Part Iii - Maritime Law: Chapter 10: General Concepts

PART III - MARITIME LAW
Chapter 10: General Concepts

is deemed extinguished due to loss of the thing due, which in this case is the all the
01. THE PHILIPPINE SHIPPING COMPANY vs. FRANCISCO GARCIA VERGARA equipment and the freight money earned during the voyage which would have
G.R. No. 1600 | June 1, 1906. amounted to an offer of the value of the vessel (Navarra).
TOPIC: Real and Hypothecary Nature PROCEDURE:

TC: held "that the defendant was not responsible to the plaintiff for the value of the
BUZZWORD: Hifalutin masyado explanation ng S.C. sa kasimple simpleng bagay. steamship Lourdes, with the costs against the latter."
DOCTRINE: FACTS:
• That which distinguishes the maritime from the civil law and even from the • The steamship Navarra collided with the Lourdes which was carrying a cargo of
mercantile law in general is the real and hypothecary nature of the former, and the hemp and coprax.
many securities of a real nature that maritime customs from time immemorial, the • The Philippine Shipping Company, the owner of the steamship Nuestra Sra. de
laws, the codes, and the later jurisprudence, have provided for the protection of Lourdes, claims an indemnification of 44,000 pesos for the loss of the said ship as
the various and conflicting interest which are ventured and risked in maritime a result of a collision.
expeditions, such as the interests of the vessel and of the agent, those of the • Ynchusti & Co. also claimed 24,705.64 pesos as an indemnification for the loss of
owners of the cargo and consignees, those who salvage the ship, those who make the cargo.
loans upon the cargo, those of the sailors and members of the crew as to their • Philippine Shipping Company, contends that the defendant should pay to 18,000
wages, and those of a constructor as to repairs made to the vessel. pesos, the value of the Navarra at the time of its loss.
• ”As evidence of this "real" nature of the maritime law we have (1) the limitation
of the liability of the agents to the actual value of the vessel and the Philippine Shipping Company Contention: that the defendant should pay to
freight money, and (2) the right to retain the cargo and the embargo and 18,000 pesos, the value of the Navarra at the time of its loss and that it was
detention of the vessel even cases where the ordinary civil law would not allow immaterial whether the Navarra had been entirely lost, provided her value at the
more than a personal action against the debtor or person liable. It will be observed time she was lost could be ascertained, since the extent of the liability of the owner
that these rights are correlative, and naturally so, because if the agent can of the colliding vessel for the damages resulting from the collision is to be
exempt himself from liability by abandoning the vessel and freight determined in accordance with such value.
money, thus avoiding the possibility of risking his whole fortune in the
business, it is also just that his maritime creditor may for any reason ISSUE/S:
attach the vessel itself to secure his claim without waiting for a 1. WON the agent is liable to the extent of the value of the vessel under the Code of
settlement of his rights by a final judgment, even to the prejudice of a Commerce: YES
third person. 1. WON PSC’s contention that it should be indemnified 1,800 is proper: NO
MAIN ISSUE.
PARTIES:
HELD:
Plaintiff-appellant: THE PHILIPPINE SHIPPING COMPANY, ET AL
Defendant-appellee: FRANCISCO GARCIA VERGARA First Issue: any liability incurred by the captain through his unlawful acts, the ship
Nature of Action: Indemnification 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
CC/MODE OF TRANSPORT (1): steamship Nuestra Sra. de Lourdes, agent liable to the extent of the value of the vessel, as to the codes of the principal
OWNER OF CC: Philippine Shipping Company maritime nations provided, with the vessel, and not individually. Such is also the
Cargo: spirit of our code.
CC/MODE OF TRANSPORT (2): Navarra, Main Issue: No the contention is improper because the Code provides that
OWNER OF CC: Francisco Garcia Vergara, civil liability is limited to the value of the vessel with all her equipment and
CAUSE/ACCIDENT: collision all the freight money earned during the voyage.
RECIT READY DIGEST: The steamship Navarra collided with the Lourdes which RULE: There is no doubt that if the Navarra had not been entirely lost, the agent,
was carrying a cargo of hemp and coprax. The Philippine Shipping Company, the having held liable for the negligence of the captain of the vessel, could have
owner of the steamship Nuestra Sra. de Lourdes, claims an indemnification of 44,000 abandoned her with all her equipment and the freight money earned during the
pesos for the loss of the said ship as a result of a collision. Ynchusti & Co. also voyage, thus bringing himself within the provisions of the article 837 in so far as the
claimed 24,705.64 pesos as an indemnification for the loss of the cargo. Philippine subsidiary civil liability is concerned. This abandonment which would have amounted
Shipping Company, contends that the defendant should pay to 18,000 pesos, the to an offer of the value of the vessel, of her equipment, and freight money earned
value of the Navarra at the time of its loss. However, the S.C. held that Garcia has an could not have been refused, and the agent could not have been personally
obligation to indemnify PSC on the grounds of the collision. However, the obligation
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compelled, under such circumstances, to pay the 18,000 pesos, the estimated value RECIT READY SUMMARY: : The case before the Supreme Court consolidated three
of the vessel at the time of the collision. different cases initiated against Aboitiz by three different insurers—Monarch,
Tabacalera, Allied Guarantee and Equitable. What happened is that the ship M/V P.
IN THIS CASE: However, the Navarra itself sank along with its cargo and freight Aboitiz owned by Aboitiz sank in the South China Sea. The vessel was ultimately
money earned. abandoned. The insurers argued that the vessel sank because of Aboitiz’ negligence,
as well as the negligence of the captain and the crew. According to the witnesses
THEREFORE: Garcia has an obligation to indemnify PSC on the grounds of the presented during the trial, the vessel sank when the wind speed is only 10-15 knots,
collision. However, the obligation is deemed extinguished due to loss of the thing which is just moderate breeze. The fast flooding of the cargo hold also means that
due, which in this case is the all the equipment and the freight money earned during there are already breaches of the hull. All the insurers won in their respective cases
the voyage which would have amounted to an offer of the value of the vessel and had final and executory decisions already. HOWEVER! Aboitiz got a preliminary
(Navarra). injunction, arguing that while it may be liable to the insurers, its liability is not the
full amount awarded to the insurers, but only limited to the value of vessel. The
DAMAGES AWARDED: none insurers’ claims must also be prorated. This according to Aboitiz, is pursuant to the
doctrine of the Limited Liability Rule arising out of the real and hypothecary nature
DISPOSITIVE: We accordingly hold that the defendant is liable for the of maritime law.
indemnification to which the plaintiff is entitled by reason of the collision, but he is
not required to pay such indemnification of the reason that the obligation thus RTC & CA: ruled against Aboitiz. But CA said limited liability rule applies.
incurred has been extinguished on account of the loss of the thing bound for the
payment thereof, and in this respect the judgment of the court below is affirmed ISSUE: Whether the claims should be limited pursuant to the Limited Liability Rule
except in so far as it requires the plaintiff to pay the costs of this action, which is not
exactly proper. After the expiration of twenty days let judgment be entered in HELD: YES! The limited liability rule states that the shipowner’s or agent’s liability is
accordance herewith and ten days thereafter the record be remanded to the Court of merely co-extensive with his interest in the vessel such that a total loss thereof
First Instance for execution. So ordered. results in its extinction. The total destruction of the vessel extinguishes maritime
liens because there is no longer any res to which it can attach. This doctrine is based
02. MONARCH INSURANCE CO. v. CA on the real and hypothecary nature of maritime law. However, there are exceptions
G.R. No. 115286 | August 11, 1994 to this doctrine. The exceptions are (1) where the injury or death to a passenger is
due either to the fault of the shipowner, or to the concurring negligence of the
TOPIC: Real and Hypothecary Rule shipowner and the captain; (2) where the vessel is insured; and (3) in workmen’s
compensation claims.
BUZZ WORD: Aboitiz liable to 110!!
However, here, Aboitiz failed to show that it was not negligent or at fault when the
DOCTRINE: vessel sank. Usually, this would mean that the limited liability rule sis not applicable.
Exceptions of limited liability rule: But because of the peculiar nature of the case, the limited liability rule should be
where the injury or death to a passenger is due either to the fault of the shipowner, applied. By doing this, all those who have claims can recover at least part of their
or to the concurring negligence of the shipowner and the captain loss from Aboitiz. The claimants must be treated as "creditors in an insolvent
where the vessel is insured corporation whose assets are not enough to satisfy the totality of claims against it."
in workmen's compensation claims
Here’s how the limited liability should be applied:
PARTIES: Collate all claims against Aboitiz. Final and executory judgments should be stayed
PETITIONERS: Monarch Insurance Co, Tabacalera Insurance Co, Hon. Judge while the other cases are still pending.
Purisima In fairness to the claimants, and as a matter of equity, the total proceeds of the
RESPONDENT: CA, Aboitiz Shipping Corporation insurance and pending freightage should now be deposited in trust.
Aboitiz should institute the necessary limitation and distribution action before the
COMMON CARRIER: M/V P. Aboitiz proper admiralty court within 15 days from finality of this decision, and thereafter
CAPTAIN: Capt. Racines deposit with it the proceeds from the insurance company and pending freightage in
OWNER: CA, Aboitiz Shipping Corporation order to safeguard the same pending final resolution of all incidents, for final pro-
CLAIMANTS: Monarch Insurance, Tabacalera Insurance, Allied Guarantee Insurance, rating and settlement thereof.
Equitable Insurance
ROUTE: Hong Kong to Manila FULLL FACTS:
CAUSE: Vessel sank. Multiple claims against Aboitiz for the value of the goods lost. 3 Consolidated Cases -
Question on whether the limited liability rule is applicable despite 110 shippers seeking indemnification for the loss of their cargoes, the shippers, their
negligence of Aboitiz. successors-in-interest, and the cargo insurers such as the Monarch and Tabacalera
filed separate suits against Aboitiz before the RTC
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since its liability is limited to the value of the vessel which was insufficient to satisfy
Claims: 110 total amounts x P41,230,115.00 which is almost thrice the amount of the aggregate claims of all 110 claimants, to indemnify Monarch and Tabacalera
insurance proceeds of P14,500,000.00 plus earned freight of P500,00000 according ahead of the other claimants would be prejudicial to the latter.
to Aboitiz. The sheriff was able to levy 5 heavy equipment owned by Aboitiz for public auction
sale. Monarch got two equipment while Tabacalera got three equipment. Certificates
On October 31, 1980, M/V P. Aboitiz, owned and operated by Aboitiz Shipping, sank of sale were issued to both.
on her voyage from Hongkong to Manila. The vessel was abandoned. This case
involves three different cases which arose from the sinking of the cargo vessel. SECOND CASE between Allied Guarantee and Aboitiz and THIRD CASE between
(FACTOID: 110 cases filed against Aboitiz for indemnity of P41M which is thrice the Equitable and Aboitiz
value of the insurance proceeds of P14.5M) Second case: Allied Guarantee was subrogated to the rights of Peak Plastic. Allied
NSS: Multiple consolidated cases. All cases originated from the Manila RTC. Guarantee sued Aboitiz for the value 676 bags of PVC compound and 10 bags of ABS
plastic (value: 280k) and attorney’s fees and damages.
FIRST CASE between Monarch and Tabacalera Insurance, and Aboitiz Third case: Equitable was subrogated to the rights of Axel Manufacturing. Equitable
Monarch and Tabacalera were insurers who were subrogated to the rights, interests sued Aboitiz, F.E. Zuellig and Franco Belgian for the value of 76 drums of synthetic
and actions of the shippers (who they paid already) against Aboitiz. organic tanning substances and 1,000 kilos of optical bleaching agents (value: 195k)
and attorney’s fees and damages.
Monarch instituted 2 civil cases.
Monarch sued Aboitiz, Malaysian International and Litonjua for the value of 3 pallets Aboitiz argued that the sinking was due to force majeure and that the
of glass tubing that sank (value: P30k). vessel was seaworthy at the time of the loss. It presented Capt. Racines,
Monarch sued Aboitiz, Compagnie Maritime des Chargeurs Reunis and F.E. Zuellig for master mariner of the vessel; and Justo Iglesias, a meteorologist from
the value of one case of motor vehicles parts (value: P40k) and attorney’s fees. PAGASA. According to Capt. Racines:
• They got a departure clearance
Tabacalera instituted 2 civil cases. • encountered rough seas with 15-20ft. waves. The chief engineer found that sea
Tabacalera sued Aboitiz, F.E. Zuellig and Franco Beligna for the value of 9 cases of water entered cargo holds 1 and 2. The water was pumped out by the vessel’s
Renault spare parts, 25 cases of door closers and 18 cases of plastic spangle (total bilge pump.
value: P366k) and attorney’s fees. • Capt. Racines was informed by the chief engineer that despite the initial pumping
Tabacalera sued Aboitiz, Citadel Lines and HK Island Shipping for the value of 4 out of the sea water, the water level in the cargo holds was rising rapidly. The
motor vehicle parts (value: 75k) and attorney’s fees. vessel’s route was diverted to the northern tip of the vessel to avoid the waves.
Unfortunately, the vessel (at that point, 250miles from the eye of the storm) began
to tilt at its starboard side.
PROCEDURE: • Water levels at the cargo hold rose from 3ft to 12 feet. The pump was now disabled
and the crew were not able to make much headway.
Monarch and Tabacalera: • October 31 – 7pm. The ship sank. It was 270 miles from Cape Bojeador in Bangui,
Presented Perfect Lambert, the surveyor who investigated why the vessel sank: Ilocos Norte. The crew was recued by M/V Capuas, manned by Capt. Gonzales. The
vessel did not encounter any weather that would cause its sinking. The wind force of crew was brought to Waileen, Taiwan where Capt. Racines lodged his marine
10-15 knots that the vessel encountered was normal at that time of the year in the protest.
South China Sea and was considered as moderate winds. • According to Iglesias and another Aboitiz witness - the Philippine Area of
vessel was probably not seaworthy as there were breaches of the hull and serious Responsibility experience stormy weather due to tropical depression “Yoning”.
flooding of 2 cargo holds during seasonal weather. • On October 31, PAGASA did not issue any weather bulletins as Yoning had exited
limited liability rule has been rendered obsolete by the advances in modern the Philippines through Bataan and made its way to South China Sea.
technology • Allied and Equitable alleged that there was no force majeure relying on Capt.
Racines’ protest and the Beaufort Scale of Wind. According to the marine protest,
the wind force was only 10-15 knots; and according to the Beaufort Scale, the wind
RTC Manila : Aboitiz liable for the ammounts. velocity was only under Scale No. 4 and the sea condition was described
Monarch and Tabacalera moved for the execution of judgment and the RTC issued "moderate breeze," and "small waves becoming longer, fairly frequent white
writs of execution. Aboitiz filed a motion to quash the writ invoking the real and horses."
hypothecary nature of liability in maritime law. • Aboitiz appealed the Allied Guarantee ruling. The CA affirmed the decision and the
MR was denied. Aboitiz appealed to the SC. While the SC appeal was pending,
CA: RTC but ruled that the amount given to Monarch and Tabacalera exceeded their Allied was granted by the RTC a writ of execution. Aboitiz asked the CA to set aside
pro-rata shares in the insurance procceds of Aboitiz in relation to the pro-rata shares the writ and the RTC was ordered to stay the execution of judgment. Allied
of the 106 other claimants. Meaning, limited liability rule applies appealed the CA order to the SC. The same thing happened to the Equitable
judgment. Equitable also appealed to the SC.
Aboitiz’s Arguments - the sinking of the cargo vessel was due to force majeure
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• The CA, in both instances, ruled that while Aboitiz is liable for the loss, the amount
to be awarded should be pro-rated in relation to the claims of the other 106
Article 837 applies the principle of limited liability in cases of collision, hence, Arts.
claimants. This is based on the limited liability rule in maritime law.
587 and 590 embody the universal principle of limited liability in all cases.
ISSUE/S:
In Yangco v. Laserna
WON limited liability rule in maritime law is applicable in favor of Aboitiz in order to
• This Court elucidated on the import of Art. 587 as follows:
stay the execution of the judgments for full indemnification of the losses suffered by
• "The provision accords a shipowner or agent the right of abandonment; and by
the petitioners as a result of the sinking of the M/V P. Aboitiz – YES
necessary implication, his liability is confined to that which he is entitled as of right
WON there was force majeure - NO
to abandon-`the vessel with all her equipments and the freight it may have earned
during the voyage.' It is true that the article appears to deal only with the limited
liability of the shipowners or agents for damages arising from the misconduct of
the captain in the care of the goods which the vessel carries, but this is a mere
Monarch and Tabacalera:
deficiency of language and in no way indicates the true extent of such liability.
The petitioners assert in common that the vessel M/V P. Aboitiz did not sink by
• The consensus of authorities is to the effect that notwithstanding the language of
reason of force majeure but because of its unseaworthiness and the concurrent fault
the aforequoted provision, the benefit of limited liability therein provided for,
and/or negligence of Aboitiz, the captain and its crew, thereby barring Aboitiz from
applies in all cases wherein the shipowner or agent may properly be held liable for
availing of the benefit of the limited liability rule.
the negligent or illicit acts of the captain.
limited liability rule has been rendered obsolete by the advances in modern
•
technology
• No vessel, no liability," expresses in a nutshell the limited liability rule
• The shipowner's or agent's liability is merely co-extensive with his interest in the
HELD: vessel such that a total loss thereof results in its extinction.
Article 1732 of the Civil Code, the defendant common carrier from the nature of its • The total destruction of the vessel extinguishes maritime liens because there is no
business and for reasons of public policy, is bound to observe extraordinary diligence longer any res to which it can attach. This doctrine is based on the real and
in the vigilance over the goods and for the safety of the passengers transported by it hypothecary nature of maritime law which has its origin in the prevailing conditions
according to all circumstances of the case. While the goods are in the possession of of the maritime trade and sea voyages during the medieval ages, attended by
the carrier, it is but fair that it exercise extraordinary diligence in protecting them innumerable hazards and perils.
from loss or damage, and if loss occurs, the law presumes that it was due to the • Article 587 speaks only of situations where the fault or negligence is committed
carrier's fault or negligence; that is necessary to protect the interest of the shipper solely by the captain. In cases where the ship owner is likewise to be blamed,
which is at the mercy of the carrier. Article 587 does not apply. Such a situation will be covered by the provisions of the
Civil Code on common carriers.
• If the loss of the vessel was due to a fortuitous event, Aboitiz would not be liable
RULE ON LIMITED LIABILITY: pursuant to Art. 1734(1). If Aboitiz is liable—that is, Aboitiz, the ship captain or the
The principle of limited liability is enunciated in the following provisions of the Code crew is negligent—then the rule of limited liability is not applicable.
of Commerce:
• This doctrine is based on the real and hypothecary nature of maritime law
• its origin in the prevailing conditions of the maritime trade and sea voyages during
Art. 587. The shipagent shall also be civilly liable for the indemnities in favor of third the medieval ages, attended by innumerable hazards and perils.
persons which may arise from the conduct of the captain in the care of goods which • To offset against these adverse conditions and to encourage shipbuilding and
he loaded on the vessel; but he may exempt himself therefrom by abandoning the maritime commerce it was deemed necessary to confine the liability of the owner
vessel with all the equipments and the freight it may have earned during the or agent arising from the operation of a ship to the vessel, equipment, and freight,
voyage. or insurance, if any.[
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 Court continues to apply limited liability rule in appropriate cases.
Art. 587. Exceptions ot limited liability rule:
where the injury or death to a passenger is due either to the fault of the shipowner,
Each co-owner may exempt himself from his liability by the abandonment, before a or to the concurring negligence of the shipowner and the captain
notary, of the part of the vessel belonging to him. where the vessel is insured
in workmen's compensation claims
Art. 837. The civil liability incurred by shipowners in the case prescribed in this
section, shall be understood as limited to the value of the vessel with all its
appurtenances and the freightage served during the voyage.
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FIRST ARGUMENT: Monarch et. al. argues that the limited liability rule based on • Aboitiz Shipping Corporation v. Court of Appeals,
the real and hypothecary nature of maritime law is already the law of the case. • Affirmed RTC and CA’s that the sinking of the M/V P. Aboitiz was not due to the
WRONG! waves caused by tropical storm "Yoning" but due to the fault and negligence
