With respect to the first requisite, the evidence does not disclose that the expenses sought to be
recovered from defendant were incurred to save vessel and cargo from a common danger. The
Facts: Plaintiff's vessel, S S "San Antonio", left Manila bound for Basco, Batanes, vis Aparri, vessel ran aground in fine weather inside the port at the mouth of a river, a place described as
Cagayan, with general cargo belonging to different shippers, among them the belonged to "very shallow". In the present case there is no proof that the vessel had to be put afloat to save it
defendant. from imminent danger.

The vessel reached Aparri, Cagayan. But while still in port, it ran aground at the mouth of the As to the second requisite, we need only repeat that the expenses in question were not incurred
Cagayan river, and, attempts to refloat it under its own power having failed, plaintiff have it refloated for the common safety of vessel and cargo, since they, or at least the cargo, were not in imminent
by the Luzon Stevedoring Co. at an agreed compensation. Once afloat the vessel returned to peril. The cargo could, without need of expensive salvage operation, have been unloaded by the
Manila to refuel and then proceeded to Basco, the port of destination. There the cargoes were owners if they had been required to do so.
delivered to their respective owners or consignees, who, with the exception of defendant, made a
deposit or signed a bond to answer for their contribution to the average. With respect to the third requisite, the salvage operation, it is true, was a success. But as the
sacrifice was for the benefit of the vessel — to enable it to proceed to destination — and not for the
Plaintiff avers that the expenses incurred in floating the vessel constitute general average to which purpose of saving the cargo, the cargo owners are not in law bound to contribute to the expenses.
both ship and cargo should contribute. Hence, plaintiff brought the present action in the Court of
First Instance of Manila to make defendant pay his contribution. The final requisite has not been proved, for it does not appear that the expenses here in question
were incurred after following the procedure laid down in article 813.
Defendant, in his answer, denies liability to his amount, alleging, among other things, that the
stranding of the vessel was due to the fault, negligence and lack of skill of its master, that the In conclusion we found that plaintiff not made out a case for general average, with the result that
expenses incurred in putting it afloat did not constitute general average, and that the liquidation of its claim for contribution against the defendant cannot be granted.
the average was not made in accordance with law.
Additional Discussion on General Averages:
The CFI ruled in favor of the plaintiff, hence prompting the defendant to appeal the case to the
Supreme Court The law on averages is contained in the Code of Commerce. Under that law, averages
are classified into simple or particular and general or gross. Generally speaking, simple or particular
Issue: Whether or not allowing the general average for floating the vessel was proper? averages include all expenses and damages caused to the vessel or cargo which have not inured
to the common benefit (Art. 809), and are, therefore, to be borne only by the owner of the property
Held: NO. Tolentino, in his commentaries on the Code of Commerce, gives the following requisites gave rise to same (Art. 810); while general or gross averages include "all the damages and
for general average: expenses which are deliberately caused in order to save the vessel, its cargo, or both at the same
time, from a real and known risk" (Art. 811). Being for the common benefit, gross averages are to
First, there must be a common danger. This means, that both the ship and the be borne by the owners of the articles saved (Art. 812).
cargo, after has been loaded, are subject to the same danger, whether during the voyage,
or in the port of loading or unloading; that the danger arises from the accidents of the sea, In classifying averages into simple o particular and general or gross and defining each
dispositions of the authority, or faults of men, provided that the circumstances producing class, the Code (Art. 809 and 811) at the same time enumerates certain specific cases as coming
the peril should be ascertained and imminent or may rationally be said to be certain and specially under one or the other denomination. Going over the specific cases enumerated we find
imminent. This last requirement exclude measures undertaken against a distant peril. that, while the expenses incurred in putting plaintiff's vessel afloat may well come under number 2
of article 809-which refers to expenses suffered by the vessel "by reason of an accident of the sea
Second, that for the common safety part of the vessel or of the cargo or both is of the force majuere" — and should therefore be classified as particular average, the said expenses
sacrificed deliberately. do not fit into any of the specific cases of general average enumerated in article 811. No. 6 of this
article does mention "expenses caused in order to float a vessel," but it specifically refers to "a
#TEAMDREAMWORKS
ALABA - ALANO - AMBROCIO - BAUCAN - BOLIGOR - CAGAMPANG - CAÑEDO - LAURENTE - MIRANDA - NENARIA

vessel intentionally stranded for the purpose of saving it" and would have no application where, as
in the present case, the stranding was not intentional.
#TEAMDREAMWORKS
ALABA - ALANO - AMBROCIO - BAUCAN - BOLIGOR - CAGAMPANG - CAÑEDO - LAURENTE - MIRANDA - NENARIA

2.2
G.R. No. L-11515 July 29, 1918 Hamburg-American Line denies liability for damages and asserts that it has a lien on the property
INTERNATIONAL HARVESTER COMPANY IN RUSSIA, plaintiff-appellee,vs. for general average.
HAMBURG-AMERICAN LINE, defendant-appellant.
Crossfield & O'Brien for appellant. CFI: Ruled in favor of International Harvesting.
Lawrence & Ross for appellee.
STREET, J.: ISSUES:
(1) Whether the cargo is liable to be made to contribute, by way of general average, to the costs
FACTS: and expenses incurred by reason of the internment of the Suevia in the port of Manila.

