MARITIME LAW
I. GENERAL CONCEPTS
A. Real and Hypothecary Nature
TEODORO YANGCO, ETC. VS. MANUEL LASERNA G.R. No. L-47447-47449
October 29, 1941
KEYWORD: S.S. NEGROS/ BOAT OVERLOADED
DOCTRINE: 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 to the insurance
thereon, if any. In the instant case it does not appear that the vessel was
insured. Whether the abandonment of the vessel sought by the petitioner
in the instant case was in accordance with law of not, is immaterial. The
vessel having totally perished, any act of abandonment would be an idle
ceremony.
PONENTE: MORAN, J.
FACTS: the steamer S.S. Negros, belonging Yangco, left the port of
Romblon on its retun trip to Manila. Typhoon signal No. 2 was then up, of
which fact the captain was duly advised and his attention thereto called by
the passengers themselves before the vessel set sail. The boat was
overloaded as indicated by the loadline which was 6 to 7 inches below the
surface of the water. In addition, the vessel carried thirty sacks of crushed
marble and about one hundred sacks of copra and some lumber. The
passengers, numbering about 180, were overcrowded, the vessel's
capacity being limited to only 123 passengers. After two hours of sailing,
the boat encountered strong winds and rough seas between the islands of
Banton and Simara, and as the sea became increasingly violent, the captain
ordered the vessel to turn left, evidently to return to port, but in the
manuever, the vessel was caught sidewise by a big wave which caused it to
capsize and sink. Many of the passengers died in the mishap, among them
being AntolinAldaa,Victorioso, CasianaLaserna,GenaroBasaa all of
whom were relatives of the respondents in separate civil actions. These
respondents instituted in the Court of First Instance of Capiz separate civil
actions against petitioner here to recover damages for the death of the
passengers aforementioned.
PETITIONERS CONTENTION: After the rendition of the judgment against
him, Yangco, by a verified pleading, sought to abandon the vessel to the
plainitffs in the three cases, together with all its equipments, without
prejudice to his right to appeal.
RTC: The court awarded the heirs damages for the death of the victims.The
abandonment having been denied, an appeal was taken to the Court of
Appeals, wherein all the judgmnets were affirmed except that which sums
was increased to P4,000.
CA: Affirmed the trial court.
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?
SC: NO. This question is controlled by the provisions of article 587 of the
Code of Commerce. Said article reads:
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 provisions accords a shipowner or agent the right of abandonment;
and by necessary implication, his liability is confined to that which he is
entitled as of right to abandon "the vessel with all her equipment and
the freight it may have earned during the voyage."
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 the contract of agency 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.
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 such that a total loss thereof results in its
extinction.
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 such that a total loss thereof results in 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 to the insurance thereon, if any. In the
instant case it does not appear that the vessel was insured.Whether the
abandonment of the vessel sought by the petitioner in the instant case was
in accordance with law of not, is immaterial. The vessel having totally
perished, any act of abandonment would be an idle ceremony.
Judgement is reversed and petitioner is hereby absolved of all the
complaints.#ABILO
DELA TORRE VS CA
FACTS
Respondent Crisostomo Concepcion owned LCT-Josephine,
a vessel registered with the Philippine Coast Guard. On Feb.
1, 1984, he entered into a preliminary agreement with
Roland dela Torre for the dry-docking and repairs of the said
vessel. Afterwhich, it shall be chartered for 10,000 a month
with the condition that the charterer will pay for the
insurance premium of the vessel. Roland will also take
charge of the maintenance cost of the vessel.
In 1984, Concepcion and the Philippine Trigon Shipyard
Corporation entered into a contract of agreement wherein
the latter would charter LCT-Josephine.
Subsequently, LCT-Josephine was sub-chartered to Trigon
Shipping Lines owned by Rolandos father. It was again sub-
chartered to Ramon Larrazabal for the transport of gravel
and sand to Leyte.
The vessel arrived at Leyte, and the vessel ramp was
lowered for unloading, with the use of the payloader of the
Larrazabals. While the payloader was on deck, the vessel
ramp started to move downward, the vessel tilted and sea
water rushed in. Thereafter, the vessel sank.
Concepcion demanded PTSC/Roando to refloat the vessel.
However, this did not materialize.
Concepcion filed for a complaint for a sum of money with
damages against PTSC and Rolando.
The RTC ruled that the cause was the improper lowering of
the ramp, which was under the control of the vessel captain
and crew.
ISSUE: Whether or not the Limited Liability Rule may apply:
HELD: No. The only party who may invoke this rule is the
shipowner, Concepcion. He is the very person the limited
liability rule is trying to protect. It would be absurd to apply
the limited liability rule against him, who in the first place, is
the person who should be benefitting from it. The charterer
cannot represent ownership of the vessel, and that they do
not completely or absolutely step into the shoes of the
shipowner or agent because there should exist a conflict of
interest. The rights of the sub-charterer, whose rights
cannot rise above that of the former, cannot set up the rule
against the ship owner.

CASE TITLE: CHUA YEK HONG vs. INTERMEDIATE APPELLATE COURT
KEYWORD: Luzviminda, doctrine of limited liability
PONENTE: Melencio-Herrera, J.
DOCTRINE: Under Art. 587 of the Code of Commerce, 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 may exempt himself therefrom by abandoning
the vessel with all the equipments and the freight it may have earned
during the voyage. (Doctrine of Limited Liability)
FACTS:
Petitioner is a duly licensed copra dealer based at Puerta Galera,
Oriental Mindoro, while private respondents are the owners of the vessel,
"M/V Luzviminda I," a common carrier engaged in coastwise trade from
the different ports of Oriental Mindoro to the Port of Manila.
In October 1977, petitioner loaded 1,000 sacks of copra, valued at
P101,227.40, on board the vessel "M/V Luzviminda I" for shipment from
Puerta Galera, Oriental Mindoro, to Manila. Said cargo, however, did not
reach Manila because somewhere between Cape Santiago and Calatagan,
Batangas, the vessel capsized and sank with all its cargo.
Petitioner then instituted before the then CFI of Oriental
Mindoro, a Complaint for damages based on breach of contract of carriage
against private respondents
PETITIONERS CONTENTION:
Private respondents as shipowners should be held liable for
breach of contract of carriage
RESPONDENTS CONTENTION:
In their answer, private respondents averred that even assuming
that the alleged cargo was truly loaded aboard their vessel, their liability
had been extinguished by reason of the total loss of said vessel.
ISSUE: Whether or not the Doctrine of Limited Liability under Article 587 of
the Code of Commerce as expounded in Yangco vs. Laserna applies in the
case at bar
RULING:
1) TRIAL COURT: GRANTED
Defendants are jointly and severally liable to pay the plaintiff the
sum of P101,227.40 representing the value of the cargo belonging to the
plaintiff which was lost while in the custody of the defendants and other
miscellaneous expenses
2) CA: DENIED
Under Art. 587 of the Code of Commerce and the doctrine in
Yangco vs. Lasema, private respondents' liability, as ship owners, for the
loss of the cargo is merely co-extensive with their interest in the vessel
such that a total loss thereof results in its extinction.
3) SC: DENIED
The term "ship agent" as used in Art. 587 is broad enough to
include the ship owner. Pursuant to said provision, therefore, both the ship
owner and ship agent are civilly and directly liable for the indemnities in
favor of third persons, which may arise from the conduct of the captain in
the care of goods transported, as well as for the safety of passengers
transported. However, under the same Article, this direct liability is
moderated and limited by the ship agent's or ship owner's right of
abandonment of the vessel and earned freight. This expresses the
universal principle of limited liability under maritime law. The most
fundamental effect of abandonment is the cessation of the responsibility
of the ship agent/owner. It has thus been held that by necessary
implication, the ship agent's or ship owner's liability is confined to that
which he is entitled as of right to abandon the vessel with all her
equipment and the freight it may have earned during the voyage," and "to
the insurance thereof if any" (Yangco vs. Lasema, supra). In other words,
the ship owner'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. "No
vessel, no liability" expresses in a nutshell the limited liability rule.
The limited liability rule, however, is not without exceptions,
namely: (1) where the injury or death to a passenger is due either to the
fault of the ship owner, or to the concurring negligence of the ship owner
and the captain; (2) where the vessel is insured; and (3) in workmen's
compensation claims. In this case, there is nothing in the records to show
that the loss of the cargo was due to the fault of the private respondent as
shipowners, or to their concurrent negligence with the captain of the
vessel.
In sum, it will have to be held that since the ship agent's or ship
owner's liability is merely co-extensive with his interest in the vessel such
that a total loss thereof results in its extinction (Yangco vs. Laserna, supra),
and none of the exceptions to the rule on limited liability being present,
the liability of private respondents for the loss of the cargo of copra must
be deemed to have been extinguished. There is no showing that the vessel
was insured in this case. #AFAN
B. Limited Liability Rule
CASE TITLE:HEIRS OF AMPARO DE LOS SANTOS vs. HONORABLE COURT OF
APPEALS AND COMPANIA MARITIMA
KEYWORD: overwhelming typhoon WELMING
PONENTE: MEDIALDEA, J
DOCTRINE:
The limited liability doctrine applies not only to the goods but also in all
cases like death or injury topassengers wherein the shipowner or agent
may properly be held liable for the negligent or illicit acts of thecaptain
(Yangco v. Laserna, ibid). Article 587 speaks only of situations
where the fault or negligence iscommitted solely by the captain. In
cases where the shipowner is likewise to be blamed, Article 587 does
notapply (see Manila Steamship Co., Inc. v. Abdulhanan, et al.,
100 Phil. 32, 38). Such a situation will becovered by the provisions
of the New Civil Code on Common Carriers.
SHORT FACTS:
M/V 'Mindoro' sailed from pier 8 North Harbor, Manila, on November
2,1967 at about 2:00 (should have been 6:00 p.m.) in the afternoon bound
for New Washington, Aklan, with many passengers aboard. It appears that
said vessel met typhoon 'Welming' on the Sibuyan Sea, Aklan, at about
5:00 in the morning of November 4, 1967 causing the death of many of its
passengers, although about 136 survived.As already stated, the boat met
typhoon 'Welming' and due to the strong waves it sank causing the
drowning of many passengers among whom were Amparodelos Santos
and all the aforesaid children. The case is pending for almost 23 years.
ISSUE:
Whether there was negligence on the part of Maritima and whether of
Article 587 of the Code of Commerce should apply.
PETITIONERS CONTENTION:
Negligence on the part of the shipowner.
RESPONDENTS CONTENTION:
The defendant alleges that no negligence was ever established and, in fact,
the shipowners and their officers took all the necessary precautions in
operating the vessel. Furthermore, the loss of lives as a result of the
drowning of some passengers, including the relatives of the herein
plaintiff, was due to force majeure because of the strong typhoon
'Welming.'
RULING:
1. TRIAL COURT
Sustained the position of private respondent
CompaniaMaritimaand issued a decision on March 27, 1974, to
wit:the Court finds that in view of lack of sufficient evidence, the
case be, as it is hereby DISMISSED.For lack of evidence, the
counterclaim is also hereby
2. APPELLATE COURT
Affirmed the decision on appeal. While it found that there was
concurring negligence on the part of the captain which must be
imputable to Maritima, the Court of Appeals ruled that Maritima
cannot be held liable in damages based on the principle of limited
liability of the shipowner or ship agent under Article 587 of the
Code of Commerce.
3. SUPREME COURT
Under this provision, a shipowner or agent has the right of abandonment;
and by necessary implication, his liability is confined 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" (Yangco v. Laserna, et al., 73
Phil. 330, 332). Notwithstanding the passage of the New Civil Code, Article
587 of the Code of Commerce is still good law. The reason lies in the
peculiar nature of maritime law which is 94 exclusively real and
hypothecary that operates to limit such liability to the value of the vessel,
or to the insurance thereon, if any (Yangco v. Laserna, Ibid). As correctly
stated by the appellate court, "(t)his rule is found necessary to offset
against the innumerable hazards and perils of a sea voyage and to
encourage shipbuilding and marine commerce. (Decision, Rollo, p. 29).
