G. URRUTIA & COMPANY, plaintiff-appellant, vs.

THE PASIG
STEAMER AND LIGHTER CO., defendant-appellee.

Under date of May 19, 1909, counsel for G. Urrutia and Company
filed a written complaint against The Pasig Steamer and Lighter Co.,
wherein it was alleged that the plaintiff company was the owner of the
steamer Nuestra Seora del Pilar, inscribed in the marine registry of
the port of Manila; that the said vessels was provided with the proper
license to navigate and trade in the waters of the Philippines, was
worth P80,000 in cash, and, on the dates mentioned in the complaint,
was carrying a cargo valued at P45,000; that the defendant company
was the owner of the steamer San Juan, inscribed in the marine
registry of the port of Manila; that on or about December 6, 1908,
while a storm was raging, the steamer Nuestra Seora del Pilar,
belonging to the plaintiff, was navigating in the direction of the port of
Legaspi and, after twenty hours and thirty minutes, descried, toward
Mal-Abrigo, a steamship which had signal flags hoisted, wherefore
the Nuestra Seora del Pilar directed its course towards the said
vessel, which proved to be the San Juan displaying the signals M Y
and L D, which mean: "Am unable to navigate. Will you tow me to a
safe anchorage?" that on that occasion, the steamer Nuestra Seora
del Pilar, with great risk to itself, rendered salvage service to the San
Juan by taking it to a safe port, and that, had it not been for the
opportune, prompt and efficacious aid lent by the Nuestra Seora del
Pilar, the San Juan and its cargo would certainly have been totally
lost; that the salved steamer, together with its cargo, was worth on
the dates of the salvage and the complaint P100,000, at a true cash
valuation; that the just and adequate remuneration for the salvage
service rendered by the Nuestra Seora del Pilar to the San Juan
amounted to the sum of P40,000; and that; notwithstanding that the
plaintiff company had demanded of the defendant concern the
payment of the said sum for the salvage service referred to, and
since the 15th of January, the defendant, without objecting to the
amount of the plaintiff's claim, had not paid the same and had been
delaying the payment thereof under futile pretexts: wherefore, the
plaintiff prayed that judgment be rendered in its behalf, to enable it to
collect from the defendant the sum of P40,000, with legal interest
thereon from January 15, and the costs.
Issue: Whether or not there is salvage?

Held: YES

When so important a service is rendered as that of salving a vessel

with its crew and the cargo it carries, from a positive danger to which
it is exposed, exposed, strict justice demands that whoever effects so
meritorious a service should receive adequate remuneration therefor,
not only on account of act performed in behalf of the shipowner and
the crew, but also because of the danger run by the vessel which
made the salvage, due to the circumstances that existed at the time
such service was rendered.

The principle has been established by the courts of the United States
that when a vessel has been disabled by the breaking of its shaft at
sea and the hoist signals asking for aid, and another vessel goes to
its relief and takes it in tow, such service rendered is one of salvage,
and not merely of towage.

The towage of a vessel in peril to some place of security, when it is

unable by itself to reach the same, is a service of salvage.

The towage of a vessel which has the lost use of its engine by
accident, though it is complete in its hull and masts, is a service of
salvage, and it is not necessary that the said loss be inevitable since,
in view of the peril, the vessel could not be salved in any other way;
for it is sufficient that at the moment the service was rendered there
was a probable, threatening danger and reasonable fear that it might
strike.

Hence it is not here a question of a simple service of towage in

ordinary and normal whether, but of an extraordinary act of salvage
performed in behalf of the steamer San Juan, in exceptional
circumstances and while a cyclone was raging over the part of the
sea where the salved vessel then was, which, in the midst of such
peril, was unable to govern its movements through its engine on
account of the inserviceability of its propeller.