International Harvester delivered to the Hamburg-American Line a large consignment of agricultural (2) Whether the defendant is liable for the expenses of transferring the cargo to another ship and
machinery, to be delivered to the order of the consignor at Vladivostock, Russia. Shipment to be transporting it to the port of destination.
transported from Baltimore, Maryland to Hamburg, Germany.
ISSUE 1:
The bill of lading provided, among other things, that the goods should be forwarded by Hamburg-
American Line from Hamburg to Vladivostock at the ship’s expense but at the risk of the owner of NO. Cargo not liable to general average; No common danger to ship and cargo
the goods. It was also provided that goods thus destined for points beyond Hamburg should be Herein, it is not claimed that the agricultural machinery was contraband of war; and being neutral
subject to the terms expressed in the customary form of bill of lading in use at the time of shipment goods, it was not liable to forfeiture in the event of capture by the enemies of the ship’s flag. It
by the carrier completing the transit. follows that when the master of the Suevia decided to take refuge in the port of Manila, he acted
exclusively with a view to the protection of his vessel. There was no common danger to the ship
When the shipment arrived at Hamburg the carrier company transferred the cargo to the Suevia, a and cargo; and therefore it was not a case for a general average.
ship of its own line, and issued to itself therefor, as forwarding agent, another bill of lading in the
customary form in use in the port of Hamburg, covering the transportation from Hamburg to “When a ship shall have entered a port of refuge in consequence of accident, sacrifice, or other
Vladivostock. extraordinary circumstance which renders that necessary for the common safety, the expense of
entering such port shall be admitted as general average.” (Section 10, York-Antwerp Rules)
While the ship was en route to Russia, war broke out in Europe; and as the Suevia was a German
vessel, the master considered it necessary to take refuge in the nearest neutral port, which ISSUE 2:
happened to be Manila.
YES. Hamburg-American Line is liable for the expenses incident to the transhipment and
Accordingly the ship was put into this harbor on August 1914. International Harverster in January, conveyance of the cargo to Vladivostock. The original bill of lading issued to the shipper in
1915, made demand upon Hamburg-American Line in Manila that it should forward the cargo to Baltimore contained the provision that the goods should be forwarded from Hamburg to
Vladivostock. Vladivostock at the steamer’s expense.

This Hamburg-American refused to do except upon the condition that International Harvester would Outbreak of war between Germany and Russia would have absolved carrier from contract
agree to subject said cargo to liability upon general average to satisfy the costs and expenses of of affreightment, if not for the latter’s terms
the Suevia incident to its stay in the port of Manila. International Harvester refused.
The outbreak of the war between Germany and Russia undoubtedly absolved Hamburg-American
Hamburg-American Line offered to deliver the cargo provided the owner would deposit with Line from so much of the contract of affreightment as required Hamburg-American Line to convey
Hamburg-American Line a sum of money equivalent to 20% of the value of said cargo, as security the goods to Vladivostock upon the ship on which it was embarked.
for the costs and expenses to be adjusted as general average. The costs and expenses amounted
to P63,024.50, which included port charges, repairs, and wages and maintenance of officers and But by the terms of the contract of affreightment, Hamburg-American Line was bound to forward
crew. the cargo to Vladivostock at the steamer’s expense, not necessarily by a steamer belonging to it;
and thus Hamburg American Line is liable for the expenses incurred by the owner in completing
International Harvester instituted an action in the CFI of Manila. Meanwhile, International Harvester the unfinished portion of the voyage in another ship.
obtained the delivery of the property from the Suevia by means of a writ of replevin and forwarded
it to Vladivostock by another steamer. Election to discharge at another port not made by master
#TEAMDREAMWORKS
ALABA - ALANO - AMBROCIO - BAUCAN - BOLIGOR - CAGAMPANG - CAÑEDO - LAURENTE - MIRANDA - NENARIA

Under paragraph X of the bill of lading, the master is given the election to discharge at another
port, if war should interfere with the completion of the voyage to the port of destination. No such
election has been made by the master. On the contrary, after arrival in Manila, he refused to
discharge the goods, and must be held to have elected to retain them, leaving the obligations of
the contract intact.

Stipulations exempting a shipowner from liability construed against it

Stipulations, in a bill of lading exempting a shipowner from the liability which would ordinarily attach
to him under the law are to be strictly construed against him. This rule should be applied all the
more in a case where the bill of lading under which the exemption is claimed was issued by
Hamburg-American Line to itself.
#TEAMDREAMWORKS
ALABA - ALANO - AMBROCIO - BAUCAN - BOLIGOR - CAGAMPANG - CAÑEDO - LAURENTE - MIRANDA - NENARIA

2.3
#TEAMDREAMWORKS
ALABA - ALANO - AMBROCIO - BAUCAN - BOLIGOR - CAGAMPANG - CAÑEDO - LAURENTE - MIRANDA - NENARIA

2.4 or otherwise, including damage by breaching or scuttling a burning ship, in extinguishing a fire on
EASTERN SHIPPING LINES, INC. V. MARGARINE-VERKAUFS-UNION GMBH – G.R. NO. L- board the ship, shall be made good as general average. ... "
31087 – 93 SCRA 257

Facts:

MARGARINE-VERKAUFS-UNION, a corporation not engaged in business in the Philippines, was


the consignee of copra in bulk shipped from Cebu on board EASTERN SHIPPING LINES’s vessel
for discharge at Hamburg, Germany. Petitioner’s bill of lading for the cargo provided that the
contract shall be governed by the laws of the Flag of the Ship carrying the goods. In case of
average, same shall be adjusted according to York-Antwerp Rules. While the vessel was off
Gibraltar, a fire broke out aboard the and caused water damage to the copra. EASTERN SHIPPING
LINES rejected MARGARINE-VERKAUFS-UNION GmbH ‘s claim for payment.

Issue:

Should Article 848 of the Code of Commerce govern this case despite the bill of lading which
expressly contained for the application of the York-Antwerp Rules which provide for MARGARINE-
VERKAUFS-UNION GmbH’s fun recovery of the damage loss?

Held:

No. We hold that the lower court correctly ruled the cited codal article to be not applicable in this
particular case for the reason that the bill of lading contains an agreement to the contrary. There is
a clear and irreconcilable inconsistency between the York-Antwerp Rules expressly adopted by the
parties as their contract under the bill of lading which sustains Eastern’s claim and the codal article
cited by Margarine which would bar the same.

what is here involved is a contract of adhesion as embodied in the printed bill of lading issued by
petitioner for the shipment to which respondent as the consignee merely adhered, having no choice
in the matter, and consequently, any ambiguity therein must be construed against petitioner as the
author.