of Aboitiz, its master and crew. Aboitiz, and the captain and crew of the M/V P.
As already held in Aboitiz v General Accident Fire and Life Assurance, Aboitiz to have been concurrently negligent.
• It should be pointed out, however, that the limited liability discussed in said case is • Country Bankers Insurance Corporation v. Court of Appeals
not the same one now in issue at bar, but an altogether different aspect. • Force majeure had caused the M/V P. Aboitiz to founder and that there was no
• The limited liability settled in G.R. No. 88159 is that which attaches to cargo by negligence on the part of its officers and crew.
virtue of stipulations in the Bill of Lading, popularly known as package limitation
clauses… Said resolution did not tackle the matter of the Limited Liability Rule • M/V P. Aboitiz did not go under water because of the storm "Yoning."
arising out of the real and hypothecary nature of maritime law, which was not • While it is true that according to Iglesias, a stormy weather condition existed in the
raised therein, and which is the principal bone of contention in this case. Philippined between Oct. 28-31, the marine protest of Capt. Racines shows that the
windforce was 10-15 knots with moderate breeze according the Beaufort scale.
SECOND ARGUMENT: Monarch, et. al argues that the RTC judgments were already Further, the vessel was 200 miles away from the storm when it sank. Thus, there
final and executory and can no longer be altered, modified, etc. WRONG! was no force majeure.
• The SC reiterated its ruling in the General Accident (the one cited above) that the
While that is the general rule, the exception is applicable—where the unseaworthiness of the M/V P. Aboitiz had caused it to founder. BUT on the
interests of justice so requires. matter of Aboitiz’ negligence, the SC reiterated its ruling in Aboitiz (earlier cited)]
• The unjust and inequitable effects upon various other claimants against Aboitiz that found Aboitiz, and the captain and crew of the M/V P. Aboitiz to have
should we allow the execution of judgments for the full indemnification of been concurrently negligent.
petitioners’ claims impel us to uphold the stay of execution as ordered by the
respondent Court of Appeals. The SC reiterated its pronouncement in Aboitiz Aboitiz, and the captain and crew of the M/V P. Aboitiz to have been
Shipping Corporation vs. General Accident Fire and Life Assurance Corporation on concurrently negligent.
this very same issue. • There was no storm but just a moderate breeze
• RTC & CA found sinking of the M/V P. Aboitiz was not due to the waves caused by
THIRD ARGUMENT: Monarch and Tabacalera argues that Aboitiz failed to present tropical storm "Yoning" but due to the fault and negligence of petitioner, its master
evidence to prove its entitlement to the limited liability rule as Aboitiz was declared and crew. The court reproduces with approval said findings
in default. • The surveyor concluded that whatever the cause of the leakage of water into these
• While it is true that Aboitiz was already declared in default, this circumstance does hulls, the seaworthiness of the vessel was definitely in question because the
not prevent the CA from taking cognizance of Aboitiz’ defenses on appeal. Aboitiz breaches of the hulls and serious flooding of the two cargo holds occurred
was only absent during the pre-trial and trial, but its defenses were already raised simultaneously in seasonal weather
in its answer. • Real cause of sinking: the leakage of water into the M/V P. Aboitiz which
• A judgment of default does not imply a waiver of rights except that of probably started in the forward part of the No. 1 hull, although no explanation was
being heard and presenting evidence in defendant ’s favor. It does not proffered as to why the No. 2 hull was likewise flooded
imply admission by the defendant of the facts and causes of action of the plaintiff. • Aboitiz failed to prove hat the loss of the subject cargo was not due to its fault or
Nor could it be interpreted as an admission by the defendant that the plaintiff’s negligence
causes of action find support in the law or that the latter is entitled to the relief • This is in accordance with the rule that in cases involving the limited liability of
prayed for. shipowners, the initial burden of proof of negligence or unseaworthiness rests on
• The defendant who is declared in default for failing to appear in the pre- the claimants.
trial and trial should be allowed to reiterate all affirmative defenses • However, once the vessel owner or any party asserts the right to limit its liability,
pleaded in his answer before the CA. Likewise, the CA may review the the burden of proof as to lack of privity or knowledge on its part with respect to the
correctness of the evaluation of the plaintiff’s evidence by the lower court. matter of negligence or unseaworthiness is shifted and Aboitiz had unfortunately
• It should also be pointed out that Aboitiz is not raising the issue of its entitlement failed to discharge.
to the limited liability rule for the first time on appeal thus, the CA may properly • That Aboitiz failed to discharge the burden of proving that the unseaworthiness of
rule on the same. its vessel was not due to its fault and/or negligence should not however mean that
the limited liability rule will not be applied to the present cases.
In all the cases before the SC, the RTCs found that Aboitiz was liable
because the sinking was not due to force majeure but due to the
Why is this case taking too long?
unseasworthiness of the vessel. However, the CA, in all the cases, found
• Aboitiz tolerated the situation of several claimants waiting to get hold of its
that Aboitiz cannot be liable for the full amount of the loss because while
insurance proceeds, which, if correctly handled must have multiplied in amount by
the vessel was unseaworthy, the limited liability rule applies.
now
• The issue of whether there was negligence on the part of the master and the crew
of the vessel or if the latter is unseaworthy is also not settled.
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• Aboitiz was waiting for a judgment that might prove favorable to it, in blatant P100,000.00 as moral damages and P50,000.00 as attorney's fees, and treble the
violation of the basic provisions of the Civil Code on abuse of rights. cost of suit.
• Well aware of the 110 claimants against it, Aboitiz preferred to litigate the claims
singly rather than exert effort towards the consolidation of all claims
• Aboitiz is well aware that by not instituting the said suit, it caused the delay in the
resolution of all claims against it.
The rule on limited liability should be applied in accordance with the latest
ruling in the General Accident case (cited above, decided 1992), that 03. ABOITIZ SHIPPING CORPORATION v. GENERAL ACCIDENT FIRE AND LIFE
claimants be treated as "creditors in an insolvent corporation whose assets ASSURANCE CORPORATION
are not enough to satisfy the totality of claims against it." G.R. No. 100446 | January 21, 1993
• Here’s how the limited liability should be applied:
• Collate all claims against Aboitiz. Final and executory judgments should be stayed
TOPIC: Real and Hypothecary Nature
while the other cases are still pending.
• In fairness to the claimants, and as a matter of equity, the total proceeds of the
BUZZ WORD: Hati nalang tayo sa claims para FAIR gaming
insurance and pending freightage should now be deposited in trust.
• Aboitiz should institute the necessary limitation and distribution action before the
DOCTRINE:
proper admiralty court within 15 days from finality of this decision, and thereafter
The real and hypothecary nature of maritime law simple means that the liability of
deposit with it the proceeds from the insurance company and pending freightage
the carrier in connection with losses related to maritime contracts is confined to the
in order to safeguard the same pending final resolution of all incidents, for final
vessel, which is hypothecated for such obligations or which stands as the guaranty
pro-rating and settlement thereof.
for their settlement.
Moreover, Aboitiz should institute the necessary limitation and distribution action It has its origin by reason of the conditions and risks attending maritime trade in its
before the proper admiralty court within 15 days from finality of this decision, and earliest years when such trade was replete with innumerable and unknown hazards
thereafter deposit with it the proceeds from the insurance company and pending since vessels had to go through largely uncharted waters to ply their trade. Thus, the
freightage in order to safeguard the same pending final resolution of all incidents, for liability of the vessel owner and agent arising from the operation of such vessel were
final pro-rating and settlement thereof. confined to the vessel itself, its equipment, freight and insurance, if any, which
limitation served to induce capitalist into effectively wagering their resources against
consideration of the large attainable in the trade
DAMAGES PARTIES:
PETITIONER: Aboitiz Shipping Corporation (M/V P. Aboitiz)
Y/N REASONS RESPONDENT: General Accident Fire and Life Assurance Corporation (GAFLAC)
MORAL Y May be awarded in appropriate
CC/MODE OF TRANSPORT (1): Vessel → M/V P. Aboitiz
cases under the Chapter on human
OWNER/SHIPPER: Aboitiz
relations of the Civil Code. Because
GOODS / PASSENGERS: cargo in general but NO mention of what are those
Aboitiz purposely delayed the
iNSURANCE/SUBROGEE: GAFLAC
proceedings and acted in bad faith.
PORT OF DEPARTURE: Hong Kon
ATTY’S FEES Y Since it acted in gross and evident ROUTE: Hong Kong → Philippines
bad faith. Accordingly, pursuant to CAUSE / ACCIDENT: M/V P. Aboitiz sank
Article 2208 of the Civil Code
RECIT READY DIGEST:
ABOITIZ SHIPPING owned and operated a ship. It sank. General Accident Insurance
(GAFLAC) is the insurance company who paid the consignees for the cargo that sank
with the vessel. GAFLAC is now pursuing ABOITIZ. Several suits were filed (for
DISPOSTIVE: recovery of lost cargo, by shippers, successors in interest, cargo insurers). The Board
WHEREFORE, the petitions in G.R. Nos. 92735, 94867, and 95578 are DENIED. The of marine Inquiry (BMI) investigated and found that the sinking was due to force
decisions of the Court of Appeals in CA-G.R. No. SP-17427 dated March 29, 1990, CA- majeure and that the vessel was seaworthy. Despite this finding the RTC, in one of
G.R. SP No. 20844 dated August 15, 1990, and CA-G.R. CV No. 15071 dated August the cases against ABOITIZ (GAFLAC as claimant), ruled against the carrier saying
24, 1990 are AFFIRMED with the MODIFICATION that respondent Aboitiz Shipping that the sinking was not due to force majeure. CA and SC affirmed this decision. Now
Corporation is ordered to pay each of the respective petitioners the amounts of an execution is sought by GAFLAC. It is important to note that other cases related to
6 of 33
the same sinking ruled that the vessel was seaworthy and that the sinking of the • Part of the task resting upon this Court, therefore, is to reconcile the
ABOITIZ ship was due to force majeure. Thus, the SC is sought to prevent execution resulting apparent contrary findings in cases originating out of a single set
of the GAFLAC claim and to reconcile the apparent contrary findings. of facts.
RTC: Granted GAFLAC’s prayer for execution (then Petition for certiorari by Aboitiz) • It is in this factual milieu that the instant petition seeks a
CA: Dismissed petition for certiorari by Aboitiz 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
FACTS: real and hypothecary nature of maritime law.
• ABOITIZ SHIPPING is engaged in the business of maritime trade as a
carrier. It owned and operated the ill-fated "M/V P. ABOITIZ," a common • This is an issue which begs to be resolved considering that a number of
carrier which sank on a voyage from Hong Kong to the Philippines. suits alleged in the petition number about 110 still pending and whose
resolution shall well-nigh result in more confusion than presently attends
• General Accident Fire and Life Assurance Corporation, Ltd. (GAFLAC), on the the instant case.
other hand, is a foreign insurance company pursuing its remedies as a
subrogee of several cargo consignees whose respective cargo sank with
the said vessel and for which it has priorly paid.
ABOITIZ’S Argument
• The vessel sank which gave rise to the filing of suits for recovery of ABOITIZ argues that that LIMITED LIABILITY RULE SHOULD APPLY and thus the
lost cargo either by the shippers, their successor-in-interest, or the cargo execution of the judgment against it must be stayed (since if limited liability
insurers like GAFLAC as subrogees. rule applies, then the liability of the vessel owner is confined to the vessel itself, its
equipment, freight, and insurance if any – which means that the claimants must
• The sinking was initially investigated by the Board of Marine Inquiry share in these things)
which found that such sinking was due to force majeure and that subject
vessel, at the time of the sinking was seaworthy. The application of this established principle of maritime law would necessarily result
• Despite this administrative finding, the trial court in said Civil Case No. in a probable reduction of the amount to be recovered by GAFLAC, since it would
144425 (CIVIL CASE which is later elevated to CA and SC as aboitiz have to share with a number of parties similarly situated in the insurance proceeds
vs. ca) ruled against the carrier on the basis that the loss subject matter
therein did not occur as a result of force majeure. GAFLAC’S Arguments and Prayer:
- For the execution of full amount of judgment award
• GAFLAC’s claim was awarded. The trial court in doing so, swept aside • There is no limited liability to speak of or applicable real and hypothecary
ABOITIZ opposition which was grounded on the real and hypothecary nature rule under Art 587, 590, and 837 Code of Commerce in the face of the facts
of ABOITIZ’ liability as ship owner. found by the lower court (Civil Case 144425),
• The application of this established principle of maritime law would • upheld by CA (CA GR 10609), and affirmed in toto by SC in GR 89757 which
necessarily result in a probable reduction of the amount to be recovered cited GR 88159 as the Law of the Case; and
by GAFLAC, since it would have to share with a number of other • Under the doctrine of the Law of the Case, cases should be decided in
parties similarly situated in the insurance proceeds on the vessel conformity with doctrine of stare decisis et non quieta movere.
that sank.
PROCEDURE:
• This decision in favor of GAFLAC was elevated all the way up to the
SC (Aboitiz v. Court of Appeals) with ABOITIZ losing. RTC: Granted GAFLAC’s prayer for execution (then Petition for certiorari by Aboitiz)
CA: Dismissed petition for certiorari by Aboitiz
• The attempted execution of the judgment award in said case in the
amount of P1,072,611.20 plus legal interest has given rise to the
HOW THE CASE IS DIFFERENT WITH ABOITIZ SHIPPING CORP. v. CA
instant petition.
It is important to determine first whether or not the Resolution of this Court
• ON THE OTHER HAND, other cases (no mention of the specifics) have in, Aboitiz Shipping, Corporation vs. CA (the case elevated to the SC) effectively bars
resulted in findings upholding the conclusion of the BMI that the vessel was and precludes the instant petition as argued by respondent GAFLAC.
seaworthy at the time of the sinking, and that such sinking was due
An examination of the case shows that the same settles two principal matters, first
to force majeure.
of which is that the doctrine of primary administrative jurisdiction is not applicable
o One such ruling was likewise elevated to the SC and was there; and second is that a limitation of liability in said case would render
sustained. inefficacious the extraordinary diligence required by law of common carriers.
7 of 33
The limited liability discussed in said case is not the same one now in issue at to induce capitalists into effectively wagering their resources against the
bar, but an altogether different aspect. The limited liability settled in ABOITIZ consideration of the large profits attainable in the trade.
vs CA is that which attaches to cargo by virtue of stipulations in the Bill of Lading,
popularly known as package limitation clauses, which in that case was contained in Despite the modernization of the shipping industry and the development of high-
Section 8 of the Bill of Lading and which limited the carrier's liability to US$500.00 technology safety devices designed to reduce the risks therein, the limitation has
for the cargo whose value was therein sought to be recovered. not only persisted, but is even practically absolute in well-developed maritime
countries such as the United States and England where it covers almost all maritime
Said resolution did not tackle the matter of the Limited Liability Rule arising out of
casualties. Philippine maritime law is of Anglo-American extraction and is governed
the real and hypothecary nature of maritime law, which was not raised therein, and
by adherence to both international maritime conventions and generally accepted
which is the principal bone of contention in this case. The issues in that case,
practices relative to maritime trade and travel. This is highlighted by the following
particularly those dealing with the issues on primary administrative jurisdiction and
excerpts on the limited liability of vessel owners and/or agents.
the package liability limitation provided in the Bill of Lading, are now settled and
should no longer be touched. The instant case raises a completely different issue. In this jurisdiction, on the other hand, its application has been nearly constricted by
The resolution in such case has no bearing other than factual to the instant case. the very statute from which it originates. The Limited Liability Rule in the Philippines
is taken up in Book III of the Code of Commerce:
ISSUE 1:
Yes, the execution of judgments which have become final and executory Art. 587. The ship agent shall also be civilly liable for the indemnities in
may be stayed. 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
RULE: himself therefrom by abandoning the vessel with all her equipment and the
“. . . every court having jurisdiction to render a particular judgment has inherent freight it may have earned during the voyage.
power to enforce it, and to exercise equitable control over such enforcement. The
Art. 590. The co-owners of a vessel shall be civilly liable in the proportion
court has authority to inquire whether its judgment has been executed and will
of their interests in the common fund for the results of the acts of the
remove obstructions to the enforcement thereof. Such authority extends not only to
captain referred to in Art. 587.
such orders and such writs as may be necessary to carry out the judgment into
effect and render it binding and operative, but also to such orders and such writs as Each co-owner may exempt himself from this liability by the abandonment,
may be necessary to prevent an improper enforcement of the judgment. If a before a notary, of the part of the vessel belonging to him.
judgment is sought to be perverted and made a medium of consummating a wrong
the court on proper application can prevent it. 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 rule that once a decision becomes final and executory, it is the ministerial duty the vessel with all its appurtenances and freightage served during
of the court to order its execution, admits of certain exceptions as in cases of special the voyage.
and exceptional nature where it becomes the imperative in the higher interest of
justice to direct the suspension of its execution; whenever it is necessary to Taken together with related articles, the foregoing cover only liability for injuries to
accomplish the aims of justice; or when certain facts and circumstances transpired third parties (Art. 587), acts of the captain (Art. 590) and collisions (Art. 837).
after the judgment became final which would render the execution of the judgment This Court shall not take the application of such limited liability rule, which is a
unjust.” matter of near absolute application in other jurisdictions, so lightly as to merely
ISSUE 2: MAIN!!!! "imply" its inapplicability, because as could be seen, the reasons for its being are
Yes, the limited liability rule arising out of the real and hypothecary nature still apparently much in existence and highly regarded.
of maritime law applies in this case. IN THIS CASE:
SC has been consistent in holding that the only time the Limited Liability
RULE: Rule does not apply is when there is an actual finding of negligence on the
The real and hypothecary nature of maritime law simply means that the liability of part of the vessel owner or agent .
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 A careful reading of the decision rendered by the trial court (CIVIL CASE) as well
for their settlement. It has its origin by reason of the conditions and risks attending as the entirety of the records in the instant case will show that there has been no
maritime trade in its earliest years when such trade was replete with innumerable actual finding of negligence on the part of ABOITIZ.
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 Trial court merely held that: “. . . Considering the foregoing reasons, the Court
people and entities to venture into maritime commerce despite the risks and the holds that the vessel M/V "Aboitiz" and its cargo were not lost due to
prohibitive cost of shipbuilding. Thus, the liability of the vessel owner and fortuitous event or force majeure."
agent arising from the operation of such vessel were confined to the vessel
itself, its equipment, freight, and insurance, if any, which limitation served Unseaworthiness is not a fault that can be attributed to ABOITIZ, absent a
factual basis for such a conclusion. The unseaworthiness found in some
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cases where the same has been ruled to exist is directly attributable to the claimants, and as a matter of equity, the total proceeds of the insurance and
vessel's crew and captain, more so on the part of the latter since Article pending freightage should now be deposited in trust.
612 of the Code of Commerce provides that among the inherent duties of a
DAMAGES AWARDED → NONE IN THIS CASE
captain is to examine a vessel before sailing and to comply with the laws of
navigation. Such a construction would also put matters to rest relative to the DISPOSITIVE:
decision of the Board of Marine Inquiry. While the conclusion therein exonerating the WHEREFORE, the petition is granted. RTC decision set aside. The Trial Court is
captain and crew of the vessel was not sustained for lack of basis, the finding therein directed to desist from proceeding with the execution of the judgment rendered in
contained to the effect that the vessel was seaworthy deserves merit. CIVIL CASE pending the determination of the totality of the claims recoverable from
the petitioner as the owner of M/V P. Aboitiz.
Despite appearances, it is not totally incompatible with the findings of the trial court