Compensation in such cases as that which occurred to the San Juan,

deserves to be considered as a reward for the service rendered by
the Nuestra Seora del Pilar in the midst of a peril to which the
rescued as well as the salving steamer was exposed, and it is proper
that such reward should be made, not only because of the salvage of
the vessel and of the goods carried and the rescue of the crew, but
also in order that it may serve as an incentive to render prompt and
efficient aid in such cases when requested by those who in the midst
of such unfortunate circumstances are urgently in need thereof. It
should also be borne in mind that the Nuestra Seora del Pilar is a
merchant vessel and as such should with more reason be favored for
the service which it rendered to the San Juan, which perhaps
otherwise might have been lost with all its cargo and crew.

C.S. ROBINSON ET AL., plaintiffs-appellees, vs.THE SHIP "ALTA"

ET AL., defendants-appellants.

Facts:

the sailing vessel Alta was wrecked and stranded upon the coast of
Cavite Province. The certain of the ship removed the cargo and after
working ten or twelve days in attempts to float the ship made a
contract, in writing, with the plaintiffs, which is as follows:

MANILA, November 1, 1905.

Mr. CHARLES S. ROBINSON, Manila.

DEAR SIR: Referring to your offer of 31st ultimo, re the raising of the
ship Alta viz, to put her into Cavite and in such condition that it will
admit of her being sailed to Hongkong or other port, subject to being
passed by Lloyds' surveyor for the sum of fifteen thousand pesos
(P15,000), Philippine currency, I accept the same and shall esteem it
a favor if you will commence the work with the least possible delay.
Should you not be successful, it is distinctly understood that no
money whatever is to be paid for any work done or appliances used.

Yours, faithfully, (Sgd.) W. THONAGEL.

The plaintiffs went to work immediately upon the vessel, raised it, and
towed it to Cavite on the 10th day of December, 1905. It was at once
decided to put her into the dry dock or slip there for the purpose of
examining her hull and ascertaining the extent of the damages

The plaintiffs, on the 30th day of December, 1905, were paid by the
defendants the sum of 3,000 pesos on account of the contract. They
brought this action against the ship and her master on the 27th day of
February, 1906, claiming to recover the reasonable worth and value
of the services performed by them, which they fixed at 15,000 pesos.

Issue: WON the plaintiffs-salvor are entitled to compensation by

salvaging the ship?

Held: NO,

The contract in this case, being contingent upon success, their claim
is that they are not bound by it.

We are all of opinion that this question must be answered in the

negative. Salvage services are either (1) voluntarily, wherein the
compensation is dependent upon success; (2) rendered under a
contract for a per diem or per horam wage, payable at all events; or
(3) under a contract for a compensation payable only in case of
success.

The first and most ancient class comprises cases of pure salvage.
The second is the most common upon the Great Lakes. The third
includes the one under consideration. Obviously where the stipulated
compensation is dependent upon success, and particularly of
success within a limited time, it may be very much larger than a mere
quantum meruit. Indeed, such contracts will not be set aside unless
corruptly entered into, or made under fraudulent representations, a
clear mistake or suppression of important facts, in immediate danger
to the ship, or under other circumstances amounting to compulsion,
or when their enforcement would be contrary to equity and good
conscience.

The judgment of the court below is reversed and judgment is ordered

in favor of the defendants and against the plaintiffs, absolving the
defendants from the complaint, with the costs of the first instance. No
costs will be allowed to either party in this court. So ordered.
THE MANILA RAILROAD CO., plaintiff-appellant, vs.MACONDRAY
and CO., defendant-appellant.

plaintiff, the Manila Railroad Company, upon February 24, 1916, in

the Court of First Instance of the city of Manila to recover of the
defendant, Macondray and Co., the sum of P75,000, the alleged
value of salvage service rendered on April 6, 1915, by the steamer
Hondagua, owned by the plaintiff, to the steamer Seward, which was
owned by the defendant. At the hearing judgment was rendered in
favor of the plaintiff for the sum of P4,000. From this judgment both
parties have appealed, the plaintiff insisting that the amount allowed
by the lower court is inadequate, the defendant that it is excessive.