Contrary to the petitioners' supposition, the limited liability doctrine
applies not only to the goods but also in all cases like death or injury to
passengers wherein the shipowner or agent may properly be held liable for
the negligent or illicit acts of the captain (Yangco v. Laserna, Ibid). It must
be stressed at this point that Article 587 speaks only of situations where
the fault or negligence is committed solely by the captain. In cases where
the shipowner is likewise to be blamed, Article 587 does not apply (see
Manila Steamship Co., Inc. v. Abdulhanan, et al., 100 Phil. 32, 38). Such a
situation will be covered by the provisions of the New Civil Code on
Common Carriers. Owing to the nature of their business and for reasons of
public policy, common carriers are tasked to observe extraordinary
diligence in the vigilance over the goods and for the safety of its
passengers (Article 1733, New Civil Code). Further, they are bound to carry
the passengers safely as far as human care and foresight can provide, using
the utmost diligence of very cautious persons, with a due regard for all the
circumstances (Article 1755, New Civil Code). Whenever death or injury to
a passenger occurs, common carriers are presumed to have been at fault
or to have acted negligently unless they prove that they observed
extraordinary diligence as prescribed by Articles 1733 and 1755 (Article
1756, New Civil Code). #AGUILA
II. VESSELS
CASE TITLE: PHILIPPINE REFINING CO. INC. vs. FRANCISCO JARQUE, JOSE
COROMINAS, and ABOITIZ &
KEYWORD: Vessels PANDAN and ZARAGOZA
PONENTE: MALCOLM
DOCTRINE: Vessels are considered personal property under the civil
law. The only difference between a chattel mortgage of a vessel and a
chattel mortgage of other personalty is that it is not now necessary for a
chattel mortgage of a vessel to be noted n the registry of the register of
deeds, but it is essential that a record of documents affecting the title to a
vessel be entered in the record of the Collector of Customs at the port of
entry.
SHORT FACTS: Francisco Jarque executed three mortgages on the motor
vessels Pandan and Zaragoza. These documents were recorded in the
record of transfers and incumbrances of vessels for the port of Cebu and
each was therein denominated a "chattel mortgage". Neither of the first
two mortgages had appended an affidavit of good faith. The third
mortgage contained such an affidavit, but this mortgage was not
registered in the customs house until May 17, 1932, or within the period of
thirty days prior to the commencement of insolvency proceedings against
Francisco Jarque; also, while the last mentioned mortgage was subscribed
by Francisco Jarque and M. N. Brink, there was nothing to disclose in what
capacity the said M. N. Brink signed. A fourth mortgage was executed by
Francisco Jarque and Ramon Aboitiz on the motorship Zaragoza and was
entered in the chattel mortgage registry of the register of deeds on May
12, 1932, or again within the thirty-day period before the institution of
insolvency proceedings. These proceedings were begun on June 2, 1932,
when a petition was filed with the Court of First Instance of Cebu in which
it was prayed that Francisco Jarque be declared an insolvent debtor, which
soon thereafter was granted, with the result that an assignment of all the
properties of the insolvent was executed in favor of Jose Corominas. Judge
Jose M. Hontiveros declined to order the foreclosure of the mortgages, but
on the contrary sustained the special defenses of fatal defectiveness of the
mortgages.
ISSUE: Whether or not the foreclosure of the mortgages should be
approved.
PETITIONERS CONTENTION (PHILIPPINE REFINING CO. INC.): The
foreclosure of the mortgages should be approved
RESPONDENTS CONTENTION : foreclosure of the mortgages should be
declined.
RULING:
1. TRIAL COURT: DECLINED.

2. APPELLATE COURT: AFFIRMED.
3. SUPREME COURT: AFFIRMED. Vessels are considered personal property
under the civil law. Similarly under the common law, vessels are personal
property although occasionally referred to as a peculiar kind of personal
property. Since the term "personal property" includes vessels, they are
subject to mortgage agreeably to the provisions of the Chattel Mortgage
Law. Indeed, it has heretofore been accepted without discussion that a
mortgage on a vessel is in nature a chattel mortgage. The only difference
between a chattel mortgage of a vessel and a chattel mortgage of other
personalty is that it is not now necessary for a chattel mortgage of a vessel
to be noted n the registry of the register of deeds, but it is essential that a
record of documents affecting the title to a vessel be entered in the record
of the Collector of Customs at the port of entry. Otherwise a mortgage on
a vessel is generally like other chattel mortgages as to its requisites and
validity. The Chattell Mortgage Law in its section 5, in describing what shall
be deemed sufficient to constitute a good chattel mortgage, includes the
requirement of an affidavit of good faith appended to the mortgage and
recorded therewith. The absence of the affidavit vitiates a mortgage as
against creditors and subsequent encumbrancers. As a consequence a
chattel mortgage of a vessel wherein the affidavit of good faith required by
the Chattel Mortgage Law is lacking, is unenforceable against third
persons.#AGUILAR
III. PERSONS WHO TAKE PART IN MARITIME COMMERCE
A. Ship Owners and Ship Agents; Captains and Masters of
Vessels; Officers and Crew, Supercargoes
CASE TITLE: CHUA YEK HONG vs. INTERMEDIATE APPELLATE COURT
KEYWORD: copra
PONENTE: Melencio-Herrera, J.
DOCTRINE:
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 may exempt
himself therefrom by abandoning the vessel with all the equipments and
the freight it may have earned during the voyage.
FACTS:
Petitioner is a duly licensed copra dealer based at Puerta Galera, Oriental
Mindoro, while private respondents are the owners of the vessel, "M/V
Luzviminda I," a common carrier engaged in coastwise trade from the
different ports of Oriental Mindoro to the Port of Manila.
In October 1977, petitioner loaded 1,000 sacks of copra, valued at
P101,227.40, on board the vessel "M/V Luzviminda I" for shipment from
Puerta Galera, Oriental Mindoro, to Manila. Said cargo, however, did not
reach Manila because somewhere between Cape Santiago and Calatagan,
Batangas, the vessel capsized and sank with all its cargo.
Petitioner then instituted before the then CFI of Oriental Mindoro, a
Complaint for damages based on breach of contract of carriage against
private respondents
PETITIONERS CONTENTION:
Private respondents as shipowners should be held liable for breach of
contract of carriage
RESPONDENTS CONTENTION:
In their answer, private respondents averred that even assuming that the
alleged cargo was truly loaded aboard their vessel, their liability had been
extinguished by reason of the total loss of said vessel.
ISSUE: whether or not private respondents are liable for the loss of 1000
sacks of copra
RULING:
TRIAL COURT: GRANTED
Defendants are jointly and severally liable to pay the plaintiff the sum of
P101,227.40 representing the value of the cargo belonging to the plaintiff
which was lost while in the custody of the defendants and other
miscellaneous expenses
CA: DENIED
Under Art. 587 of the Code of Commerce and the doctrine in Yangco vs.
Lasema, private respondents' liability, as ship owners, for the loss of the
cargo is merely co-extensive with their interest in the vessel such that a
total loss thereof results in its extinction.
SC: DENIED
Article 587 of the Code of Commerce provides:
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 may exempt
himself therefrom by abandoning the vessel with all the equipments and
the freight it may have earned during the voyage.
The term "ship agent" as used in Art. 587 is broad enough to include the
ship owner. Pursuant to said provision, therefore, both the ship owner and
ship agent are civilly and directly liable for the indemnities in favor of third
persons, which may arise from the conduct of the captain in the care of
goods transported, as well as for the safety of passengers transported.
However, under the same Article, this direct liability is moderated and
limited by the ship agent's or ship owner's right of abandonment of the
vessel and earned freight. This expresses the universal principle of limited
liability under maritime law. The most fundamental effect of abandonment
is the cessation of the responsibility of the ship agent/owner. It has thus
been held that by necessary implication, the ship agent's or ship owner's
liability is confined to that which he is entitled as of right to abandon the
vessel with all her equipment and the freight it may have earned during
the voyage," and "to the insurance thereof if any" (Yangco vs. Lasema,
supra). In other words, the ship owner'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. "No vessel, no liability" expresses in a nutshell the
limited liability rule.
In sum, it will have to be held that since the ship agent's or ship owner's
liability is merely co-extensive with his interest in the vessel such that a
total loss thereof results in its extinction (Yangco vs. Laserna, supra), and
none of the exceptions to the rule on limited liability being present, the
liability of private respondents for the loss of the cargo of copra must be
deemed to have been extinguished. There is no showing that the vessel
was insured in this case.
CASE TITLE: THE PHILIPPINE AMERICAN GENERAL INSURANCE COMPANY,
INC., vs. CA and FELMAN SHIPPING LINES
PONENTE: BELLOSILLO, J
KEYWORD/S: Coca-cola bottles; unseaworthy
DOCTRINE:The ship agent is liable for the negligent acts of the captain in
the care of goods loaded on the vessel. This liability however can be limited
through abandonment of the vessel, its equipment and freightage as
provided in Art. 587. Nonetheless, there are exceptional circumstances
wherein the ship agent could still be held answerable despite the
abandonment, as where the loss or injury was due to the fault of the
shipowner and the captain.
SHORT FACTS:In 1983, Coca-Cola Bottlers Philippines, Inc., loaded on
board MV Asilda, a vessel owned and operated by Felman Shipping
Lines, 7,500 cases of 1-liter Coca-Cola softdrink bottles to be transported
from Zamboanga toCebu for consignee Coca-
Cola Bottlers Philippines, Inc., Cebu. The shipment was insured with
petitioner Philippine American General Insurance Co., Inc.
(PHILAMGEN)MV Asilda . The vessel left the port of Zamboanga in fine
weather at 8 in the evening of the same day. At around 8:45 the following
morning, the vessel sank in the waters of Zamboanga delNorte bringing
down her entire cargo with her including the subject 7,500 cases Coca-Cola
bottles. Hence, Coca-Cola Bottlers, Cebu plant, filed a claim with FELMAN
for recovery of damages. FELMAN denied the claim thus prompting the
consignee to file an insurance claim with PHILAMGEN which paid its claim
of P755,250.00.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.
PETITIONERS CONTENTION: The sinking and total loss of MV Asilda and
its cargo were due to the vessels unseaworthiness as she was put to sea in
an unstable condition. It further alleged
that the vessel was improperly manned and that its officers were grossly
negligent in failing to take appropriate measures to proceed to a nearby
port or beach after the vessel started to list.
RESPONDENTS CONTENTION: No right of subrogation in favor of
PHILAMGEN was transmitted by the shipper, and that, in any event,
FELMAN had abandoned all its rights, interests and ownership over MV
Asilda together with her freight and appurtenances for the purpose of
limiting and extinguishing its liability under Art. 587 of the Code of
Commerce.
ISSUES: (a) whether or not FELMAN is liable for the loss of the cargo YES
(b) whether the limited liability under Art.
587 of the Code of Commerce should apply-NO
RULING:
TC: IN FAVOR OF FELMAN.It ruled that MV Asilda was seaworthy when it
left the port of Zamboanga as confirmed by certificates issued by the
Philippine Coast Guard and the shipowners surveyor attesting to its
seaworthiness.