and the CA, whose finding of "unseaworthiness" clearly did not pertain to the 04. CRESCENT PETROLEUM, LTD. vs. M/V "LOK MAHESHWARI," THE
structural condition of the vessel which is the basis of the BMI's findings, but to the SHIPPING CORPORATION OF INDIA, and PORTSERV LIMITED and/or
condition it was in at the time of the sinking, which condition was a result of the acts TRANSMAR SHIPPING, INC.
of the captain and the crew. G.R. No.155014. | November 11, 2005
The rights of a vessel owner or agent under the Limited Liability Rule are
TOPIC: Admiralty Jurisdiction
akin to those of the rights of shareholders to limited liability under our
corporation law. Both are privileges granted by statute, and while not
BUZZWORD: Everything is Canadian
absolute, must be swept aside only in the established existence of the
most compelling of reasons. In the absence of such reasons, this Court
DOCTRINE: Under Batas Pambansa Bilang 129, as amended by Republic Act No.
chooses to exercise prudence and shall not sweep such rights aside on
7691, RTCs exercise exclusive original jurisdiction "(i)n all actions in admiralty and
mere whim or surmise, for even in the existence of cause to do so, such
maritime where the demand or claim exceeds two hundred thousand pesos
incursion is definitely punitive in nature and must never be taken lightly.
(P200,000) or in Metro Manila, where such demand or claim exceeds four hundred
The rights of parties to claim against an agent or owner of a vessel may be thousand pesos (P400,000)."
compared to those of creditors against an insolvent corporation whose
assets are not enough to satisfy the totality of claims as against it. While PARTIES:
each individual creditor may, and in fact shall, be allowed to prove the actual
amounts of their respective claims, this does not mean that they shall all be allowed Petitioner: Crescent Petroleum, Ltd. (Crescent): a corporation organized and
to recover fully thus favoring those who filed and proved their claims sooner to the existing under the laws of Canada that is engaged in the business of selling
prejudice of those who come later. petroleum and oil products for the use and operation of oceangoing vessels
Respondent: M/V "LOK MAHESHWARI," THE SHIPPING CORPORATION OF INDIA, and
In both insolvency of a corporation and the sinking of a vessel, the PORTSERV LIMITED and/or TRANSMAR SHIPPING, INC.
claimants or creditors are limited in their recovery to the remaining value Nature of Action: action "for a sum of money with prayer for temporary restraining
of accessible assets. In the case of an insolvent corporation, these are the residual order and writ of preliminary attachment" against respondents Vessel and SCI,
assets of the corporation left over from its operations. In the case of a lost vessel, Portserv and/or Transmar
these are the insurance proceeds and pending freightage for the particular
voyage. CC/MODE OF TRANSPORT (1): M/V "Lok Maheshwari"
In the instant case, there is, therefore, a need to collate all claims OWNER OF CC: Shipping Corporation of India (SCI) (INDIAN)
preparatory to their satisfaction from the insurance proceeds on the vessel Type of Charter: Time Charter
M/V P. Aboitiz and its pending freightage at the time of its loss. Charterer: Halla Merchant Marine Co. Ltd. (Halla), a South Korean company.
Sub-charter: Transmar Shipping, Inc. (Transmar) (Canadian)
No claimant can be given precedence over the others by the simple Second Sub-charter: Portserv Limited (Portserv) (CANADIAN)
expedience of having filed or completed its action earlier than the rest. CAUSE/ACCIDENT:
Thus, execution of judgment in earlier completed cases, even those
already final and executory, must be stayed pending completion of all RECIT READY DIGEST: This case is for the satisfaction of unpaid supplies furnished
cases occasioned by the subject sinking. Then and only then can all such by a foreign supplier in a foreign port to a vessel of foreign registry that is owned,
claims be simultaneously settled, either completely or pro-rata should the chartered and sub-chartered by foreign entities. In this case, M/V Lok, an Indian
insurance proceeds and freightage be not enough to satisfy all claims. Vessel was being time chartered by Halla, a Korean Company, and sub-chartered by
The Court therefore, rule that the pro-rated share of each claim can only Transmar and Portserv, Canadian Companies. Portserve requested Crescent
be found after all the cases shall have been decided. In fairness to the Petroleum, another Canadian Company to supply the ship with bunker fuels.
Crescent then contacted the supplier of these Bunker Fuels, Marine Petrobulk, to
9 of 33
deliver the Bunker Fuels to the Vessel. The Bunker Fuels were received and soon prayer for temporary restraining order and writ of preliminary attachment" against
after Crescent demanded payment from respondents. However, the respondents respondents Vessel and SCI, Portserv and/or Transmar.
failed to pay and while the ship was docked in Cebu, Crescent filed an action to
collect a sum of Money. The S.C. Held that while local courts have jurisdiction over ISSUE/S:
maritime and admirality cases under B.P. 129, Crescent is not entitled to a Maritime 1. WON a Maritime lien exists: NO
Lien holding that no Maritime Lien exists in this case. 2. WON PHI laws apply: NO
3. WON Crescent entitled to a maritime lien under PHI laws: NO
PROCEDURE: 4. WON PHI has jurisdiction over maritime and admirality actions: YES
TC: decision in favor of petitioner Crescent
CA: reversed the trial court HELD:
FACTS: First Issue: The S.C. cited several jurisprudence to come to the conclusion that no
• Respondent M/V "Lok Maheshwari" (Vessel) is an oceangoing vessel of Indian Maritime lien exists,
registry that is owned by respondent Shipping Corporation of India (SCI), a
corporation organized and existing under the laws of India and principally owned JURISPRUDENCE CITED:
by the Government of India.
• It was time-chartered by respondent SCI to Halla Merchant Marine Co. Ltd. (Halla), Lauritzen v. Larsen
a South Korean company. The S.C in this case adopted a multiple-contact test to determine, in the absence
• Halla, in turn, sub-chartered the Vessel through a time charter to Transmar of a specific Congressional directive as to the statute's reach, which jurisdiction's law
Shipping, Inc. (Transmar). should be applied. The following factors were considered:
• Transmar further sub-chartered the Vessel to Portserv Limited (Portserv). (1) place of the wrongful act;
• Both Transmar and Portserv are corporations organized and existing under the (2) law of the flag;
laws of Canada. (3) allegiance or domicile of the injured;
• On or about November 1, 1995, Portserv requested petitioner Crescent Petroleum, (4) allegiance of the defendant shipowner;
Ltd. (Crescent), a corporation organized and existing under the laws of Canada that (5) place of contract;
is engaged in the business of selling petroleum and oil products for the use and (6) inaccessibility of foreign forum; and
operation of oceangoing vessels, to deliver marine fuel oils (bunker fuels) to the (7) law of the forum.
Vessel.
• Crescent granted and confirmed the request through an advice via facsimile dated Romero v. International Terminal Operating Co
November 2, 1995. The Court held that the factors first announced in the case of Lauritzen were
• As security for the payment of the bunker fuels and related services, Crescent applicable not only to personal injury claims arising under the Jones Act but to all
received two (2) checks in the amounts of US$100,000.00 and US$200,000.00. matters arising under maritime law in general.
• Thus, Crescent contracted with its supplier, Marine Petrobulk Limited (Marine
Petrobulk), another Canadian corporation, for the physical delivery of the bunker Hellenic Lines, Ltd. v. Rhoditis
fuels to the Vessel. The U.S. Supreme Court observed thatof the seven factors listed in the Lauritzen
• Marine Petrobulk delivered the bunker fuels amounting to US$103,544 inclusive of test, four were in favor of the shipowner and against jurisdiction. Moreover, the list
barging and demurrage charges to the Vessel at the port of Pioneer Grain, of seven factors in Lauritzen was not intended to be exhaustive. . . . [T]he
Vancouver, Canada. shipowner's base of operations is another factor of importance in determining
• Marine Petrobulk issued an invoice to petitioner Crescent for the US$101,400.00 whether the Jones Act is applicable; and there well may be others."
worth of the bunker fuels.
• Crescent issued a check for the same amount in favor of Marine Petrobulk, which Gulf Trading and Transportation Co. v. The Vessel Hoegh Shield
check was duly encashed. It was held that because the bunker fuel was delivered to a foreign ag vessel within
• After paying Marine Petrobulk, Crescent then sent a revised invoice to respondents the jurisdiction of the U.S., and because the invoice speci ed payment in the U.S.,
for payment of the amount stating that payment should be remitted on or before the admiralty and maritime law of the U.S. applied. It made a disclaimer that its
December 1, 1995. The period lapsed and several demands were made but no conclusion is limited to the unique circumstances surrounding a maritime lien as well
payment was received. as the statutory directives found in the Maritime Lien Statute and that the initial
• Also, the checks issued to petitioner Crescent as security for the payment of the choice of law determination is significantly affected by the statutory policies
bunker fuels were dishonored for insufficiency of funds. surrounding a maritime lien. The court also gave equal importance to the
• As a consequence, petitioner Crescent incurred additional expenses of predictability of result and protection of justified expectations in a particular eld of
US$8,572.61 for interest, tracking fees, and legal fees. law. In the maritime realm, it is expected that when necessaries are furnished to a
• On May 2, 1996, while the Vessel was docked at the port of Cebu City, petitioner vessel in an American port by an American supplier, the American Lien Statute will
Crescent instituted before the RTC of Cebu City an action "for a sum of money with apply to protect that supplier regardless of the place where the contract was formed
or the nationality of the vessel.
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The S.C. held that even if processural presumption was applied in the case at bar,
Swedish Telecom Radio v. M/V Discovery I Crescent still cannot claim a lien using the requisites under P.D. No. 1521 or the
The U.S. Court of Appeals also held that while the contacts-based framework set Ship Mortgage Decree of 1978.
forth in Lauritzen was useful in the analysis of all maritime choice of law situations,
the factors were geared towards a seaman's injury claim. THEREFORE: Case is dismissed. By erroneously claiming a maritime lien under
Philippine law instead of proving that a maritime lien exists under Canadian law,
“Finding guidance from the foregoing decisions, the Court cannot sustain petitioner petitioner Crescent failed to establish a cause of action.
Crescent's insistence on the application of P.D. No. 1521 or the Ship Mortgage
Decree of 1978 and hold that a maritime lien exists.” DAMAGES AWARDED: none
Seond and Third Issues: PHI law does not govern the case at bar, however, the DISPOSITIVE: IN VIEW WHEREOF, the Decision of the Court of Appeals in CA-G.R.
court hypothetically applied requisites under P.D. No. 1521 or the Ship No. CV 54920, dated November 28, 2001, and its subsequent Resolution of
Mortgage Decree of 1978 and found that even if applied, Crescent is still not September 3, 2002 are AFFIRMED. The instant petition for review on certiorari is
entitled to any lien. DENIED for lack of merit. Cost against petitioner.
Under P.D. No. 1521 or the Ship Mortgage Decree of 1978, the following are the 6. LOPEZ v. DURUELO
requisites for maritime liens on necessaries to exist: G.R. No. L-29166 | October 22, 1928
(1) the "necessaries" must have been furnished to and for the benefit of the vessel;
(8) the "necessaries" must have been necessary for the continuation of the voyage TOPIC: Definition
of the vessel;
(9) the credit must have been extended to the vessel; BUZZ WORD: Hindi vessel si Jison
(10) there must be necessity for the extension of the credit; and
(11) the necessaries must be ordered by persons authorized to contract on
DOCTRINE:
behalf of the vessel. These do not avail in the instant case.
The protest required by article 835 of the Code of Commerce in case of collision
between vessels is not necessary to preserve the rights of a person aboard a motor
Fourth Issue: A contract for furnishing supplies like the one involved in this case is
boat engaged in conveying passengers between ship and shore who is injured in a
maritime and within the jurisdiction of admiralty. It may be invoked before our courts
collision between the motor boat and the larger vessel.
through an action in rem or quasi in rem or an action in personam.
PARTIES:
Under Batas Pambansa Bilang 129, as amended by Republic Act No. 7691, RTCs
PETITIONER: Augusto Lopez
exercise exclusive original jurisdiction "(i)n all actions in admiralty and maritime
RESPONDENT: Juan Duruelo and Albino Jison
where the demand or claim exceeds two hundred thousand pesos (P200,000) or in
Metro Manila, where such demand or claim exceeds four hundred thousand pesos
MAIN CC: Steamer San Jacinto
(P400,000)."
COMMON CARRIER: Motorboat Jison
Two (2) tests have been used to determine whether a case involving a contract
OWNER / OPERATOR: Albino Jison
comes within the admiralty and maritime jurisdiction of a court :
PATRON: Juan Duruelo
MAQUINISTA: Rodolin Duruelo
1. the locational test: wherein maritime and admiralty jurisdiction, with a few
PASSENGERS: Augusto Lopez
exceptions, is exercised only on contracts made upon the sea and to be executed
PORT OF DEPARTURE: Silay -> Iloilo
thereon.
CAUSE /ACCIDENT: collision of the motorboat Jison and Steamer San Jacinto
2. subject matter test: I n International Harvester Company of the Philippines v.
Aragon, we adopted the American rule and held that "(w)hether or not a contract
RECIT READY DIGEST:
is maritime depends not on the place where the contract is made and is to be
Lopez encountered an accident while riding motorboat Jison (a small boat) to be able
executed, making the locality the test, but on the subject matter of the contract,
to ride the Steamer San Jacinta. The motorboat and Steamer collided resulting to the
making the true criterion a maritime service or a maritime transaction."
sinking of motorboat and injuries of Lopez. Jison’s owner and patron contend that he
has no right of action since he failed to protest within 24 hours. Court held that
RULE: It is well-settled that a party whose cause of action or defense depends upon
motorboat Jison is not a vessel contemplated under Art. 835 of Code Commerce and
a foreign law has the burden of proving the foreign law. Such foreign law is treated
no protest within 24 hours are needed for it to claim damages.
as a question of fact to be properly pleaded and proved.
RTC: in favor of Lopez. Motorboat is not a vessel
IN THIS CASE:
FACTS:
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• Lopez, a resident of municipality of Silay, Occidental is about to embark 2. WON a
Steamer San Jacinto to go to Iloilo protest is needed as a condition precedent for the maintenance of cause of
• The boat was at the anchoring-ground of the port of Silay, some half a mile action - NO
distant from the port so he first need to ride the motorboat Jison to be able
to get in the boat
• Motorboat Jison is engaged in coveying passengers and luggage back and Any floating apparatus which serves directly for the transportation of
forth from the landing to boats at anchor things or persons or which inderectly is related to this industry is not a
• Motorboat was owned and operation by Jison, with Jason Duruelo as Patron kind of vessel refered in Code of Commerce
and Rodolin Duruelo as the engineer (maquinista)
• Rodolin was only a 16y/o boy and a mere novice without experience in WHAT IS A VESSEL?
running motor boats, he is only at the 3rd year of his apprenticeship in this Vessel accroding to 3rd Book of the Code of Commerce (Maritime Commerce)
instance • law
• Motorboat Juson was overload was there were 14 passengers while its relative to mechant vessels and marine shipping;
capacity is only for 8 or 9. • vessels
• It too near to the stern of the ship, and as the propeller of the ship had not that are by masters having special training, with the elaborate apparatus of
yet ceased to turn, the blades of the propeller struck the motor boat and crew and equipment indicated in the Cod
sank • The
• Lopez was thrown into the water against the propeller, and the revolving word "vessel" (Spanish "buque," "nave"), used in the section referred to
blades inflicted various injuries upon him, consisting of a bruise in the was not intended to include all ships, craft or floating structures of every
breast, two serious fractures of the bones of the left leg, and a compound kind without limitation, and the provisions of that section should not be held
fracture of the left femur. to include minor craft engaged only in river and bay traffic.
o He was kept bed in a hospital in the City of Manila from the 28th • Vessels
of February until October 19 of the year 1927, or approximately which are licensed to engage in maritime commerce, or commerce by sea,
eight months. whether in foreign or coastwise trade, are no doubt regulated by Book III of
• Lopez filed for P120,000 damages. the Code of Commerce.
• Other
Lopez’s Argument: vessels of a minor nature not engaged in maritime commerce, such
• The approach of the Jison to this dangerous proximity with the propeller of as river boats and those carrying passengers from ship to shore,
the San Jacinto was due to the fault, negligence and lack of skill of the Juan must be governed, as to their liability to passengers, by the provisions of
Duruelo, as patron of the Jison. the Civil Code or other appropriate special provisions of law.
Juan D. and Jison: Vessel according to Mercantile Law (by writer Estasen)
• Filed a • No include war ships furthermore
demurrer as complaint does not show a right of action as a protest should • Ship, vessels, boat, embarkation, etc., refer exclusively to those which are
had been presented by Lopez within 24hrs after the occurrence, to the engaged in the transportation of passengers and freight from one port to
competent authority at the port where the accident occured. another or from one place to another
• Uder • Merchant vessels and in no way can they or should they be understood as
article 835 of the Code of Commerce, the plaintiff has shown no cause of referring to pleasure craft, yachts, pontoons, health service and harbor
action police vessels, floating storehouses, warships or patrol vessels, coast guard
vessels, fishing vessels, towboats, and other craft destined to other uses,
PROCECURE such as for instance coast and geodetic survey, those engaged in scientific
research and exploration, craft engaged in the loading and discharge of
RTC: protest was not necessary in this case vessels from same to shore or docks, or in transhipment and those small
• Article craft which in harbors, along shore, bays, inlets, coves and anchorages are
835 of CoCis found in the section dealing with collisions, and the context engaged in transporting passengers and baggage.
shows the collisions intended are collisions of sea-going vessels and cannot
be applied to small boats engaged in river and bay traffic Mercantile Law by Blanco
• Basically this author says motorboat Jison is covered in Mercantile Law
ISSUE/S: • The words "ship" (nave) and "vessel" (buque), in their grammatical sense,
1. WON are applied to designate every kind of craft, large or small, merchant
motorboat Jison is considered a vessel covered by Maritime Commerce - NO vessels or war vessels, a signification which does not differ essentially from
its juridical meaning, according to which vessels for the purposes of the
12 of 33
Code and Regulations for the organization of the Mercantile Registry, are twenty-four hours of such occurrence. It follows that the demurrer in this
considered not only those engaged in navigation, whether coastwise or on case was not well taken and should have been overruled.
the high seas, but also floating docks, pantoons, dredges, scows and any • A good cause of action upon a civil liability arising from tort under articles
other floating apparatus destined for the service of the industry or maritime 1902 and 1903 of the Civil Code may prosper
commerce.
DAMAGES – none
IN THIS CASE: THEREFORE: Lopez can file a complaint and has a cause of action despite not being
• Jison, was propelled by a second-hand motor, originally used for a tractor able to file a protest within 24 hours since the motorboat is not a vessel
plow; and it had a capacity for only eight persons. contemplated under Art. 835 of CoC
• Purpose: the carrying of passengers and luggage between the landing at
Silay and ships in the harbor. DISPOSITIVE:
• Word "nave" in Spanish, which is used interchangeably with "buque" in the The judgment appealed from is reversed, the demurrer overruled, and the defendant
Code of Commerce, means, according to the Spanish-English Dictionary is required to answer the complaint within five days after notification of the return of
complied by Edward R. Bensley and published at Paris in the year 1896, this decision to the court of origin. So ordered, with costs against the appellee.
"Ship, a vessel with decks and sails."
• a deck is not a feature of the smallest types of water craft. 07. FAUSTO RUBISO & BONIFACIO GELITO v. FLORENTINO RIVERA
• "vessel" in these codes is limited to ships and other sea-going vessels. "Its G.R. No. L-11407 | October 30. 1917
provisions are not applicable," said the court, "to vessels in inland
navigation, which are especially designated by the name of boats." TOPIC: Registration of Vessels;
• Vessels covered by the aforemention codes relate exclusively to maritime
and not to fluvial navigation; and that consequently the word 'ship' when it BUZZ WORD: Akin si Valentina! -Rubiso
is found in these provisions, ought to be understand in the sense of a vessel
serving the purpose of maritime navigation of seagoing vessel, and not in DOCTRINE:
the sense of a vessel devoted to the navigation of rivers. The requisite of registration in the registry of the purchase of a vessel is necessary
and indispensable in order that the purchaser's rights are maintained against a
Yu Con vs. Ipil (41 Phil., 770) claim by third persons.
a small vessel used for the transportation of merchandise by sea and for the making
of voyages from one port to another of these Islands, equipped and victualed for this PARTIES:
purpose by its owner, is a vessel, within the purview of the Code of Commerce, for PETITION: appeal by bill of exceptions
the determination of the character and effect of the relations created between the PLAINTIFFS AND APPELLEES: Fausto Rubiso and Bonifacio Gelito
owners of the merchandise laden on it and its owner. DEFENDANT AND APPELLANT: Florentino Rivera
2ND ISSUE: CC/MODE OF TRANSPORT (1): Valentina pilot boat