Seward left Saigon for the Philippine Islands, encountering a

moderately high sea. The ship was laden with a cargo of rice, the
weight of which, taken in connection with the condition of the sea,
caused the vessel to spring a leak, and her master felt compelled to
return to Saigon. At this juncture the steamship Hondagua was
sighted, whereupon the Seward flew the international code signal "In
distress; want immediate assistance." The Hondagua changed her
course and approached the Seward, the latter in succession
displaying the following signals: "I have sprung a leak;" "I wish to be
taken in tow;" "Can you spare hawser;" and "The leak is gaining
rapidly." In response to signals from the Hondagua the Seward sent
her own boat to the Hondagua for a heaving line, by means of which
a hawser was passed from the Hondagua to the Seward and the
former, with the latter in tow, then proceeded at half speed towards
Saigon.

ISSUE: (1) Is the plaintiff entitled to recover from the owner of the
Seward, in this action, remuneration for saving the cargo as well as
for saving the ship? (2) What is the reasonable compensation which
should be allowed in this action?

HELD: YES BOTH

salvage allowance should be apportioned between the ship and

cargo in the proportion of their respective values, the same as in a
case of general average; and neither is liable for the salvage due
from the other

In fixing the amount of compensation to be awarded for salvage

service, it has bee n declared by the Supreme Court of the United
States that the principal circumstances to be taken into consideration
are: (1) The labor expended by the salvors in rendering the salvage
service; (2) The promptitude, skill, and energy displayed in rendering
the service and saving the property; (3) The value of the property
employed by the salvors in rendering the service, and the danger to
which such property was exposed; (4) The risk incurred by the
salvors in rescuing the property from the impending peril; (5) The
value of the property salved; and (6) The degree of danger from
which the property was rescued.
In applying these criteria to the case now before us, the following
circumstances, not already noted, are pertinent, namely: the
Hondagua was delayed in her voyage about nine hours, during five of
which she was engaged in towing the Seward. This delay caused her
to enter at Iloilo, the port of her arrival instead of the late afternoon of
the previous day; but the unloading of her cargo was not thereby
retarded. Considered on the basis of charter party contract under
which she was operating, the Hondagua was earning about P300 per
day, which was considered reasonable compensation for her use,
including the services off officers and crew. The service rendered did
not involve any further expenditure of labor on the part of the salvors
than such as was commonly incident to working the ship. No unusual
display of skill and energy on their part was required; and the
condition of the sea was not such as to involve any special risk either
to the Hondagua or her crew. Finally, the danger from which the
Seward was rescued was real, as the ship when taken in tow was
confronted by a serious peril. The value of the vessel when saved
was, we think, properly fixed by the trial court at P20,000.

In determining the amount of the award to be allowed in cases of this

kind the aim should be to hold out to seafaring men a fair inducement
to the performance of salvage services without fixing a scale of
compensation so high as to cause vessel in need of such services to
hesitate and decline to receive them because of the ruinous cost.
That the salvor is entitled, as of bounty, to something more than mere
remuneration for his own work and the risk incurred by him
THOMAS A. WALLACE, plaintiff-appellant, vs.PUJALTE & CO. and
MIGUEL PUJALTE, defendants-appellees.

Facts:

This is an action of replevin begun by the owner to recover

possession of a schooner called the Kodiak which had been deserted
by its captain and crew by reason of its having been capsized by a
gale and which had been found, taken possession of and towed into
port by the defendants Miguel Pujalte and Miguel Ossorio who, at the
time the action was begun, were engaged in completing the salvage
of the vessel. The defendants Miguel Pujalte and Miguel Ossorio set
up their rights on the vessel as salvors and contend that they were
entitled to the possession of the vessel until the salvage operations
were completed and that, if possession were taken from them before
that time, they were entitled to the same compensation as they would
have been if the plaintiff had allowed them to complete the work.