CA: MODIFIED TCS RULING. It found MV Asilda unseaworthy for being
top- heavy as 2,500 cases of Coca-Cola softdrink bottles were improperly
stowed on deck. In other words, while the vessel possessed the necessary
Coast Guard certification indicating its seaworthiness with respect to the
structure of the ship itself, it was not seaworthy with respect to the
cargo. Nonetheless, the appellate court denied the claim of PHILAMGEN
on the ground that the assureds implied warranty of seaworthiness was
not complied with. Furthermore, respondent court held that the filing of
notice of abandonment had absolved the shipowner/agent from liability
under the limited liability rule.
SC: RULED FOR PETITIONER
A) YES. MV Asilda was unseaworthy when it left the port of
Zamboanga. In a joint statement, the captain as well as the chief mate of
the vessel confirmed that the weather was fine when they left the port of
Zamboanga. The Elite Adjusters, Inc., submitted a report regarding the
sinking of MV Asilda. The report states that they found in the course of
investigation that a reasonable explanation for the series of lists
experienced by the vessel that eventually led to her capsizing and sinking,
was that the vessel was top-heavy which is to say that while the vessel may
not have been overloaded, yet the distribution or stowage of the cargo on
board was done in such a manner that the vessel was in top-heavy
condition at the time of her departure and which condition rendered her
unstable and unseaworthy for that particular voyage.Under Art 1733 of the
Civil Code, (c)ommon carriers, from the nature of their business and for
reasons of public policy, are bound to observe extraordinary diligence in
the vigilance over the goods and for the safety of the
passengers transported by them, according to all the circumstances of
each case x xxx" In the event of loss of goods, common carriers are
presumed to have acted negligently. FELMAN, the shipowner, was not
able to rebut this presumption.
B) NO. Art. 587 of the Code of Commerce is not applicable to the
case at bar. Simply put, the ship agent is liable for the negligent acts of the
captain in the care of goods loaded on the vessel. This liability however
can be limited through abandonment of the vessel, its equipment and
freightage as provided in Art. 587. Nonetheless, there are exceptional
circumstances wherein the ship agent could still be held answerable
despite the abandonment, as where the loss or injury was due to the fault
of the shipowner and the captain. The international rule is to the effect
that the right of abandonment of vessels, as a legal limitation of a
shipowners liability, does not apply to cases where the injury or average
was occasioned by the shipowners own fault.It must be stressed at this
point that Art. 587 speaks only of situations where the fault or negligence
is committed solely by the captain. Where the shipowner is likewise to be
blamed, Art. 587 will not apply, and such situation will be covered by the
provisions of the Civil Code on common carrier. As such, FELMAN was
equally negligent. It cannot therefore escape liability through the
expedient of filing a notice of abandonment of the vessel by virtue of Art.
587 of the Code of Commerce.#ASUNCION
Title: Sweet Lines v CA
Keyword: Super delay, engine repair, dropped at Tacloban instead of
Catbalogan
Doctrine: Mechanical defects in the carrier are not considered a caso
fortuito that exempts the carrier from responsibility.
Ponente: Melencio-Herrera, J.
Facts: The respondents, having first class tickets, boarded the M/V Sweet
Grace to Catbalogan. The vessel had some engine problems which led to a
change of schedule and they were thus delayed for a substantial amount of
time. Furthermore, the vessel brought the respondents to Tacloban
instead of Catbalogan. This led the respondents to purchase another set of
tickets and to ride another ferryboat going to Catbalogan.
Petitioner's contention: there was casa fortuiso by reason of engine break
that needs repair
Respondent's contention: sued the petitioner carrier for damages for the
breach of contract of carriage.
Issue: Whether or not the petitioner is liable for damages.
Ruling:
Trial Court: Carrier In bad faith
CA: Affirmed that carrier is in bad faith
SC: The Court held that the petitioner is liable for damages specifically
moral damages because there was bad faith on its part. The Court found
that such bad faith is present based on three circumstances namely:
1. Petitioner did not give any notice to the respondents as to the change of
schedule of the vessel.
2. The petitioner knew fully that it would take no less than fifteen (15)
hours to effect the repairs of the damaged engine. The petitioner also
assured that the vessel will leave within a short period of time and when
the defendants wanted to leave the trip petitioner stated that the the
vessel is already leaving.
3. The petitioner did not even offer to refund the tickets and provide for
their transportation from Tacloban to Catbalogan. #BRILLANTES
B. Arrastre Operator
Case Title: Firemans Fund Insurance Co. vs Metro Port Services
Keyword:
Ponente: Gutierrez, Jr. J.
Doctrine:
Facts:Vulcan Industrial and Mining Corporation imported from theUnited
States several machineries and equipment which were loaded on board
the SIS Albert Maersk at the port of Philadelphia, U.S.A., and transhipped
for Manila through the vessel S/S Maersk Tempo. The cargo which was
covered by a clean bill of lading issued by Maersk Line and consisted of
core drills and steel tubings. The shipment was turned over complete and
in good condition to the arrastre operator E. Razon (Metro Port Service
Inc). DaniloLibrando, tractor operator and employee of E. Razon was
ordered to transport the shipment to the Equipment Yard at Pier 3. While
Librando was maneuvering the tractor (owned and provided by Maersk
Line) to the left, the cargo fell from the chassis and hit one of the container
vans of American President Lines. It was discovered that there were no
twist lock at the rear end of the chassis where the cargo was loaded. There
was heavy damage to the cargo as the parts of the machineries were
broken, denied, cracked and no longer useful for their purposes. Firemans
Fund Insurance paid the value of the damages to Vulcan Industrial and
Mining Corporation. The former now filed a suit against Maersk Line,
Compania General de Tabacos de Filipinas and E. Razon for the coverage of
the insurance policy.
Issue:May E. Razon/Metro Port Service be held liable for the damage of the
Cargo since the damage was caused while it was in their custody and that
the tractor operator was their employee.
Ruling:
RTC: Judgment is rendered in favor of Firemans Fund Insurance against
Maersk Line, Compania General de Tabacos de Filipinas and E. Razon
ordering them to pay in solidary the amount of damages, attorneys fee
and costs of suit.
CA Ruling: E. Razon/Metro Port Service appealed, and the CA reversed the
decision of the trial court.
SC: The legal relationship between the consignee and the arrastre operator
is akin to that of a depositor and warehouseman. The relationship between
the consignee and the common carrier is similar to that of the consignee
and the arrastre operator. Since it is the duty of the ARRASTRE to take
good care of the goods that are in its custody and to deliver them in good
condition to the consignee, such responsibility also devolves upon the
CARRIER. Both the ARRASTRE and the CARRIER are therefore charged with
and obligated to deliver the goods in good condition to the consignee. To
carry out its duties, the ARRASTRE is required to provide cargo handling
equipment which includes among others trailers, chassis for containers. In
some cases, however, the shipping line has its own cargo handling
equipment. The records reveal that Maersk Line provided the chassisand
the tractor which carried the carried the subject shipment. It merely
requested the ARRASTRE to dispatch a tractor operator to drive the tractor
inasmuch as the foreign shipping line did not have any truck operator in its
employ. Such arrangement is allowed between the ARRASTRE and the
CARRIER pursuant to the Management Contract. It was clearly one of the
services offered by the ARRASTRE. It was the arrastre that had the sole
discretion and prerogative to hire and assign Librando to operate the
tractor. Since the arrastre offered its delivery for the operation drivers for
the operation of tractors in the handling of cargo and equipment, then the
ARRASTRE should see to it that the drivers under its employ must exercise
due diligence in the performance of their work. Whether or not the twist
lock can be seen by the naked eye when the cargo has been loaded on the
chassis, an efficient and diligent tractor operator must nevertheless check
if the cargo is securely loaded on the chassis.Therefore, Metro Port Service
Inc. is solidarily liable in the instant case for the negligence of its employee.
#CAPCO
CASE TITLE: INTERNATIONAL CONTAINER TERMINAL SERVICES, INC
vs. PRUDENTIAL GUARANTEE & ASSURANCE CO., INC.
KEYWORD: Canned food stuff, Arrastre
PONENTE: Panganiban, J.
DOCTRINE:When cargo is placed on a vessel at the shippers load and
count, the arrastre operator is required only to deliver to the consignee
the container van received from the shipper, not to verify or to compare
the contents thereof with those declared by the shipper. A claim for
reimbursement for the loss, damage or misdelivery of goods must be filed
within 15 days from the date the consignee learns of such problem
FACTS: On April 25, 1990, mother vessel Tao He loaded and received on
board in San Francisco, California, a shipment of five (5) lots of canned
foodstuff complete and in good order and condition for transport to
Manila in favor of Duel Food Enterprises (consignee). China Ocean
Shipping Company issued the corresponding bill of lading therefor.
Consignee insured the shipment with Prudential Guarantee and Assurance,
Inc. against all risks for P1,921,827.00 under Marine Insurance Policy No.
20RN-3011/90.
On May 30, 1990, the shipment arrived at the Port of Manila and
discharged by [the] vessel MS Wei He in favor of International Container
Terminal Services, Inc. for safekeeping.
On June 1, 1990, A. D. Reyna Customs Brokerage (defendant brokerage)
withdrew the shipment and delivered the same to the consignee. An
inspection thereof revealed that 161 cartons were missing valued at
P85,984.40.
PETITIONERS CONTENTION: ICTSI counters that it observed extraordinary
diligence over the subject shipment while under its custody; that the loss is
not attributable to its fault or its agent, representative or employee; that
consignee failed to file a formal claim against it in accordance with PPA
Administrative Order No. 10-81; and that the complaint states no cause of
action.
RESPONDENTS CONTENTION:
ISSUE:1. Whether or not the petitioner is negligentin its duty to exercise
due diligence over the shipment, 2. Whether or notthe appellate court
misconstrued the liability clause printed on the dorsal side of the Arrastre
and Wharfage Bill/Receipt.
RULING:
TRIAL COURT: The trial court rendered a Decision dismissing Prudentials
Complaint against ICTSI.
CA: The appellate court found ICTSI negligent in its duty to exercise due
diligence over the shipment.It also ruled that the filing of a claim depended
on the issuance of a certificate of loss by ICTSI based on the liability clause
printed on the back of the arrastre and wharfage receipt. Since ICTSI did
not issue such a certificate despite being informed of the shortage, the 15-
day period given to the consignee for filing a formal claim never began. By
subrogation, Prudential, as insurer of the consignee, was entitled to hold
the ICTSI liable for the shortage.
SC:1. The legal relationship between an arrastre operator and a consignee
is akin to that between a warehouseman and a depositor. As to both the
nature of the functions and the place of their performance, an arrastre
operators services are clearly not maritime in character.
In a claim for loss filed by a consignee, the burden of proof to show
compliance with the obligation to deliver the goods to the appropriate
party devolves upon the arrastre operator. Since the safekeeping of the
goods rests within its knowledge, it must prove that the losses were not
due to its negligence or that of its employees.
2. In order to hold the arrastre operator liable for lost or damaged
goods, the claimant should file with the operator a claim for the value of
said goods within fifteen (15) days from the date of discharge of the last
package from the carrying vessel. The filing of the claim for loss within the
15-day period is in the nature of a prescriptive period for bringing an
action and is a condition precedent to holding the arrastre operator
liable. This requirement is a defense made available to the arrastre
operator, who may use or waive it as a matter of personal discretion.
The said requirement is not an empty formality. It gives the arrastre
contractor a reasonable opportunity to check the validity of the claim,
while the facts are still fresh in the minds of the persons who took part in
the transaction, and while the pertinent documents are still
available. Such period is sufficient for the consignee to file a provisional
claim after the discharge of the goods from the vessel. For this reason, we
believe that the 15-day limit is reasonable.