The Court finds no error and upholds the lower court's ruling sustaining respondent's damage claim
although the amount thereof did not exceed 5% of respondent's interest in the cargo and would
have been barred by the cited article of the Commerce Code. We hold that the lower court correctly
ruled the cited codal article to be "not applicable in this particular case for the reason that the bill of
lading (Exhibit "F") contains "an agreement to the contrary" for it is expressly provided in the last
sentence of the first paragraph (Exhibit "1-A") that "In case of average, same shall be adjusted
according to York-Antwerp Rules of 1950." The insertion of said condition is expressly authorized
by Commonwealth Act No. 65 which has adopted in toto the U.S. Carriage of Goods by Sea Act.
Now, it has not been shown that said rules limit the recovery of damage to cases within a certain
percentage or proportion that said damage may bear to claimant's interest either in the vessel or
cargo as provided in Article 848 of the Code of Commerce On the contrary, Rule 3 of said York-
Antwerp Rules expressly states that "Damage done to a ship and cargo, or either of them, by water
#TEAMDREAMWORKS
ALABA - ALANO - AMBROCIO - BAUCAN - BOLIGOR - CAGAMPANG - CAÑEDO - LAURENTE - MIRANDA - NENARIA

2.5
#TEAMDREAMWORKS
ALABA - ALANO - AMBROCIO - BAUCAN - BOLIGOR - CAGAMPANG - CAÑEDO - LAURENTE - MIRANDA - NENARIA

2.6
ISSUE: Whether or not defendant Philippine Steamship Company is liable to pay the
[G.R. No. 18957. January 16, 1923. ] petitioner.

THE GOVERNMENT OF THE PHILIPPINE ISLANDS v. PHILIPPINE STEAMSHIP CO., INC., and RULING: YES. The trial judge was entirely right in finding that negligence was imputable to
FERNANDEZ HERMANOS both vessels, though differing somewhat in character and degree with respect to each. The mate
of the Antipolo was clearly negligent in having permitted that vessel to approach directly
1. ADMIRALTY AND MARITIME LAW; COLLISION; SOLIDARY LIABILITY OF COLLIDING towards the Isabel until the two were in dangerous proximity. Negligence shortly preceding
VESSELS. — Under articles 827 and 828 of the Code of Commerce, in case of a collision between the moment of collision is, however, undoubtedly chargeable to the Isabel, for the incorrect and
two vessels at sea, both are solidarily liable for the loss of cargo carried by either, not only in the incompetent way in which this vessel was then handled.
case where both vessels may be shown to be actually blameworthy but also in the case where it is
obvious that only one was at fault but the proof does not show which. It results that both vessels were at fault; and although the negligence on the part
of the mate of the incoming vessel preceded the negligence on the part of the mate of the
2. ID.; ID.; ID.; RESPONSIBILITY OF VESSEL SURVIVING COLLISION. — Where two ships outgoing vessel by an appreciable interval of time, the first vessel cannot on that account
approaching each other at sea are both negligently managed, with the result that a collision occurs be absolved from responsibility. Indeed, in G. Urrutia & Co. v. Baco River Plantation Co., supra,
and one is sunk with total loss of both ship and cargo, the owner of the other vessel is liable to any the Supreme Court found reason for holding that the responsibility rested exclusively on a steamer
shipper of cargo aboard the sunken vessel to the full extent of the value thereof; and it makes no which had allowed dangerous proximity to a sailing vessel to be brought about under somewhat
difference that the negligence imputable to the two vessels may have differed somewhat in similar conditions.
character and degree and that the negligence of the sunken ship was somewhat more marked than
that of the other. The trial judge committed no error in holding that both vessels were to blame and in
applying article 827 of the Code of Commerce to the situation before him. It is there declared that
FACTS: In this action the Government of the Philippine Islands seeks to recover the sum where both vessels are to blame, both shall be solidarily responsible for the damage occasioned
of P14,648.25, the alleged value of 911 sacks of rice which were lost at sea as a result of a collision to their cargoes. As the Isabel was a total loss and cannot sustain any part of this liability,
between the steamer Antipolo, owned by the defendant company, and the vessel Isabel, upon the burden of responding to the Government of the Philippine Islands, as owner of the rice
which said rice was embarked. embarked on the Isabel, must fall wholly upon the owner of the other ship, that is, upon the
defendant, the Philippine Steamship Company, Inc.
At about 10 o’clock at night on February 10, 1920, the coastwise vessel Isabel left the
port of Manila with primary destination to Balayan, Batangas, carrying, among its cargo, 911 sacks
of rice belonging to the plaintiff. After the boat 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, 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 ten 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," he put his helm hard to the starboard. However,
the mate on the Isabel 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 CFI rendered judgment for full recovery of the amount claimed by the plaintiff from the
Philippine Steamship Company, with interest from the date of the filing of the complaint. Hence this
appeal.
#TEAMDREAMWORKS
ALABA - ALANO - AMBROCIO - BAUCAN - BOLIGOR - CAGAMPANG - CAÑEDO - LAURENTE - MIRANDA - NENARIA

2.7
GORGONIO DE SARASOLA v. YU BIAO SONTUA
G.R. No. L-22630
January 31, 1925
Johns, J.

Facts:
Motorboat Mercedes entered the Manila Bay. It navigated in the direction of the lighthouse, several
minutes thereafter it was struck by the steamship Y. Sontua, and as a result of the collision it
suffered damages by reason of which it sank within half an hour.

The Court held that from what has been said the negligence of the Y. Sontua was the primary
cause of the accident, and that the Mercedes was guilty of contributory negligence in failing to
maintain its course, and that the case comes under the provisions of article 827.

However, plaintiff has filed a petition for a rehearing in which he contended that there is no evidence
that if the Mercedes had remained true to its course, there would not have been any collision, and
that for such reason article 827 of the Code of Commerce is not in point.

Issue:
Whether both vessels will be held liable for the collision which resulted from both vessels’
negligence pursuant to Article 827 of the Code of Commerce?

Held:
Yes, the court said that in this case we have this situation wherein one vessel is going out of the
bay and the other coming in ; each on its own course. If both had followed their respective course
there would have been a full clearance and no collision. That the officers on the one vessel at a
distance of two or three miles could clearly see the course and maneuvers of the other vessel. The
Y. Sontua changed its course which was the primary cause of the collision. Even so, if the
Mercedes had remained true to its course, there would have been a full clearance. It appears from
the physical facts that by the aid of natural light, at the time of and prior to the collision, either vessel
could be clearly and distinctly seen for a considerable distance.