There is little dispute about the important facts of the case. It appears
that on the 4th day of August, 1913, the schooner Kodiak was lost off
the coast of Mindoro, having been blown on her side by heavy winds.
She was floating at the mercy of the elements of three or four days.
On or about 7th of August, the report of her loss reached the
Collector of Customs of the Philippine Islands who immediately
issued a circular letter to the masters of all steamers and vessels
plying in Philippine waters, declaring the Kodiak a derelict and a
danger to navigation. As soon as the circular letter was received by
defendants Miguel Pujalte and Miguel Ossorio they chartered the
coast guard cutter Mindoro and proceeded to search for the lost
schooner. On the 8th day of August they left the port of Manila
carrying on board Captain Jose Muoz and some men, who were to
take charge of, and direct, the salvage operations. Two days later the
Kodiak was located, floating abandoned on her side, with all her sails
unfurled and under water. Immediately a boat, with Captain Jose
Muoz and his men, was lowered from the coast guard cutter and, in
the midst of a heavy sea and strong wind, they succeeded in making
fast a rope to the stern of the Kodiak . They towed her into the port of
Pola, reaching that port a day or two later, they being obliged to
proceed very slowly not only on account of the heavy sea but also by
reason of the fact that the Kodiak was full of water. Once in Pola Bay
men were left in charge of the vessel while Captain Jose Muoz went
back to Manila on the Mindoro, and reported to his employers. They
immediately chartered the steamer Lakandula to carry workmen and
to tow a lighter called the Paquita with salvage materials and
implements to Pola Bay. They also dispatched the steamer Maria
Luisa Y. to assist in the salvage work.

On the 12th day of August 1913 plaintiff's agent delivered to Miguel

Pujalte the following letter:

We have been informed that the schooner Kodiak has been towed
into the port of Pola, Mindoro, by the cutter Mindoro belonging to the
Government which was chartered for that purpose by you. The
Kodiak belongs to Captain Thomas A. Wallace, of Binaluan (Palawan)
and we are the persons to whom the vessel and cargo were
consigned. On behalf of the owner of the Kodiak we offer to pay you
for the services rendered in salving the vessel up to the present time,
and we offer to take possession of the Kodiak where it now is on the
beach of Mindoro. As representatives of the owner we shall refuse to
pay any expense which you may incur from now on.

Please furnish us with the amount of compensation to which you

believe you are entitled.

In case you ask more than we regard as reasonable we will pay you
the amount decided upon by a board of arbitration to be selected by
the officers of the Maritime Association; and if this is not agreeable to
you we will pay you whatever a court of justice will adjudge.

If you require it we will give a bond to carry the above offer into effect.

The defendants contend that all the arrangements for the salvage of
the Kodiak has been made before the receipt of the letter written by
plaintiff's agent and that the larger part of the expenses for the
salvage of the Kodiak had already been incurred at that time; that
they therefore proceeded with the salvage and were about to finish
their work successfully when the complaint was filed in this case and
the possession of the schooner
Issue: WON there is a valid salvage? And does the salvors entitled to
compensation?

HELD: YES

There is no doubt about the fact that the Kodiak capsized off the
coast of Mindoro during a storm and that she was deserted by her
officers and crew and left floating on her side with sails unfurled and
under water. Nor is there question about the fact that the Bureau of
Navigation of the Philippine Islands declared the vessel a derelict and
dangerous to navigation

that a considerable portion of the expenses were incurred after the

owner delivered the letter of August 12 notifying the defendants that
he would pay the expenses incurred up to the time the notice was
served together with the compensation to which they were entitled,
and that they would pay nothing from that time forward either as
expenses or as compensation

Whatever might be said with regard to the effect of this letter on the
relations between the parties if it stood alone in the record it is
unnecessary to say. It is not a demand for the possession of the
Kodiak in the sense in which that word is generally used. It is merely
an offer to do certain things. We do not care to determine the precise
effect of this offer from a legal point of view since it appears that the
circumstances

Whatever effect the notice in question might have produced was

nullified by the attitude of the plaintiff's agent who signed and served
the notice they requiring that the defendants comply on the spot with
the provisions thereof, particularly those relating to furnishing a
statement of the expenses and the value of the services which had
been rendered up to the time of the service of the notice. The fulfill
this requirement was at the time clearly impossible and the
defendants cannot be held responsible for their not doing so.