In the case at bar, the consignee had all the time to make a formal
claim from the day it discovered the shortage in the shipment, which was
June 4, 1990, as shown by the records. According to the independent
adjuster, the stripping or opening of the sea vans containing the shipped
canned goods was made at the consignees place upon receipt of the
shipment. After discovering the loss, the consignee asked the adjuster to
investigate the reason for the short-landing of the shipment. By the time
the claim for loss was filed on October 2, 1990, four months had already
elapsed from the date of delivery, June 4, 1990.#CASTILLO
C. Pilots
Far Eastern Shipping vs. CA G.R. No. 130068; October 1, 1998
Keyword: Vessel rammed into the apron of the pier wherein Capt. Gavino
was the PILOT.
Ponente: REGALADO, J.
Doctrine: A pilot, in maritime law, is a person duly qualified, and licensed,
to conduct a vessel into or out of ports, or in certain waters
Facts: The M/V PAVLODAR, owned and operated by the Far Eastern
Shipping Company (FESC), arrived at the Port of Manila from Vancouver,
British Columbia.
Appellant Senen Gavino was assigned by the Appellant Manila Pilots'
Association (MPA) to conduct docking maneuvers for the safe berthing of
the vessel to Berth No. 4. Gavino boarded the vessel at the quarantine
anchorage and stationed himself in the bridge, with the master of the
vessel, Victor Kavankov, beside him.
When the vessel proceeded to the Manila International Port and
eventually reached the landmark (the big church by the Tondo North
Harbor) one-half mile from the pier, Gavino ordered the engine stopped.
When the vessel was already about 2,000 feet from the pier, Gavino
ordered the anchor dropped. However, the anchor did not take hold as
expected. The speed of the vessel did not slacken. The bow of the vessel
rammed into the apron of the pier causing considerable damage to the
pier. The vessel sustained damage too. Consequently, the Philippine Ports
Authority (PPA) filed a complaint FESC, Capt. Gavino, and the MPA.
The trial court ordered the defendants therein jointly and severally to pay
PPA.
Respondent appellate court affirmed the findings of the court a quo except
that if found no employer-employee relationship existing between herein
private respondents Manila Pilots' Association (MPA, for short) and Capt.
Gavino.
Petitioner FESC asserts that since the MV PAVLODAR was under
compulsory pilotage at the time of the incident, it was the compulsory
pilot, Capt. Gavino, who was in command and had complete control in the
navigation and docking of the vessel. It is the pilot who supersedes the
master for the time being in the command and navigation of a ship and his
orders must be obeyed in all respects connected with her navigation.
Consequently, he was solely responsible for the damage caused upon the
pier apron, and not the owners of the vessel. It claims that the master of
the boat did not commit any act of negligence when he failed to
countermand or overrule the orders of the pilot because he did not see
any justifiable reason to do so. In other words, the master cannot be
faulted for relying absolutely on the competence of the compulsory pilot. If
the master does not observe that a compulsory pilot is incompetent or
physically incapacitated, the master is justified in relying on the pilot.
Issue: Whether or not the pilot of a commercial vessel, under compulsory
pilotage, is solely liable for the damage caused by the vessel to the pier, at
the port of destination, for his negligence.
Held: No.
(Doctrine on Pilot)
A pilot, in maritime law, is a person duly qualified, and licensed, to
conduct a vessel into or out of ports, or in certain waters. In a broad sense,
the term "pilot" includes both (1) those whose duty it is to guide vessels
into or out of ports, or in particular waters and (2) those entrusted with
the navigation of vessels on the high seas. However, the term "pilot" is
more generally understood as a person taken on board at a particular
place for the purpose of conducting a ship through a river, road or channel,
or from a port.
Under English and American authorities, generally speaking, the
pilot supersedes the master for the time being in the command and
navigation of the ship, and his orders must be obeyed in all matters
connected with her navigation. He becomes the master pro hac vice and
should give all directions as to speed, course, stopping and reversing
anchoring, towing and the like. And when a licensed pilot is employed in a
place where pilotage is compulsory, it is his duty to insist on having
effective control of the vessel, or to decline to act as pilot. Under certain
systems of foreign law, the pilot does not take entire charge of the vessel,
but is deemed merely the adviser of the master, who retains command
and control of the navigation even in localities where pilotage is
compulsory.
(Doctrine on Master)
While it is indubitable that in exercising his functions a pilot is in
sole command of the ship and supersedes the master for the time being in
the command and navigation of a ship and that he becomes master pro
hac vice of a vessel piloted by him, there is overwhelming authority to the
effect that the master does not surrender his vessel to the pilot and the
pilot is not the master. The master is still in command of the vessel
notwithstanding the presence of a pilot. There are occasions when the
master may and should interfere and even displace the pilot, as when the
pilot is obviously incompetent or intoxicated and the circumstances may
require the master to displace a compulsory pilot because of
incompetency or physical incapacity. If, however, the master does nor
observe that a compulsory pilot is incompetent or physically incapacitated,
the master is justified in relying on the pilot, but not blindly.
The master is not wholly absolved from his duties while a pilot is
on board his vessel, and may advise with or offer suggestions to him. He is
still in command of the vessel, except so far as her navigation is concerned,
and must cause the ordinary work of the vessel to be properly carried on
and the usual precaution taken. Thus, in particular, he is bound to see that
there is sufficient watch on deck, and that the men are attentive to their
duties, also that engines are stopped, towlines cast off, and the anchors
clear and ready to go at the pilot's order.
(Doctrine on Shipowner)
The owners of the vessel are responsible to the injured party for
the acts of the pilot, and they must be left to recover the amount as well as
they can against him. It cannot be maintained that the circumstance of
having a pilot on board, and acting in conformity to his directions operate
as a discharge of responsibility of the owners. Except insofar as their
liability is limited or exempted by statute, the vessel or her owner are
liable for all damages caused by the negligence or other wrongs of the
owners or those in charge of the vessel. Where the pilot of a vessel is not a
compulsory one in the sense that the owner or master of the vessel are
bound to accept him, but is employed voluntarily, the owners of the vessel
are, all the more, liable for his negligent act. And as a general rule, the
owners or those in possession and control of a vessel and the vessel are
liable for all natural and proximate damages caused to persons or property
by reason of her negligent management or navigation.
In the case at bar, it was found that Capt. Gavino as pilot, Capt.
Kabancov as master are liable due to their negligence. Petitioner FESC is
also liable.
Upon assuming such office as compulsory pilot, Capt. Gavino is
held to the universally accepted high standards of care and diligence
required of a pilot, whereby he assumes to have skill and knowledge in
respect to navigation in the particular waters over which his license
extends superior to and more to be trusted than that of the master. A pilot
should have a thorough knowledge of general and local regulations and
physical conditions affecting the vessel in his charge and the waters for
which he is licensed, such as a particular harbor or river. He is not held to
the highest possible degree of skill and care, but must have and exercise
the ordinary skill and care demanded by the circumstances, and usually
shown by an expert in his profession. Under extraordinary circumstances, a
pilot must exercise extraordinary care. Here, Capt. Gavino failed to
measure up to such strict standard of care and diligence required of pilots.
He was an experienced pilot and by this time should have long familiarized
himself with the depth of the port and the distance he could keep between
the vessel and port in order to berth safely.
And a perusal of Capt. Kabankov's testimony makes it apparent
that he was remiss in the discharge of his duties as master of the ship,
leaving the entire docking procedure up to the pilot, instead of maintaining
watchful vigilance over the risky maneuver. #DELMUNDO
IV. CHARTER PARTIES (ARTICLES 652-718)
A. Different Kinds of Charter Parties
CASE TITLE: LITONJUA SHIPPING VS. NATIONAL SEAMEN BOARD
DOCTRINE: Kinds of Charter Parties
KEYWORD: bareboat, time and voyage charter
PONENTE: FELICIANO, J.
FACTS:
Petitioner Litonjua is the duly appointed local crewing Managing Office of
the Fairwind Shipping Corporation ('Fairwind). The M/V Dufton Bay is an
ocean-going vessel of foreign registry owned by the R.D. Mullion Ship
Broking Agency Ltd. ("Mullion"). While the Dufton Bay was in the port of
Cebu and while under charter by Fairwind, the vessel's master contracted
the services of, among others, private respondent Gregorio Candongo to
serve as Third Engineer for a period of twelve (12) months with a monthly
wage of US$500.00. This agreement was executed before the Cebu Area
Manning Unit of the NSB. Thereafter, private respondent boarded the
vessel. Before expiration of his contract, private respondent was required
to disembark at Port Kelang, Malaysia, and was returned to the Philippines.
The cause of the discharge was described in his Seaman's Book as 'by
owner's arrange".
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 petitioner Litonjua as agent of the
shipowner and of the charterer of the vessel.
At the initial hearing, the NSB hearing officer held a conference with the
parties, at which conference petitioner Litonjua was represented by one of
its supercargos, Edmond Cruz. Edmond Cruz asked, in writing, that the
hearing be postponed for a month upon the ground that the employee of
Litonjua in charge of the case was out of town. The hearing officer denied
this request and then declared petitioner Litonjua in default. At the
hearing, private respondent testified that when he was recruited by the
Captain of the Dufton Bay, the latter was accompanied to the NSB Cebu
Area Manning Unit by two (2) supercargos sent by petitioner Litonjua to
Cebu, and that the two (2) supercargos Edmond Cruz and Renato Litonjua
assisted private respondent in the procurement of his National
Investigation and Security Agency (NISA) clearance. Messrs. Cruz and
Litonjua were also present during private respondent's interview by
Captain Ho King Yiu of the Dufton Bay.
NSB HEARING OFFICER:
From the evidence on record it clearly appears that there was no sufficient
or valid cause for the respondents to terminate the services of
complainant prior to the expiry date of the contract. For this reason the
respondents have violated the conditions of the contract of employment
which is a sufficient justification for this Board to render award in favor of
the complainant of the unpaid salaries due the latter as damages
corresponding to the unexpired portion of the contract including the
accrued leave pay.
NSB CENTRAL OFFICE:
While it appears that in the preparation of the employment papers of the
complainant, what was indicated therein was R.D. Mullion Co. (HK) Ltd. as
thecompany whom Captain Ho King Yiu, the Master of the vessel Dufton
Bay, was representing to be the shipowner, the fact remains that at the
time of the recruitment of the complainant, as duly verified by the
National Seamen Board, Cebu Area Manning Unit, the Litonjua Shipping
Company was the authorized agent of the vessel's charterer, the Fairwind
Shipping Corporation, and that in the recruitment process, the Litonjua
Shipping Company through its supercargos in the persons of Edmund Cruz
and Renato Litonjua, had knowledge thereof and in fact assisted in the
interviews conducted by the Master of the crew applicants as admitted by
Renato Litonjua including the acts of facilitating the crew's NISA clearances
as testified to by complainant. Moreover, the participation of the Litonjua
Shipping Corporation in the recruitment of complainant, together with the
other crewmembers, in Cebu can be traced to the contents of the letter by
the Fairwind Shipping Limited, thru its Director David H.L. Wu addressed to
the National Seamen Board.
The NSB then lifted the suspension of the hearing officer's decision.
Petitioner Litonjua once more moved for reconsideration.
On public respondent NSB rendered a decision which affirmed its hearing
offices decision:
The master of the vessel acted for and in behalf of Fairwind Shipping
Corporation who had the obligation to pay the salary of the complainant. It
necessarily follows that Fairwind Shipping Corporation is the employer of
said complainant. Moreover, it had been established by complainant that
Litonjua Shipping Company, Inc., had knowledge of and participated,
through its employee, in the recruitment of herein complainant.
ISSUE:
Whether or not the charterer Fairwind was properly regarded as the
employer of private respondent Candongo.
PETITIONER'S CONTENTION:
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 mere agent of the charterer. It is insisted that
private respondent's contract of employment and affidavit of undertaking
clearly showed that the party with whom he had contracted was none
other than Mullion, the shipowner, represented by the ship's master.
Petitioner also argues that its supercargos merely assisted Captain Ho King
Yiu of the Dufton Bay in being private respondent as Third Engineer.