Pursuant to Article 827 of the Code of Commerce


If both vessels may be blamed for the collision, each one shall be liable for his own
damages, and both shall be jointly responsible for the losses and damages suffered by
their cargoes.
#TEAMDREAMWORKS
ALABA - ALANO - AMBROCIO - BAUCAN - BOLIGOR - CAGAMPANG - CAÑEDO - LAURENTE - MIRANDA - NENARIA

2.8 Hence the rule is that in case of collision there should be abandonment of the vessel by the
LUZON STEVEDORING CORPORATION, petitioner, shipowner or agent in order to enjoy the limited liability provided for under said Article 837.
vs.
COURT OF APPEALS, HIJOS DE F. ESCANO, INC., and DOMESTIC INSURANCE COMPANY The exception to this rule is when the vessel is totally lost in which case there is no vessel to
OF THE PHILIPPINES, respondents. abandon so abandonment is not required. Because of such total loss the liability of the shipowner
G.R. No. L-58897 December 3, 1987 or agent for damages is extinguished. Nevertheless, the shipowner or agent is personally liable for
GANCAYCO, J.: claims under the Workmen's Compensation Act and for repairs of the vessel before its loss. 23

FACTS: On May 30, 1968, a maritime collision occurred within the vicinity of the entrance to the In case of illegal or tortious acts of the captain the liability of the shipowner and agent is subsidiary.
North Harbor, Manila between the tanker LSCO "Cavite" owned by Luzon Stevedoring Corporation In such instance the shipowner or agent may avail of the provisions of Article 837 of the Code by
and MV "Fernando Escano" a passenger ship owned by Hijos de F. Escano, Inc. as a result of abandoning the vessel. 24
which said passenger ship sunk. An action in admiralty was filed by Hijos de F. Escano, Inc. and
Domestic Insurance Company of the Philippines against the Luzon Stevedoring Company (LSC) However, if the injury or damage is caused by the shipowner's fault as where he engages the
in the CFI of Cebu. services of an inexperienced and unlicensed captain or engineer, he cannot avail of the provisions
● CFI: LSCO "Cavite" was solely to blame for the collision. With respect to the defense that of Article 837 of the Code by abandoning the vessel. 25 He is personally liable for the damages
LSCO's liability is limited to the value of the LSCO "Cavite" and freight earned, invoking arising thereby.
Art. 837 of the Code of Commerce, the Court believes and so holds that the defense has
not been established. Moreover, the evidence is such that in principle Art. 837 does not ART. 587. The ship agent shall also be civilly liable for the indemnities in favor of third persons
apply here. which arise from the conduct of the captain in the vigilance over the goods which the vessel carried;
● CA: affirmed in toto but he may exempt himself therefrom by abandoning the vessel with all her equipment and the
freight he may have earned during the voyage.
ISSUE: W/N under Art. 837 of the Code of Commerce abandonment of vessel at fault is necessary xxx xxx xxx
in order that the liability of owner of said vessel shall be limited only to the extent of the value
thereof, its appurtenances and freightage earned in the voyage ART. 590. The co-owners of the vessel shall be civilly liable in the proportion of their contribution
to the common fund for the results of the acts of the captain, referred to in Article 587.
RULING: YES, abandonment is necessary. Each co-owner may exempt himself from this liability by the abandonment, before a notary, of that
part of the vessel belonging to him.
There is no question that the action arose from a collision and the fault is laid at the doorstep of xxx xxx xxx
LSCO "Cavite" of petitioner. Undeniably petitioner has not abandoned the vessel. Hence
petitioner can not invoke the benefit of the provisions of Article 837 of the Code of ART. 837. The civil liability incurred by the shipowners in the cases prescribed in this section, shall
Commerce to limit its liability to the value of the vessel, all the appurtenances and freightage be understood as limited to the value of the vessel with all her appurtenances and freight earned
earned during the voyage. during the voyage.

We reiterate what We said in previous decisions that the real and hypothecary nature of the liability
of the shipowner or agent is embodied in the provisions of the Maritime Law, Book III, Code of
Commerce. 21 Articles 587, 590 and 837 of the same code are precisely intended to limit the liability
of the shipowner or agent to the value of the vessel, its appurtenances and freightage earned in
the voyage, provided that owner or agent abandons the vessel. Although it is not specifically
provided for in Article 837 of the same code that in case of collision there should be such
abandonment to enjoy such limited liability, said article on collision of vessels is a mere
amplification of the provisions of Articles 587 and 590 of same code where abandonment of the
vessel is a pre-condition. Even without said article, the parties may avail of the provisions of Articles
587 and 590 of same code in case of collision. This is the reason why Article 837 of the same code
is considered a superfluity. 22
#TEAMDREAMWORKS
ALABA - ALANO - AMBROCIO - BAUCAN - BOLIGOR - CAGAMPANG - CAÑEDO - LAURENTE - MIRANDA - NENARIA

2.9 (a) A marine peril;