It appears from all the facts and circumstances of the case that the
defendants acted in good faith; that they kept the expenses within
reasonable bound; that they acted with dispatch and performed their
work, generally speaking, in a workmanlike manner.
As to the amount of compensation we cannot say that it is excessive.

JOSE FERNANDEZ, O. N. HOLMSEN, and M. A. MACLEOD, plaintiffs-

appellants,
vs.
THOMPSON & CO., W.F. STEVENSON & CO., KER & CO., Captain GUY,
Captain SWAN, JOHN DOE, RICHARD ROE and HENRY JONES,
defendants-appellees.

the British steamer Bengloe owned by W. Thompson & co., while en route
from Manila to European ports, stranded on the Mayone shoal in the Sulu sea
some twenty-five miles from Brook's Point on the Island of Palawan.

Bengloe abandoned last Thursday eighteen days on Corral Reef no assistance

whatever to hand ship dangerous position settling down forward and listed
heavily to Port Cargo in aft holds possible to salve. Crew all safe.

Jose Fernandez, O. N. Holmsen, and M. A. Macleod, now plaintiffs, were

residents of Palawan. On learning of the abandonment of the Bengloe by her
crew, these gentlemen formed a partnership, with a capital of P1,500, for the
purpose of salving the vessel and cargo. They hired the launch Florence of
between thirty and forty tons capacity from the provincial authorities of
Puerto Princesa, and with a number of laborers proceeded to the wreck to
ascertain its condition

the London Salvage Association acting in the interest of the underwriters of

the ship and the cargo, and with the consent of the ship's agents, engaged
Ker & Co. to take charge of the salvage operations. The latter firm in its turn
employed William Swan, an engineer and marine surveyor, to conduct the
work. Swan left Manila on the Coast Guard Cutter Polillo on October 6 for the
scene of the wreck.

Swan, the captain of the Bengloe, and their assistants arrived at the wreck
on October 9, that is, two days after the arrival of Fernandez, Holmsen, and
Macleod, and after the copra and other effects had been removed. Macleod
and the two laborers found on board were shown scant hospitality by the
second party, and were pointedly given to understand that their presence
was not desired.

When the other plaintiffs Holmsen and Fernandez, returned on the launch,
they were prevented from taking any further part in the salvage operations.

Fernandez, Holmsen, and Macleod began action in the Court of First Instance
of the city of Manila to recover from the owners of the Bengloe and other
parties the sum of P179,780, claimed to be due as compensation for the
salvage of merchandise and effects of the value of P2,500 from the
steamship Bengloe and as damages because of having been forcibly deprived
of the possession of the steamship and thereby prevented from prosecuting
salvage operations.

The defendants originally claimed the sole and exclusive possession of the
wreck on the ground that they had not abandoned it but only left to seek
assistance. The trial court, however, found that the appearances justified the
conclusion that the Bengloe was abandoned by the defendants on October 7,
1914, and that the plaintiffs commenced the salvage operations in entire
good faith.

ISSUE: had the plaintiffs adequate equipment to effect the salvage of the
ship and cargo? Had plaintiffs the right to insist upon retaining possession of
the Bengloe and her cargo for the purpose of salvage as against the salvors
employed by the owners and underwriters? Was P1,200 adequate
compensation for the property saved by the plaintiff?

HELD:

Both No That such equipment was inadequate for the salvage of a vessel
valued at P100,000, laden with sugar, copra, and bunker coal of a value of
P352,500, perilously situated, seems undeniable. But plaintiffs also made
futile efforts, presumably in good faith, to acquire adequate salvage
equipment. We thus have presented this unique situation: Well-intentioned
men with inadequate equipment are first on the scene of a wreck, and while
in technical possession, are driven off and operations begun by a second
salvage party under an expert superintendent and with adequate equipment.