Petitioner also points to the circumstance that the discharge and the
repatriation of private respondent was specified in his Seaman's Book as
having been "by owner's arrange." Litonjua thus argues that being the
agent of the charterer and not of the shipowner, it accordingly should not
have been held liable on the contract of employment of private
respondent.
SUPREME COURT:
In modern maritime law and usage, 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.
A bareboat or demise charter is a demise of a vessel, much as a lease of an
unfurnished house is a demise of real property. The shipowner turns over
possession of his vessel to the charterer, who then undertakes to provide a
crew and victuals and supplies and fuel for her during the term of the
charter. The shipowner is not normally required by the terms of a demise
charter to provide a crew, and so the charterer gets the "bare boat", i.e.,
without a crew. Sometimes, of course, the demise 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 agents and servants or employees of the charterer,
and the charterer (and not the owner) through the agency of the master,
has possession and control of the vessel during the charter period.
A time charter, upon the other hand, like a demise charter, is a contract for
the use of a vessel for 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 bare-boat
charter), retains possession and control through the master and crew who
remain his employees. What the time charterer acquires is the right to
utilize the carrying capacity and facilities of the vessel and to designate her
destinations during the term of the charter.
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.
It is well settled 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 vice, and not the general
owner of the vessel, is held liable for the expenses of the voyage including
the wages of the seamen.
It is important to note that petitioner Litonjua did not place into the record
of this case a copy of the charter party covering the M/V Dufton Bay. We
must assume that petitioner Litonjua was aware of the nature of a
bareboat or demise charter and that if petitioner did not see fit to include
in the record a copy of the charter party, which had been entered into by
its principal, it was because the charter party and the provisions thereof
were not supportive of the position adopted by petitioner Litonjua in the
present case, a position diametrically opposed to the legal consequence of
a bareboat charter. Treating Fairwind as owner pro hac vice, petitioner
Litonjua having failed to show that it was not such, we believe 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
private respondent.
There is a ethically more compelling basis for holding petitioner Litonjua
liable on the contract of employment of private respondent. The charterer
of the vessel, Fairwind, clearly benefitted from the employment of private
respondent as Third Engineer of the Dufton Bay, along with the ten other
Filipino crewmembers recruited by Captain Ho in Cebu at the same
occasion. If private respondent had not agreed to serve as such Third
Engineer, the ship would not have been able to proceed with its voyage.
Secondly, the scope of authority or the responsibility of petitioner Litonjua
was not clearly delimited.
There is the circumstance that extreme hardship would result for the
private respondent if petitioner Litonjua, as Philippine agent of the
charterer, is not held liable to private respondent upon the contract of
employment. Clearly, the private respondent, and the other Filipino crew
members of the vessel, would be defenseless against a breach of their
respective contracts. While wages of crew members constitute a maritime
lien upon the vessel, private respondent is in no position to enforce that
lien. If only because the vessel, being one of foreign registry and not
ordinarily doing business in the Philippines or making regular calls on
Philippine ports cannot be effectively held to answer for such claims in a
Philippine forum. Upon the other hand, it seems quite clear that petitioner
Litonjua, should it be held liable to private respondent for the latter's
claims, would be better placed to secure reimbursement from its principal
Fairwind. In turn, Fairwind would be in an indefinitely better position (than
private respondent) to seek and obtain recourse from Mullion, the foreign
shipowner, should Fairwind feel entitled to reimbursement of the amounts
paid to private respondent through petitioner Litonjua. #Dugena
B. Effect of Charter on Character of Carrier
CASE TITLE: Planters Products, Inc. vs. Court of Appeals
KEYWORDS: Charter-Party; UREA FERTILIZER
DOCTRINE: 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 shipowner 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.
FACTS: Planters Products, Inc. (PPI), purchased from Mitsubishi
International Corporation (MITSUBISHI) of New York, U.S.A., Urea 46%
fertilizer which the latter shipped in bulk aboard the cargo vessel M/V Sun
Plum owned by private respondent Kyosei Kisen Kabushiki Kaisha (KKKK)
from Alaska, U.S.A., to Port Point, San Fernando, La Union, Philippines.
Prior to its voyage, a time charter-party on the vessel M/V Sun Plum
pursuant to the Uniform General Charterwas entered into between
Before loading the fertilizer aboard the vessel, four (4) of herholdswere all
presumably inspected by the charterers representative and found fit to
take a load of urea in bulk. The vessels hold to be properly swept, cleaned
and dried at the vessels expense and the vessel to be presented clean for
use in bulk to the satisfaction of the inspector before daytime commences.
After the Urea fertilizer was loaded in bulk by stevedores hired by and
under the supervision of the shipper, the steel hatches were closed with
heavy iron lids, covered with three (3) layers of tarpaulin, then tied with
steel bonds. The hatches remained closed and tightly sealed throughout
the entire voyage.
Upon arrival of the vessel at her port of call, the steel pontoon hatches
were opened with the use of the vessels boom. The hatches remained
open throughout the duration of the discharge.
It took eleven (11) days for PPI to unload the cargo. The survey report
submitted by CSCI (Cargo SuperintendentsCompany Inc.) to the consignee
(PPI) dated 19 July 1974 revealed a shortage in the approximating 18 M/T
was contaminated with dirt.
ISSUE: WON the charter party changed the character of the public carrier
to a private carrier?
LOWER COURT: IN FAVOR OF PETITIONER. Lower Court held the carrier
liable. A common carrier is presumed negligent in case of loss or damage
of the goods it contracts to transport
CA: REVERSED. The cargo vessel M/V Sun Plum owned by private
respondent KKKK was a private carrier and not a common carrier by reason
of the time charter-party.
SC: NO. A charter-party is defined as a contract by which an entireship,
or some principal part thereof, is let by the owner toanother person for a
specified time or use. A contract ofaffreightment by which the owner of a
ship or other vessel lets the whole or a part of her to a merchant or other
Mitsubishi
person
as shipper/charterer
for the conveyance
and KKKKofas goods,
shipowner.
on a particular voyage, in
consideration of the payment of freight.
Charter parties are of two types: (a) contract of affreightment which
involves the use of shipping space on vessels leased by the owner in part
or as a whole, to carry goods for others; and, (b) charter by demise or
bareboat charter, by the terms of which the whole vessel is let to the
charterer with a transfer to him of its entire command and possession and
consequent control over its navigation, including the master and the crew,
who are his servants.
Contract of affreightment may either be time charter, wherein the 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 shipowner to
supply the ships stores, pay for the wages of the master and the crew, and
defray the expenses for the maintenance of the ship.
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. Hardly
then can we charge the charterer, a stranger to the crew and to the ship,
with the duty of caring for his cargo when the charterer did not have any
control of the means in doing so. 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.
It is therefore 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.
HOWEVER, the presumption of negligence on the part of the respondent
carrier has been efficaciously overcome by the showing of extraordinary
zeal and assiduity exercised by the carrier in the care of the cargo. The
period during which private respondent was to observe the degree of
diligence required of it as a public carrier began from the time the cargo
was unconditionally placed in its charge after the vessels holds were duly
inspected and passed scrutiny by the shipper, up to and until the vessel
reached its destination and its hull was re-examined by the consignee, but
prior to unloading. #ENCARNACION
TITLE: CALTEX VS SULPICIO
KEYWORD/S: MT VECTOR AND DOA PAZ COLLISION, DUMALI POINT,
CONTRACT OF AFFREIGHTMENT--VOYAGE CHARTER
PONENTE: PARDO, J
FACTS:
MT VECTOR owned and operated by Vector Shipping left Limay, Bataan at
about 8:00pm on Dec 19, 1987 eon route to Masbate, loaded with
petroleum products shipped by CALTEX. On the other hand, on Dec 20,
1987 at about 6:30 am passenger ship owned by SULPICIO LINES MV DOA
PAZ left the port of Tacloban headed for Manila with a complement of 59
crew members including the master and his officers and passengers
totaling 1,493 as indicated in the coastguard clearance.
At about 10:30 pm of Dec 20, 1987 the two vessels collided in the open sea
within the vicinity of Dumali Point between MARINDUQUE AND ORIENTAL
MINDORO. All crew members of MV DOA PAZ died, while 2 survivors
from MT VECTOR claimed that they were sleeping at the time of the
incident.
THE MV DOA PAZ carried an estimated 4,000 passengers; many were not
in the manifest. Only 24 survived the tragedy. The BUREAU OF MARINE
INQUIRY(BMI) after investigation found that MT VECTOR, it's registered
owner and operator were at fault. SULPICIO alleged that CALTEX chartered
MT VECTOR with gross and evident bad faith knowing fully well that MT
VECTOR WAS IMPROPERLY MANNED, ILL-EQUIPPED, UNSEAWORTHY AND
A HAZARD TO SAFE NAVIGATION.
ISSUE: WHETHER OR NOT THE CALTEX IS LIABLE
RULING :
No, 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 being engaged in "public
service". The civil code demands diligence which is required by the nature
of the obligation and that which corresponds with the circumstances of the
persons, time and of the place.
In the case at bar, CALTEX AND VECTOR entered into a contract of
affreightment, also known as voyage charter wherein the ship is leased for
a single voyage. The charter party provides for the hire of the VESSEL
ONLY, the ship owner to supply the ship's store, pay for wages of the
master of the crew and defray expenses for the maintenance of the ship. If
the charterer is a contract of affreightment, which leaves the general
owner in possession of the ship as owner for the voyage, THE RIGHTS AND
RESPONSIBILITIES OF OWNERSHIP REST ON THE OWNER. THE CHARTERER
IS FREE FROM LIABILITY TO THIRD PERSONS IN RESPECT OF THE SHIP.

THE SUPREME COURT CHARACTERIZED THE SAID SPECIE OF CHARTER
PARTY AS ONE WHICH DOES NOT AFFECT THE AT ALL THE NATURE OF THE
BUSINESS OF SULPICIO LINES AS A COMMON CARRIER.#ESGUERRA
V. COLLISIONS
CASE TITLE: Williams v Yangco
KEYWORD: Subic
PONENTE: Carson, J.
DOCTRINE: Since it does NOT appear from the evidence that the perilous
situation of the launch in time to avoid the accident by the exercise of
ordinary care, it is very clear that the plaintiff cannot escape the legal
consequences of the contributory negligence of his launch, even were we
to hold that the doctrine is applicable in this jurisdiction. FACTS:
The steamer Subic, owned by the defendant, collided with the launch
Euclid owned by the plaintiff, in the Bay of Manila at an early hour on the
morning of January 9, 1911, and the Euclid sank five minutes thereafter.
The findings of record disclosed that the officers on both boats were
negligent in the performance of their duties at the time of the accident,
and that both vessels were to blame for the disaster. (Yes, ito lang ang
facts na nasa full text ng case)
Plaintiffs defense
Based his contentions upon the theory of the facts as contended for by
him, insists that under the doctrine of "the last clear chance," the
defendant should be held liable because, as he insists, even if the officers
on board the plaintiffs launch were negligent in failing to exhibit proper
lights and in failing to take the proper steps to keep out of the path of the
defendants vessel, nevertheless the officers on defendants vessel, by the
exercise of due precautions might have avoided the collision by a very
simple maneuver.
ISSUES:
WON plaintiff (Elucid) has a cause of action against defendant. RULING:
Trial court
Euclid was worth at a fair valuation P10,000; that both vessels were
responsible for the collision; and that the loss should be divided equally
between the respective owners, P5,000 to be paid to the plaintiff by the
defendant, and P5,000 to be borne by the plaintiff himself.