Motorboat Jison is not such a boat as is contemplated in article 835 of the OWNER: Rubiso and Gelito
Code of Commerce, requiring protest in case of collision. CAUSE / ACCIDENT: Stranded boat in TIngloy, Bauan, Batangas
RULE: The protest required by article 835 of the Code of Commerce in case of RECIT READY DIGEST:
collision between vessels is not necessary to preserve the rights of a person aboard Rivera acquired pilot boat Valentina on January 4, 1915, from its original owner the
a motor boat engaged in conveying passengers between ship and shore who is Chinaman Sy Qui, but did not inscribe his title in the mercantile registry
injured in a collision between the motor boat and the larger vessel. according to article 573 of the Code of Commerce in relation to article 2 of Act No.
1900, until much later on. Subsequently Fubiso bought said pilot boat in a sale at
• In this case: even if said provision had been considered applicable to the public auction for the sum of P55.45 and inscribed his title in the mercantile
case in hand, a fair interpretation of the allegations of the complaint registry immediately. Who has a better right? The requisite of registration in
indicates, we think, that the injuries suffered by Lopez in this case were of the registry of the purchase of a vessel is necessary and indispensable in order that
such a nature as to excuse protest the purchaser's rights may be maintained against a claim filed by a third person.
Rubiso wins because he registered his right first, despite the previous purchase of
• Article 836, it is provided that want to protest cannot prejudice a person
Rivera.
not in a condition to make known his wishes.
• An individual who has suffered a compound fracture of the femur and
CFI BATANGAS:
received other physical injuries sufficient to keep him in a hospital for may
In favor of Rubiso. Ordered Florentino to place the boat at the disposal of Rubiso
months, cannot be supposed to have in a condition to make protest within
13 of 33
FACTS: • At public auction in conformity with the order contained in the judgment
• Rubiso (and Gelito) alleged that they are the owner of the pilot boat named rendered by the justice of the peace, court, on January 23 of the same year,
Valentina, which had been in bad condition since the year 1914. against the Chinaman Sy Qui and in behalf of the plaintiff, Fausto Rubiso
o That such boat was stranded in Tingloy, of the municipality of
Bauan, Batangas; ISSUE/S:
o the defendant Florentino E. Rivera took charge or possession of 1. Whether or not Rubiso has a better right to the boat Valentina –
said vessel without the knowledge or consent of the plaintiff and YES
refused to deliver it to them, under claim that he was the owner
thereof; ISSUE 1:
o That he suffered damages. That he cannot repair the vessel and RUBISO has a better right to the boat Valentina.
from unrealized profit. (P1,750)
o Prayed that defendant deliver said pilot boat to the plaintiffs and RULE:
pay damages. Article 573 of the Code of Commerce:
• Defendant Rivera denied all these, with the exception of those admitted in Merchant vessels constitute property which may be acquired and transferred by any
the special defense and consisting in that said pilot boat belonged to the of the means recognized by law. The acquisition of a vessel must appear in a written
concern named "Gelito and Co.," instrument, which shall not produce any effect with respect to third persons if not
o Bonifacio Gelito being a copartner thereof to the extent of two- inscribed in the registry of vessels.
thirds, and the Chinaman Sy Qui, to that of the one-third, of the
IN THIS CASE:
value of said vessel;
o Gelito sold his share to his copartner Sy Qui, as attested by the • Even though Rivera was the first one who bought the boat, it was Rubiso
who registered the vessel first in the office of the Collector of Customs.
instrument Exhibit A, registered in the office of the Collector of
Rivera only registered the vessel on March 17, 1915 while Rubiso had it
Customs and made a part of his answer; that later said Chinaman,
registered on January 27, 1915 in the same month of the purchase.
the absolute owner of the vessel, sold it in turn to the defendant
Rivera, according to the public instrument, also attached to his • With respect to the rights of the two purchasers, whichever of them who
answer as Exhibit B; and that, for the reason, Rivera took registered the vessel first is the one entitled by the protection of the law,
possession of said pilot boat Valentina, as its sole owner. which considers him the absolute owner of the boat and free from
encumbrances and claims.
• The record shows it to have been fully proven that Bonifacio Gelito sold his
share in the pilot boat Valentina, consisting of a two-thirds interest therein, • Rivera is now considered a third person who was directly affected by the
to the Chinaman Sy Qui, the co-owner of the other one-third interest in said registration. Ships and vessels, whether moved by steam or sail, partake
vessel; the nature of real property on account of their value in the world of
o Gelito is no longer entitled to exercise any action whatever in commerce
respect to the boat in question. Selling his share, the whole
THEREFORE:
ownership in the vessel having been
Hence, Rubiso has a better right in the case at hand for the reason of his registration
o Sy then sold this boat to Florentino E. Rivera for P2,500.
of the said boat.
▪ Evidenced by a deed ratified on the same date before a
notary, then registered in the Bureau of Customs on
DAMAGES: NONE
March 17th.
• After the sale of the boat to the defendant Rivera, there was a suit against DISPOSITIVE PORTION:
the Chinaman Sy Qui to enforce payment of a certain sum of money by Judgment is affirmed with costs against the appellant.
Fausto Rubiso.
o Rubiso then acquired said vessel at a public auction sale and for
the sum of P55.45. 08. POILAND INDUSTRIAL LIMITED vs. NATIONAL DEVELOPMENT COMPANY,
o The certificate of sale and adjudication of the boat in question was DEVELOPMENT BANK OF THE PHILIPPINES
issued by the sheriff on behalf of Fausto Rubiso, in the office of the G.R. No. 143866 | August 22, 2005
Collector of Customs, on January 27 of the same year and was also
entered in the commercial registry. Topic: Maritime Lien
To Clarify:
Valentina was twice sold: Buzzword: Merger of Company
• First privately by its owner Sy Qui to the defendant Florentino E. Rivera, on
January 4, 1915, and DOCTRINE:
14 of 33
• A maritime lien is akin to a mortgage lien in that in spite of the transfer of • The advances were utilized to augment GALLEON's working capital depleted as a
ownership, the lien is not extinguished. The maritime lien is inseparable from the result of the purchase of five new vessels and two second-hand vessels in 1979
vessel and until discharged, it follows the vessel. Hence, the enforcement of a and competitiveness of the shipping industry.
maritime lien is in the nature and character of a proceeding quasi in rem. • GALLEON had incurred an obligation in the total amount of US$3,391,084.91 in
• favor of Asian Hardwood.
• Section 21, P.D. No. 1521: SECTION 21. Maritime Lien for Necessaries; persons • To finance the acquisition of the vessels, GALLEON obtained loans from Japanese
entitled to such lien. — Any person furnishing repairs, supplies, towage, use of dry lenders.
dock or marine railway, or other necessaries to any vessel, whether foreign or • On October 10, 1979, GALLEON, through Cuenca, and DBP executed a Deed of
domestic, upon the order of the owner of such vessel, or of a person authorized by Undertaking whereby DBP guaranteed the prompt and punctual payment of
the owner, shall have a maritime lien on the vessel, which may be enforced by suit GALLEON's borrowings from the Japanese lenders.
in rem, and it shall be necessary to allege or prove that credit was given to the • To secure DBP's guarantee under the Deed of Undertaking, GALLEON promised,
vessel. among others, to secure a first mortgage on the five new vessels and on the
second-hand vessels.
• As stated in Section 21, P.D. No. 1521, a maritime lien may consist in “other • Thus, GALLEON executed on January 25, 1982 a mortgage contract over five of its
necessaries spent for the vessel.” The ship modification cost may properly be vessels namely, M/V "Galleon Honor," M/V "Galleon Integrity," M/V "Galleon
classified under this broad category because it was a necessary expenses for the Dignity," M/V "Galleon Pride," and M/V "Galleon Trust" in favor of DBP.
vessel’s navigation. As long as an expense on the vessel is indispensable to the • Meanwhile, on January 21, 1981, President Ferdinand Marcos issued Letter of
maintenance and navigation of the vessel, it may properly be treated as a Instruction (LOI) No. 1155, directing NDC to acquire the entire shareholdings of
maritime lien for necessaries under Section 21, P.D. No. 1521." GALLEON for the amount originally contributed by its shareholders payable in five
(5) years without interest cost to the government.
• In the same LOI, DBP was to advance to GALLEON within three years from its
PARTIES: effectivity the principal amount and the interest thereon of GALLEON's maturing
Petitioner: Poliand Industrial Limited obligations.
Respondent: NDC, DBP • On August 10, 1981, GALLEON, represented by its president, Cuenca, and NDC,
Nature of Action Filed: Collection Suit represented by Minister of Trade Roberto Ongpin, forged a Memorandum of
Agreement, 5 whereby NDC and GALLEON agreed to execute a share purchase
CC/Mode of Transportation: Ships agreement within sixty days for the transfer of GALLEON's shareholdings.
Owner: Galleon • Thereafter, NDC assumed the management and operations of GALLEON although
Cause/Accident: unpaid credit loans Cuenca remained president until May 9, 1982.
• Using its own funds, NDC paid Asian Hardwood on January 15, 1982 the amount of
Recit Ready Facts: US$1,000,000.00 as partial settlement of GALLEON's obligations.
Poliand is an assignee of the of the rights of Asian Hardwood over the outstanding • On February 10, 1982, LOI No. 1195 was issued directing the foreclosure of the
obligation of National Development Corporation (NDC), the latter being the owner of mortgage on the five vessels.
Galleon which previously secured credit accommodations from Asian Hardwood for • For failure of GALLEON to pay its debt despite repeated demands from DBP, the
its expenses on provisions, oil, repair, among others. Galleon also obtained loans vessels were extrajudicially foreclosed on various dates and acquired by DBP for
from Japanese lenders to finance acquisition of vessels which was guaranteed by the total amount of P539,000,000.00.
DBP in consideration of a promise by Galleon to secure a first mortgage on the • DBP subsequently sold the vessels to NDC for the same amount.
vessels. DBP later transferred ownership of the vessel to NDC. A collection suit was • Asian Hardwood assigned its rights over the outstanding obligation of GALLEON of
filed after repeated demands of Poliand for the satisfaction of the obligation from US$2,315,747.32 to World Universal Trading and Investment Company, S.A. (World
Galleon, NDC and DBP went unheeded. Universal), embodied in aDeed of Assignment executed on April 29, 1989.
• World Universal, in turn, assigned the credit to petitioner POLIAND sometime in July
PROCEDURE: 1989.
RTC: RULED IN FAVOR OF pOLIAND • On March 24, 1988, then President Aquino issued Administrative Order No. 64,
CA: Modified judgement absolving DBP. directing NDC and Philippine Export and Foreign Loan Guarantee Corporation (now
Trade and Investment Development Corporation of the Philippines) to transfer
FACTS: (suri medj C&P And haha ng facts important kasi yung compounding some of their assets to the National Government, through the Asset Privatization
transfers and credits) Trust (APT) for disposition.
• Asian Hardwood Limited (Asian Hardwood), a Hong Kong corporation, extended • Among those transferred to the APT were the five GALLEON vessels sold at the
credit accommodations in favor of GALLEON totaling US$3,317,747.32.2. foreclosure proceedings.
• At that time, GALLEON, a domestic corporation organized in 1977 and headed by • On September 24, 1991, POLIAND made written demands on GALLEON, NDC, and
its president, Roberto Cuenca, was engaged in the maritime transport of goods. DBP for the satisfaction of the outstanding balance in the amount of
US$2,315,747.32.
15 of 33
• For failure to heed the demand, POLIAND instituted a collection suit against NDC, which Section 17, P.D. No. 1521 declares as having preferential status in the event
DBP and GALLEON filed on October 10, 1991 with the Regional Trial Court. of the sale of the vessel. One of such claims enumerated under Section 17, P.D. No.
1521 which is considered to be superior to the preferred mortgage lien is a maritime
NDC/DBP Contention: lien arising prior in time to the recording of the preferred mortgage.
• NDC and DBP both argue that POLIAND's claim cannot prevail over DBP's mortgage
credit over the foreclosed vessels because the mortgage executed in favor of DBP Second Issue: A maritime lien is akin to a mortgage lien in that in spite of the
pursuant to the October 10, 1979 Deed of Undertaking signed by GALLEON and transfer of ownership, the lien is not extinguished. The maritime lien is inseparable
DBP was an ordinary ship mortgage and not a preferred one, that is, it was not from the vessel and until discharged, it follows the vessel. Hence, the enforcement
given in connection with the construction, acquisition, purchase or initial operation of a maritime lien is in the nature and character of a proceeding quasi in rem. The
of the vessels, but for the purpose of guaranteeing GALLEON's foreign borrowings. expression "action in rem" is, in its narrow application, used only with reference to
• NDC adds that being an ordinary ship mortgage, the Civil Code provisions on certain proceedings in courts of admiralty wherein the property alone is treated as
concurrence and preference of credits and not P.D. No. 1521 should govern. NDC responsible for the claim or obligation upon which the proceedings are based.
contends that under Article 2246, in relation to Article 2241 of the Civil Code, the Considering that DBP subsequently transferred ownership of the vessels to NDC, the
credits guaranteed by a chattel mortgage upon the thing mortgaged shall enjoy Court holds the latter liable on the maritime lien. Notwithstanding the subsequent
preference (with respect to the thing mortgaged), to the exclusion of all others to transfer of the vessels to NDC, the maritime lien subsists.
the extent of the value of the personal property to which the preference exists.
Following NDC's theory, DBP's mortgage credit, which is fourth in the order of Third Issue: Article 578 of the Code of Commerce is not relevant to the facts of the
preference under Article 2241, is superior to POLIAND's claim, which enjoys no instant case because it governs the sale of vessels in a foreign port while the
preference. resolution of the instant case depends on the determination as to which creditor is
entitled to the proceeds of the foreclosure sale of the vessels. Article 580, while
Procedure: providing for the order of payment of creditors in the event of sale of a vessel, had
RTC: been repealed by the pertinent provisions of Presidential Decree (P.D.) No. 1521,
• trial court concluded that under LOI No. 1155, DBP and NDC are liable for those otherwise known as the Ship Mortgage Decree of 1978.
obligations. The trial court also found NDC liable for GALLEON's obligations based
on the Memorandum of Agreement dated August 1981 executed between Fourth Issue: The provision of P.D. No. 1521 on the order of preference in the
GALLEON and NDC, where it was provided that NDC shall prioritize repayments of satisfaction of the claims against the vessel is the more applicable statute to the
GALLEON's valid and subsisting liabilities subject of a meritorious lawsuit or which instant case compared to the Civil Code provisions on the concurrence and
have been arranged and guaranteed by Cuenca. preference of credit. General legislation must give way to special legislation on the
• same subject, and generally be so interpreted as to embrace only cases in which the
• trial court found that GALLEON's advances obtained from Asian Hardwood were special provisions are not applicable.
used to cover for the payment of bunker oil/fuel, unused stores and oil, bonded There is no question that the mortgage executed in favor of DBP is covered by P.D.
stores, provisions, and repair and docking of the GALLEON vessels. The trial court No. 1521. Contrary to NDC's assertion, the mortgage constituted on GALLEON's
also found that the advances from Asian Hardwood were spent for ship vessels in favor of DBP may appropriately be characterized as a preferred mortgage
modiFIcation cost and the crew's salary and wages. DBP contends that a ship under Section 2, P.D. No. 1521 because GALLEON constituted the same for the
modiFIcation cost is omitted under Section 17, P.D. No. 1521, hence, it does not purpose of financing the construction, acquisition, purchase of vessels or initial
have a status superior to DBP's preferred mortgage lien. operation of vessels. Without DBP's guarantee, the Japanese lenders would not have
provided the funds utilized in the purchase of the GALLEON vessels. The mortgage in
ISSUE/S: favor of DBP was therefore constituted to facilitate the acquisition of funds
1. WON Whether POLIAND has a maritime lien enforceable against NDC or necessary for the purchase of the vessels.
DBP or both: YES
1. WON both DBP and NDC are solidarily liable: NO, only NDC Fifth Issue: Under Article 2208 71 of the Civil Code, attorney's fees may be
2. WON the Code of Commerce is applicable in the case at bar: NO awarded inter alia when the defendant's act or omission has compelled the plaintiff
3. WON the Civil Code provisions apply: NO, P.D. 1521 applies to incur expenses to protect his interest or in any other case where the court deems
4. WON NDC is liable for Attorney’s fees: YES it just and equitable that attorney's fees and expenses of litigation be recovered.
5. WON NDC is liable under LOI 1155: No, LOI’s are just directives and do not have
the force and effect of law. Sixth Issue:
6. WON DBP is liable under LOI1155: No • Although LOI No. 1155 was undoubtedly issued at the time when the President
7. WON NDC is liable under the corporation code: no exercised legislative powers granted under Amendment No. 6 of the 1973
Constitution, the language and purpose of LOI No. 1155 precludes this Court from
HELD: declaring that said LOI had the force and effect of law in the absence of any of the
conditions set out in Parong. Nothing in the language of LOI No. 1155 suggests that
First Issue: “Before POLIAND’s claim may be classified as superior to the mortgage it was issued to address the security of the nation. Obviously, LOI No. 1155 was in
constituted on the vessel, it must be shown to be one of the enumerated claims
16 of 33
the nature of a mere administrative issuance directed to NDC, DBP and MARINA to DISPOSITIVE: WHEREFORE, both Petitions in G.R. No. 143866 and G.R. No. 143877
undertake a policy measure, that is, to rehabilitate a private corporation. are DENIED. The Decision of the Court of Appeals in CA-G.R. CV No. 53257 is
• The decree or instruction should have been issued either when there existed a MODIFIED to the extent that National Development Company is liable to Poliand
grave emergency or threat or imminence or when the Legislature failed or was Industrial Limited for the amount of One Million One Hundred Ninety Three Thousand
unable to act adequately on the matter. The quali􏰁cation that there exists a grave Two Hundred Ninety Eight US Dollars and Fifty-Six US Cents (US$ 1,193,298.56), plus
emergency or threat or imminence thereof must be interpreted to refer to the interest of 12% per annum computed from 25 September 1991 until fully paid. In
prevailing peace and order conditions because the particular purpose the President other respects, said Decision is AFFIRMED. No pronouncement as to costs.
was authorized to assume legislative powers was to address the deteriorating
peace and order situation during the martial law period. 11. STANDARD OIL COMPANY OF NEW YORK v. LOPEZ CASTELO
G.R. No. L-13695 | October 18, 1921
7th Issue: Being a mere administrative issuance, LOI No. 1155 cannot be a valid TOPIC: Liability of Ship Owners of Ship Agents
source of obligation because it did not create any privity of contract between DBP
and POLIAND or its predecessors-in-interest. At best, the directive in LOI No. 1155 BUZZ WORD: Father and SON (owner and captain) liable in case of jettiSON
was in the nature of a grant of authority by the President on DBP to enter into
certain transactions for the satisfaction of GALLEON's obligations. DOCTRINE:
The owner of the vessel is civilly liable for the acts of the captain; and he can only
8Th Issue: The records do not show SEC approval of the merger. POLIAND cannot escape from this civil liability by abandoning his property in the ship and any freight
assert that no conditions were required prior to the assumption by NDC of ownership that he may have earned on the voyage
of GALLEON and its subsisting loans. Compliance with the statutory requirements is
a condition precedent to the effective transfer of the shareholdings in GALLEON to PARTIES:
NDC. In directing NDC to acquire the shareholdings in GALLEON, the President could COMMON CARRIER: Steamer Batangueño
not have intended that the parties disregard the requirements of law. In the absence OWNER: Manuel Lopez Castelo
of SEC approval, there was no effective transfer of the shareholdings in GALLEON to CHARTERER / SHIP AGENT: Jose Lim Chumbuque
NDC. Hence, NDC did not acquire the rights or interests of GALLEON, including its SHIPPER: Standard Oil Company
liabilities. GOODS: 200 cases Petroleum
CONTRACT: Contract of Affreightment
RULE: SECTION 21. Maritime Lien for Necessaries; persons entitled to such lien. — ROUTE: Port Manila -> Port of Casiguran, Sorsogon (interisland trade)
Any person furnishing repairs, supplies, towage, use of dry dock or marine railway, CAUSE: pertoleum cargoes were jettisoned due to storm
or other necessaries to any vessel, whether foreign or domestic, upon the order of
the owner of such vessel, or of a person authorized by the owner, shall have a RECIT READY SUMMARY: Standard Oil shipped petroleum via Steamer
maritime lien on the vessel, which may be enforced by suit in rem, and it shall be Batangueno, a chartered vessel of Chumbuque. A storm came and the petroleum
necessary to allege or prove that credit was given to the vessel. cargoes on the deck were jettisoned. Standard Oil filed a claim for the value of these
jettisoned cargoes. Court the shipowner and charterer civilly liable despite the failure
Under the aforequoted provision, the expense must be incurred upon the order of of the captain to institute liquidation proceedings. The deck cargoes is allso included
the owner of the vessel or its authorized person and prior to the recording of the ship in the general weight average of the ship.
mortgage. Under the law, it must be established that the credit was extended to the CFI Manila: in favor of Standard Oil.
vessel itself.
FACTS:
• Jose chartered the Steamer Batangueno for use in coveying cargo between
certain ports of PH Islands
IN THIS CASE: The trial court found that GALLEON’s advances obtained from Asian
o Contract: Crew to be supplied by Castelo (owner) and that Jose will
Hardwood were used to cover for the payment of bunker oil/fuel, unused stores and
have no control over the crew.
oil, bonded stores, provisions, and repair and docking of the GALLEON vessels. These
expenses clearly fall under Section 21, P.D. No. 1521. • Standard Oil Company delivered to the agent of the boat a quantity of
petroleum
The trial court also found that the advances from Asian Hardwood were spent for o to be conveyed from Manila -> Casiguran
ship modification cost and the crew’s salary and wages. DBP contends that a ship o freight paid at destination
modification cost is omitted under Section 17, P.D. No. 1521, hence, it does not have o Bill of lading: no provision on the storage of the petroleum
a status superior to DBP’s preferred mortgage lien. • Standard placed the petroleum upon the deck of the ship and not in the
hold
THEREFORE: POLIAND’s mortgage is superior and NDC is liable
17 of 33
• A violent typhoon passed at the western coast of Sorsogon and as
compelled for the safety of all to jettison the entire consignment of RULE:
petroleum consisting of 200 cases Spanish Code of Commerce
• After the storm, only 13 cases of petroleum were recovered • Merchandise laden on the upper deck of the vessel shall contribute in the
• Standard Oil instituted a case against the owner of the ship, Lopez Castelo general average if it should be saved; but that there shall be no right to
to recover the value of the petroleum jettisoned but not recovered indemnity if it should be lost by reason of being jettisoned for the general
safet
CFI Manila: in favor Standard Oil • XPT: when the marine ordinances allow its shipment in this manner in
• Captain exercised proper discretion in casting this petroleum overboard, as coastwise navigation
a step necessary to the salvation of the ship;
• Even after the vessel was thus eased, capt. was with difficulty prevented The Marine Regulations now in force in these Islands contain provisions
from capsizing, so great was the intensity of the storm. recognizing the right of vessels engaged in the interisland trade to carry
deck cargo
ISSUE/S: • Gasoline, which from its inflammable nature - not permitted to be carried in
1. WON the loss of this petroleum was a general average loss or a particular the hold of any passenger vessel, though it may be carried on the deck if
less to be borne solely by the owner of the cargo - General certain precautions are taken
2. Who is the person, or persons, who are liable to make good this loss, and • No express provision declaring that petroleum shall be carried on deck in
what are the conditions under which the action can be maintained? Lopez any case; but having regard to its inflammable nature and the known
Castelo and Chumbuque (owner and charterer) and ofcoure the practices of the interisland boats, it cannot be denied that this commodity
captain also, as well as gasoline, may be lawfully carried on deck in our coatwise
trade.
1ST ISSUE: Marine cargo placed in the deck is now included in the general • Why allowed? coastwise trade the boats are small and voyages are short, if
aaverage weight threatening weather arises, it can often reach a port of safety before
disaster overtakes
RULE:
BEFORE: Deck cargo NOT included in general average weight IN THIS CASE:
Spanish Commercial Code and under the doctrines prevailing in the courts The loss of this petroleum is a general and not a special average
of admiralty of England America • It Is with the result that the Standard Oil is entitled to recover in some way
Ordinarily the loss of cargo carried on deck shall not be considered a general and from somebody an amount bearing such proportion to its total loss as
average loss. the value of both the ship and the saved cargo bears to the value of the
ship and entire cargo before the jettison was effected.
Rule I of the York-Antwerp Rules
No jettison of deck cargo shall be made good as general average. 2ND ISSUE: Lopez Castelo and Chumbuque are civilly liable to Standard Oil
RULE:
Subsection 1 of article 815 of the Code of Commerce, it is expressly declared Art. 586 of Code of Commerce
that deck cargo shall be cast overboard before cargo stowed in the hold. Both the owner of the vessel and the naviero, or charterer, shall be civil liable for
the acts of the master.
Reason:
• deck cargo is in an extra-hazardous position and, if on a sailing vessel, its Article 587 where it is used alone, and apparently in a sense broad enough to
presence is likely to obstruct the free action of the crew in managing the include the owner
ship
• In small vessels - renders the boat top-heavy and thus may have to be cast Naviero – a person undertaking the voyage, who in one case may be the owner
overboard sooner than would be necessary if it were in the hold and in another the charterer.
• It is always the first cargo to go over in case of emergency
• In short: since deck cargo ung nasa pinaka taas na floor lang ng ship, di The owner of the vessel is civilly liable for the acts of the captain; and he
daw kasama sa general weight talaga and di rin kasi sya properly stored can only escape from this civil liability by abandoning his property in the
pag sa deck lang. ship and any freight that he may have earned on the voyage
• The owner of the ship is a person to whom the plaintiff in this case may
NOW: Deck cargo included in general weight immediately look for reimbursement to the extent above stated is deducible
Jettisoned goods carried on deck, according to the custom of trade, by steam vessels not only from the general doctrines of admiralty jurisprudence but from the
navigating coastwise and in land waters, are entitled to contribution as a general provisions of the Code of Commerce applicable to the case.
average loss
18 of 33
Article 582 of the Code of Commerce namely, the owner of the ship, leaving him to obtain recourse, as it is very
Captain is required to initiate the proceedings for the adjustment, liquidation, and easy to do, from other individuals who have been drawn into the venture as
distribution of any gross average to which the circumstances of the voyage may shippers.
have given origin; and it is therefore his duty to take the proper steps to protect any
shipper whose goods may have been jettisoned for the general safety. DAMAGES
• Consignee - should give sufficient bond as a condition precedent to the • Standard is entitled to recover - total value of the jettisoned cargo,
delivery of goods to them to respond the their proportion of general belonging partly to the Stadard to another shipper, was P880.35, of which
average P719.95 represented the value of the Standard’s petroleum
• Captain - required to take the necessary steps to effect the adjustment,
liquidation, and distribution of the general average. DISPOSITIVE: Accordingly, modifying the judgment appealed from to this extent,
we affirm the same, with costs. So ordered.
Court is against this provision. Reasons:
• Article 582 provides that Liquidation of the general average is a condition
precedent to the liability of the Lopez Castelo, and that at any rate Lopez SEPARATE OPINION:
Castelo, as owner of the ship, should only be held liable for his proportion of ARAULLO, J., dissenting:
the general average.
• Article 582 are intended to supply the shipowner, acting of cause in the Main points: Shipowner should not be held civilly iable
person of the captain, with a means whereby he may escape bearing the 1. Although it is true that the captain is, as stated in the decision, primarily the
entire burden of the loss and may distribute it among all the persons who representative of the shipowner or agent, it cannot in all cases, be deduced
ought to participate in sharing it that the shipowner must be civilly responsible for all the acts of the captain.
• If Standard has any right of action at all upon the state of facts here 2. Liquidation is a condition precedent
presented, it is against the captain, who has been delinquent in performing
the duty which the law imposes on him. What is gross or general average?
• In short: even if di maka file daw ng liquidation si captain, magiging liable Article 811 defines gross or general averages as damages and expenses which are