ERLANGER & GALINGER, plaintiffs and appellants, (b) service voluntarily rendered when not required as an existing duty or from special contract;
Vs. (c) success, in whole or in part, or that the services rendered contributed to such success.
THE SWEDISH EAST ASIATIC Co. (LTD.) ET AL., defendants. THE "OELWERKE TEUTONIA"
and NEW ZEALAND INSURANCE Co. (LTD.), appellants. From the circumstances of the case, it can be seen that the captain had over 2 days to arrange for
GR No. 10051. March 9, 1916. salvage operations but he did nothing, while the plaintiffs, who were strangers and had no interest,
sent out a salvage expedition in twenty-four hours after they discovered that the ship was wrecked.
Facts:
The steamship Nippon was loaded with copra and some other general merchandise. It sailed from The evidence proves that the Nippon was in peril; that the captain left in order to protect his life and
Manila on May 7, 1913 and was bound for Singapore. However, it went aground the Scarborough the lives of the crew; that the animo revertendi (without any intention of returning to it) was slight.
Reef which is 120-130 miles from the nearest island in Luzon. Some crew left Nippon to ask for
assistance. The Philippine Government sent the coast guard cutter, Mindoro, to where Nippon was A salvor, in the view of the maritime law, has an interest in the property; this is called a lien, but it
stranded. never goes, in the absence of a contract expressly made, upon the idea of a debt due by the owner
to the salvor for services rendered, but upon the principle that the service creates a property in the
On May 12, the steamship Machuria which was bound for Hong Kong was requested to pass by thing saved. He is, to all intents and purposes, a joint owner and if the property is lost lie must bear
Scarborough Reef. Machuria took the captain and the remaining crew in the ship and such were his share like the other joint owners.
preceeding to Hong Kong.
Moreover, in the present case the plaintiff-appellant claims that the Nippon was a derelict or quasi-
Meanwhile, the steamship Mindoro proceeded to the Nippon and removed the balance of the derelict and that their claim should be adjudged upon this basis. A "derelict" is defined as "a ship
baggage of the officers and crew which was found on the deck. On May 14, 1913, the plaintiff or her cargo which is abandoned and deserted at sea by those who are in charge of it, without any
applied to the Director of Navigation for a charter of a coast guard cutter, for the purpose of hope of recovering it, or without any intention of returning to it." If those in charge of the property
proceeding to "the stranded and abandoned steamer Nippon." The plaintiffs, Erlanger & Galinger, quitted it or left it with the intention of finally leaving it, it is derelict, and the change of their intention
took possession of the Nippon on or about May 17, 1913, and continued in possession until about and an attempt to return will not change its nature.
the 1st of July, when the last of the cargo was shipped to Manila. The Nippon was floated and
towed to Olongapo, where temporary repairs were made, and then brought to Manila. RIGHT OF POSSESSION OF DERELICT.
When a vessel is found at sea, deserted, and has been abandoned by the master and crew without
The plaintiffs brought the present action against the insurance companies and underwriters, who the intention of returning and resuming possession, she is, in the sense of the law, derelict,
represented the cargo salvaged from the Nippon, to have the amount of salvage, to which the abandoned, and the finder who takes possession with the intention of saving her gains a right of
plaintiffs were entitled, determined. possession which he can maintain against the true owner. The owner does not, indeed, renounce
his right of property. This is not presumed to be his intention, nor does the finder acquire any such
Issue: Whether the plaintiffs are entitled to recover proceeds from salvaged goods. right. But the owner does abandon, temporarily, his right of possession, which is transferred to the
finder who becomes bound to preserve the property with good faith and bring it to a place of safety
Ruling: Yes. The SC allowed salvage in this case. They held that the master had taken insufficient for the owner's use; and lie acquires a right to be paid for his services a reasonable and proper
precautions to protect his vessel and although the ship was not a legal derelict, the libelants were compensation out of the property itself. He is not bound to part with the possession until it is paid,
salvors and entitled to salvage. or the property is taken into the possession of the law preparatory to the amount of salvage being
legally ascertained.
Generally salvage may be defined as a service which one person renders to the owner of a ship
or goods by his own labor, preserving the goods or ship which the owner or those entrusted with
the care of them have either abandoned in distress at sea or are unable to protect and secure. It is
found on the equity of remunerating private and Individual services performed in saving, in whole
or in part, a ship or its cargo from impending peril, or of recovering them after actual loss. It is a
compensation for actual services rendered to the property charged with it, and is allowed for
meritorious conduct of the salvor and in consideration of a benefit conferred upon the person whose
property he has saved.

Three elements are necessary to a valid salvage claim:


#TEAMDREAMWORKS
ALABA - ALANO - AMBROCIO - BAUCAN - BOLIGOR - CAGAMPANG - CAÑEDO - LAURENTE - MIRANDA - NENARIA

2.10 was made, can repudiate it and are bound to pay only what such services are reasonably
No. 3488. August 10, 1907 worth.
C. S. ROBINSON ET AL., plaintiffs and appellees,
Vs. Issue:
THE SHIP "ALTA" ET AL., defendants and appellants. Whether or not salvors are bound to the contract they signed

Doctrine: Held:
Where a contract is entered into by competent persons, and is free from fraud or misrepresentation, Yes. Where a contract is entered into by competent persons, and is free from fraud or
whereby one of the parties thereto agrees, for a fixed price, to perform certain salvage services misrepresentation, whereby one of the parties thereto agrees, for a fixed price, to perform certain
with respect, to a vessel in distress, payable only in case of success, the contract will not be set salvage services with respect, to a vessel in distress, payable only in case of success, the contract
aside so as to permit a recovery as for the reasonable value of such services, solely because the will not be set aside so as to permit a recovery as for the reasonable value of such services, solely
contractor afterwards finds that the price agreed upon is inadequate by reason of the increased because the contractor afterwards finds that the price agreed upon is inadequate by reason of the
coat of the work which was not foreseen when the contract was made. increased coat of the work which was not foreseen when the contract was made.