The trial judge was of opinion that the vessels were jointly responsible for
the collision and should be held jointly liable for the loss resulting from the
sinking of the launch. But actions for damages resulting from maritime
collisions are governed in this jurisdiction by the provisions of section 3,
title 4, Book III of the Code of Commerce, and among these provisions we
find the following:
"ART. 827. If both vessels may be blamed for the collision, each one shall
be liable for its own damages, and both shall be jointly responsible for the
loss and damage suffered by their cargoes."
CA
We are all agreed with the trial judge in his holding that the responsible
officers on both vessels were negligent in the performance of their duties
at the time when the accident occurred, and that both vessels were to
blame for the collision.
SUPREME COURT:
None. In disposing of this case the trial judge apparently had in mind that
portion of the section which treats of the joint liability of both vessels for
loss or damage suffered by their cargoes. In the case at bar, however, the
only loss incurred was that of the launch Euclid itself, which went to the
bottom soon after the collision.
In cases of a disaster arising from mutual negligence of two parties, the
party who has a last clear opportunity of avoiding the accident,
notwithstanding the negligence of his opponent, is considered wholly
responsible for it under the common-law rule of liability as applied in the
courts of common law in the United States. But this, is limited in its
application by the further rule, that where the previous act of negligence
of one vessel has created a position of danger, the other vessel is not
necessarily liable for the mere failure to recognize the perilous situation;
and it is only when in fact it does discover it in time to avoid the casualty
by the use of ordinary care, that it becomes liable for the failure to make
use of this last clear opportunity to avoid the accident
In the case at bar, the most that can be said in support of plaintiffs
contention is that there was negligence on the part of the officers on
defendants vessel in failing to recognize the perilous situation created by
the negligence of those in charge of plaintiffs launch, and that had they
recognized it in time, they might have avoided the accident. But since it
does NOT appear from the evidence that they did, in fact, discover the
perilous situation of the launch in time to avoid the accident by the
exercise of ordinary care, it is very clear that under the above set out
limitation to the rule, the plaintiff cannot escape the legal consequences of
the contributory negligence of his launch, even were we to hold that the
doctrine is applicable in this jurisdiction, upon which point we expressly
reserve our decision at this time. #FLORANDA
CASE TITLE: Smith Bell And Company Inc. And Tokyo Marine And Fire
Insurance Co., Inc Vs. Court Of Appeals And Carlos A. Go Thong And Co.,
KEYWORD: #DonCarlos #YotaiMaru #Banggaantayu...then selfie after XD
BONUS Key: Justice (herein CFI Judge) Bernardo P. Fernandez ^_^
PONENTE: En Banc, Feliciano (J): 14 concur
DOCTRINE: CIVIL LAW; QUASI-DELICT; NEGLIGENCE; FACTORS
CONSTITUTIVE THEREOF WHICH NEGLIGENCE WAS THE PROXIMATE CAUSE
OF THE COLLISION; 3 Principal Factors
SHORT FACTS: On 3 May 1970, 3:50 a.m., on the approaches to the port of
Manila near Caballo Island, a collision took place between the M/V Don
Carlos, an inter-island vessel owned and operated by Carlos A. Go Thong
and Company (Go Thong), and the M/S Yotai Maru, a merchant vessel
of Japanese registry. The Don Carlos was then sailing south bound
leaving the port of Manila for Cebu, while the Yotai Maru was
approaching the port of Manila, coming in from Kobe, Japan. The bow of
the Don Carlos rammed the portside (left side) of the Yotai Maru
inflicting a 3 cm. gaping hole on her portside near Hatch 3, through which
seawater rushed in and flooded that hatch and her bottom tanks,
damaging all the cargo stowed therein. The consignees of the damaged
cargo got paid by their insurance companies.
The insurance companies in turn, having been subrogated to the interests
of the consignees of the damaged cargo, commenced actions against Go
Thong for damages sustained by the various shipments in the then CFI of
Manila. 2 cases were filed in the CFI of Manila.
The first case was commenced by Smith Bell and Sumitomo Marine and
Fire Insurance Company Ltd., against Go Thong, in Branch 3, which was
presided over by Judge Bernardo P. Fernandez.
The second case was filed by Smith Bell and Company, Inc. and Tokyo
Marine and Fire Insurance Company, Inc. against Go Thong in Branch 4,
which was presided over by then Judge, later Associate Justice of this
Court, Serafin R. Cuevas. Civil Cases 82567 (Judge Fernandez) and 82556
(Judge Cuevas) were tried under the same issues and evidence relating to
the collision between the Don Carlos and the Yotai Maru the parties in
both cases having agreed that the evidence on the collision presented in
one case would be simply adopted in the other.
ISSUE: Whether or not M/V Don Carlos was negligent and thus shall be
held liable for the collision
PETITIONERS CONTENTION:
In their Petition for Review, petitioners assail the finding and conclusion of
the Sison Decision, that the "Yotai Maru" was negligent and at fault in the
collision, rather than the "Don Carlos."
RESPONDENTS CONTENTION:
Private respondent Go Thong, upon the other hand, argues that the
Supreme Court, in rendering its minute Resolution in G.R. No. L-48839, had
merely dismissed Go Thongs Petition for Review of the Reyes, L.B., J.
Decision for lack of merit but had not affirmed in toto that Decision. Thus,
Go Thong concludes, this Court did not hold that the "Don Carlos" had
been negligent in the collision.
RULING:
1. TRIAL COURT: In favor of petitioner. In both cases, the Manila CFI held
that the officers and crew of the Don Carlos had been negligent, that
such negligence was the proximate cause of the collision and accordingly
held Go Thong liable for damages to the insurance companies.
2. APPELLATE COURT
a) In CA-GR 61320-R, the Court of Appeals through Reyes, L.B., J., rendered
affirmed the Decision of Judge Fernandez. Go Thong moved for
reconsideration, without success.
b) In CA-GR 61206-R, the Court of Appeals through Sison, P.V., J., reversed
the Cuevas Decision and held the officers of the Yotai Maru at fault in
the collision with the Don Carlos, and dismissed the insurance
companies complaint. Smith Bell & Co. and the Tokyo Marine & Fire
Insurance Co. Inc. asked for reconsideration, to no avail. Hence, the
petition for review on certiorari.
3. SUPREME COURT: M/V Don Carlos was negligent.
(a) Reyes ( ) J. Fernandez decision: Go Thong then went to the Supreme
Court on Petition for Review. Supreme Court denied the Petition for lack of
merit. Go Thong filed a Motion for Reconsideration; the Motion was
denied by the Supreme Court .
(b) Sison ( X )Cuevas decision: The Supreme Court reversed and set aside
the Decision of the Court of Appeals in CA-GR 61206-R, and reinstated and
affirmed the decision of the trial court in its entirety; with costs against Go
Thong.
The SC ruled that M/V Don Carlos was negligent and its negligence was the
sole proximate cause of the collision and of the resulting damages. The
Court believes that there are three (3) principal factors which are
constitutive of negligence on the part of the "Don Carlos," which
negligence was the proximate cause of the collision.
1) The failure of the "Don Carlos" to comply with the requirements of Rule
18 (a) of the International Rules of the Road. (page 499 footnote in Aquino
transpo book 2011 ed)
2) "Don Carlos" was its failure to have on board that might a "proper look-
out" as required by Rule I (B). Under Rule 29 of the same set of Rules, all
consequences arising from the failure of the "Don Carlos" to keep a
"proper look-out" must be borne by the "Don Carlos.
A "proper look-out" is one who has been trained as such and who is given
no other duty save to act as a look-out and who is stationed where he can
see and hear best and maintain good communication with the officer in
charge of the vessel, and who must, of course, be vigilant.
3) The third factor constitutive of negligence on the part of the "Don
Carlos" relates to the fact that Second Mate Benito German was,
immediately before and during the collision, in command of the "Don
Carlos." Second Mate German simply did not have the level of experience,
judgment and skill essential for recognizing and coping with the risk of
collision as it presented itself that early morning when the "Don Carlos,"
running at maximum speed and having just overtaken the "Don Francisco"
then approximately one mile behind to the starboard side of the "Don
Carlos," found itself head-on or nearly head-on vis-a-vis the "Yotai Maru."
It is essential to point out that this situation was created by the "Don
Carlos" itself.
Article 633 of the Code of Commerce provides: The second mate shall
take command of the vessel in case of the inability or disqualification of
the captain and sailing mate, assuming, in such case, their powers and
liability. #GUETA
TITLE: National Development Company vs. Court of Appeals
TOPIC: Collisions
KEYWORD/s: Doa Nati <3 Yasushima Maru
PONENTE: PARAS, J.
DOCTRINES:
The laws of the Philippines will apply in case at bar and it is immaterial
whether the collision actually occurred in foreign waters.
Liability of owner and agent of vessel; The agent even though he was not
the owner of the vessel, is liable to the shippers and owners of cargo
transported by it, for losses and damages to the cargo without prejudice to
his rights against the owner of the ship. It is well settled that both the
owner and agent of the offending vessel are liable for the damage done
where both are impleaded; that in case of collision, both the owner and
the agent are civilly responsible for the acts of the captain
FACTS:
* A memorandum was entered into between defendants National
Development Company (NDC) and Maritime Company of the Philippines
(MCP) on September 13, 1962:
* Defendant NDC as the first preferred mortgagee of 3 ocean-going vessels
including vessel Doa Nati appointed defendant MCP as its agent to
manage and operate said vessels in its behalf.
* February 28, 1964 - The E. Phillipp Corporation of the New York loaded
on board the vessel Doa Nati at San Francisco, California, a total of
1,200 bales of American raw cotton
* consigned to the order of Manila Banking Corporation and the Peoples
Bank and Trust Company, acting for and in behalf of the Pan Asiatic
Commercial Company, Inc., who represents Riverside Mills Corporation
* At 6:04 a.m. on April 15, 1964 at Ise Bay, Japan - the vessel figured in a
collision with a Japanese vessel (SS Yasushima Maru)
* as a result of which 550 bales of aforesaid cargo were lost and/or
destroyed
* The damage and lost cargo was worth P344,977.86 which amount, the
Development Insurance and Surety Corporation as insurer, paid to the
Riverside Mills Corporation as holder of the negotiable bills of lading duly
endorsed. The insurer filed before the CFI of Manila an action for the
recovery of said amount from NDC and MCP.
PETITIONERS CONTENTION:
The Carriage of Goods by Sea Act should apply to the case at bar and not
the Civil Code or the Code of Commerce, in determining the liability for
loss of cargos resulting from the collision outside the territorial jurisdiction
of the PH
Under Section 4 (2) of said Act, the carrier is NOT responsible for the loss
or damage resulting from the "act, neglect or default of the master,
mariner, pilot or the servants of the carrier in the navigation or in the
management of the ship." Petitioners insist that based on the findings of
the trial court which were adopted by the Court of Appeals, both pilots of
the colliding vessels were at fault and negligent.
PRIVATE RESPONDENTS CONTENTION:
DISC had paid as insurer the total amount of P364,915.86 to the
consignees or their successors-in-interest, for the said lost or damaged
cargoes., and thus entitled to recovery from the ship owner or carrier.
ISSUE: W/N the COGSA will apply to collision of vessels in foreign waters
RULING:
TRIAL COURT
NDC and MCP are liable to DISC; COGSA was not applied in determining
the liability of NDC and MCP
COURT OF APPEALS: affirmed in toto
SUPREME COURT: NO. The Code of Commerce is applicable in the case. It
was held that the law of the country to which the goods are to be
transported governs the liability of the common carrier in case of their
loss, destruction or deterioration. Thus, the rule was specifically laid down
that for cargoes transported from Japan to the Philippines, the liability of
the carrier is governed primarily by the Civil Code and in all matters not
regulated by said Code, the rights and obligations of common carrier shall
be governed by the Code of Commerce and by special laws.