pa rin daw si owner.. so Art. 582 provision should not a mandatory deliberately caused in order to save the vessel, her cargo, or both at the same time,
precedent daw. from a real and known risk, and particularly, such as goods jettisoned to lighten the
vessel, whether they belong to the vessel, to the cargo, or to the crew, and the
Making of the liquidation is not a condition precedent to the liability of the damage suffered through said act by the goods or board; the damage caused to the
shipowner of the shipper whose property has been jettisoned. vessel by scuttling or entering her hold in order to save the cargo; and the expenses
• It is true that if the captain does not comply with the article relating to the of the liquidation of the average.
adjustment, liquidation, and distribution of the general average, Art. 582
gives to those concerned, whether shipowner (naviero) or shipper, the right Article 812 provides that in order to satisfy the amount of the gross or general
to maintain an action against the captain for indemnification for the loss average, all persons having an interests in the vessel and cargo at the time of the
occurrence of the average shall contribute.
• But the recognition of this right of action does not by any means involve the
suppression of the right of action which is elsewhere recognized in the
Article 846 provides that the persons interested in the proof and liquidation of
shipper against the ship's owner.
averages may mutually agree and bind themselves at any time with regard to the
• The shipper may claim against the shipowner and the latter may indemnify
liability, liquidation and payment thereo
its captain.
• In the absence of agreements: the proof of the average shall take place
in the port where the repairs are made, should any be necessary, or in the
Reasons why should the ship owner be also held liable
port of unloading
• the owner of the ship ordinarily has vastly more capital embarked upon a
voyage than has any individual shipper of cargo. Article 847 provides that when the liquidation of the averages is made privately by
• the owner of the ship, in the person of the captain, has complete and virtue of agreement, as well as when a judicial authority takes part therein at the
exclusive control of the crew and of the navigation of the ship, as well as of request of any of the parties interested who do not agree thereto, all of them shall
the disposition of the cargo at the end of the voyage. be cited and heard, should they not have renounced this right
• To adopt the interpretation of the law for which the appellant contends After agreement on the liquidation… the liquidator appointed, in order that he may
would place the shipowner in a position to escape all responsibility for a proceed with thepro rata distribution of the average among the contributing values,
general average of this character by means of the delinquency of his own after fixing the amount mentioned in said article of the contributing capital
captain. 1. By the value of the cargo, according to the rules established in article 854;
• The evident intention of the Code, taken in all of its provisions, is to place
the primary liability upon the person who has actual control over the 2. by the value of the vessel in her actual condition, according to a statement
conduct of the voyage and who has most capital embarked in the venture, of experts
19 of 33
3. by 50 per cent of the amount of the freight, deducting the remaining 50 per disposed of them upon arriving at port, after part thereof, which included
cent for wages and maintenance of the crew. 1awph!l.net the petroleum boxes belonging to Standaard, had been jettisoned, it was
not because the captain of said vessel had not fulfilled his duty with
Article 852: "If the captain should not comply with the provisions contained in the
respect to the care of the cargo, but because he did not proceed in
foregoing article, the shipowner or agent or the freighters shall demand the
accordance with the provision of article 851 already cited, in the
liquidation, without prejudice to the action they may bring to demand indemnity
adjustment, liquidation, and distribution of the gross average caused by
from him."
that accident. and did not, as he should have done, according to article
852, require the liquidation either of the agent or the shippers.
Article 867 the captain is authorized to attach the goods saved until the shippers
should pay the amount, if they should fail to do so by the third day after demand • Therefore, captain and Standard, and not to the conduct of the captain in
upon them. And since the captain may require bond, he may delay the delivery of the custody of the cargo, is the fact attributable that the shippers were
the goods saved to the shippers until they make the payment. able to carry away the dispose of the cargo savedIn article 826 of section 3
of the same title, which deals with collisions, it is provided that the agent of
the vessel at fault shall indemnify the losses and damages suffered, after
IN THIS CASE: an expert appraisal, if a vessel should collide with another through the
• Captain of the Batangueño delivered the respective cargoes of the other fault, negligence, or lack of skill of the captain, sailing mate, or any other
shippers without previously requiring a bond, can not constitute the basis member of the complement, and, according to article 831, if a vessel
for making the captain responsible, much less the owner of the vessel, as should be forced to collide with another by a third vessel, the agent of the
the trial court has erroneously held in the judgment appealed from and as third vessel shall indemnify for the losses and damages caused, the
this court is given to understand in referring to said filing of the bond as a captain being civilly liable to said agent, this liability being understood to
prerequisite to the delivery of the cargo. be limited to the value of the vessel with all equipment and freight earned.
• What does the Code authorize the shipper?
The liquidation is a condition precedent, not to the liability of the
o to demand from the captain and later to institute the action
shipowner to the shipper whose goods may have been jettisoned, as stated
corresponding to them against him to recover indemnity if he in the decision in question, but to the partition which must be made
should not comply with the provisions upon the subject between the agent or shipowner and the shippers of the respective amount
o if he should fail to effect the liquidation, or if, in lieu thereof, he of the average.
should deliver the respective cargoes to the shippers or permit • This partition, and not that the shipowner should suffer all loss but may
them to dispose of the same, in which case the responsibility may afterwards evade and distribute it among all persons who should share in
be fixed upon the captain and not upon the agent upon this the average, is the real interpretation of the provisions to which reference is
ground, and for not requiring the shippers to give said bond. made in the same decision.
o
• Neither is it true that, as stated in said decision, the shipowner has, through
There is no relation whatever between said articles 586, 587, and 588, the captain, the complete and exclusive control of the crew and the sailing
invoked in the decision, and those which treat of averages. of the vessels, as well as of the destination of the cargo at the end of the
1. Civil responsibility of the shipowner and agent for the acts of the captain voyage, and that, for this reason, the principal liability for the payment of
and the obligations incurred by the latter for the repair, equipment, and the gross average must fall upon the shipowner.
provisioning of the vessel.
2. Article 587, establishes the same responsibility of the agent for indemnities,
in favor of third persons, which may arise from the conduct of the captain in
the care of the goods which the vessel may carry, from which he may
exempt himself by abandoning the vessel with all her equipment and the
freight he may have earned during the voyage
IN THIS CASE: 12. VICENTE VERZOSA and RUIZ, REMENTERIA CIA., S. in C., v. SILVINO LIM
• it is not the conduct of the captain in the care of the goods which has given and SIY CONG BIENG & COMPANY, INC.
rise to the right to exact the corresponding civil responsibility, but, G.R. No. 20145 | November 15, 1923
according to article 862, the failure of the captain to comply with the
provisions of article 851, with respect to the adjustment, liquidation, and TOPIC: Extent of Liability;
distribution of the gross average and the failure to attend to the claims
which the agent or the shippers may or should have made, inasmuch as BUZZ WORD: BaNYEK! Nabangga si Perla
said article 852 clearly so declares,
• If the consignees or owners of the cargo on board the DOCTRINE:
vessel Batangueño took away with them their respective cargoes or
20 of 33
In Art. 826 of the Code of Commerce, it is declared that the owner of any vessel shall • An additional reason for this maneuver, as stated by Captain Carrido, is that
be liable for the indemnity due to any other vessel injured by the fault, negligence, the captain of the Ban Yek waived his hand to Garrido, indicating that the
or lack of skill of the captain of the first. latter should turn his vessel towards the middle of the stream.
• At about the same time that Perla was thus deflected from her course the
PARTIES engine on the Ban Yek was reversed and three blasts were given by this
PETITIONER: Vicente Verzosa & Ruiz (owners of coastwise Perla) vessel to indicate that she was backing.
RESPONDENT: Silvino Lim, et al (owner and agent of vessel Ban Yek) • Now, it appears that when the engine is reversed, a vessel swings to the
right or left in accordance with the direction in which the blades of the
CC/MODE OF TRANSPORT (1): Coastwise Perla propeller are set; and as Ban Yek began to back, her bow was thrown out
CC/MODE OF TRANSPORT (2): Vessel Ban Yek into the stream, a movement which was assisted by the current of the river.
OWNER OF PERLA: Verzosa &Ruiz • By this means Ban Yek was brought to occupy an oblique position across
OWNER OF BAN YEK: Silvino Lim the stream at the moment Perla was passing; and the bow of Ban Yek
AGENT OF BAN YEK: Siy Cong Bieng and Co crashed into the starboard bumpers of the Perla, carrying away external
PORT OF DEPARTURE: Naga, Bicol parts of the ship and inflicting material damage on the hull.
ROUTE: Naga (through Bicol River) to Manila
CAUSE / ACCIDENT: Collision Versoza’s Arguments:
NATURE OF ACTION: Recovery of damages for the collision • Said collision was due to the experience, carelessness and lack of skill on
the part of the captain of the Ban Yek and to his failure to observe the rules
RECIT READY DIGEST: of navigation appropriate to the case.
While in the course of their voyage, Ban Yek gave 2 blasts indicating the intention to
pass on the left or to her own portside. In reply, Perla gave a single blast indicating Lim’s Arguments:
that she disagreed and Ban Yek never replied to that. The act of not replying was • Respondents filed a counterclaim saying that collision was due exclusively
interpreted as an act of acquiescence. However, the danger of collision became to the inexperience and carelessness of the captain and officers of the
imminent so the Captain of Perla put his vessel to port and he did such as well steamship Perla.
because the Captain of Ban Yek waived his hand indicating that Capt of Perla should
put his vessel towards the middle of the stream. The 2 vessels eventually collided. PROCEDURE:
CFI absolved Lim et al but no damages were awarded to Verzosa et. al. SC
CFI Manila: Absolved defendants, but no damages was awarded to the petitioners
CFI Manila: Absolved defendants, but no damages was awarded to the petitioners
ISSUE/S:
FACTS: 1. Who is responsible for the collision? CAPTAIN & PILOT IN CHARGE OF
• Petitioners Verzosa and Ruiz instituted an action in the CFI-Manila against BAN YEK
the respondents Silvino Lim et al to recover a sum of money alleged to be 1. Who must respond for the damages, if any? LIM AS OWNER, SIY CONG
the damages resulting to the plaintiffs from a collision between Perla and BIENG AS AGENT
Ban Yek.
• In Bicol River, while the boats were yet more than a kilometer apart, Ban HELD:
Yek gave 2 blasts with her whistle, thus indicating an intention to pass on ISSUE 1:
the left, or to her own port side. The Captain and Pilot in charge of Ban Yek should be held responsible for
• In reply to this signal the Perla gave a single blast, thereby indicating that the collision.
she disagreed with the signal given by the Ban Yek and would maintain her
position on the right, that is, would keep to the starboard.
RULE:
• Ban Yek made no reply to this signal.
No fault can be attributed to the officers navigating the Perla either in maintaining
• As Perla was navigating with the current, then running in from the sea, this
the course which had been determined upon for that vessel in conformity with the
vessel, under paragraph 163 of Customs Marine Circular No. 53, had the
marine regulations applicable to the case or in deflecting the vessel towards the
right of way over Ban Yek, and the officers of the Perla interpreted the
middle of the stream after the danger of collision became imminent.
action of the Ban Yek in not replying to the Perla’s signal as an indication of
acquiescence of the officers of the Ban Yek in the determination of the Perla
IN THIS CASE:
to keep to the starboard.
The fault is to be attributed exclusively to the negligence and inattention of the
• When the danger of collision became imminent, Capt. Garrido of Perla,
captain and pilot in charge of the Ban Yek. The Perla undoubtedly had the right of
seeing that he was shut off by the Ban Yek from passing to the right, put his
way, since this vessel was navigating with the current, and the officers in charge of
vessel to port, intending to avoid collision or minimize its impact by getting
the Perla were correct in assuming, from the failure of the Ban Yek to respond to the
farther out into the stream.
21 of 33
single blast of the Perla, that the officers in charge of the Ban Yek recognized that •But while it is thus demonstrated that Silvino Lim is liable for these
the Perla had a right of way and acquiesced in her resolution to keep to the right. damages in the character of owner, it does not necessarily follows
that Siy Cong Bieng & Co., as character or agent (casa aviera), is
Excuse urged by Ban Yek: exempt from liability; and we are of the opinion that both the
1. its vessel is somewhat larger than the Perla and that it was desirable for the owner and agent can be held responsible where both are
Ban Yek to keep on the side of the long arc of the curve of the river; and in impleaded together.
this connection it is suggested that the river is deeper on the outer edge of • The liability of the naviero, in the sense of charterer or agent, if not
the bend than on the inner edge. expressed in article 826 of the Code of Commerce, is clearly deducible from
2. on a certain previous occasion the Ban Yek on coming out from this port the general doctrine of jurisprudence stated in article 1902 of the Civil
had gotten stuck in the mud in this bend by keeping too far to the right Code, and it is also recognized, but more especially as regards contractual
3. the practice of ships in navigating this stream to keep nearer the outside obligations, in article 586 of the Code of Commerce.
than to the inside of the bend. • Moreover, we are of the opinion that both the owner and agent (naviero)
should be declared to be jointly and severally liable, since the obligation
• Such excuses and suggestions of Ban Yek are by no means convincing. which is the subject of this action had its origin in a tortious act and did not
• It appears in evidence that the river bottom here is composed of mud and arise from contract. Article 1137 of the Civil Code, declaring that joint
silt, and as the tide at the time of this incident was nearly at its flood, there obligations shall be apportionable unless otherwise provided, has no
was ample depth of water to have accommodated the Ban Yek if she had application to obligation arising from tort.
kept to that part of the stream which it was proper for her to occupy. DAMAGES
• Court further observe that the disparity in the size of the vessels was not
such as to dominate the situation and deprive the Perla of the right of way
under the conditions stated. Y/N Reasons
The trial judge suggests in his opinion that when Capt. Garrido saw that the Ban Yek Actual/Compensatory Y P17,827.00 – Represents the limit of the
was holding her course to the left, he (Garrido) should have changed the course of plaintiffs’ right of recovery. On the original
the Perla to port more promptly. complaint recovery is sought for an additional
• The validity of this criticism cannot be admitted. Among rules applicable to amount of P18,000, most of which consists of
navigation, none is better founded on reason and experience than that damages supposed to have been incurred from
which requires the navigating officers of any vessel to assume that an the inability of the Perla to maintain her
approaching vessel will observe the regulations prescribed for navigation. regular schedule while laid up in the dock
Any other rule would introduce guesswork into the control of ships and undergoing repairs. The damages thus
produce uncertainty in the operation of the regulations. claimed, in addition to being somewhat of a
speculative nature, are in our opinion not
IN THIS CASE: su􏰁ciently proved to warrant the court in
● Renzo was allowing the same.
drunk when
he drove *no other damages were granted
the pedicab
THEREFORE:
iSSUE 2: Silvino as the owner and Siy Cong as the agent should pay jointly and severally the
Silvino Lim as the owner and Siy Cong Bieng should respond for the damages incurred by Perla.
damages incurred.
DISPOSITIVE:
RULE: Judgment will be entered for the plaintiffs to recover jointly and severally from the
In Art. 826 of the Code of Commerce, it is declared that the owner of any vessel shall defendants Silvino Lim and Siy Cong Bieng & Co. the sum of seventeen thousand
be liable for the indemnity due to any other vessel injured by the fault, negligence, eight hundred and twenty-seven pesos (17,827), with interest from the date of the
or lack of skill of the captain of the first. institution of the action, without special pronouncement as to costs of either
instance. So ordered.
IN THIS CASE:
• Silvino Lim is impleaded as owner; and Siy Cong Bieng & Co. is impleaded 13. WING KEE COMPRADORING CO. v. BARK "MONONGAHELA"
as the shipping agent (casa aviera), or person in responsible control of the G.R. No. 19540 | January 29, 1923
Ban Yek at the time of the accident.
TOPIC: Liability of Ship Owners and Agents: Extent of Liability
22 of 33
11.WON Action can be brought against admiral Lines despite agency being ceased:
BUZZWORD: Singinlin ang Agent para sa Utang ng Barko YES
12.WON Admiral Lines is liable to Wee Kee: YES MAIN ISSUE
DOCTRINE: By article 586 of the Code of Commerce, "the owner of a vessel and
agent be civilly liable for the acts of the captain and for the obligations contracted by HELD:
the latter to repair, equip, and provision the vessel, provided the creditor proves that
the amount claimed was invested therein." First Issue:
What was in the documents presented: The first requisitions for supplies are on
PARTIES: forms headed The Admiral Line." Then follows Manila, the date, and the name, "Wing
Kee Compradoring Co." Next is the order, reading: "Please deliver to S. S.
1. Plaintiff-appellant:Wing Kee Compradoring Company Monongahela now lying at Bay, the following goods and send bills to the Admiral
5. Respondent: THE BARK "MONONGAHELA," VICTOR S. FOX & CO., INC., owner of Line:". After this the goods are named. At the foot is found, "United States Shipping
the bark Monongahela, THE ADMIRAL LINE, and C.G. LOTHIGIUS, Board Emergency Fleet Corporation," although these words are erased in a few of
6. Nature of Action Filed: complaint for sum of money amounting to P17,675.64, the requisitions, "The Admiral Line (Paci c Steamship Co.) Operating Agents. By J. J.
with interest and costs against Victor S. Fox Inc as owner of the bark Monogahela Armstrong." On the side of the requisitions in red ink the following: "Note: This
and The Admiral Line and C.G. Lothigius as Agents of the former requisition must be receipted by ether Chief O cer, Chief Steward or Chief Engineer
CC/MODE OF TRANSPORT:Bark Monongahela and returned to the Admiral Line, with six copies of invoice immediately after deliver
7. OWNER OF CC: Victor S. Fox Inc of goods." After May 4, 1921, the requisitions seem to have been made our by the
8. AGENT: Admiral Line steward and the master.
9. CAPTAIN OF BARK: C.G. Lothigius
10.CAUSE/ACCIDENT: non-payment of amount due in furnishing the bark The S.C. deduced from the documents presented that the Admiral Line was the
operating agent for the Monongahela, and was responsible as such until the agency
RECIT READY DIGEST: Wee Kee sold goods, wares, and merchandise to the was terminated.
defendants for the use of the crew of the Bark Monongahela. It was seeking payment
from Admiral Lines as the agent as stipulated in the documents and bills presented. Second Issue: “To our minds this is a rather far-fetched argument, for pursued to
However, Admiral argues that its agency ceased and action cannot be filed against its logical conclusion, every agent for a vessel could thus avoid responsibility
it. The S.C. found Admiral liable since it was the agent at the time wares were pursuant to article 586 of the Code of Commerce, by giving up its agency when
bought. threatened with suit to enforce the obligations of third parties. Moreover, the bills
were presented when the Admiral Line was yet the agent.”
PROCEDURE:
TC: found as a fact that on or before August 4, 1921, the Admiral Line had ceased to Main Issue: Admiral is liable (discussion below)
act as agent for the Monongahela. Nevertheless, supplies were furnished the
Monongahela after these dates by Wee Kee. RULE:
when the agents buy in their own names, but really for the account of their principal,
FACTS: the seller has an option to look to either for payment, unless (1) he trusted the agent
• Wing Kee Compradoring Company furnished various supplies for the Bark exclusively; or (2) by the usage and understanding of the business the agent only is
Monongahela. held; or (3) unless the special circumstances of the case show that only the agent
• Most of the bills for these goods are made out against the "Admiral Line, S. S. was intended to be bound and the seller knew it or was chargeable with knowledge
Monongahela." of it.
• All are countersigned by the master and the first steward.
• In the Manila Daily Bulletin for August 2, 1921, appeared the following: "Notice — IN THIS CASE: the bills were presented when the Admiral Line was yet the agent.
Bark Monongahela — The under-signed hereby give notice that they are not
responsible in any manner whatsoever for any indebtedness incurred by the Bark THEREFORE: Admiral Line, as agent for the Bark Monongahela, is liable to the
Monongahela, its Master and/or Crew — The Admiral Line." plaintiff for supplies furnished the Monongahela between March 16, 1921 and August
• Nevertheless, supplies were furnished theMonongahela after these dates by the 2, 1921, but is not responsible for supplies furnished after that date.
plaintiff.
DAMAGES AWARDED: NONE
Admiral Lines Contention: agency has ceased, action cannot be brought against
Admiral Line DISPOSITIVE: In accordance with the foregoing, judgment is reversed and the
plaintiff shall have and recover from the defendant, the Admiral Line, the sum of
ISSUE/S: P16,526.29, without interest and cost. So ordered.
1. WON Admiral Lines is the agent: YES
14. YU BIAO SONTUA & CO v. MIGUEL OSSORIO
23 of 33
G.R. No. L-17690 | June 14, 1922 2. Yu Biao
sustained damages to the amount of P27,400 for the demurrage and delay
TOPIC: Extent of Liability in the ordinary voyages of the aforesaid vessel Y. Sontua.
Other: Motorboat Alfonso’s crew as well as its owner Ossorio is liable to them
DOCTRINE:
Although the duties enumerated in article 612 of the Code of Commerce are inherent PROCEDURE:
in the master, the civil liability arising from the nonfulfilment thereof is not limited to
the latter, since while the master is responsible to the ship agent, he is, in turn, RTC: Ossorio’s employees are negligent and he is ordered to pay Yu Biao P67,400
liable to third persons, as is clearly provided in article 618 of the said Code, which in with legal interest thereon from the date of the filing of the complaint, and the costs
its subsections 5 and 7 expressly mentions such duties enumerated in the aforesaid
article 612. Ossorio’s Argument:
• He has
PARTIES: taken no part either directly or indirectly in the acts alleged in the
PETITIONER: Yu Biao Sontua complaint
RESPONDENT: Miguel Ossorio • If Yu
Biao has sustained any damages, they are not the result of the act said to
COMMON CARRIER 1: Motorboat Alfonso have been committed by his agents and employees and are not likewise
OWNER: Miguel Ossorio imputable to his negligence of theor any of his agents, employees, or
mandatories.
COMMON CARRIER 2: Steamer Y. Sontua • On his
OWNER: Yu Biao (Earnshaw Shipyards) appeal:
CAUSE: Fire extended to the other ship 1. explosi
on in question was due to the negligence of the persons in charge
RECIT READY SUMMARY: of the motor boat Alfonso;
Fire broke out in the motoroboat Alfonso which extended to Yu Biao’s Steamer Y. 2. he is
Sontua. Fire broke out because of the improper loading of petroleum and gasoline. not liable for the negligence of his agents and employees
Court held that the fire breakage was due to the negligence of Ossorio’s crew and he 3. excessi
as well as the owner of the motorboat. ve sum as damages
RTC: in favor of Yu Biao
ISSUE/S:
FACTS: 1. WON
• A fire Ossorio’s employees are negligent – YES
broke out on board the motorboat Alfonso in the Pasig River, Manila when it 2. WON
is about the weigh anchor Ossorio should also be held liable - YES
• Owing
to the proximity of the motor boat to the steamer Y. Sontua, the magnitude HELD:
of the fire and the inflammability of the material that served as fuel, the fire 1ST ISSUE: Crew of Motorboat Alfonso is negligent in loading the goods
spread to the said steamer Y. Sontua, and so rapidly that it was impossible
for the crew of the Y. Sontua to check its progress, IN THIS CASE:
• Damag • there
es to Yu Biao’s deck amounted to P67,400. were loaded in the said motor boat Alfonso
• Yu o 2,000
Biao, which is a regular partnership and the owner of the steamer Y. cases of petroleum
Sontua, brought this action to recover from the Ossorio, the owner and o 8,473
agent of said motor boat Alfonso, the said amount as indemnity for the cases of gasoline
damages sustained by him because of the negligence of agents of Ossorio • (of
which 5,000 cases of gasoline and 2,000 of petroleum were placed in the
Yu Biao’s cause of action: hold of said motor boat, and the balance on deck)
1. appurt o loading
enances and parts of the aforesaid vessel that were destroyed and was done without permission from the customs authorities
damaged by the said fire, and for the repair of which the sum of P40,000 • cases
was expended. were loaded by means of straps supporting 10 or 12 cases at a time
24 of 33
• that • Article 612 of Code of Commerce are inherent in the master such
the said cases of gasoline and petroleum were placed in the hold about 14 inherent duties do not limit to the latter the civil liability arising from their
feet from the boiler of the main engine and about 4 feet from the boiler of nonfulfillment, but while the master is responsible to the ship agent, the
the smaller engine; that on the evening of the 13th of March, 1920, the ship agent, in turn, is responsible to third persons, as is clearly provided in
smaller engine was in operation preparatory to the departure of the motor article 618 of said Code
boat which, at that time, was getting ready to leave • Therefore, Motorboat Alfonso’s crew and its owner Ossorio is liable for the
• the fire negligence of his crew,
in said motor boat burst out with an explosion followed by a violent
expulsion of gasoline and petroleum; DAMAGES
• Theref Amount to be paid for repairs:
ore, the inevitable effect of the explosion and fire which occurred in the • Sum paid amounted to P27,968
motor boat Alfonso; that this explosion and fire in the said motor boat is, • Materials used in said repairs - P12,139.30.
with good ground, imputable to the negligence of the persons having
charge at that time of said motor boat and under whose direction the On the alleged Delay
loading of the aforesaid cases of petroleum and gasoline had been Ossorio not liable for the respective amount for delay because delay in
performed. repair was not due to the repair of the vessel and is remote and, therefore,
not chargeable to the defendant
2ND ISSUE: Ossorio is likewise liable to Yu Biao for the negligence of his • steamer was delayed 10 in the Pasig River, waiting for available space in
employees / crew the shipyard before it was taken to the said repair-shop
RULE: In American law, principles similar to those in force in the Philippines and o BUT! It was not absolutely necessary that the repair of the
contained in the Code of Commerce above cited, are prevailing: damages caused by the fire should be made in the shipyard; that
said vessel was taken to the shipyard for repair of some parts of it
Vessel owner's liability in general. — The general liability of a vessel owner not damaged by the fire in question.
extends to losses by fire arising from other than a natural or other excepted cause,
whether occurring on the ship accidentally, or communicated from another vessel, or Yu Biao even claimed delay of 70 days – still not chargeable to Ossorio
from the shore; and the fact that fire produces the motive power of a boat does not • Unrealized profit reduced to one-half, or thirty-five days at the rate of
affect the case. Such losses are not within the exceptions either of act of God, or P410.84 a day which is the net profit that the aforesaid steamer Y.
peril of the sea, except by local custom, unless proximately caused by one of these Sontua failed to realize as a consequence of said delay
events. In jurisdictions where the civil law obtains, however, it has been held that if
property on a steamboat is destroyed by fire, the owners of the boat are not Real amount to be paid by reason of delay: 14,379.40
responsible, if it was being navigated with proper diligence, although the accident
occurred at night. The common law liability extends even to loss by fires caused Total sum which Yu Biao is entitled to recover as damages: P54,486.70
entirely by spontaneous combustion of the cargo, without any negligence on the part
of master or crew. DISPOSITIVE:
The judgment appealed from is hereby modified and the defendant sentenced to pay
Responsibility of the master to 3rd persons the plaintiff the sum of P54,486.70 with costs. So ordered.
Although the duties enumerated in article 612 of the Code of Commerce are inherent
in the master, the civil liability arising from the nonfulfilment thereof is not limited to 16. MACONDRAY AND CO., INC. v. PROVIDENT INSURANCE CORPORATION
the latter, since while the master is responsible to the ship agent, he is, in turn, G.R. No. 15405 | December 9, 2004
liable to third persons, as is clearly provided in article 618 of the said Code, which in
its subsections 5 and 7 expressly mentions such duties enumerated in the aforesaid TOPIC: Powers and Functions of Ship Agent;
article 612.
BUZZ WORD: POTAAAAsh kulang!
IN THIS CASE: DOCTRINE:

• It is proven that the agents and employees, through whose negligence the Article 586 of the Code of Commerce states that a ship agent is "the person
explosion and fire in question occurred, were agents, employees, and entrusted with provisioning or representing the vessel in the port in which it may be
mandatories of the defendant. Where the vessel is one of freight, a public found."
concern or public utility, its owner or agent is liable for the tortious acts of Hence, whether acting as agent of the owner of the vessel or as agent of the
his agents (arts. 587, 613, and 618, Code of Commerce; and arts. 1902, charterer, petitioner will be considered as the ship agent and may be held liable as
1903, 1908, Civil Code). such, as long as the latter is the one that provisions or represents the vessel.
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PARTIES: • that it has no control over the acts of the captain and crew of the Carrier
PETITIONER: Macondray and Co., Inc. and cannot be held responsible for any damage arising from the fault or
RESPONDENT: Provident Insurance Corp. negligence of said captain and crew;
• that upon arrival at the port of Sangi, Toledo City, Cebu, the M/V Trade
CC/MODE OF TRANSPORT (1): M/V Trade Carrier Carrier discharged the full amount of shipment.
SHIPPER: Canpotex Shipping Services Ltd., Inc.
CONSIGNEE: Atlas Fertilizer Corp Provident’s Arguments:
GOODS / PASSENGERS: 5,000 metric tons of Standard Grade Muriate of Potash • that
PORT OF DEPARTURE: Vancouver, Canada losses worth P1,657,700.95 had been incurred and it paid for such therefore
ROUTE: Vancouver → Toledo, Cebu City has stepped into the shoes of consignee
CAUSE / ACCIDENT: losses/shortage • it even
INSURER: Provident Insurance Corp presented testimonies of Marina Celerina Aguas and depositions of Alberto
Milan to prove that the material facts of the complaint are deemed
admitted by Macondray
RECIT READY DIGEST:
Canpotex shipped on board M/V Trade Carrier 5000 metric tons of potash in favor of ISSUE/S:
Atlas to be delivered in Cebu. Such shipments were insured by Provident. When the
shipment arrived, it was discovered that the shipment sustained losses to which 1. Whethe
Provident paid for and thereby subrogated of the right to go after Macondray but the r or not MACONDRAY is an agent and thus liable for any loss sustained by
latter refused to pay so Provident filed a case. Both RTC and CA ruled in favor of any party from the vessel owned by defendant TRADE & TRANSPORT - YES
Macondray but SC held that as a ship agent, he is still liable for such. HELD:
Yes, Macondray can be considered as a ship agent and thus liable for the
loss sustained in the case at bar.
RTC: Ruled in favor of Macondray and dismissed the case RULE:
CA: Affirmed the trial court’s ruling that Macondray was not the agent of Trade and Article 586 of the Code of Commerce states that a ship agent is "the person
Transport but it ruled that Macondray could still be held liable for the shortages of entrusted with provisioning or representing the vessel in the port in which it may be
the shipment because the latter was the ship agent of Canpotex, the shipper and found."
charter of the vessel M/V Trade Carrier. So, Macondray is liable for the losses
incurred in the shipment of subject cargoes to Provident by virtue of the right of Hence, whether acting as agent of the owner of the vessel or as agent of the
subrogation. charterer, petitioner will be considered as the ship agent and may be held liable as
such, as long as the latter is the one that provisions or represents the vessel.
FACTS: IN THIS CASE:
• CANPOTEX SHIPPING SERVICES LIMITED INC (CANPOTEX), shipped and • The trial court found that petitioner "was appointed as local agent of the
loaded on board the vessel M/V Trade Carrier, 5000 metric tons of Standard vessel, which duty includes arrangement for the entrance and clearance of
Grade Muriate of Potash in bulk for transportation to and delivery at the the vessel."
port of Sangi, Toledo City, Cebu, in favor of ATLAS FERTILIZER • Further, the CA found and the evidence shows that petitioner represented
CORPORATION (ATLAS). Subject shipments were insured with PROVIDENT the vessel. The latter prepared the Notice of Readiness, the Statement of
against all risks. Facts, the Completion Notice, the Sailing Notice and Custom's Clearance.
• Petitioner's employees were present at Sangi, Toledo City, one day before
• When the shipment arrived, ATLAS discovered that the shipment sustained the arrival of the vessel, where they stayed until it departed. They were
losses. Provident paid for losses. Formal claims was then filed with TRADE & also present during the actual discharging of the cargo.
TRANSPORT and MACONDRAY but the same refused and failed to settle the • Moreover, Mr. de la Cruz, the representative of petitioner, also prepared for
same. the needs of the vessel, like money, provision, water and fuel.
Macondray’s Arguments:
• As ship agent, it may be held civilly liable in certain instances
• MACONDRAY denied liability over the losses for having no absolute relation
with defendant TRADE AND TRANSPORT, the alleged operator of the vessel Article 586. The shipowner and the ship agent shall be civilly liable for the
who transported the subject shipment; acts of the captain and for the obligations contracted by the latter to repair,
• that accordingly, MACONDRAY is the local representative of the CANPOTEX; equip, and provision the vessel, provided the creditor proves that the
the charterer of M/V TRADE CARRIER and not party to this case; amount claimed was invested for the benefit of the same.
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Article 587. The ship agent shall also be civilly liable for the indemnities in 18.TYPE OF CHARTER: time charter party
favor of third persons which may arise from the conduct of the captain in 19.CONSIGNEE: Heindrich Trading Corp. (HEINDRICH)
the care of the goods which he loaded on the vessel; but he may exempt 20.GOODS/PASSENGERS: 8,260 metric tons or 165,200 bags of Grey Portland
himself therefrom by abandoning the vessel with all her equipments and Cement
the freight it may have earned during the voyage. 21.ROUTE: Shanghai Port China to Port of Manila
22.CAUSE/ACCIDENT: out of the 165,200 bags of cement, 43,905 bags were in bad
THEREFORE:
order and condition.
These acts all point to the conclusion that it was the entity that represented the
23.LOCATION OF ACCIDENT: During inspection upon arrival in the port of Manila
vessel in the Port of Manila and was the ship agent within the meaning and context
of Article 586 of the Code of Commerce.
RECIT READY DIGEST:
Respondent insurance company insured 162,200 bags of cement being shipped by
Cardia from Shanghai, to its consignee Hendrich to the Manila. However, some bags
DAMAGES
of cement were found to be in bad condition upon arrival in the port of Manila. The
P1,657,700.95 – LIABILITY OF MACONDRAY FOT THE LOSSES/SHORTAGE INCURRED
Co-insurers paid Hendrich the amount of the damaged goods and was subrogated
the latter’s rights and filed for damages. It impleaded AceNav, Cardia’s agent, as a
THEREFORE: party to the suit to whom the CA found to be liable for 30% of the amount claimed
Both the findings of the TC and CA are correct that Macondray is liable as a ship by the Co-insurers. However, AceNav argued that it cannot be made liable since it is
agent. merely an agent of Cardia and not a Ship Agent as defined in the Code of
Commerce. The S.C. ruled in favor of AceNav holding that since it is a mere agent,
DISPOSITIVE: and since its principal Cardia was not impleaded in the suit, AceNav cannot be held
Petition is denied and the assailed decision is affirmed. liable for the damage caused by Cardia.
18. ACE NAVIGATION CO., INC. v. FGU PROCEDURE:

G.R. No. 171591 | June 25, 2012 RTC: dismissed the complaint
CA:
TOPIC: Powers and Functions of Ship Agent • held PAKARTI, SHINWA, KEE YEH and its agent, SKY, solidarily liable for 70% of the
damages sustained by the cargo. This solidarity liability was borne by their failure
BUZZWORD: Mere Agent to prove that they exercised extraordinary diligence in the vigilance over the bags
of cement entrusted to them for transport.
DOCTRINE: Under Article 586, a ship agent is defined as the person entrusted with • On the other hand, the CA passed on the remaining 30% of the amount claimed to
the provisioning of a vessel, or who represents her in the port in which she may be the shipper, CARDIA, and its agent, ACENAV, upon a finding that the damage was
found. partly due to the cargo's inferior packing.
• affirmed the findings of the RTC that it did not acquire jurisdiction over its person
Note: Important Point regarding the purpose of a Bill of Lading as a contract in this for defective service of summons.
case. “As a contract, it names the contracting parties, which include the consignee,
fixes the route, destination, and freight rates or charges, and stipulates the rights FACTS:
and obligations assumed by the parties. As such, it shall only be binding upon the
parties who make them, their assigns and heirs.” The subject vessel is owned PAKARTI which it chartered to SHINWA. Representing
itself as owner of the vessel, SHINWA entered into a charter party contract with Sky
PARTIES: International, Inc. (SKY), an agent of Kee Yeh Maritime Co. (KEE YEH), which further
chartered it to Regency Express Lines S.A. (REGENCY). Thus, it was REGENCY that
1. Petitioner: Ace navigation directly dealt with consignee HEINDRICH, and accordingly, issued Clean Bill of
13.Respondent: FGU Insurance Corp. & Pioneer Insurance Corp. Lading No. SM-1.(this is important if Ma’am asks about who and why these parties
14.Nature of Action Filed: complaint for damages against the following "REGENCY were impleaded by Co-insurers as liable for damages. They kept sub-chartering the
EXPRESS LINES, S.A./UNKNOWN CHARTERER OF THE VESSEL 'PAKARTI vessel owned by Pakarti and their defenses were that they were parties to the B.O.L.
TIGA'/UNKNOWN OWNER and/or DEMIFE (sic) CHARTERER OF THE VESSEL with Heindrich. Other than that I dont think its too important to the main discussion
'PAKARTI TIGA', SKY INTERNATIONAL, INC. and/or ACE NAVIGATION COMPANY, of the case topic.)
INC."
CC/MODE OF TRANSPORT: M/V Pakarti Tigaa • CARDIA shipped on board the vessel M/V Pakarti Tigaat Shanghai Port China, 8,260
15.OWNER OF CC: P.T. Pakarti Tata (PAKARTI) metric tons or 165,200 bags of Grey Portland Cement to be discharged at the Port
16.SHIPPER: Cardia Limited (CARDIA) of Manila and delivered to its consignee, HEINDRICH.
17.Charter: Shinwa Kaiun Kaisha Ltd. (SHINWA)
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• The subject shipment was insured with respondents, FGU Insurance Corp. (FGU)
and Pioneer Insurance and Surety Corp. (PIONEER), against all risks under Marine IN THIS CASE:
Open Policy No. 062890275 for the amount of P18,048,421.00. • Records show that the obligation of ACENAV was limited to informing the
• the vessel arrived at the Port of Manila and the shipment was discharged. consignee HEINDRICH of the arrival of the vessel in order for the latter to
• However, upon inspection of HEINDRICH and petitioner Ace Navigation Co., Inc. immediately take possession of the goods.
(ACENAV), agent of CARDIA, it was found that out of the 165,200 bags of cement, • No evidence was offered to establish that ACENAV had a hand in the provisioning
43,905 bags were in bad order and condition. of the vessel or that it represented the carrier, its charterers, or the vessel at any
• Unable to collect the sustained damages in the amount of P1,423,454.60 from the time during the unloading of the goods.
shipper, CARDIA, and the charterer, REGENCY, the respondents, as co-insurers of • Clearly, ACENAV's participation was simply to assume responsibility over the cargo
the cargo, each paid the consignee, HEINDRICH, the amounts of P427,036.40 and when they were unloaded from the vessel.
P284,690.94, respectively, and consequently became subrogated to all the rights
and causes of action accruing to HEINDRICH. THEREFORE: Hence, no reversible error was committed by the courts a quo in
• Respondent Co-insurers then filed for damages. holding that ACENAV was not a ship agent within the meaning and context of Article
586 of the Code of Commerce, but a mere agent of CARDIA, the shipper. The the CA
AceNav Contention: it cannot be held liable for the damages sought to be erred in ordering ACENAV jointly and severally liable with CARDIA to pay 30% of the
collected by the respondents since it was not a party to the bill of lading. It was not a respondents' claim.
real party-in-interest from whom the respondents can demand compensation. It
further denied being the local ship agent of the vessel or REGENCY and claimed to DAMAGES AWARDED: NONE
be the agent of the shipper, CARDIA.
DISPOSITIVE: WHEREFORE, the assailed Decision and Resolution of the Court of
FGU and Pioneer Contention: that ACENAV is a ship agent and not a mere agent Appeals are hereby REVERSED. The complaint against petitioner Ace Navigation Co.,
of CARDIA, Inc. is hereby DISMISSED.
ISSUE/S:
20. INTER-ORIENT MARITIME ENTERPRISES v. NLRC
1. WON AceNav may be held liable to the respondents for 30% of their claim. NO
G.R. No. 115286 | August 11, 1994
24.WON AceNav is a party to the bill of lading: YES
25.WON AceNav is a Ship Agent: NO MAIN ISSUE
TOPIC: Discreton of Captain or Master
HELD:
BUZZ WORD: Maingat tumayo si TAYOng sa ship
First Issue:
DOCTRINE:
• CARDIA was not impleaded as a party to this suit liability attributed upon it by the
The applicable principle is that the captain has control of all departments of service
CA on the basis of its finding that the damage sustained by the cargo was due to
in the vessel, and reasonable discretion as to its navigation
improper packing cannot be borne by ACENAV.
• As a mere agent, AceNav cannot be held accountable for the damage supposedly
Compagnie de Commerce vs. Hamburg is instructive and wherein the Court
caused by its principal.
recognized the discretionary authority of the master of a vessel and his right to
exercise his best judgment, with respect to navigating the vessel he commands
Second Issue:
• original parties to the bill of lading are: (a) the shipper CARDIA; (b) the carrier
PARTIES:
PAKARTI; and (c) the consignee HEINDRICH.
PETITIONER: Inter-Orient Maritime Enterprise, Inc., Trenda World Shipping Manila
• ACENAV, as admitted agent of CARDIA, also became a party to the said contract of
and Sea Horse Ship Mgt.
carriage.
RESPONDENT: NLRC and Capt. Rizalino Tayong
Main Issue: AceNav is not a Ship Agent but a mere agent of Cardia.
COMMON CARRIER: M/V Oceanic
(Further discussion below)
CAPTAIN: Capt. Rizalino Tayong - a licensed Master Mariner with experience in
commanding ocean-going vessels
RULE:
EMPLOYER: Trenda World Shipping Manila and Sea Horse Ship Mgt.
ART. 586. The shipowner and the ship agent shall be civilly liable for the acts of the
AGENCY: Inter-Orient Maritime Enterprise, Inc.
captain and for the obligations contracted by the latter to repair, equip, and
ROUTE: HK -> Singapore -> Richard Bay, South Africa
provision the vessel, provided the creditor proves that the amount claimed was
invested therein.
RECIT READY SUMMARY: Capt. Tayong sailed M/V Oceanice from HK -> SG ->
By ship agent is understood the person entrusted with the provisioning of a vessel,
South Africa. He took necessary precautions such as when there was a storm and on
or who represents her in the port in which she may be found.
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not deciding to sail to from SG -> Africa since the vessel is unseaworthy and really
needed to await for the supplies to be delivered in SG before sailing to Africa. Capt. Tayong: instituted a complaint for illegal dismissal before the POEA claiming
Petitioners illegally dismissed him because they suffered delay due to Capt. his unpaid salary for the unexpired portion of the written employment contract, plus
Tayong’s call to wait for the supplies and said that it was not really necessary. attorney's fees.
POEA: in favor of petitioners. Waiting of supplies not necessary
NLRC: reversed. In favor of Capt. Tayong Petitioners: denied illegal dismissal
• Captain Tayong, who must protect the interest of petitioners, had caused
FACTS: them unnecessary damage, and that they, as owners of the vessel, cannot
• Capt. Tayong was employed as Master of vessel M/V Oceanic Mindoro for 1 be compelled to keep in their employ a captain of a vessel in whom they
year and assumed command of TWS and SH’s vessel at the port of have lost their trust and confidence.
Hongkong.
• His instructions were to replenish bunker and diesel fuel, to sail forthwith to • A direct result of Captain Tayong's delay, petitioners' vessel was placed
Richard Bay, South Africa, and there to load 120,000 metric tons of coal. "off-hire" by the charterers for twelve (12) hours.
• This meant that the charterers refused to pay the charter hire or
Safety Measures: compensation corresponding to twelve (12) hours, amounting to
1. Typhoon Gordon US$15,500.00, due to time lost in the voyage.
• While still at the Port of HK and in the process of unloading cargo, Capt.
Tayong received a weather report that a storm code-named "Gordon" would PROCEDURE:
shortly hit Hongkong
• He took precautionary measures were taken to secure the safety of the POEA: in favor of petitioners. there was valid cause for his untimely repatriation
vessel, as well as its crew, considering that the vessel's turbo-charger was • Captain
leaking and the vessel was fourteen 14 years old Tayong’s concern for the oxygen and acetylene was not legitimate as these
• He even followed up the request of former captain for supplies of oxygen supplies were not necessary or indispensable for running the vessel
and acetylene, necessary for the welding-repair of the turbo-charger and • Vessel
the economizer which was requested by the Chied Engineer of the vessel was seaworthy
and approved by ship owner
NLRC: reversed, in favor of Capt. Tayong
2. HK -> SG Safety measure on water leak • Captain Tayong had not been afforded an opportunity to be heard and that
• While saling HK -> SG, he reported a water leak in the turbo charger, no substantial evidence was adduced to establish the basis for petitioners'
subsequently instructed to blank off the cooling water and maintain loss of trust or confidence in the Captain
reduced RPM unless authorized by the owner • he had only acted in accordance with his duties to maintain the
• Vessel had stopped in mid-ocean for six (6) hours and forty-five (45) seaworthiness of the vessel and to insure the safety of the ship and the
minutes due to a leaking economizer. He was instructed to shut down the crew.
economizer and use the auxiliary boiler instead • petitioners to pay the Captain (a) his salary for the unexpired portion of the
contract at US$1,900.00 a month, plus one (1) month leave benefit; and (b)
3. SG -> South Africa. On hold they stayed in SG to wait for supplies attorney's fees equivalent to ten percent (10%) of the total award due.
• Chief Engineer reminded Captain Tayong that the oxygen and acetylene
supplies had not been delivered ISSUE/S: WON Captain Tayong had reasonable grounds to believe that the safety of
• Capt. Tayong called the shipowner, Sea Horse Ship Management, Ltd., in the vessel and the crew under his command or the possibility of substantial delay at
London and informed them that the departure of the vessel for South Africa sea required him to wait for the delivery of the supplies needed for the repair of the
may be affected because of the delay in the delivery of the supplies turbo-charger and the economizer before embarking on the long voyage from
• Capt. Tayong informed Mr. Clark, the Technical Director, the that vessel Singapore to South Africa – YES, HE JUST TOOK NECESSARY PRECAUTION
cannot sail without the oxygen and acetylene for safety reasons due to the
problems with the turbo charger and economizer HELD:
• Capt. Tayong communicated to Sea Horse his reservations regarding Procedural: Petitioners failed to attach a clearly legible, properly certified, true copy
proceeding to South Africa without the requested supplies and immediately of the decision of the NLRC dated 23 April 1994, in violation of requirement no. 3 of
sailed upon its deliver Revised Circular No. 1-88. On this ground alone, the petition could have been
dismissed. But the Court chose not to do so, in view of the nature of question here
Upon arriving in Richard Bay, South Africa, he was instructed to turn-over his post to raised and instead required private respondent to file a comment on the petition
the new captain. He was thereafter repatriated to the Philippines, after serving
petitioners for a little more than two weeks. He was not informed of the charges RULE:
against him. A captain commonly performs three (3) distinct roles:
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1. he is a general agent of the shipowner; • The applicable principle is that the captain has control of all departments of
2. he is also commander and technical director of the vessel; and service in the vessel, and reasonable discretion as to its navigation
3. he is a representative of the country under whose flag he navigates. • It is the right and duty of the captain, in the exercise of sound discretion
and in good faith, to do all things with respect to the vessel and its
Importance of a caption of a vessel equipment and conduct of the voyage which are reasonably necessary for
• The captain of a vessel is a confidential and managerial employee within the protection and preservation of the interests under his charge, whether
the meaning of the above doctrine. those be of the shipowners, charterers, cargo owners or of underwriters
• A master or captain, for purposes of maritime commerce, is one who has • It is a basic principle of admiralty law that in navigating a merchantman,
command of a vessel. the master must be left free to exercise his own best judgment.
• The important is the role performed by the captain as commander of the
vessel (like a CEO) has to do with the operation and preservation of the Compagnie de Commerce v. Hambur
vessel during its voyage and the protection of the passengers (if any) and recognized the discretionary authority of the master of a vessel and his right to
crew and cargo. exercise his best judgment, with respect to navigating the vessel he command
Chater party
Authority of a Captain Shipowner: Owner of Sambia vessel
• In his role as general agent of the shipowner, the captain has authority to Charterer: Compagnie de Commerce
sign bills of lading, carry goods aboard and deal with the freight earned, Route: Saigon -> Ports of Dunkirk and Hamburg in Europe.
agree upon rates and decide whether to take cargo. Cause: ”The Sambia, flying the German flag, could not, in the judgment of its
• The ship captain, as agent of the shipowner, has legal authority to enter master, reach its ports of destination because war (World War I) had been declared
into contracts with respect to the vessel and the trading of the vessel, between Germany and France. he master of the Sambia decided to deviate from the
subject to applicable limitations established by statute, contract or stipulated voyage and sailed instead for the Port of Manila.
instructions and regulations of the shipowner.
• To the captain is committed the governance, care and management of the Supreme Court: There is a ground for reasonable apprehension for danger
vessel. • the master of the Sambia had reasonable grounds to apprehend that the
• Clearly, the captain is vested with both management and fiduciary vessel was in danger of seizure or capture by the French authorities in
functions. Saigon and was justified by necessity to elect the course which he took —
i.e., to flee Saigon for the Port of Manila — with the result that the
IN THIS CASE: shipowner was relieved from liability for the deviation from the stipulated
• Captain Tayong was denied any opportunity to defend himself and was not route and from liability for damage to the cargo.
even informed of the charge against him • Seizure at the hands of an "enemy of the King" though not inevitable, was
• Official report of Mr. Clark - Captain did not arbitrarily and maliciously delay a possible outcome of a failure to leave the port of Saigon
the voyage to South Africa and that there have been a disruption in the
normal functioning of the vessel's turbo-charger. The word "necessity" when applied to mercantile affairs
• Engine was really problematic, as proof - the Oceanic Mindoro had stopped where by the force of circumstances, a man has the duty cast upon him of taking
in mid-ocean for six (6) hours and forty-five (45) minutes on its way to some action for another, and under that obligation adopts a course which, to the
Singapore because of its leaking economizer judgment of a wise and prudent man, is apparently the best for the interest of the
• Indeed, if the ship captain is convinced, such as Capt. Tayong in this case, persons for whom he acts in a given emergency, it may properly be said of the
as a reasonably prudent and competent mariner acting in good faith that course so taken that it was in a mercantile sense necessary to take it.
the shipowner's or ship agent's instructions (insisted upon by radio or Compagnie de Commerce contended that the shipowner should, at all events, be
telefax from their offices thousands of miles away) will result, in the very held responsible for the deterioration in the value of the cargo incident to its long
specific circumstances facing him, in imposing unacceptable risks of loss or stay on board the vessel from the date of its arrival in Manila until the cargo was
serious danger to ship or crew, he cannot casually seek absolution from his sold. The Supreme Court, in rejecting this contention also, declared that:
responsibility, if a marine casualty occurs, in such instructions.
The master is entitled to delay for such a period as may be reasonable
A ship's captain must be accorded a reasonable measure of discretionary under the circumstances, before deciding on the course he will adopt
authority to decide what the safety of the ship and of its crew and cargo • He should not be held responsible for a reasonable delay incident to an
specifically requires on a stipulated ocean voyage. effort to ascertain the wishes of the freighter, and upon failure to secure
• The captain is held responsible, and properly so, for such safety. He is right prompt advice, to decide for himself as to the course which he should adopt
there on the vessel, in command of it and (it must be presumed) to secure the interests of the absent owner of the property aboard the
knowledgeable as to the specific requirements of seaworthiness and the vessel.
particular risks and perils of the voyage he is to embark upon. • He may claim a fair opportunity of carrying out a contract, and earning the
freight, whether by repairing or transhipping.
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o Should the repair of the ship be undertaken, it must be proceeded PETITIONER: Far Eastern Shipping Company
with diligently; and if so done, the freighter will have no ground of RESPONDENT: Court of Appeals and Philippine Ports Authority
complaint, although the consequent delay be a long one, unless,
indeed, the cargo is perishable, and likely to be injured by the CC/MODE OF TRANSPORT (1): M/V PAVLODAR
delay. Where that is the case, it ought to be forwarded, or sold, or OWNER/OPERATOR: Far Eastern Shipping Corporation
given up, as the case may be, without waiting for repairs. MASTER OF THE VESSEL: Victor Kavankov
PILOT: Senen Gavino
A shipowner or shipmaster (if communication with the shipowner is PORT OF DEPARTURE: Vancouver, British Columbia
impossible), will be allowed a reasonable time in which to decide what ROUTE: Vancouver to Manila
course he will adopt in such cases as those under discussion; time must be CAUSE: Failure of the anchor to take hold so the vessel rammed into the apron of
allowed to him to ascertain the facts, and to balance the conflicting the pier
interests involved, of shipowner, cargo owner, underwriter on ship and NATURE OF ACTION: PPA filed through OSG in the RTC a complaint for sum of
freight. money against FESC, Capt. Gavino and Manila Pilots’ Association
• But once the time has elapsed, he is bound to act promptly according as he
has elected either to repair, or abandon the voyage, or tranship. CARRIER/MODE OF TRANSPORT: Marine Vessel
• If he delays, and owing to that delay a perishable cargo suffers damage, the
shipowner will be liable for that damage; he cannot escape that obligation RECIT-READY:
by pleading the absence of definite instructions from the owners of the M/V PAVLODAR, owned and operated by the Far Eastern Shipping Company (FESC),
cargo or their underwriters, since he has control of the cargo and is entitled arrived at the Port of Manila and was assigned Berth 4 of the Manila International
to elect Port, as its berthing space. Gavino, who was assigned by the Appellant Manila Pilots’
Association to conduct the docking maneuvers for the safe berthing, boarded the
THERFORE: Capt. Tayong’s call to wait seven (7) hours in Singapore for the delivery vessel at the quarantine anchorage and stationed himself in the bridge, with the
on board the Oceanic Mindoro of the requisitioned supplies needed for the welding- master of the vessel, Victor Kavankov, beside him. After a briefing of Gavino by
repair, on board the ship, of the turbo-charger and the economizer equipment of the Kavankov of the particulars of the vessel and its cargo, the vessel lifted anchor from
vessel, is really necessary and not merely arbitrary, capricious or grossly the quarantine anchorage and proceeded to the Manila International Port. The sea
insubordinate behavior on his part. was calm and the wind was ideal for docking maneuvers. When the vessel reached
the landmark, one-half mile from the pier, Gavino ordered the engine stopped. When
DISPOSITIVE: the vessel was already about 2,000 feet from the pier, Gavino ordered the anchor
ACCORDINGLY, petitioners having failed to show grave abuse of discretion dropped. Kavankov relayed the orders to the crew of the vessel on the bow. The left
amounting to loss or excess of jurisdiction on the part of the NLRC in rendering its anchor, with two (2) shackles, were dropped. However, the anchor did not take hold
assailed decision, the Petition for Certiorari is hereby DISMISSED, for lack of merit. as expected. The speed of the vessel did not slacken. A commotion ensued between
Costs against petitioners. the crew members. After Gavino noticed that the anchor did not take hold, he
SO ORDERED. ordered the engines half-astern. Abellana, who was then on the pier apron, noticed
that the vessel was approaching the pier fast. Kavankov likewise noticed that the
21. FAR EASTERN SHIPPING v. COURT OF APPEALS anchor did not take hold. Gavino thereafter gave the “full-astern” code. Before the
G.R. No. 130068 | October 1, 1998 right anchor and additional shackles could be dropped, the bow of the vessel
rammed into the apron of the pier causing considerable damage to the pier as well
TOPIC: Shipowner and Pilot as the vessel.
BUZZ WORD: Anchor na hindi nag-hold on sa relationship RTC: Ordered FESC, Capt Gavino and PPA to JOINTLY and SEVERALLY pay PPA the
amount of p1,053,300.00 representing ACTUAL DAMAGES and costs of suit
DOCTRINE:
As a general rule, negligence in order to render a person liable need not be the sole CA: affirmed the findings of RTC but found no ER-EE relationship between Gavino
cause of an injury. It is sufficient that his negligence, concurring with one or more and Manila Pilot’s Assoc.
efficient causes other than plaintiff’s, is the proximate cause of the injury. • This being so, it ruled instead that liability of MPA is anchored not on Art.
Accordingly, where several causes combine to produce injuries, a person is not 2180 but on the provisions of Customs Administrative Order and modified
relieved from liability because he is responsible for only one of them, it being the decision of the trial court by holding MPA STILL SOLIDARILY liable to PPA
sufficient that the negligence of the person charged with injury is an efficient cause but entitled MPA to reimbursement from Gavino for such amount of
without which the injury would not have resulted to as great an extent, and that adjudged liability
such cause is not attributable to the person injured.
FACTS:
PARTIES:
31 of 33
• On June 20, 1980, the M/V PAVLODAR, flying under the flagship of the SEC. 8. Compulsory Pilotage Service. — For entering a harbor and
USSR, owned and operated by the Far Eastern Shipping Company (FESC), anchoring thereat, or passing through rivers or straits within a pilotage
arrived at the Port of Manila from Vancouver, British Columbia at district, as well as docking and undocking at any pier/wharf, or shifting from
about 7:00 o'clock in the morning. one berth or another, every vessel engaged in coastwise and foreign trade
• The vessel was assigned Berth 4 of the Manila International Port, as its shall be under compulsory pilotage.
berthing space.
• Captain Roberto Abellana was tasked by the Philippine Port Authority to In case of compulsory pilotage, the respective duties and responsibilities of the
supervise the berthing of the vessel. compulsory pilot and the master have been specified by the same regulation:
• Appellant Senen Gavino was assigned by the Appellant Manila Pilots'
Association (MPA) to conduct docking maneuvers for the safe berthing of SEC. 11. Control of vessels and liability for damage. — On compulsory
the vessel to Berth No. 4. pilotage grounds, the Harbor Pilot providing the service to a vessel shall be
• Gavino boarded the vessel at the quarantine anchorage and stationed responsible for the damage caused to a vessel or to life and property at ports
himself in the bridge, with the master of the vessel, Victor Kavankov, beside due to his negligence or fault. He can only be absolved from liability if the
him. accident is caused by force majeure or natural calamities provided he has
• After a briefing of Gavino by Kavankov of the particulars of the vessel and exercised prudence and extra diligence to prevent or minimize damage.
its cargo, the vessel lifted anchor from the quarantine anchorage and
proceeded to the Manila International Port. The Master shall retain overall command of the vessel even on
pilotage grounds whereby he can countermand or overrule the order
• The sea was calm and the wind was ideal for docking maneuvers.
or command of the Harbor Pilot on board. In such event, any damage
• When the vessel reached the landmark (the big church by the Tondo
caused to a vessel or to life and property at ports by reason of the fault or
North Harbor) one-half mile from the pier, Gavino ordered the engine
negligence of the Master shall be the responsibility and liability of the
stopped. When the vessel was already about 2,000 feet from the pier,
registered owner of the vessel concerned without prejudice to recourse
Gavino ordered the anchor dropped.
against said Master
• Kavankov relayed the orders to the crew of the vessel on the bow. The left
anchor, with 2 shackles, were dropped. Such liability of the owner or Master of the vessel or its pilots shall be
• However, the anchor did not take hold as expected. The speed of the vessel determined by competent authority in appropriate proceedings in the light of
did not slacken. the facts and circumstances of each particular case.
• A commotion ensued between the crew members. A brief conference
ensued between Kavankov and the crew members. SEC. 32. Duties and responsibilities of the Pilot or Pilots' Association.
• When Gavino inquired what was all the commotion about, Kavankov — The duties and responsibilities of the Harbor Pilot shall be as follows:
assured Gavino that there was nothing to it.
• After Gavino noticed that the anchor did not take hold, he ordered the xxx xxx xxx
engines half-astern.
• Abellana, who was then on the pier apron noticed that the vessel was f) a pilot shall be held responsible for the direction of a vessel from
approaching the pier fast. the time he assumes his work as a pilot thereof until he leaves it
• Kavankov likewise noticed that the anchor did not take hold. anchored or berthed safely; Provided, however, that his
• Gavino thereafter gave the "full-astern" code. responsibility shall cease at the moment the Master neglects or
• Before the right anchor and additional shackles could be dropped, the bow refuses to carry out his order.
of the vessel rammed into the apron of the pier causing considerable
damage to the pier. The vessel sustained damage too. Customs Administrative Order No. 15-65 issued twenty years earlier
• Kavankov filed his sea protest. likewise provided in Chapter I thereof for the responsibilities of pilots:
• Gavino submitted his report to the Chief Pilot who referred the report to the
Philippine Ports Authority. Par. XXXIX. — A Pilot shall be held responsible for the direction of a vessel
• Abellana likewise submitted his report of the incident. from the time he assumes control thereof until he leaves it anchored free
• The rehabilitation of the damaged pier cost the Philippine Ports Authority from shoal; Provided, That his responsibility shall cease at the moment the
the amount of P1,126,132.25. master neglects or refuses to carry out his instructions.
PERTINENT RULES on PILOTAGE: xxx xxx xxx