Facts: There are numerous cases in which it has been held that the salvors are bound by contracts which
On the 26th day of September, 1905, the sailing vessel Alta was wrecked and stranded upon the they have made. In the case of The Silver Spray (1 Brown's Admiralty, 349, s. c. 22 Fed. Cases,
coast of Cavite Province. The captain of the ship removed the cargo and after working ten or twelve 141), the court said:
days in attempts to float the ship made a contract, in writing, with the plaintiffs, which is as follows:
"Mr. CHARLES S. ROBINSON, Manila. "On the part of the respondent it is contended that the compensation must be limited to the
"DEAR SIR: Referring to your offer of 31st ultimo, re the raising of the ship Alta—viz, to put contract price, and, on the part of the libellants the court is asked to disregard the contract and
her into Cavite and in such condition that it will admit of her being sailed to Hongkong or other award them a sum as salvage somewhat commensurate to their expenditures. As the matter turned
port, subject to being passed by Lloyds' surveyor—for the sum of fifteen thousand pesos out, it was no doubt a hard bargain for the libellants. But I do not understand that a court of
(P15,000), Philippine currency, I accept the same and shall esteem it a favor if you will admiralty will set aside a contract for that cause alone, where it is free from all fraud,
commence the work with the least possible delay. Should you not be successful, it is distinctly deception, mistake, or circumstances of controlling necessity. McArthur had ample time for
understood that, no money whatever is to be paid for any work done or appliances used. consideration, and there is no pretense of any fraud or deception on the part of Moore or
"Yours, faithfully, (Sgd.) "W. THONAGEL. his agent Reilly, or that McArthur did not know all about the situation, and the difficulties in
The plaintiffs went to work immediately upon the vessel, raised it, and towed it to Cavite on the the way of getting the boilers out, and there was no controlling necessity of duty or
10th day of December, 1905. It was at once decided to put her into the dry dock or slip there for otherwise to undertake the job.
the purpose of examining her hull and ascertaining the extent of the damages. This could not be
done until the 18th day of January, owing to other demands upon the dock company. On that day "The contract appears to have been entered into openly and fairly in all "respects, and there is
she was put upon the slip, was examined, and again taken off. On the 20th day of January plaintiffs no principle or authority upon which the court can disregard it, or make a new contract for
removed all of their machinery, tackle, and utensils from the shipand did no more work upon her. the parties. It must, therefore, be enforced as it stands. [See 2 Pars. Shipp & Adm., 307, notes
2-5; The True Blue, 2 W. Rob. Adm., 176, 180 (a case very much like the present except that in
The plaintiffs, on the 30th day of December, 1905, were paid by the defendants the sum of that case the expense was largely increased by a storm having come on, and yet the contract was
3,000 pesos on account of the contract. They brought this action against the ship and her master enforced although the disparity was great.
on the 27th day of February, 1906, claiming to recover the reasonable worth and value of the
services performed by them, which they fixed at 15,000 pesos. "McArthur was under no obligation to continue the work after he saw it must be a losing
operation. His compensation was dependent upon success and he was at liberty to abandon the
Defendants’ contention is that the contract in this case, being contingent upon success, their claim work at any time. Parties, after having entered into a deliberate and explicit agreement, must not
is that they are not bound by it. In effect they claim that where a contract, Contingent upon be encouraged to make large expenditures beyond the contract price at the expense of the owners,
success, is fairly made between the master of a ship and the salvors, with full knowledge on the by the courts, loosely or without the most cogent reasons, disregarding contracts thus entered into,
part of all theparties as to the condition of the vessel, and the contract is performed by the salvors, and free from all circumstances of fraud, deception, mistake, or oppression existing at the time the
they, if it turns out that the work is more expensive than they thought it would be at the time contract was made. Parties must understand that contracts fairly entered into will be strictly
they made the contract, can repudiate it and recover what they would have been entitled to enforced in admiralty, as well as elsewhere."
recover had no contract been made, and that, on the other hand, the owners of the ship, if it turns
out that the work was less expensive than they thought it would be at the time the contract
#TEAMDREAMWORKS
ALABA - ALANO - AMBROCIO - BAUCAN - BOLIGOR - CAGAMPANG - CAÑEDO - LAURENTE - MIRANDA - NENARIA
#TEAMDREAMWORKS
ALABA - ALANO - AMBROCIO - BAUCAN - BOLIGOR - CAGAMPANG - CAÑEDO - LAURENTE - MIRANDA - NENARIA

2.11
#TEAMDREAMWORKS
ALABA - ALANO - AMBROCIO - BAUCAN - BOLIGOR - CAGAMPANG - CAÑEDO - LAURENTE - MIRANDA - NENARIA

2.12 the present action for the recovery of a salvage award of P300,000; but, in their trial brief, they
G.R. No. L-15871 November 7, 1921 reduced this demand to P297,443.40.
THE ATLANTIC, GULF & PACIFIC COMPANY OF MANILA and SIMMIE & GRILK, plaintiffs-
appellants, Judgment was rendered in favor of Atlantic Gulf and Simmie and against the Uchida Kisen Kaisha
vs. and Mitsui Bussan Kaisha in solidum for the sum of P140,000 and for costs. The action was
UCHIDA KISEN KAISHA and MITSUI BUSSAN KAISHA, defendants-appellants. dismissed as regards Vicente Madrigal, the owner of the cargo.
VICENTE MADRIGAL, defendant-appellee.
Kincaid, Perkins & Kincaid for plaintiffs and appellants. From that judgment Altantic Gulf and Simmie and Uchida Kisen Kaisha and Mitsui Bussan Kaisha
Cohn & Fisher for defendants and appellants. appealed to the Supreme Court. The Supreme Court modified the judgment appealed from,
Felix M. Roxas and Williams & Ferrier for appellee. ordered decreed that Atlantic Gulf and Simmie have and recover the sum of P98,000, Philippine
currency, from Uchida Kisen Kaisha and Mitsui Bussan Kaisha, jointly and severally, and the sum
JOHNSON, J.: of P2,000, Philippine currency, from Vicente Madrigal, without any finding as to costs.

FACTS: ISSUES:

While the steamship Kyodo Maru was discharging a cargo of coal, the property of Vicente Madrigal, 1. Is the petitioner entitled to the 300,000 compensation claim?
in the harbor of Manila, inside the breakwater, one of the lighters alongside said vessel sank. In 2. Is Vicente Madrigal (owner of the cargo) liable?
swinging with the tide, the Kyodo Maru came violently in contact with this submerged lighter, the
result being that her hull was perforated. HELD:

The said steamer began to sink during the morning of October 22 and touched the bottom of the ISSUE 1:
harbor at 10 a.m. She continued to sink deeper into the mud until, on October 23, the forward half
of the vessel was entirely submerged, while the stern half was still afloat. The value of the vessel This question of compensation involves two elements: (a) The actual expenses incurred in the
at the time of the accident was about P1,300,000, Philippine currency. salvage operation, and (b) the reward for services rendered by the plaintiffs as salvors.