It appears, however, that collision falls among matters NOT specifically
regulated by the Civil Code, so that no reversible error can be found in
respondent courts application to the case at bar of Articles 826 to 839,
Book Three of the Code of Commerce, which deal exclusively with collision
of vessels.
More specifically, Article 826 of the Code of Commerce provides that
where collision is imputable to the personnel of a vessel, the owner of the
vessel at fault, shall indemnify the losses and damages incurred after an
expert appraisal. But more in point to the instant case is Article 827 of the
same Code, which provides that if the collision is imputable to both
vessels, each one shall suffer its own damages and both shall be solidarily
responsible for the losses and damages suffered by their cargoes.
Significantly, under the provisions of the Code of Commerce, particularly
Articles 826 to 839, the ship owner or carrier, is not exempt from liability
for damages arising from collision due to the fault or negligence of the
captain.
Primary liability is imposed on the shipowner or carrier in recognition of
the universally accepted doctrine that the shipmaster or captain is merely
the representative of the owner who has the actual or constructive control
over the conduct of the voyage.
MCPs claim that the fault or negligence can only be attributed to the pilot
of the vessel SS Yasushima Maru and not to the Japanese Coast pilot
navigating the vessel Dona Nati, need not be discussed lengthily as said
claim is not only at variance with NDCs posture, but also contrary to the
factual findings of the trial court affirmed no less by the Court of Appeals,
that both pilots were at fault for not changing their excessive speed
despite the thick fog obstructing their visibility. #LEANO

Case Title : Mecenas (v) CA, Capt. Santisteban and Negros Navigation Co.
Inc.
Key Phrase : Green Light Starboard (Chap3 keyword : mahjong)Ponente :
Feliciano, J.
Doctrine :"Route observance" of the International Rules of the Road
(Rule18) will not relieve a vessel from responsibility if the collision could
have been avoided by proper care and skill on her part or even by a
departure from the rules.
FACTS:
1. "M/V Don Juan" sank within 10-15 min from impact causing the death of
hundreds of its passengers (the collision incident happened around
10:30pm of April 22, 1980 when the sea was calm, the weather fair and the
visibility was good)
a. Defendant PNOC's version - An interisland vessel (M/V Don Juan) owned
and operated by Negros Navigation was first sighted at about 5 or 6 miles
from a barge-type oil tanker (M/T Tacloban City) owned by the Philippine
National Oil Company (PNOC) and operated PNOC Shipping
Don Juan was on the starboard (right) side of Tacloban City and as it
approached, Tacloban City gave a leeway of 10 to the left to enable
Tacloban to see the direction of Don Juan.
Don Juan switched to green light, signifying that it will pass Tacloban
City's right side; it will be a starboard to starboard passing and Tacloban
City's purpose in giving a leeway of 10 at this point, is to give Don Juan
more space for her passage (this leeway was increased by Tacloban City to
an additional 15 towards the left) at this time the way was clear and Don
Juan has not changed its course.When Tacloban City altered its course the
second time, from 300 to 285, Don Juan was about 4.5 miles away and
despite executing a hardport maneuver, the collision nonetheless occurred
as Don Juan rammed the Tacloban City near the starboard bow
b. Negros Navigations version
Don Juan first sighted Tacloban City 4 miles away and Tacloban City
showed its red and green lights twice; it proceeded to, and will cross, the
path of Don Juan (Tacloban was on the left side of Don Juan)
Upon seeing Tacloban's red and green lights, Don Juan executed hard
starboard (Tacloban was about 1,500 feet away) in conformity with the
rule that "when both vessels are head on or nearly head on, each vessel
must turn to the right in order to avoid each other"; nonetheless, Tacloban
appeared to be heading towards Don Juan.
Don Juan, after execution of hard starboard, will move forward 200
meters before the vessel will respond to such maneuver; Between 9 to 15
seconds from execution of hard starboard, collision occurred.
2. Alleging negligence of defendants, the 7 legitimate children of Sps.
Mecenas file a complaint against Negros Navigation and the captain of the
"Don Juan" (Capt. Roger Santisteban).
ISSUES: Whether or not private respondents acted recklessly (with gross
negligence).
RULING:
Regional Trial Court of QC defendants are equally negligent and liable
M/ V Don Juan and Tacloban City became aware of each other's presence
in the area by visual contact at a distance of something like 6 miles from
each other and they were fully aware that if they continued on their
course, they will meet head on. They executed maneuvers inadequate, and
too late, to avoid collision thus the defendants are equally negligent and
are liable for damages.
Court of Appeals
"Don Juan" was at least as negligent as the M/T "Tacloban City" in the
events leading up to the collision and the sinking of the "Don Juan."
Supreme Court petition for review on certiorari is granted (CA = reversed
& set aside)
1. Grossness of the negligence of "Don Juan" underscored in the context of
the following facts:
a) "Don Juan" was more than twice as fast as the "Tacloban City" because
The "Don Juan's" top speed was 17 knots while that of the "Tacloban City"
was 6.3. knots
b) "Don Juan" carried the full complement of officers and crew members
specified for a passenger vessel of her class
c) "Don Juan" was equipped with radar which was functioning that night
d) "Don Juan's" officer on-watch had sighted the "Tacloban City" on his
radar screen while the latter was still four (4) nautical miles away and
visual confirmation of radar contact was established by the "Don Juan"
while the "Tacloban City" was still 2.7 miles away
2. Had "Don Juan" taken seriously its duty of extraordinary diligence, it
could have easily avoided the collision with the "Tacloban City," and
indeed, the "Don Juan" might well have avoided the collision even if it had
exercised ordinary diligence merely.
3. In ordinary circumstances, a vessel discharges her duty to another by a
faithful and literal observance of the Rules of Navigation, and she cannot
be held at fault for so doing even though a different course would have
prevented the collision BUT this rule is not to be applied where it is
apparent, as in the instant case, that her captain was guilty of negligence
or of a want of seamanship in not perceiving the necessity for, or in so
acting as to create such necessity for, a departure from the rule and acting
accordingly.
4. "Don Juan" having sighted the "Tacloban City" when it was still a long
way off was negligent in failing to take early preventive action and in
allowing the 2 vessels to come to such close quarters as to render the
collision inevitable when there was no necessity for passing so near to the
"Tacloban City" as to create that hazard or inevitability, for the "Don Juan"
could choose its own distance AND it is noteworthy that the "Tacloban
City," upon turning hard to port shortly before the moment of collision,
signaled its intention to do so by giving two (2) short blasts with horn while
the "Don Juan " gave no answering horn blast to signal its own intention
and proceeded to turn hard to starboard.
5. We conclude that Capt. Santisteban and Negros Navigation are properly
held liable for gross negligence in connection with the collision of the "Don
Juan" and "Tacloban City" and the sinking of the "Don Juan" leading to the
death of hundreds of passengers and we find no necessity for passing upon
the degree of negligence or culpability properly attributable to PNOC and
PNOC Shipping or the master of the "Tacloban City," since they were never
impleaded here. #LUALHATIMARQUEZ
CASE TITLE: Aboitiz Shipping vs General Accident Fire and Life Insurance
Corp Keyword: sinking ship, varying decisions of the
TC and CA Ponente: Justice Melo
Facts: Aboitiz Shipping is the owner and operator of M/V P. Aboitiz. The
vessel sank while on a voyage from Hongkong to the Philippines. Several
suits for recovery of the lost cargo either by the shippers, their successors-
in-interest, or the cargo insurers like General Accident (GAFLAC) were filed.
The 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 ruled 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 such sinking 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 in this and related cases.
Petitioners Contention:
1. The Limited Liability Rule warrants immediate stay of execution of
judgment to prevent impairment of other creditors' shares;
2. The finding of unseaworthiness of a vessel is not necessarily attributable
to the shipowner; and
3 The principle of "Law of the Case" is not applicable to the present
petition.
Respondents Contention:
1. There is no limited liability to speak of or applicable real and
hypothecary rule under Article 587, 590, and 837 of the Code of Commerce
in the face of the facts found by the lower court (Civil Case No. 144425),
upheld by the Appellate Court (CA G.R. No. 10609), and affirmed in toto by
the Supreme Court in G.R. No. 89757 which cited G.R. No. 88159 as the
Law of the Case; and
2. Under the doctrine of the Law of the Case, cases involving the same
incident, parties similarly situated and the same issues litigated should be
decided in conformity therewith following the maxim stare decisis et non
quieta movere.
Ruling:
Trial Court and CA: The rulings vary which prompted petitioner to file the
present action.
Supreme Court:
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 may exempt
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 common fund 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.
In the instant case, there is, therefore, a need to collate all claims
preparatory to their satisfaction from the insurance proceeds on the vessel
M/V P. Aboitiz and its pending freightage at the time of its loss. No
claimant can be given precedence over the others by the simple
expedience of having filed or completed its action earlier than the rest.
Thus, execution of judgment in earlier completed cases, even those
already final and executory, must be stayed pending completion of all
cases occasioned by the subject sinking. Then and only then can all such
claims be simultaneously settled, either completely or pro-rata should the
insurance proceeds and freightage be not enough to satisfy all claims.
The petition was granted. #LUZADIO
Title: The Philippine American General Insurance Company v. Court of
Appeals
Ponente: Justice Bellosillo
Doctrine: The right of abandonment of vessels, as a legal limitation of a
shipowners liability, does not apply to cases where the injury or average
was occasioned by the shipowners own fault. It must be stressed at this
point that Art. 587 speaks only of situations where the fault or negligence
is committed solely by the captain.
Keyword: Cocacola
Facts:
Coca-Cola Bottlers Philippines, Inc., loaded on board MV Asilda, a vessel
owned and operated by respondent Felman Shipping Lines (FELMAN for
brevity), 7,500 cases of 1-liter Coca-Cola softdrink bottles to be
transported from Zamboanga City to Cebu City for consignee Coca-Cola
Bottlers Philippines, Inc., Cebu.[1] The shipment was insured with
petitioner Philippine American General Insurance Co., Inc. (PHILAMGEN for
brevity).
MV Asilda left the port of Zamboanga in fine weather at eight oclock in
the evening of the same day. At around eight forty-five the following
morning, the vessel sank in the waters of Zamboanga del Norte bringing
down her entire cargo with her including the subject 7,500 cases of 1-liter
Coca-Cola softdrink bottles. The consignee Coca-Cola Bottlers Philippines,
Inc. 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.
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. PHILAMGEN alleged that the sinking and total loss of MV
Asilda and its cargo were due to the vessels unseaworthiness as she was
put to sea in an unstable condition. It further alleged that the vessel was
improperly manned and that its officers were grossly negligent in failing to
take appropriate measures to proceed to a nearby port or beach after the
vessel started to list.
FELMAN filed a motion to dismiss based on the affirmative defense that no
right of subrogation in favor of PHILAMGEN was transmitted by the
shipper, because it had abandoned all its rights, interests and ownership
over MV Asilda together with her freight and appurtenances for the
purpose of limiting and extinguishing its liability.
Issues: a) whether MV Asilda was seaworthy when it left the port of
Zamboanga; (b) whether the limited liability under Art. 587 of the Code of
Commerce should apply.
Ruling
Trial Court: Rendered judgment in favor of FELMAN. It ruled that MV
Asilda was seaworthy when it left the port of Zamboanga as confirmed by
certificates issued by the Philippine Coast Guard and the shipowners
surveyor attesting to its seaworthiness. Thus the loss of the vessel and its
entire shipment could only be attributed to either a fortuitous event, in
which case, no liability should attach unless there was a stipulation to the
contrary, or to the negligence of the captain and his crew.
Appellate Court: Rendered judgment finding MV Asilda unseaworthy for
being top- heavy as 2,500 cases of Coca-Cola softdrink bottles were
improperly stowed on deck. In other words, while the vessel possessed the
necessary Coast Guard certification indicating its seaworthiness with
respect to the structure of the ship itself, it was not seaworthy with
respect to the cargo.