The services rendered by the plaintiffs contributed immediately to the

preservation of a small amount of property on the stranded vessel, but as an
actual fact, their further exertions, however meritorious they were intended
to be were not successful in any degree and cannot be compensated in
damages.

THE ATLANTIC, GULF & PACIFIC COMPANY OF MANILA and

SIMMIE & GRILK, plaintiffs-appellants, vs.UCHIDA KISEN KAISHA
and MITSUI BUSSAN KAISHA, defendants-appellants.

on the 21st day of October, 1918, while the steampship Kyodo Maru
was discharging a cargo of coal, the property of the defendant
Vicente Madrigal, in the harbor of Manila, inside the breakwater, one
of the lighters alongside said vessel sank. In swinging with the tide,
the Kyodo Maru came violently in contact with this submerged lighter,
the result being that her hull was perforated.

The said steamer began to sink during the morning of October

22d and touched the bottom of the harbor at 10 o'clock of the same
morning. She continued to sink deeper into the mud until, on October
23d, the forward half of the vessel was entirely submerged, while the
stern half was still afloat.

On the afternoon of October 23d, the plaintiffs, at the request of the

captain and agents of the ship, took possession of the sinking vessel
as salvors and commenced salvage operation at once. At that time
they had submitted two propositions to the captain and agents of the
ship as to compensation for the salvage services to be performed:
One for P150,000 in case of success and reimbursement of
expenses in case of failure, and another for P300,000 "no cure no
pay." The plaintiffs were informed that the propositions would be
transmitted to the owners of the vessel in Japan for acceptance or
rejection, but they were requested to continue work in the meantime,
upon the understanding that if no special contract should be made
they would be compensated as salvors.

The vessel was floated on October 30th and the salvage

operations ended the following day. On the afternoon of October 30th
the plaintiffs were informed in writing that the head office of the
steamship company in Japan had, by cable, rejected both of the
above-mentioned propositions, and that it was proposed to settle with
them on the basis of the reasonable value of their services as
salvors.

ISSUE: (1) with regard to the amount of compensation to be awarded

to the plaintiffs for the salvage of the ship in question, and (2) whether
or not the defendant-appellee Vicente Madrigal, as owner of the
cargo, is liable for any contribution to such compensation.

HELD:

1. This question of compensation involves two elements: (a) The

actual expenses incurred in the salvage operation, and (b) the reward
for services rendered by the plaintiffs as salvors.

(a) we are persuaded that most of the charges for expenses made by
the plaintiffs are really exorbitant. Considering all of the facts and
circumstances of this case, and specially the inflated war prices of
materials at the time the salvage in question was performed, we are
of the opinion that the sum of P50,000 would be a very reasonable
allowance to the plaintiffs for their cash outlay and the rental value of
their equipment.

(b) With regard to the reward for salvage services, defendants-

appellants maintain that the sum of P35,000 would be a liberal net
award to the salvors.

we are persuaded that the sum of P50,000 would be an equitably

liberal net compensation to the plaintiffs as salvors of the Kyodo
Maru. This together with the sum of P50,000 which we have found
should be allowed them for their expenses and the reasonable rental
value of their equipment, makes a total award to the plaintiffs of the
sum of P100,000. We are persuaded that this amount is a sufficient
compensation for the outlay and effort of the salvors in the present
case, and that the same is liberal enough to constitute an inducement
to others to render like services in similar emergencies in the future.

2. YES, we cannot agree with him that "such removal did not operate
in any way to benefit the cargo, nor save it from any risk or damage.'
Had the vessel completely sunk and listed, extreme difficulty would
no doubt have been encountered in removing the coal in question
from her hold, thus occasioning considerable expense and loss to this
defendant. It is also undeniable that part of the plaintiffs expenses
which we have allowed against defendants-appellants were incurred
in carrying such coal to the shore. It is but just, then, that defendant-
appellee should share a proportionate amount of the award.