On the afternoon of October 23, the Atlantic Gulf & Pacific Company of Manila and Simmie & Grilk, A. Suffice it to say that after a perusal of the luminous briefs of the eminent counsel for both parties,
at the request of the captain and agents of the ship, took possession of the sinking vessel as salvors in relation with the evidence adduced during the trial of the cause, we are persuaded that most of
and commenced salvage operation at once. At that time they had submitted two propositions to the charges for expenses made by the plaintiffs are really exorbitant. Considering all of the facts
the captain and agents of the ship as to compensation for the salvage services to be performed: and circumstances of this case, and specially the inflated war prices of materials at the time the
one for P150,000 in case of success and reimbursement of expenses in case of failure, and another salvage in question was performed, we are of the opinion that the sum of P50,000 would be a very
for P300,000 “no cure no pay.” reasonable allowance to the plaintiffs for their cash outlay and the rental value of their equipment.
B. With regard to the reward for salvage services, defendants-appellants maintain that the sum of
Atlantic Gulf and Simmie were informed that the propositions would be transmitted to the owners P35,000 would be a liberal net award to the salvors.
of the vessel in Japan for acceptance or rejection, but they were requested to continue work in the
meantime, upon the understanding that if no special contract should be made they would be Section 10 of Act No. 2616 prescribes the rule for determining the reward for salvage as
compensated as salvors. The vessel was floated on October 30 and the salvage operations ended follows:
the
following day. 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
On the afternoon of October 30, Atlantic Gulf and Simmie were informed in writing that the head Instance of the province where the things salvage are found, taking into account
office of the steamship company in Japan had, by cable, rejected both of the propositions, and that principally the expenditures made to recover or save the vessel or the cargo or both, the
it was proposed to settle with them on the basis of the reasonable value of their services as salvors. zeal demonstrated, the time employed, the services rendered, the excessive expenses
occasioned, the number of persons who aided, the danger to which they and their vessels
Atlantic Gulf and Simmie then made demand for payment of P150,000. Uchida Kisen Kaisha and were exposed, as well as that which menaced the things recovered or salvaged, and the
Mitsui Bussan Kaisha (not including Madrigal) offered to pay P75,000. Atlantic Gulf and Simmie value of such things after deducting the expenses.
then made a counter offer of P125,000. This was rejected. Atlantic Guld and Simmie then brought
#TEAMDREAMWORKS
ALABA - ALANO - AMBROCIO - BAUCAN - BOLIGOR - CAGAMPANG - CAÑEDO - LAURENTE - MIRANDA - NENARIA

Applying now the rules prescribed by section 10 of said Act No. 2616, above quoted, in determining is approximately 2 per cent of the value of the ship (which is estimated at P1,300,000). Hence the
the reward for the salvage in question, the following facts should be taken into account: defendant-appellee should be made to pay 2 per cent of the award of P100,000, or the sum
(1) That the salvage operations in question were performed in Manila Bay, inside the of P2,000.
breakwater, where the depth of the water was only about 21 feet at low tide;
(2) that those operations lasted eight days — from noon of October 23rd to October 31st Wherefore, the judgment appealed from is hereby modified, and it is hereby ordered and decreed
— although the salvors appear to have rendered services until the 8th of November; that the plaintiffs have and recover the sum of P98,000, Philippine currency, from the defendants
(3) that the vessel salved and its cargo were never in danger of total loss, although it is Uchida Kisen Kaisha and Mitsui Bussan Kaisha, jointly and severally, and the sum of P2,000,
admitted that if the vessel had sunk and listed, the expenses of recovering the same Philippine currency, from the defendant Vicente Madrigal, without any findings as to costs in this
would have been considerable; instance. So ordered.
(4) that the salvage operation was comparatively simple, consisting merely of using
pumps to prevent the vessel from sinking any further, while the salvors were building a
cofferdam around the submerged forehatch preparatory to pumping her out;
(5) that there was no danger to the lives and property of the salvors in view of the proximity
to the shore of the place where the work was performed;
(6) that the value of the equipment used, including the launches employed to maintain
the ferry service, was about P300,000;
(7) that the plaintiffs' outlay, together with the reasonable rental value of their equipment,
was, as we have heretofore estimated, the sum of P50,000;
(8) that the Kyodo Maru was, at the time she was salved, valued at P1,300,000;
(9) that the captain of said vessel was in a hurry to get her out because he had to meet a
new charter in Japan; and
(10) that the plaintiffs accomplished the salvage with energy and promptitude, to the
entire satisfaction of the captain and agents of the vessel.

Considering all of the foregoing facts in relation with the award heretofore made by this court in the
salvage cases of Erlanger and Galinger vs. Swedish East Asiatic Co., Ltd. (34 Phil., 178), Manila
Railroad Co. vs. Macondray and Co. (37 Phil., 850), and G Urrutia and Co. vs. Pasig Steamer and
Lighter Co. (22 Phil., 330), we are persuaded that the sum of P50,000 would be an equitably
liberal net compensation to the plaintiffs as salvors of the Kyodo Maru. This together with
the sum of P50,000 which we have found should be allowed them for their expenses and the
reasonable rental value of their equipment, makes a total award to the plaintiffs of the sum
of P100,000. We are persuaded that this amount is a sufficient compensation for the outlay
and effort of the salvors in the present case, and that the same is liberal enough to constitute
an inducement to others to render like services in similar emergencies in the future.

ISSUE 2:

The next question for determination is the liability, if any, of the defendant Vicente Madrigal as
owner of the cargo, to contribute to the salvage award above-mentioned.