Supreme Court:
a. MV Asilda was unseaworthy when it left the port of Zamboanga. The
vessel was designed as a fishing vessel x x x x and it was not designed to
carry a substantial amount or quantity of cargo on deck. Therefore, the
cargo had been confined to those that could have been accommodated
under deck, her stability would not have been affected and the vessel
would not have been in any danger of capsizing, even given the prevailing
weather conditions at that time of sinking. But from the moment that the
vessel was utilized to load heavy cargo on its deck, the vessel was rendered
unseaworthy for the purpose of carrying the type of cargo because the
weight of the deck cargo so decreased the vessels metacentric height as to
cause it to become unstable. Considering that the ships hatches were
properly secured, the empty Coca-Cola cases recovered could have come
only from the vessels deck cargo. It is settled that carrying a deck cargo
raises the presumption of unseaworthiness unless it can be shown that the
deck cargo will not interfere with the proper management of the ship.
However, in this case it was established that MV Asilda was not designed
to carry substantial amount of cargo on deck. The inordinate loading of
cargo deck resulted in the decrease of the vessels metacentric height thus
making it unstable. The strong winds and waves encountered by the vessel
are but the ordinary vicissitudes of a sea voyage and as such merely
contributed to its already unstable and unseaworthy condition.
b. On the second issue, Art. 587 of the Code of Commerce is not applicable
to the case at bar. Simply put, the ship agent is liable for the negligent acts
of the captain in the care of goods loaded on the vessel. This liability
however can be limited through abandonment of the vessel, its equipment
and freightage as provided in Art. 587. Nonetheless, there are exceptional
circumstances wherein the ship agent could still be held answerable
despite the abandonment, as where the loss or injury was due to the fault
of the shipowner and the captain. The international rule is to the effect
that the right of abandonment of vessels, as a legal limitation of a
shipowners liability, does
not apply to cases where the injury or average was occasioned by the
shipowners own fault. It must be stressed at this point that Art. 587
speaks only of situations where the fault or negligence is committed solely
by the captain. Where the shipowner is likewise to be blamed, Art. 587 will
not apply, and such situation will be covered by the provisions of the Civil
Code on common carrier. #MACALINO
VI. SALVAGE
TITLE: ERLANGER & GALINGER vs. THE SWEDISH EAST ASIATIC CO.
DOCTRINE: Three elements are necessary to a valid salvage claim: (1) A
marine peril. (2) Service voluntarily rendered when not required as an
existing duty or from a special contract. (3) Success, in whole or in part, or
that the service rendered contributed to such success.
FACTS:
May 7, 1913: Steamship NIPPON loaded with copra and other general
merchandise sailed from Manila to Singapore.
May 8, 1914 -- 4:30PM: It went aground Scarborough Reef.
May 9, 1913: Chief officer Weston and 9 other members of crew left
NIPPON.
May 12, 1913 -- Morning: They reached Santa Cruz, Zambales and Weston
sent a telegram to Helm, Director of Bureau of Navigation, Manila stating
that NIPPON was stranded on Scarborough Reef and wants immediate
assistance for saving crew.
1:30PM: Government of the Phil Islands orderd coast
guard cutter MINDORO with life-saving appliances to the scene of the
wreck.
3:00PM: Steamship MANCHURIA sailed from Manila to
Hongkong was requested to pass by Scarborough Reef.
May 13, 1912: MANCHURIA arrived before MINDORO and took on board
the captain and remainder of crew. MANCHURIA was still near
Scarborough Reef when MINDORO arrived. Captain of MANCHURIA
informed captain of MINDORO that the crew and captain were on board
and proceeding to Hongkong. Captain of MINDORO offered assistance but
MANCHURIA declined. MINDORO proceeded to NIPPON and removed
balance of baggage found on deck. MINDORO proceeded to Santa Cruz,
Zambales, took Weston and 9 crew members on board and brought to
Manila.
Captain Dixon of MANCHURIA sent a message that all were
rescued from NIPPON and that it was stranded on the extreme north end
of shoal. It also stated that the streamer was full of water fore and fat and
is badly ashore and it was abandoned. Captain of NIPPON saw said
message before it was sent. The crew boarding MANCHURIA took with
them the chronometer, ships register, ships articles, ships logs and much
of crews baggage amounting to P 156, 231.73.
May 14, 1913: Erlanger & Galinger applied to Director of Navigation for a
charter of a coast guard cutter for the purpose of proceeding to the
stranded steamer NIPPON. The coast guard cutter MINDORO was
chartered to Erlanger & Galinger.
May 17, 1913: Erlanger & Galinger took possession of NIPPON and
continued in possession until about July 1 when the last cargo was shipped
to Manila. NIPPON was floated and towed to Olongapo and temporary
repairs were made. It was then brought to Manila.
The ship was valued at P 250, 000.00. Erlanger & Galingers claim was
settled for P 145, 800.00. they filed this action against the insurance
companies who represented the cargo salved from NIPPON, to have the
amount of salvage they were entitled, determined.
THE RESPONDENTS: The Oelwerke Teutonia is a corporation as claimant of
copra.
New Zealand Insurance Company as insurer and assignee of
ownders of 33 crates of agar-agar.
Tokio Marine Insurance Company as insurer and assigne of 1, 000
cases of bean oil and 2 cases of bamboo lacquer work.
The Thames and Mersey Marine Insurance Company as a
reinsurer to the extent of P6,500 on the cargo of copra
PETITIONERS CONTENTION: They are entitled to a reimbursement of their
expenses, out of the gross value of the salved property. They also
contended that the cargo and vessel are equally chargeable with the
expense of the salvage. They also claim that that the NIPPON was a derelict
or quasi-derelict.
RESPONDENTS CONTENTION: They contended that Erlanger & Galinger
were not salvors of the copra and that the latter were not entitled to
recover one-half of the proceeds of copra. They also contended that the
captain and the crew did not leave the ship sine animo revertendi, but that
it was their intention to go to Hongkong and procure assistance with which
to save the ship and her cargo.
ISSUE: 1. Whether or not the ship was abandoned.
2. Whether or not the salvage was conducted with skill, diligence
and efficiency.
RULING:
Honorable A. S. Crossfield: The court found that the plaintiffs were
"entitled to recover one-half of the net proceeds from the property salved
and sold (which has nothing to do with the steamship itself), and one-half
the value of the property delivered to the claimants."
Supreme Court:
The question whether or not a particular ship and her cargo is a fit object
of salvage depends upon her condition at the time the salvage services are
performed.
Three elements are necessary to a valid salvage claim: (1) A marine peril.
(2) Service voluntarily rendered when not required as an existing duty or
from a special contract. (3) Success, in whole or in part, or that the service
rendered contributed to such success.
1. The ship was abandoned.
At the time the plaintiff commenced the attempt to salve what
was possible of the S. S. Nippon and cargo, it was justified, from
all the conditions existing, in believing that it had been abandoned
and in taking possession, even though the master of the vessel
intended when he left it, to return and attempt salvage. Captain
Dixon also sent telegrams stating that NIPPON was stranded.
The evidence also proves that the Nippon was in peril; that the
captain left in order to protect his life and the lives of the crew;
that the animo revertendi was slight. The argument of the
defendant-appellant to the effect that the ship was in no danger is
a bit out of place in view of the statement of the captain that she
would sink with the first gale, coupled with the fact that a
typhoon was the cause of her stranding.
2. The plaintiffs were diligent in commencing the work and were
careful and efficient in its pursuit and conclusion.
While the plaintiff entered upon the salvage proceedings without
proper means and not being adapted by their business to conduct
their work, and while it may appear that possibly the salvage
might have been conducted in a better manner and have
accomplished somewhat better results in the saving of the copra
cargo, yet it appears that they quickly remedied their lack of
means and corrected the conduct of the work so that it
accomplished fairly good results. It does not appear from the
evidence that anyone then or subsequently suggested or found
any other course which might have been pursued and which
would have brought better results.
The plaintiffs commenced the actual work of salving the ship and
cargo on May 18, 1913. The last of the cargo was a brought to
Manila the latter part of June. The last of the dry copra was
brought to Manila on June 5. The estimates of the experts with
regard to the time necessary to remove the cargo ranged from
eight to twenty days. The greater portion of the cargo was
brought in by the plaintiffs within fifteen days. The delay after
June 5 was due to the difficulty in inducing laborers to work with
wet copra. This difficulty would have arisen with any set of salvors
and cannot be attributed to a lack of care or diligence on the part
of the plaintiffs.#MAGALIT
TITLE: Honorio Barrios vs. Carlos A. Go Thong
KEYWORD: Salvage vs Towage
DOCTRINE: When the ship stranded is not in a perilous condition, the
services rendered by another ship in attaching it in tow is merely towage
and not salvage.
PONENTE: Barrera, J.
FACTS:
Honorio Barrios, the captain of MV Henry I of William Lines Incorporated,
received an SOS signal by blinkers from the MV Don Alfredo, owned and
operated by Carlos A. Go Thong & Company, causing the former to alter
its course to render aid. MV Don Alfredo was found to be in trouble due to
engine failure and the loss of a propeller. With the consent of Captain
Loresto of the distressed vessel, the plaintiff tied MV Don Alfredo to MV
Henry I and had it in tow towards the direction of Dumaguete City. The
next morning they came across MV Lux, a sister ship of MV Don Alfredo.
And Upon the request of Captain Lorseto, the tow lines were released.
ISSUE: Whether the services rendered by the petitioner to the respondent
constituted salvage or towage.
PETITIONERS CONTNETION:
- claims salvage of the distressed ship amounting to P100,000
RESPONDENTS CONTENTION:
- the petitioner cannot claim separate compensation from that they own
from the shipping company
DECISION:
COURT OF FIRST INSTANCE
Dismissed. The MV Don Alfredo was not in a perilous condition, therefore
cannot be considered quasi-derelict and the Salvage Law (Act 2616) is not
applicable.
INTERMEDIATE APPELLATE COURT: **case silent
SUPREME COURT
The Court ruled that the service was towage.
Section 1 of the Salvage Law (Act 2616) provides that:
Section 1. When in case of shipwreck, the vessel or its cargo shall be
beyond the control of the crew, or shall have been abandoned by them,
and picked up and conveyed to a safe place by other persons, the latter
shall be entitled to reward for the salvage.
Salvage, has been defined as the compensation allowed to persons by
whose assistance a ship or her cargo has been saved, in whole or in part,
from impending peril on the sea, or in recovering such property from
actual loss, as in case of shipwreck,
derelict, or recapture. It has three elements, namely: (1) a marine peril; (2)
service voluntarily rendered when not required as an existing duty or from
a special contract; and (3) success in whole or in part, or that the service
rendered contributed to such success. The court opined that there was no
sea peril to begin with to warrant the claim for salvage. Although it is true
that the ship was in a helpless condition due to engine failure, there was
no peril. The weather was fair and clear, the waves were small, there was
no risk in floundering, and in case the ship were to drift, the anchor could
easily be lowered. The crew did not even find it necessary to lower the
motor boats and evacuate its passengers, neither was there a necessity to
jettison the cargo for safety measures. The vessel was crew were only
prevented from moving the vessel, such case did not make the vessel a
quasi-derelict.
Instead, what constituted was a towage. By the consent of the respondent
from the petitioners offer to tow the vessel, they impliedly entered into a
juridical relationship of towage.
***the material distinction between TOWAGE and SALVAGE is that a
reward ought to sometimes be given to the crew of the salvage vessel and
other participants in the salvage service; no such reward is given in case of
towage. In towage, the master and crew are not entitled to remuneration
pursuant to the contract of towage.#MANALANG