The Port of Manila is within the Manila Pilotage District which is under compulsory
pilotage pursuant to Section 8, Article III of Philippine Ports Authority Par. XLIV. — Pilots shall properly and safely secure or anchor vessels under
Administrative Order No. 03-85: their control when requested to do so by the master of such vessels.
32 of 33
ISSUE: relieved from liability because he is responsible for only one of them, it
Whether or not both the pilot and the master were negligent - YES being sufficient that the negligence of the person charged with injury is an
efficient cause without which the injury would not have resulted to as great
HELD: an extent, and that such cause is not attributable to the person injured.
YES. The SC started by saying that in a collision between a stationary object and a • It
moving object, there is a presumption of fault against the moving object (based on is no defense to one of the concurrent tortfeasors that the injury would not
common sense and logic). It then went on to determine who between the pilot and have resulted from his negligence alone, without the negligence or wrongful
the master was negligent. acts of the other concurrent tortfeasor.
• W
RULE AND IN THIS CASE here several causes producing an injury are concurrent and each is an
efficient cause without which the injury would not have happened, the
PILOT (GAVINO) injury may be attributed to all or any of the causes and recovery may be
• A had against any or all of the responsible persons although under the
pilot, in maritime law, is a person duly qualified, and licensed, to circumstances of the case, it may appear that one of them was more
conduct a vessel into or out of ports, or in certain waters. culpable, and that the duty owed by them to the injured person was not the
• H same.
e is an expert who’s supposed to know the seabed, etc. that a master of a • N
ship may not know because the pilot is familiar with the port. o actor's negligence ceases to be a proximate cause merely because it does
• H not exceed the negligence of other actors. Each wrongdoer is responsible
e is charged to perform his duties with extraordinary care because the for the entire result and is liable as though his acts were the sole cause of
safety of people and property on the vessel and on the dock are at stake. the injury.
• C • T
apt. Gavino was found to be negligent. The court found that his reaction here is no contribution between joint tortfeasors whose liability is solidary
time (4 minutes) to the anchor not holding ground and the vessel still going since both of them are liable for the total damage. Where the concurrent or
too fast was too slow. successive negligent acts or omissions of two or more persons, although
• A acting independently, are in combination the direct and proximate cause of
s an expert he should’ve been reacting quickly to any such happenings. a single injury to a third person, it is impossible to determine in what
proportion each contributed to the injury and either of them is responsible
MASTER for the whole injury.
• I • W
n compulsory pilotage, the pilot momentarily becomes the master here their concurring negligence resulted in injury or damage to a third
of the vessel. The master, however may intervene or countermand the party, they become joint tortfeasors and are solidarily liable for the
pilot if he deems there is danger to the vessel because of the incompetence resulting damage under Article 2194 of the Civil Code.
of the pilot or if the pilot is drunk.
• B THEREFORE:
ased on Capt. Kavankov’s testimony, he never sensed the any danger even In the case at hand, the negligence of both the master and the pilot being so
when the anchor didn’t hold and they were approaching the dock too fast. apparent renders them both liable with the owner and operator solidarily.
He blindly trusted the pilot. This is negligence on his part. He was right
beside the pilot during the docking, so he could see and hear everything DAMAGES: ACTUAL → P1,053,300.00
that the pilot was seeing and hearing.
• T DISPOSITIVE PORTION:
he master’s negligence translates to unseaworthiness of the vessel, and in WHEREFORE, in view of all of the foregoing, the consolidated petitions for review are
turn means negligence on the part of FESC. DENIED and the assailed decision of the Court of Appeals is AFFIRMED in toto. Capt.
Gavino and FESC solidarily liable.
CONCURRENT TORTFEASORS
• A
s a general rule, that negligence in order to render a person liable need not
be the sole cause of an injury. It is sufficient that his negligence, concurring
with one or more efficient causes other than plaintiff's, is the proximate
cause of the injury.
• A
ccordingly, where several causes combine to produce injuries, person is not
33 of 33

Part Iii - Maritime Law: Chapter 10: General Concepts

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PART III - MARITIME LAW

Chapter 10: General Concepts

TOPIC: Real and Hypothecary Nature PROCEDURE:

2ND ISSUE: CC/MODE OF TRANSPORT (1): Valentina pilot boat

IN THIS CASE: DOCTRINE:

18. ACE NAVIGATION CO., INC. v. FGU PROCEDURE:

PERTINENT RULES on PILOTAGE: xxx xxx xxx

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