Considering, however, that the removal of said coal from the sinking vessel was merely incidental
to salving her; and considering that only 573 tons of such cargo were actually taken by the plaintiffs
from the ship, it being no longer necessary to touch the rest for the purpose of raising her, we are
of the opinion that full justice would be done to all the parties concerned by taking the value of the
said 573 tons of coal in relation with the value of the ship, and thus apportion the salvage award
between their respective owners. The said 573 tons of coal, at P45 a ton, are worth P25,785, which
#TEAMDREAMWORKS
ALABA - ALANO - AMBROCIO - BAUCAN - BOLIGOR - CAGAMPANG - CAÑEDO - LAURENTE - MIRANDA - NENARIA

2.13
#TEAMDREAMWORKS
ALABA - ALANO - AMBROCIO - BAUCAN - BOLIGOR - CAGAMPANG - CAÑEDO - LAURENTE - MIRANDA - NENARIA

2.14 JOSE FERNANDEZ, O. N. HOLMSEN, and M. A. MACLEOD vs. THOMPSON & CO., W.F. The defendants originally claimed the sole and exclusive possession of the wreck on the ground
STEVENSON & CO., KER & CO., Captain GUY, Captain SWAN, JOHN DOE, RICHARD ROE that they had not abandoned it but only left to seek assistance. The trial court, however, found that
and HENRY JONES, the appearances justified the conclusion that the Bengloe was abandoned by the defendants. The
trial court further found that the equipment of the plaintiffs was utterly inadequate for the task they
FACTS: endeavored to undertake, and that they had no right to insist upon retaining possession of the
wreck as against the representative of the owners and underwriters, who had superior equipment
On September 13, 1914, the British steamer Bengloe owned by W. Thompson & co., while en route and ample financial resources.
from Manila to European ports, stranded on the Mayone shoal in the Sulu. On the same day,
officers of the vessel, with four seamen, were sent in search of assistance. No word having been Issue:
received from these men. the captain later arrived at Puerto Princesa, Palawan. While at that place, Had the plaintiffs adequate equipment to effect the salvage of the ship and cargo?
the captain sent a telegram informing: Had plaintiffs the right to insist upon retaining possession of the Bengloe and her cargo for the
purpose of salvage as against the salvors employed by the owners and underwriters?
“Bengloe abandoned last Thursday eighteen days on Corral Reef no assistance whatever to hand
ship dangerous position settling down forward and listed heavily to Port Cargo in aft holds possible Ruling:
to salve. Crew all safe. Proceeding Manila per Panglima due fifteenth advise Leith. (Sgd.) Guy, No. The only equipment actually in the possession of the plaintiffs for salving the Bengloe and he
Master." cargo was a small launch and some baskets and sacks.That such equipment was inadequate for
the salvage of a vessel valued at P100,000, laden with sugar, copra, and bunker coal of a value of
Plaintiffs, residents of Palawan, learned of the abandonment of the Bengloe by her crew, then P352,500, perilously situated, seems undeniable. But plaintiffs also made futile efforts, presumably
formed a partnership, with a capital of P1,500, for the purpose of salving the vessel and cargo. in good faith, to acquire adequate salvage equipment. We thus have presented this unique
They hired the launch Florence of between thirty and forty tons capacity from the provincial situation: Well-intentioned men with inadequate equipment are first on the scene of a wreck, and
authorities of Puerto Princesa, and with a number of laborers proceeded to the wreck to ascertain while in technical possession, are driven off and operations begun by a second salvage party under
its condition immediately took possession of the vessel and removed 14.937 kilos of copra and an expert superintendent and with adequate equipment. No evidence was submitted, and in fact
certain furniture and effects, of the approximate value of P2,500 and stored in the Government no satisfactory evidence could have been presented, to show that the vessel could have been
warehouse. The copra being perishable was later sold by an order of court and the proceeds saved and the cargo salved with the small launch at plaintiffs' disposal. Nor can we do more than
amounting to P2,051.63 deposited with the clerk of court. The other articles were left in the custody speculate as to the value of plaintiffs' services if they had been permitted to help and the two parties
of the provincial treasurer of Palawan. Holmsen and Fernandez began negotiations with various had worked together. The services rendered by the plaintiffs contributed immediately to the
owners of vessels in Manila, however, the boat was ever chartered or placed at the disposition of preservation of a small amount of property on the stranded vessel, but as an actual fact, their further
the plaintiffs. exertions, however meritorious they were intended to be were not successful in any degree and
cannot be compensated in damages.
In the meantime, the London Salvage Association acting in the interest of the underwriters of the
ship and the cargo, and with the consent of the ship's agents, engaged Ker & Co. to take charge The amount of the property saved was valued at approximately P2,500. Plaintiffs incurred
of the salvage operations. They employed William Swan, an engineer and marine surveyor, to expenditures in the sum of P972.95 in the salvage of the copra and other effects and in making
conduct the work. Swan left Manila and met captain and members of the crew of the Bengloe on arrangements for the salvage of the remainder of the cargo. The quantum for salvage allowed by
board, and took them back to the wreck. But discovered that the copra and other effects had been the trial court of P1,200 was therefore approximately one-half of the value of this property and gave
removed and was forced to leave the vessel by the captain of the Polillo and a lieutenant of the plaintiffs, in addition to their expenses, only a little more than P200 as a bounty.
Constabulary sent to the wreck with constabulary soldiers to protect it from plunder. When the other
plaintiffs Holmsen and Fernandez, returned on the launch, they were prevented from taking any Compensation for salvage services necessarily depends on the circumstances of the particular
further part in the salvage operations. case. In this instance, we are inclined to agree with appellants that a reasonable, and at the same
time liberal award, for their services as meritorious salvors, would be P2,000.
Then began action in the Court of First Instance of the city of Manila to recover from the owners of
the Bengloe and other parties the sum of P179,780, claimed to be due as compensation for the Courts of admiralty usually consider the following circumstances as the main ingredients in
salvage of merchandise and effects of the value of P2,500 from the steamship Bengloe and as determining the amount of the reward to be decreed for a salvage service: (1) The labor expended
damages because of having been forcibly deprived of the possession of the steamship and thereby by the salvors in rendering the salvage service. (2) The promptitude, skill, and energy displayed in
prevented from prosecuting salvage operations. rendering the service and saving the property. (3) The value of the property employed by the
salvors rendering the service, and the danger to which such property was exposed. (4) The risk
#TEAMDREAMWORKS
ALABA - ALANO - AMBROCIO - BAUCAN - BOLIGOR - CAGAMPANG - CAÑEDO - LAURENTE - MIRANDA - NENARIA

incurred by the salvors in securing the property from the impending peril. (5) The value of the
property saved. (6) The degree of danger from which the property was rescued.

Das könnte Ihnen auch gefallen